University of Santo Tomas

Faculty of Civil Law

LABOR LAW
Pre-week Notes 2019
ACADEMICS COMMITTEE

SECRETARY GENERAL: Edrea Jean V. Ramirez

EXECUTIVE COMMITTEE: Aya Dominique S. Caparas, Arianna Laine T. Sarmiento,
Belle Colleen T. De Leon, Pamela Nicole S. Manalo, Ruth Mae G. Sanvictores

LABOR LAW COMMITTEE

COMMITTEE HEAD: Izzel Jarviz M. Arzadon

SUBJECT HEADS: Lance Lester Angelo Sim, Carla Joey C. Arrogante
MEMBERS: Rani Mae B. Aberin, Estella Mariez M. America, Lorane Angeli L.
Basbas, Alexander J. Cairo, Marie Angelica A. Cordoba, Faith Marie A. Flores,
Sherlyn A. Layesa, Mervin Angelo V. Manalo, Alarice V. Reyes

Atty. Teodoro Lorenzo A. Fernandez

ADVISER
 UST LAW PRE-WEEK NOTES 2019
LABOR LAW
LABOR CODE
APPLICABILITY OF THE LABOR CODE
GR: All rights and benefits granted to workers
under the LC shall apply alike to all workers,
whether agricultural or non-agricultural. (LC, Art.
6)
XPNs:
1. Government employees
2. Employees of government-owned and
controlled corporations created by special or
original charter
3. Foreign governments
4. International agencies
5. Corporate officers/ intra-corporate disputes
which fall under P.D. 902-A and now fall under
the jurisdiction of the regular courts pursuant
to the Securities Regulation Code.
6. Local water district except where the NLRC’s
jurisdiction is invoked.
7. As may otherwise be provided by the LC.
Test to Determine the Applicability of the LC to
GOCC; ‘Original Charter or Manner of Creation
Test’
When a GOCC is created by a special charter, it is
subject to the provisions of the Civil Service Law
while those incorporated under the general
Corporation Law is subject to the provisions of
the Labor Code. (PNOC-EDC v. Legardo, GR No.
58494, 5 July 1989)
Labor Dispute between Government Employees
It is the Public Sector Labor-Management Council,
not the DOLE shall hear the dispute. (E.O. 180,
Sec.15, June 1, 1987)
RECRUITMENT AND PLACEMENT
RECRUITMENT OF LOCAL AND MIGRANT
WORKERS
Recruitment and Placement
1. Any act of Canvassing, Enlisting, Transporting,
Contracting, Hiring, Utilizing, or Procuring
workers (CETCHUP); and
2. Includes Contact services, Referrals,
Advertising or Promising for employment,
locally or abroad, whether for profit or not.
[LC, Art. 13(b)] (CRAP)
The definition of "recruitment and placement"
under Article 13(b) of the Labor Code includes
promising or 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. (People vs Racho, G.R. No. 227505,
October 02, 2017)
Persons Deemed Engaged in Recruitment and
Placement
Any person or entity which, in any manner, offers
or promises for a fee employment to 2 or more
persons shall be deemed engaged in recruitment
and placement. (LC, Art. 13[b])
PRIVATE RECRUITMENT
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
GR: No person or entity other than public
employment offices, shall engage in the
recruitment and placement of workers. (LC, Art. 16)
XPNs:
1. Public employment offices
2. Private employment offices
3. Private recruitment entities
4. Shipping or manning agents or representatives
5. The POEA
6. Construction contractors if authorized by the
DOLE and Construction Industry Authority
7. Members of the diplomatic corps (but hiring
must be processed through POEA)
8. Other persons or entities as may be authorized
by the SOLE
9. Name hires (Sec. 1[i], Rule II, Omnibus Rules
and Regulations implementing the Migrant
Workers and Overseas Filipinos Act of 1995 as
amended by R.A. 10022)
ILLEGAL RECRUITMENT
Under Article 38(a) of the LC, illegal recruitment
means any recruitment activities, including the
prohibited practices enumerated under Article 34
of this Code, to be undertaken by non-licensees or
non-holders of authority.
Under 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: Provided, That any such non-licensee or
non-holder who, in any manner, offers or promises
for a fee employment abroad to two or more
persons shall be deemed so engaged. (RA 10022,
Sec. 5)
Elements of Illegal Recruitment
1. The offender is a licensee/non-licensee or
holder/non-holder of authority engaged in the
recruitment and placement of workers; and
2. The offender undertakes:
a. 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 [LC, Art. 13(b);
R.A. 8042 as amended by R.A. 10022]; or
b. Any prohibited practices enumerated
(People vs. Sadiosa, GR 107084, May 15,
1998; RA 8042, Sec. 10) under Section 5 of
RA 10022. (LC, Art. 34; RA 8042, Sec. 5, as
amended by RA 10022)
Types of Illegal Recruitment
1. Simple – is committed where a licensee/non-
licensee or holder/non-holder of authority
undertakes either any recruitment activities
defined under Article 13(b), or any prohibited
practices enumerated under Section 5 of RA
10022.
Prescription of action: Five (5) years(Sec. 12,
R.A. 8042)
2. Illegal Recruitment as Economic Sabotage -
it is economic sabotage when complex illegal
recruitment is committed.
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 Labor Law and Social Legislation
a. Syndicated – committed by a syndicate if
carried out by a group of three (3) or more
persons in conspiracy or confederation
with one another;
b. Large Scale or qualified –committed
against three (3) or more persons
individually or as a group (People v.
Sadiosa, G.R. No. 107084, 15 May 1998)
despite the lack of necessary license from
POEA. (People v. Alzona, G.R. No. 132029, 30
July 2004)
Prescription of action: Twenty (20) years
(Sec. 12, R.A. 8042)
EMPLOYMENT OF NON-RESIDENT ALIENS
EMPLOYMENT PERMIT OF NON-RESIDENT
ALIENS
An employment permit may be issued to:
1. a non-resident alien; or
2. 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.
Persons Required to Obtain Employment
Permit
GR: All non-resident foreign nationals who intend
to engage in gainful employment in the Philippines
and any domestic or foreign employer who desires
to engage an alien for employment in the
Philippines.
XPNs:
1. Members of the diplomatic services and
foreign government officials accredited by the
Philippine government;
2. Officers and staff of international organizations
of which the Philippine government is a
cooperating member, and their legitimate
spouses desiring to work in the Philippines;
3. Foreign nationals elected as members of the
Governing Board who do not occupy any other
position, but have only voting rights in the
corporation;
4. All foreign nationals granted exemption by
special laws and all other laws that may be
promulgated by the Congress;
5. 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 solely for the
purpose of interviewing Filipino applicants for
employment abroad;
6. Foreign nationals who come to the Philippines
to teach, present and/or conduct research
studies in universities and colleges provided
that the exemption is on a reciprocal basis; and
7. Resident foreign nationals and temporary or
probationary resident visa holders employed
or seeking employment in the Philippines. (DO
97-09, Series of 2009)
LABOR STANDARDS
CONDITIONS OF EMPLOYMENT
COVERAGE/EXCLUSIONS
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
GR: Title I, Book III of the Labor Code dealing with
hours of work, weekly rest periods, holidays,
service incentive leaves and service charges, covers
all employees in all establishments, whether for
profit or not. (LC, Art. 82)
XPN: (GF-MOM-WPD)
1. Government employees
2. Field personnel
3. Managerial employees
4. Officers and members of the managerial staff
5. Members of the family of the employer who
are dependent on him for support
6. Workers paid by results (Secs. 1 and 2, Rule I,
Book III, Rules Implementing the Labor Code.)
7. Persons in the personal service of another; and
8. Domestic helpers
NORMAL HOURS OF WORK
GR: The normal hours of work of any employee
shall not exceed 8 hours a day. (LC, Art. 83)
XPNs:
1. Health personnel
2. Compressed workweek
Part-time Work
It is not prohibited to have normal hours of work of
less than eight hours a day. What the law regulates
is work hours exceeding eight – it prescribes the
maximum but not the minimum.
COMPRESSED WORKWEEK
It is a scheme 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.
The normal workday is increased to more than 8
hours, but not to exceed 12 hours, without
corresponding overtime premium. The concept can
be adjusted accordingly depending on the normal
workweek of the company. (Department Advisory
Order No. 2, Series of 2004)
Requisites
1. The scheme is expressly and voluntarily
supported by majority of the Ees
2. In firms using substances, or operating in
conditions that are hazardous to health, a
certification is needed from an accredited
safety organization or the firm’s safety
committee that work beyond 8 hours is within
the limit or levels of exposure set by DOLE’s
occupational safety and health standards.
3. The DOLE Regional Office is duly notified.
(Department Advisory Order No. 2, Series of
2004)
HOURS WORKED
Working Time
Working time is one during which an employee is
actually working. It may include an instance when
an employee is not actually working but he is
required to be present in the employer's premises.
Thus, the fact that he is required to be present
although not actually doing any work, is still
deemed working time. (Poquiz, 2012, p. 179)
When Hours Worked are Compensable
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 UST LAW PRE-WEEK NOTES 2019
1. Ee is required to be on duty or to be at a
prescribed workplace;
2. Ee is suffered or permitted to work;
3. Rest periods of short duration during working
hours which shall not be more than 20
minutes; and
4. Meal periods of less than 20 minutes. (IRR,
Book III, Rule I, Sec. 7)
Principles In Determining Hours Worked
1. All hours which the Ee is required to give to his
Er regardless of whether or not such hours are
spent in productive labor or involve physical
or mental exertion.
2. Rest period is excluded from hours worked,
even if Ee does not leave his workplace, it
being enough that:
a. He stops working
b. May rest completely
c. May leave his workplace, to go elsewhere,
whether within or outside the premises of
the workplace
3. All time spent for work is considered hours
worked if:
a. The work performed was necessary
b. If it benefited the Er
c. Or the Ee could not abandon his work at
the end of his normal working hours
because he had no replacement
d. Provided, the work was with the
knowledge of his Er or immediate
supervisor
4. The time during which an Ee is inactive by
reason of interruptions in his work beyond his
control shall be considered working time:
a. If the imminence of the resumption of the
work requires the Ees presence at the
place of work; or
b. If the interval is too brief to be utilized
effectively and gainfully in the Ees own
interest. (IRR, Book III, Rule I, Sec. 4)
Semestral Break Of Teachers
Semestral break of teachers is considered as
compensable hours worked for it is a form of an
interruption beyond their control. (University of
Pangasinan Faculty Union v. University of
Pangasinan, G.R. Nos. 64821-23, 29 January 1993)
Work Hours of Seaman
Seamen are required to stay on board 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
and subsistence allowances when required to be
on board.
The correct criterion in determining whether or
not sailors are entitled to overtime pay is not,
therefore, whether they were on board and cannot
leave ship beyond the regular eight working hours
a day, but whether they actually rendered service
in excess of said number of hours.
MEAL PERIODS
Duration
Every Er shall give his Ees not less than 60 minutes
or 1 hour time-off for regular meals. (LC, Art. 85)
As a general rule, employees are entitled to at least
one hour time-off for regular meals which can be
taken inside or outside company premises.
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
For a full one-hour undisturbed lunch break, the
employees can freely and effectively use this hour
not only for eating, but also for their rest and
comfort which are conducive to more efficiency
and better performance in their work. Since the
employees are no longer required to work during
this one-hour lunch break, there is no more need
for them to be compensated for this period. (Sime
Darby Pilipinas, Inc. v. NLRC, G.R. No. 119205)
Non-Compensability of The Meal Period
It is not compensable during a time-off. Ee must be
completely relieved from duty.
Compensable Meal Period
It is compensable where the lunch period or meal
time:
1. Is predominantly spent for the Er’s benefit; or
2. When it is less than 60 minutes.
If the so called “meal time” is less than 20 minutes,
it becomes only a rest period and under the same
Sec. 7, is considered working time. (Azucena, Vol. 1,
2016, p. 213)
NIGHT SHIFT DIFFERENTIAL
Every employee shall be paid a night shift
differential of not less than ten percent (10%) of
his regular wage for each hour of work performed
between 10:00 PM and 6:00 AM. (LC, Art. 86)
G.R.: All employees are entitled to NSD.
XPNS:
1. Those of the government and any of its
political subdivisions, including government-
owned and/or controlled corporations;
2. Those of retail and service establishments
regularly employing not more than five (5)
workers;
3. Domestic helpers and persons in the personal
service of another;
4. Managerial employees as defined in Book
Three of this Code;
5. 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 II, IRR, Labor Code)
Where the night-time work of an employee
overlaps with overtime work, the receipt of
overtime pay does not preclude the receipt of night
differential pay. The latter is night pay; the former
is payment beyond eight-hour work. (Poquiz, 2012,
p. 185)
Night Differential in Overtime Pay
If work is done between 10PM and 6AM is
overtime work, then the 10% NSD should be based
on the overtime rate.
When the tour of duty of an employee falls at night
time, the receipt of overtime pay will not preclude
the right to night differential pay. The latter is
payment for work done during the night and the
other is payment for the excess of the regular
eight-hour work. (NARIC v NARIC Workers Union,
105 Phil. 891)
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OVERTIME WORK, OVERTIME PAY
Overtime work is the service rendered in excess
of and in addition to eight hours on ordinary
working days, which are the prescribed daily work
period, is overtime work. (Caltex Regular
Employees at Mla. Office v Caltex Phils., Inc., 247
SCRA 398)
Overtime pay is the additional compensation of at
least 25% on the regular wage for the service or
work rendered or performed in excess of 8 hours a
day by employees or labourers in employment
covered by the Eight-hour Labor Law. (LC, Art. 87)
Overtime pay is based on regular base pay exluding
money received by employee in differenct concepts
such as Christmas bonus and other fringe benfits.
It is computed by multiplying the overtime hourly
rate by the number of hours in excess of eight.
(Azucena, Vol. 1, 2016, p. 246)
NOTE: Express instruction from the Er to the Ee to
render OT work is not required for the Ee to be
entitled to OT pay; it is sufficient that the Ee is
permitted or suffered to work. (Azucena, Vol. 1,
2016, p. 222) However, written authority after
office hours during rest days and holidays are
required for entitlement to compensation.
Condition for Entitlement To Overtime Pay
Entitlement to overtime pay must first be
supported by sufficient proof that said overtime
work was actually performed, before an employee
may avail of said benefit. (Cagampan v NLRC, 195
SCRA 633)
Overtime Pay Rates
OVERTIME PAY RATES
During a
Additional compensation of
regular
25% of the regular wage
working day
Rate of the first 8 hours
worked on
plus at least 30% of the
regular wage (RW):
During a
holiday or rest If done on a special holiday
day OR rest day:
30% of 130% of RW
If done on a special holiday
AND rest day:
30% of 150% of RW
If done on a regular holiday:
30% of 200% of RW
Basis of Computation of Overtime Pay
Regular wage which includes the cash wage only,
without deduction on account of the facilities
provided by the Er. (LC, Art. 90)
Waiver of Overtime Pay
GR: The right to overtime pay cannot be waived.
The right is intended for the benefit of the laborers
and employees. Any stipulation in the contract that
the laborer shall work beyond eight hours without
additional compensation for the extra hours is
contrary to law and null and void. (Azucena, Vol. 1,
2016, p. 259)
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
XPNs:
1. When the alleged waiver of overtime pay is in
consideration of benefits and privileges which
may be more than what will accrue to them in
overtime pay, the waiver may be permitted.
(Azucena, Vol. 1, 2016, p. 262)
2. Compressed workweek (CWW) arrangement.
Overtime Rate Subject to Stipulation
GR: The premium for work performed on the
employees rest days or on special days or regular
holidays are included as part of the regular rate of
the employee in the computation of OT pay for any
OT work rendered on said days especially if the
employer pays only the minimum OT rates
prescribed by law.
XPN: Ees and Er may stipulate in their collective
agreement the payment of OT rates higher than
those provided by law and exclude the premium
rates in the computation of OT pay. Such
agreement may be considered valid only if the
stipulated OT pay rates will yield to the Ees not less
than the minimum prescribed by law.
Overtime Pay In A Compressed Workweek
Scheme
Any work performed beyond 12 hours a day or 48
hours a week shall be subject to OT premium.
(Department Advisory No. 02, s. of 2004)
UNDERTIME NOT OFFSET BY OVERTIME
Where a worker incurs undertime hours during his
regular daily work, said undertime hours should
not be offset against the overtime hours on the
same day or on any other day. (Azucena, Vol. 1,
2016, p.268; LC, Art. 88)
It has been held the proper remedy should be to
deduct undertime or absences against the
employee's accrued leave but pay him the overtime
to which he is rightfully entitled. Lastly, the rule
will prevent the anomalous situation whereby an
employee could schedule his working hours at will
thereby destroying the regular working schedules.
(Detective and Protective Bureau, Inc. v. United
Employees Welfare Association, G.R. No. L-4337, 29
December 1951)
REST PERIODS
Right to weekly rest day (WRD)
Every Er shall give his Ees a rest period of not less
than 24 consecutive hours after every 6
consecutive normal work days. (IRR, Book III, Rule
III, Sec. 3)
EMERGENCY REST DAY WORK
Employee To Work On His Rest Day
GR: The Ee cannot be compelled by the Er to work
on his rest day.
XPNs:
1. In case of actual or impending emergencies
caused by serious accident, fire, flood, typhoon,
earthquake, epidemic or other disaster or
calamity to prevent loss of life and property, or
imminent danger to public safety;
2. In cases of urgent work to be performed on the
machinery, equipment, or installation, to avoid
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 UST LAW PRE-WEEK NOTES 2019
serious loss which the employer would
otherwise suffer;
3. In the event of abnormal pressure of work due
to special circumstances, where the employer
cannot ordinarily be expected to resort to
other measures;
4. To prevent loss or damage to perishable goods;
5. Where the nature of the work requires
continuous operations and the stoppage of
work may result in irreparable injury or loss to
the employer; and
6. Under other circumstances analogous or
similar to the foregoing as determined by the
Secretary of Labor and Employment. (LC, Art.
92)
Holiday Pay is a one-day pay given by law to an
employee even if he does not work on a regular
holiday. (Azucena, Vol. 1, 2016, p. 277)
It is a premium given to Ees pursuant to the law
even if he has not been suffered to work on a
regular holiday. It is limited to the 12 regular
holidays, also called legal holidays listed by law.
The Ee should not have been absent without pay on
the working day proceeding the regular holiday.
Persons Entitled To Holiday Pay
GR: All Ees are entitled. (IRR, Book III, Rule IV,
Sec.1)

PREMIUM PAY XPNs:Persons not Entitled to Holiday Pay

1. Government Ees and any of its political
Premium Pay subdivisions, including GOCCs (with original
charter);
It is the additional compensation for work 2. Retail and service establishments regularly
rendered by the Ee on days when normally he employing less than 10 workers;
should not be working such as special holidays and 3. Domestic helpers and persons in the personal
WRDs. service of another;
4. Ee engaged on task or contract basis or purely
Rates of Compensation For Rest Day, Sunday or commission basis;
Holiday Work 5. Members of the Family of the Er who are
dependent on him for support;
RATES OF 6. Managerial Ee and other members of the
INSTANCES ADDITIONAL managerial staff;
COMPENSATION 7. Field personnel and other Ee whose time and
Work on a scheduled performance are unsupervised by the Er; and
+ 30% premium pay 8. Ee paid fixed amount for performing work
rest day
of 100% RW (IRR, Book irrespective of the time consumed in the
III, Rule III, Sec. 7) performance thereof. (IRR, Book III, Rule IV,
Work performed on Sec.1)
Sundays and Holidays + 30% premium payof
by an Ee who has no 100% RW (IRR, Book Legal Holiday
regular workdays and III, Rule III, Sec. 7)
rest days It is a day designated or set apart by the legislature,
Work on a Sunday + 30% premium pay for a purpose within the meaning of the term
(If Ee’s scheduled rest of 100% RW (IRR, Book "holiday" (29 C.J. 762), in order to commemorate an
day) III, Rule III, Sec. 7) important event.
1st 8 hrs: + 30% PP of
100% RW Regular Holidays (RH)

Work performed on GR:They are compensable whether worked or

Excess of 8 hrs: + 30%
any Special Holiday
of hourly rate on said
date. (M.C. No. 10, Series
of 2004)
1st 8 hrs: + 50% PP of
100% RW
Work performed on a
Special Holiday and
Excess of 8 hrs:+ 30%
same day is the
of hourly rate on said
scheduled rest day
date. (M.C. No. 10, Series
of 2004)
Ee is only entitled to
his basic rate. No PP is
required.
Work performed on a
Reason: Work
Special Working
performed is
Holiday
considered work on
ordinary working days
(IRR, Book III, Rule III,
Sec. 7)
NOTE: Holiday work provided under Art. 93
pertains to special holidays or special days.
HOLIDAY PAY
Holiday Pay
unworked subject to certain conditions. They are
also called legal holidays.
XPN: A legal holiday falling on a Sunday creates no
legal obligation for the employer to pay extra, aside
from the usual holiday pay, to its monthly-paid
employees. (Wellington Investment and
Manufacturing Corporation vs. Trajano et al., G.R.
No. 114698, July 3, 1995)
Rule On Two Regular Holidays Falling On The
Same Day (Double Holiday Pay)
If two regular holidays fall on the same day (such as
Good Friday falling on Araw ng Kagitingan [April
9]), the employees should be paid 400% of the
basic wage for both holidays provided he worked
on that day or was on leave of absence with pay or
was on authorized absence on the day prior to the
regular holiday.Holiday pay is a statutory benefit
demandable under the law. Since a worker is
entitled to the enjoyment of ten paid regular
holidays (Art. 94, LC), the fact that two holidays fall
on the same date should not operate to reduce to
nine the ten holiday pay benefits a worker is
entitled to receive. (Asian Transmission Corp vs CA,
G.R. No 144664, March 25. 2004)

Double Holiday Pay

UNIVERSITY OF SANTO TOMAS 5 UST L A W B A R O P E R A T I O N S

FACULTY OF CIVIL LAW ACADEMICS COMMITT EE 2019
 Labor Law and Social Legislation
There are 2 RHs falling on the same day. 5. Holiday pay; and
6. Commissions
MAUNDY XPN: It is an integral part of the basic salary.
THURSDAY & (Philippine Duplicators, Inc. v. NLRC, G.R. No.
WED RATE
ARAW NG 110068, Febuary 15, 1995)
KAGITINGAN
Present Unworked 200% These salary-related benefits should be included in
LOA w/pay Unworked 200% the computation of the 13th moth pay if by
300% individual or collective agreement, company
LOA w/ pay Worked practice or policy, the same are treated as part of
(at least)
Authorized 300% the basic salary of the employees.
Worked
absence (at least)
390% Minimum Period of Service Required
Authorized Worked and day
(+30% of each
absence is Rest Day It is imposed as a ‘minimum service requirement’
3 100%)
that the employee should have worked for atleast
Concept of Successive Regular Holidays one (1) month during a calendar year. (No. X[A],
DOLE Handbook on Workers Statutory Monetary
ENTITLED Benefits)
MAUNDY GOOD TO
WED Persons Covered by P.D. 851
THURS FRIDAY HOLIDAY
PAY
Worked RH RH Yes. Both 1. Employees
LOA
w/pay
RH RH Yes. Both GR: All rank-and-file Ees are covered by P.D. 851
regardless of the amount of basic salary that they
LOA w/o
RH RH No. Both receive in a month, if their Ers are not otherwise
pay
exempted from paying the 13th month pay. Such
Yes. Only to
LOA w/o Ees are entitled to the 13th month pay regardless
Worked RH holiday pay
pay of said designation of employment status, and
on Friday
irrespective of the method by which their wages
are paid.
Conditions For An Employee To Be Entitled To
Two (2) Successive Holiday Pays
Provided, that they have worked for at least 1
month, during a calendar year. (Revised Guidelines
On the day immediately preceding the 1st RH, he
on the Implementation of the 13th Month Pay Law)
must be:
1. Present (worked); or,
XPN:
2. On LOA with pay. (IRR, Book III, Rule IV, Sec.
a. Government Ees;
10)
b. Ees paid purely on commission basis;
c. Ees already receiving 13th month pay;
If the Above Stated Conditions Are Not Met
d. Managers; and
e. Seafarers
He must work on the 1st RH to be entitled to
holiday pay on the 2nd RH. (IRR, Book III, Rule IV,
NOTE: Managerial employees may receive 13th
Sec. 10)
month pay, if such payment has been a company
practice.
13th MONTH PAY
(P.D. 851)
2. Employers
13thMonth Pay Or Its Equivalent
GR: All Ers are covered by PD 581.
It is a form of monetary benefit equivalent to the
XPN:
monthly basic compensation received by an
a. The Government and any of its political
employee, computed pro-rata according to the
subdivisions, including GOCCs;
number of months within a year that the employee
has rendered service to the employer. (DOLE’s BWC
XPN to XPN: Corporations operating
issues Q & A on 13th month pay)
essentially as privated subsidiaries of the
Government.
Additional income based on wage required by P.D.
851 requiring all Ers to pay their Ees a 13th month
b. Ers already paying their Ees 13th month pay or
pay which is equivalent to 1/12 of the total basic
more in a calendar year in its equivalent at the
salary earned by an Ee within a calendar year.
time of the issuance of the Revised Guidelines;
Basic Salary
c. Ers of those who are paid on purely basis of:
i. Commission;
Includes all remunerations or earnings paid by the
employer to an employee for services rendered
NOTE: Bus drivers and conductors who
including cost-of-living allowances.
are paid a fixed or guaranteed minimum
wage in case their commission be less than
It does not include all allowances and monetary
the statutory minimum are entitled to a
benefits which are not considered or integrated as
13th-month pay equivalent to one-twelfth
part of the regular or basic salary such as:
of their total earnings during the calendar
1. Cash equivalent of unused vacation and sick
year. (Philippine Agricultural Commercial
leave credits;
and Industrial Workers Union v. NLRC, GR
2. Overtime pay;
No. 107994, 14 August 1995)
3. Premium pay;
4. Night Shift Differential;

UNIVERSITY OF SANTO TOMAS 6 UST L A W B A R O P E R A T I O N S

FACULTY OF CIVIL LAW ACADEMICS COMMITT EE 2019
 UST LAW PRE-WEEK NOTES 2019
ii. Boundary; or
iii. Task; and
iv. Fixed amount for performing a specific
work irrespective of the time consumed in
the performance thereof.
XPN: Where the workers are paid on a piece-rate
basis, in which case, the employer shall be covered
by the Revised Guidelines insofar as the workers
are concerned.
NOTE: Piece-Rate Workers refers to those who
are 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.
d. Distressed Ers:
a. Currently incurring substantial losses;
or
b. In the case of non-profit institutions and
organizations, where their income,
whether from donations, contributions,
grants and other earnings from any
source, has consistently declined by
more than 40% of their normal income
for the last 2 years, subject to the
provision of Sec. 7 of P.D. 851
The following Ees may or may not be entitled to
13th month pay
1. Ee paid by results – Entitled to 13th month
pay.
NOTE: Ees paid a fixed or guaranteed wage
plus commission are also entitled to the
mandated 13thmonth pay, based on their total
earnings during the calendar year, i.e. on both
their fixed or guaranteed wage and
commission.
2. Those with Multiple Ers – Government Ees
working part time in a private enterprise,
including private educational institutions, as
well as Ees working in 2 or more private firms,
whether full or part time basis, are entitled to
the required 13th month pay from all their
private Ers regardless of their total earnings
from each or all their Ers. (Revised Guidelines
on the Implementation of 13th Month Pay Law)
3. Private School Teachers, including faculty
members of universities and colleges –
Entitled regardless of the number of months
they teach or are paid within a year, if they
have rendered service for at least 1 month
within a year.
4. Resigned or Separated Ees - If resigned or
separated from work before the time of
payment of 13th month pay, entitled to
monetary benefits in proportion to the length
of time he started working during the calendar
year up to the time of resignation or
termination of service (Pro-rated 13th month
pay). (Section 6, DOLE Revised Guidelines on
13th Month Pay)
5. Employees who are paid a fixed or
guaranteed wage plus commission are also
entitled to the thirteenth-month pay, based on
their earningsduring the calendar year (i.e., on
both their fixed or guaranteed wageand
commission).
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
NOTE: In the consolidated cases of Boie Takeda
Chemicals, Inc. vs. Dionisio de la Serna, G.R. No.
92174 December 10, 1993, and Philippine Fuji Xerox
Corporation vs. Cresenciano B. Trajano and
Philippine Fuji Xerox Employees Union, G.R. No.
102552 December 10, 1993, the Supreme Court
ruled that commissions, while included in the
generic term wage, are not part of "basic
salary/wage" and therefore should not be included
in computing the thirteenth-month pay. Thus:
In remunerative schemes consisting of a
fixed or guaranteed wage plus commission, the
fixed or guaranteed wage is patently the "basic
salary" for this is what the employee receives
for a standard work period. Commissions are
given for extra efforts exerted in
consummating sales or other related
transactions. They are, as such, additional
pay, which this Court has made clear do not
form part of the "basic salary." (228 SCRA 329
[1993])(Handbook on Workers’ Statutory
Monetary Benefits, Bureau of Working
Conditions, 2016)
WAGES
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, payable by an Er to an Ee
under a written or unwritten contract of
employment:
1. For work done or to be done, or for services
rendered or to be rendered; and,
2. Includes fair and reasonable value of board,
lodging, or other facilities customarily
furnished by the Er to the Ee as determined
by SLE.
NOTE:The term "wages" also covers all benefits of
the employee under the CBA such as severance
pay, educational allowance, accrued vacation leave
earned but not enjoyed, as well as workmen's
compensation awards and unpaid salaries for
services rendered. (PNB v Cruz, 180 SCRA 206)
“No Work, No Pay” Principle (Fair Day’s Wage
for a Fair Day’s Labor)
GR: If there is no work performed by the employee,
without the fault of the employer, there can be no
wage or pay. Burden of economic loss suffered by
employee shall not be shifted to the employer.
XPNs: The laborer was able, willing and ready to
work but was:
1. Prevented by management;
2. Illegally locked out;
3. Illegally suspended;
4. Illegally dismissed;
5. Illegally prevented from working. (Aklan
Electric Coop. v. NLRC, G.R. No. 129246, January
10, 2000)
“Equal Pay For Equal Work” Principle
Persons who work with substantially equal
qualifications, skill, effort and responsibility, under
similar conditions, should be paid similar salaries.
Employees holding the same position and rank are
presumed to be performing equal work. The rule
equal pay for equal work applies whether the
employee is hired locally or abroad. (International
7 UST L A W B A R O P E R A T I O N S
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 Labor Law and Social Legislation
School Alliance of Educators v. Quisumbing, G.R. No.
128845, 1 June 2000)
Applicability of The Term Wages
GR: It applies to all employees.
XPNs:
1. Farm tenancy or leasehold;
2. Household or domestic helpers, including
family drivers and persons working in the
personal service of another;
3. Home workers engaged in needlework or in
any cottage industry duly registered in
accordance with law; (LC, Art. 98)
4. Workers in any duly registered cooperatives
when so recommended by the Bureau of
Cooperative Development and upon approval
of the SLE;
5. Workers of a barangay micro business
enterprise; (R.A. 9178)
6. Retail and service establishments regularly
employing not more than 10 workers. (RA
6727, Sec. 4)
NOTE: Retail and service establishments must file
an application for exemption with the duly
appropriate Regional Board.
Barangay Micro Business Enterprise refers to
any business entity or enterprise engaged in the
production, processing or manufacturing of
products or commodities, including agro-
processing, trading and services, whose total assets
including those arising from loans but exclusive of
the land on which the particular business entity's
office, plant and equipment are situated, shall not
be more than Three Million Pesos. (RA 9178)
WAGE vs. SALARY
WAGE SALARY
(Gaa v.CA, G.R. No. 44169, 3 Dec. 1985)
Compensation for Paid to “white-
manual labor (skilled or collared workers” and
unskilled) also known as denotes a higher
“blue-collared workers,” degree of employment
paid at stated times and or a superior grade of
measured by the day, services and implies a
week, month or season. position or office.
Suggestive of a larger
Considerable pay for a
and more permanent
lower and less
or fixed compensation
responsible character of
for more important
employment.
service.
GR: Not subject to
execution
Subject to execution.
XPN: Debts incurred for
food, shelter, clothing
and medical attendance.
The Supreme Court reached the conclusion that
words “wages” and “salary” are in essence
synonymous. (Azucena, Vol. 1, 2016, p. 305)
The distinction between salary and wage was only
for the purpose of Art. 1708 of the Civil Code which
mandates that laborer's wages shall not be subject
to execution or attachment except for debts incurred
for food, shelter, clothing and medical attendance.
(Gaa v. Court of Appeals, GR No. L-44169, December
3, 1985) In labor law, the distinction is only a
matter of semantics. It is settled that wage and
salary are synonymous. Likewise, the term "pay" is
also synonymous with wage and salary. (Equitable
PCI v Sadac, G.R. No. 164772, June 8, 2006)
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Commission
A fee paid based on a percentage of the sale made
by an employee or agent, as distinguished from
regular payments of wages or salary.
Inclusion of Commission in Basic Salary
1. Included in the basic salary – If the
commission is comprised of a pre-determined
percentage of the selling price of the goods.
2. Excluded from basic salary – If the
commission is paid as productivity bonus or
closely resemble profit-sharing, or when it has
no clear, direct or necessary relation to the
amount of work actually done by each
individual employee.
FACILITIES vs. SUPPLEMENTS
BASIS FACILITIES SUPPLEMENT
Forms part of Independent of
Inclusion
the wage wage
Deductible from Not wage
Deduction
wage deductible
For the benefit of Granted for the
To whose
the worker and convenience of
benefit
his family. the Er.
MINIMUM WAGE
Minimum wage is the lowest wage rate fixed by
law that an employer can pay his workers. (RA
6727, Implementing Rules) Compensation which is
less than such minimum rate is considered an
underpayment that violates the law. (Azucena, Vol.
1, 2016, p. 317)
Minimum Wage Non-Negotiable; Non Waivable
The minimum wage fixed by law is mandatory;
thus it is non-waivable and non-negotiable. The
enactment is compulsory in nature in order to
ensure decent living conditions. (PAM Co. v.
PAMEA-FFW, 51 SCRA 98)
XPNs to the Coverage of Minimum Wage
1. household or domestic helpers, including
family drivers and persons in the personal
service of another;
2. homeworkers engaged in needle-work;
3. workers employed in any establishment duly
registered with the National Cottage Industries
and Development Authority provided that such
workers perform the work in their respective
homes;
4. workers in any duly registered cooperative
when so recommended by the Bureau of
Cooperative Development and upon approval
of the SOLE. (Azucena, Vol. 1, 2016, p. 320)
NON-DIMINUTION OF BENEFITS
GR: Nothing in the Labor Code shall be construed
to eliminate or in any way diminish supplements,
or other employee benefits being enjoyed at the
time of the promulgation of the Code. (LC, Art. 100)
Benefits being given to Ees cannot be taken back or
reduced unilaterally by the Er because the benefit
has become part of the employment contract,
whether written or unwritten.
XPN:
1. Correction of error
2. Contingent benefit or conditional bonus
3. Wage order compliance
8 UST L A W B A R O P E R A T I O N S
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 UST LAW PRE-WEEK NOTES 2019
4. Benefits on reimbursement basis
5. Reclassification of position
6. Negotiated benefits
7. Productivity incentives
NOTE: If the error is not corrected in a reasonable
time, it ripens into a company policy and Ees can
demand it as a matter of right.
Bonus
Refers to the payment in excess of regular or
guaranteed wages. It is granted to an employee for
his tangible contribution to the success of the
employer’s business, without which the employer
may not realize bigger profits. The contribution
may be in the form of an employee’s commitment
to the job, his industry and loyalty. (Metro Transit
Org., Inc. v. NLRC, G.R. No. 116008, July 11, 1995)
GR: The payment of bonus is a management
function, not a demandable and enforceable
obligation, which cannot be enforced 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. (Philippine National Construction
Corporation v. NLRC, G.R. No. 128345, May 18, 1999)
XPN: Bonuses can be demanded as a matter of
right if:
1. Given without any condition; hence, part of the
wage or salary; (Atok Big Wedge Mining Co.,
Inc. v. Atok Big Wedge Mutual Benefit Assn., 92
Phil. 754)
2. Grant thereof is a result of an agreement such
as the CBA; (Gery v. Insular Lumber, 93 Phil.
807)
3. Given on account of company policy or
practice; (Claparols v. CIR, 65 SCRA 613)
4. Grant is mandated by law.
Bonus Treated As Not Part Of Wages
Bonus is not considered part of wages if it is paid
only upon realization of profits or amount of
production or output. (Atok Big Wedge Mining Co.,
Inc. v. Atok Big Wedge Mutual Benefit Assn., 92 Phil.
754)
Benefit Acquired Through Company Practice
An employee can demand as a matter of right
benefits granted by the employer for a
considerable, long period of time as the same may
ripen into a company practice.
If it is a past error that is being corrected, no vested
right may be said arisen nor any diminution of
benefit under Article 100 of the Labor Code may be
said to have resulted by virtue of the correction.
(Globe Mackay v. NLRC, 163 SCRA 71)
PAYMENT BY RESULTS
Workers paid by result are:
1. Paid based on the work completed; and
2. Not on the time spent in working.
Pay of these workers is calculated not on the basis
of time spent on the job but of the quantity and
quality or the kind of work they turn out. (Azucena,
Vol. 1, 2016, p. 346)
It includes those who are paid on piece work,
“takay” or task basis, who shall be entitled to
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
receive not less than the prescribed statutory
minimum wage for an eight-hour work or a
proportion thereof for less than eight hours work.
(Art. 124, infra.)
Categories of Workers Paid by Results
A. As to Presence of Control
1. Supervised (Piece-rate worker) - works directly
under the supervision of the employer.
2. Unsupervised (Takay or Pakyaw)- works away
from the employer’s premises.
B. As to Rate of Payment
1. Those who are paid piece rates which are
prescribed in Piece Rate Orders issued by
DOLE – Wages or earnings are determined by
simply multiplying the number of pieces
produced by the rate per piece.
2. Those who are paid output rates which are
prescribed by the Er and are not yet
approved by the DOLE – The number of pieces
produced is multiplied by the rate per piece as
determined by the Er.
a. If resulting amount is equivalent to or
more than the applicable statutory
minimum rate in relation to the number
of hours worked, worker will receive such
amount.
b. If the amount is less than the applicable
legal rate, employer is required by law to
pay the difference between the resulting
amount and the applicable legal minimum
rate. (Azucena, Vol. 1, 2016, p. 318)
Entitlement to Statutory Benefits
GR: All employees paid by result shall receive not
less than the applicable new minimum wage rates
for eight (8) hours work a day.
XPN: A payment by result rate has been
established by the Secretary of Labor.
Piece-rate employees are entitled to night-shift
differential, holiday pay, service incentive leave,
premium pay, and 13th-month pay.
Furthermore, they are entitled to overtime pay if
their output pay rate is not shown to be in
accordance with the standards prescribed under
the Implementing Rules or by the Secretary of
Labor. (Labor Congress of the Philippines v. NLRC et
al., G.R. No. 123938, May 21, 1998)
Summation: Benefits Payable to Piece-rate
Workers (Supervised)
1. Applicable statutory minimum daily rate
2. Service incentive leave of 5 days with pay
3. Night shift differential pay
4. Holiday pay
5. Meal and rest periods
6. Overtime pay (conditional)
7. Premium pay (conditional)
8. 13th – month pay
9. Other benefits granted by law, CBA or
company policy or practice. (Azucena, Vol. 1,
2016, p. 356)
Note: The wage rates of workers who are paid by
results may be determined through time and
motion studies or consultation with
representatives of employers’ and workers’
organizations in a tripartite called by the DOLE
9 UST L A W B A R O P E R A T I O N S
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 Labor Law and Social Legislation
Secretary. (Handbook on Workers’ Statutory
Monetary Benefits, DOLE, 2016 ed., p. 9)
Failure to reach quota
Failure to reach the validly determined quota does
not only mean less earnings for the paid-by-result
worker. Persistent failures may even mean
demotion or loss of job. (Azucena, Vol. 1, 2016, p.
357)
APPRENTICES/LEARNERS/PERSONS WITH
DISABILITY
Minimum wage applicable
The wage or salary rate shall not be less than 75%
of the applicable minimum wage.
PAYMENT OF WAGES
Forms of Payment
GR: The laborer’s wages shall be paid in legal
currency. (Art. 1705, NCC)
No employer shall pay the wages of an employee
by means of:
1. Promissory notes;
2. Vouchers;
3. Coupons;
4. Tokens;
5. Tickets;
6. Chits; or
7. Any object other than legal tender.
NOTE: This prohibition applies even when
expressly requested by the employee.
XPN: Payment of wages by check or money order
shall be allowed if:
1. It is customary on the date of the effectivity of
the Code;
2. Necessary because of special circumstances as
specified in the regulation issued by the SLE;
or
3. Stipulated in the CBA; (LC, Art. 102)
4. Where the following conditions are met:
a. There is a bank or other facility for
encashment within a radius of one (1)
kilometer from the workplace;
b. The employer or any of his agents or
representatives does not receive any
pecuniary benefit directly or indirectly
from the arrangement;
c. The employees are given reasonable time
during banking hours to withdraw their
wages from the bank which time shall be
considered as compensable hours worked
if done during working hours; and
d. The payment by check is with the written
consent of the employees concerned if
there is no collective agreement
authorizing the payment of wages by bank
checks. (IRR, Book III, Rule VIII, Sec. 2)
Time of Payment
GR: Wages shall be paid:
1. At least once every two (2) weeks, or,
2. Twice a month at intervals not exceeding
sixteen (16) days.
XPN:
1. On account of force majeure or circumstances
beyond the employer’s control, payment shall be
made immediately after such force majeure or
circumstances have ceased;
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
2. If engaged to perform a task which cannot be
completed in two (2) weeks shall be subject to
the following conditions, in the absence of a
CBA or arbitration award:
a. That payments are made at intervals not
exceeding sixteen (16) days, in proportion
to the amount of work completed;
b. That final settlement is made upon
completion of the work. (LC, Art. 103)
Place of Payment
GR: At or near the place of undertaking.
XPN:
1. When payment cannot be effected at or near
the place of work by reason of the
deterioration of peace and order conditions, or
by reason of actual or impending emergencies
caused by fire, flood, epidemic or other
calamity rendering payment thereat
impossible;
2. When the employer provides free
transportation to the employees back and
forth; and,
3. Under any other analogous circumstances;
Provided, that the time spent by the employees
in collecting their wages shall be considered as
compensable hours worked.
WAGE STUDIES, WAGE AGREEMENTS AND
WAGE DETERMINATION
Wage Order
This is an order issued by the RTWPB whenever
conditions in the region so warrant after
investigating and studying all pertinent facts and
based on the standards and criteria prescribed by
the Labor Code.
It establishes the minimum wage rates to be paid
by employers in the region, which shall in no case
be lower than the applicable statutory minimum
wage rates.
WAGE DISTORTION/RECTIFICATION
Concept
A situation where an increase in wage results in the
elimination or severe contraction of intentional
quantitative differences in wage or salary rates
between and among- the employee-groups in an
establishment as to effectively obliterate the
distinctions embodied in such wage structure
based on skills, length of service or other logical
bases of differentiation. (LC, Art. 124)
Elements of Wage Distortion
1. An existing hierarchy of positions with
corresponding salary rates.
2. A significant change or increase in the salary
rate of a lower pay class without a
corresponding increase in the salary rate of a
higher one;
3. The elimination of the distinction between the
2 groups or classes; and
4. The WD exists in the same region of the
country. (Alliance Trade Unions v. NLRC, G.R.
No. 140689, February 17, 2004)
In mandating an adjustment, the law did not
require that there be an elimination or total
abrogation of quantitative wage or salary
differences; a severe contraction is enough.
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 UST LAW PRE-WEEK NOTES 2019
(Metrobank v. NLRC, G.R. No. 102636, September 10,
1993)
Causes
Wage distortions have often been the result of:
1. Government decreed increases in minimum
wages;
2. Merger of two companies (with differing
classifications of employees and different wage
rates) where the surviving company absorbs
all the employees of the dissolved corporation;
3. Wage distortion arose because the effectivity
dates of wage increases given to each of the
two classes of employees (rank-and-file and
supervisory) had not been synchronized in
their respective CBAs. (Metro Transit Org., Inc.
v NLRC, 67 SCRA 477)
Cases Not Representative Of Wage Distortion
1. Where the hierarchy of positions based on
skills, length of service and other logical bases
of differentiation was preserved; (Prubankers
Association v Prudential Bank & Trust Company,
302 SCRA 74)
2. A disparity in wages between employees
holding similar positions but in different
regions;
3. Where the disparity was simply due to the fact
that the employees had been hired on different
dates and were thus receiving different
salaries; (Manila Mandarin Employees Union v
NLRC, G.R. No. 108556, 19 November 1996)
4. That an employee was initially hired at a
position level carrying a hiring rate higher than
the rates of others;
5. That an employee failed to meet the cut-off
date in the grant of yearly CBA increase; or
6. That the employee had been promoted while
the others were not.
Non-strikeablity of WD
WD is non-strikeable. (Ilaw at Buklod ng
Manggagawa v. NLRC, G.R. No. 91980, June 27,
1991) WD is neither a deadlock in collective
bargaining nor an ULP.
LEAVES
SERVICE INCENTIVE LEAVE (SIL)
It is 5-days leave with pay for every Ee who has
rendered at least 1 year of service whether
continuous or broken. (LC, Art. 95; Sec. 2, Rule V,
Book III, IRR)
Right to SIL
GR: Every Ee who has rendered at least 1 year of
service shall be entitled to a yearly SIL of 5 days
with pay. Leave pay means an Ee gets paid despite
absence from work. (Azucena, Vol. 1, 2016, p. 295)
XPNs:
1. Government Ees, whether employed by the
National Government or any of its political
subdivisions, including those employed in
government-owned and/or controlled
corporations with original charters or created
under special laws;
2. Persons in the personal service of another;
3. Managerial Ees, if they meet all of the following
conditions:
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
a. Their primary duty is to manage the
establishment in which they are employed
or of a department or subdivision thereof;
b. They customarily and regularly direct the
work of two or more Ees therein; and
c. They have the authority to hire or fire other
Ees of lower rank; or their suggestions and
recommendations as to hiring, firing, and
promotion, or any other change of status of
other Ees are given particular weight.
4. Officers or members of a managerial staff, if
they perform the following duties and
responsibilities:
a. Primarily perform work directly related to
management policies of their Er;
b. Customarily and regularly exercise
discretion and independent judgment;
c. (i) Regularly and directly assist a
proprietor or managerial Ee in the
management of the establishment or
subdivision thereof in which he or she is
employed; or (ii) execute, under general
supervision, work along specialized or
technical lines requiring special training,
experience, or knowledge; or (iii) execute,
under general supervision, special
assignments and tasks; and
d. Do not devote more than twenty percent
(20%) of their hours worked in a
workweek to activities which are not
directly and closely related to the
performance of the work described in
e. paragraphs 4.a, 4.b, and 4.c above;
5. Field personnel and those whose time and
performance is unsupervised by the Er;
6. Those already enjoying this benefit;
7. Those enjoying vacation leave with pay of at
least 5 days; and
8. Those employed in establishments regularly
employing less than 10 Ees.
NOTE: Ees engaged on task or contract basis or
paid on purely commission basis are not
automatically exempted from the grant of service
incentive leave, unless, they fall under the
classification of field personnel.
If required to be at specific places at specific times,
Ees including drivers cannot be said to be field
personnel despite the fact that they are performing
work away from the principal office of the Ee; as
such they are entitled to SIL. (Autobus Transport
Systems v. Bautista G.R. No. 156367, 16 May 2005)
Entitlement of Piece-Rate Workers To SIL
Piece-rate workers are entitled to the full benefit of
the yearly 5-day service incentive leave. Under P.D.
851 or the SIL Law, the exclusion from its coverage
of workers who are paid on a purely commission
basis is only with respect to field personnel. Ees
engaged on task or contract basis or paid on
purely commission basis are not automatically
exempted from the grant of SIL, unless, they fall
under the classification of field personnel. (Serrano
v. Severino Santos, G.R. No. 187698, August 09,
2010)
Entitlement of Terminated Ees to SIL
1. Illegally dismissed Ees- entitled to SIL until
actual reinstatement. (Integrated Contractor
and Plumbing Works, Inc. v. NLRC, G.R. No.
152427, August 09, 2005)
2. Legally dismissed Ees – the Ee who had not
been paid SIL from the outset of employment
is entitled only to such pay after a year from
11 UST L A W B A R O P E R A T I O N S
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 Labor Law and Social Legislation
commencement of service until termination of
employment or contract. (JPL Marketing
Promotions v. CA, G.R. No. 151966, July 08,
2005)
MATERNITY LEAVE
Sec 14-A of R.A. 8282
Coverage
This benefit applies to all female Ees, whether
married or unmarried.
A covered female Ee, regardless of her civil status,
is entitled to a daily maternity benefit equivalent to
100% of her present basic salary, allowances and
other benefits or the cash equivalent of such
benefits for 60 days, or 78 days in case of
caesarean delivery.
NOTE: The female Ee should have paid at least
three (3) monthly contributions in the twelve (12)-
month period immediately preceding the semester
of her child birth or miscarriage.
Requirements In Order That Maternity Benefits
May Be Claimed
1. There is childbirth, abortion or miscarriage
2. She has paid at least three (3) monthly
contributions immediately preceding the
semester of her childbirth or miscarriage.
PATERNITY LEAVE
R.A. 8187
Paternity leave
It refers to the benefits granted to a married male
Ee allowing him not to report for work for 7 days
but continues to earn the compensation on
the condition that his spouse has delivered a child
or suffered a miscarriage for purposes of enabling
him to effectively lend support to his wife in her
period of recovery and/or in the nursing of the
newly-born child. In the event it is not availed of,
such leave is not convertible to cash.
Concept of paternity leave benefits
Every married male Ee in the private and public
sectors shall be entitled to a paternity leave of 7
days with full pay for the first 4 deliveries of the
legitimate spouse with whom he is cohabiting.
Conditions for Entitlement To Paternity Leave
The male Ee is:
1. Legally married to, and is cohabiting with the
woman who delivers the baby;
2. Ee of private or public sector;
3. May be availed of only for the first 4 deliveries
of the legitimate spouse with whom he is
cohabiting; and
4. Notify his Er of the pregnancy of his legitimate
spouse and the expected date of such delivery
NOTE: Delivery shall include childbirth or any
miscarriage.
PARENTAL LEAVE/ SOLO PARENT’S WELFARE
ACT (R.A. 8972)
Leave benefits granted to a solo parent to enable
him/her to perform parental duties and
responsibilities - where physical presence is
required. (Sec. 3(d), RA 8972)
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Parental leave of not more than 7 working days
every year shall be g ranted to any solo parent Ee
who has rendered service of at least one (1) year. It
should be noted that this is in addition to the
legally mandated leaves, namely, the SIL, the SSS
sick leave, the SSS maternity leave and the
paternity leave. (Sec. 8, RA 8972; Azucena, Vol. 1,
2016, p. 300)
SPECIAL LEAVE BENEFIT FOR WOMEN
(R.A. 9710)
A woman Ee having rendered continuous
aggregate employment service of at least 6 months
for the last 12 months shall be entitled to a special
leave benefit (SLB) of 2 months with full pay based
on her gross monthly compensation following
surgery caused by gynaecological disorders. (Sec.
18, R.A. 9710, Magna Carta of Women)
Conditions to Claim Benefit
1. She has rendered at least six (6) months
continuous aggregate employment service for
the last twelve (12) months prior to surgery;
2. In the event that an extended leave is
necessary, the female Ee may use her earned
leave credits; and
3. This special leave shall be non-cumulative and
nonconvertible to cash. (Sec. 21, IRR, R.A. 9710,
Magna Carta of Women)
NOTE: Special leave benefit (SLB) and SSS
maternity benefit are mutually exclusive, as such a
female Ee may avail the special leave benefit in
case she undergoes surgery caused by
gynaecological disorder even on maternity leave.
However, where the woman Ee undergone surgery
due to gynaecological during her maternity leave,
she is entitled only to the difference between the
SLB and the maternity benefit. (Sec. 9, DO 112-A,
DOLE, Series of 2012)
LEAVES FOR VICTIMS OF VIOLENCE AGAINST
WOMEN and their CHILDREN (R.A. 9262)
Violence against women and their children
refers to any act or a series of acts committed by
any person against a woman who is his wife,
former wife, or against a woman with whom the
person has or had a sexual or dating relationship,
or with whom he has a common child, or against
her child whether legitimate or illegitimate, within
or without the family abode, which result in or is
likely to result in physical, sexual, psychological
harm or suffering, or economic abuse including
threats of such acts, battery, assault, coercion,
harassment or arbitrary deprivation of liberty. (Sec
3(a), R.A. 9262)
Leave Entitlement
It allows the victim of violence, which may be
physical, sexual, or psychological, to apply for the
issuance of a protection order. If such victim is an
Ee, she is entitled to a paid leave of up to 10 days in
addition to other paid leaves under the Labor Code,
other laws and company policies.
The Ee has to submit a certification from the
Punong Barangay or Kagawad, prosecutor or clerk
of court that an action under RA 9262 has been
filed and is pending.
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 UST LAW PRE-WEEK NOTES 2019
For government Ees in addition to the certification,
the Ee concerned must file an application for leave
citing as basis R.A. 9262.
SPECIAL GROUP OF EES
WOMEN WORKERS
Discriminatory Acts Against Women Ee
1. Discrimination with respect to the terms and
conditions of employment solely on account of
sex.
a. Discrimination in pay – Payment of a lesser
compensation including wage, salary or
other forms of remuneration and fringe
benefits, to a female Ee as against a male
Ee;
b. Discrimination in employment opportunity
– favoring a male Ee over a female Ee with
respect to promotion, assignment,
transfer, training opportunities, study and
scholarship grants solely in account or
their sexes (LC, Art. 133);
c. Discrimination in hiring – favoring a male
applicant with respect to hiring where the
particular job can equally be handled by a
woman;
d. Discrimination in dismissal – favoring a
male Ee over a female Ee with respect to
dismissal of personnel or the application
of the last in / first out principle or other
retrenchment policy of the Er. (Poquiz,
2012)
2. Stipulating, whether as a condition for
employment or continuation of employment:
a. That a woman Ee shall not get married; or
b. That upon marriage, such woman Ee shall
be deemed resigned or separated. (LC, Art.
134)
3. Dismissing, discriminating or otherwise
prejudice a woman Ee by reason of her being
married. (LC, Art. 134)
Standard of Reasonable Test
Under the standard reasonable test which is
parallel to the concept of a bona-fide occupational
qualification test in American jurisdictions, the Er
has the burden of proof to prove the existence of a
reasonable business necessity that would justify an
employment policy. (Star Paper Corp. v. Simbol, G.R.
No. 164774, April 12, 2006)
STIPULATION AGAINST MARRIAGE
(LC, ART. 134)
It shall be unlawful for an Er to require as a
condition of employment or continuation of
employment that a woman Ee shall not get
married, or to stipulate expressly or tacitly that
upon getting married, a woman Ee shall be deemed
resigned or separated, or to actually dismiss,
discharge, discriminate or otherwise prejudice a
woman Ee merely by reason of her marriage. (LC,
Art. 134)
No-Spouse Employment Policy
It is a policy banning spouses from working in the
same company. Generally, spouses are allowed to
work in the same company, provided it is not in the
same department, where there is direct
supervision or control. In case spouses are in the
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
same department, one of them may be reassigned
to another department.
NOTE:The XPN of Bonafide Occupational
Qualification Ruleis when the employer can prove
that reasonable demands of the business requires a
distinction based on marital status and there is no
better or acceptable policy which would better
accomplish the business purpose.
There must be a finding of any BFOQ to justify an
Er’s no spouse employment rule. There must be a
compelling business necessity for which no
alternative exists other than the discriminating
practice.
ANTI-SEXUAL HARASSMENT ACT
(R.A. 7877)
Requisites:
1. Act is committed in a work, education, or
training-related environment;
2. The doer, the harasser, is any person who has
authority, influence or moral ascendancy over
another;
3. Doer demands or requests, or requires a
sexual favor from the victim;
4. It does not matter whether such demand is
accepted or not. (RA 7877, Sec. 3)
Places where sexual harassment are committed
1. In a work-related or employment environment.
ELEMENTS:
a. The sexual favor is made as a condition in
the hiring or in the employment, re-
employment or continued employment of
said individual, or in granting said
individual favorable compensation, terms,
conditions, promotions, or privileges; or
the refusal to grant the sexual favor results
in limiting, segregating or classifying the
Ee which in a way would discriminate,
deprive or diminish employment
opportunities or otherwise adversely
affect said Ee (Quid Pro Quo Sexual
Harassment);
b. The above acts would impair the Ees’
rights or privileges under existing labor
laws; or
c. The above acts would result in an
intimidating, hostile, or offensive
environment for the Ee. (Hostile
Environment Harassment).
2. In an education or training environment
ELEMENTS:
a. Sexual harassment is employed:
i. Against one who is under the care,
custody or supervision of the
offender;
ii. Against one whose education,
training, apprenticeship or tutorship
is entrusted to the offender;
b. When sexual favor is made a condition to
the giving of a passing grade, or the
granting of honors and scholarships, or the
payment of a stipend, allowance or other
benefits, privileges, or considerations; or
c. When sexual advances result in an
intimidating, hostile or offensive
environment for the student, trainee or
apprentice.
The Definition Of Sexual Harassment Does Not
Require A Categorical Demand Or Request For
Sexual Favor
13 UST L A W B A R O P E R A T I O N S
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 Labor Law and Social Legislation
While the provision states that there must be a
“demand, request or requirement of a sexual
favor”, it is not necessary that the demand, request
or requirement of a sexual favor be articulated in a
categorical manner. It may be discerned, with
equal certitude, from the acts of the offender.
Likewise, it is not essential that the demand,
request or requirement be made as a condition for
continued employment or for promotion to a
higher position. It is enough that the respondent’s
acts result in creating an intimidating, hostile or
offensive environment for the Ee. (Domingo v.
Rayala, G.R. No. 155831, February 18, 2008)
EMPLOYMENT OF MINORS
Rules On Employment Of Minor Workers
1. No person under 18 years of age will be
allowed to be employed in an undertaking
which is hazardous or deleterious in nature.
2. No Er shall discriminate against any person in
respect to terms and conditions of
employment on account of his age.
A. Children below fifteen (15) years of age
shall not be employedexcept:
1. When the child works directly under the
sole responsibility of his parents or legal
guardian and where only members of the
family are employed, subject to the
following conditions:
a. Employment does not endanger the
child’s safety, health and morals;
b. Employment does not impair the
child’s normal development; and
c. Er-parent or legal guardian provides
the child with the primary and/or
secondary education prescribed by the
Department of Education
2. When the child’s employment or
participation in public entertainment or
information through cinema, theatre, radio
or television is essential provided:
a. Employment contract is concluded by
the child’s parents or legal guardian;
b. With the express agreement of the
child concerned, if possible; and
c. The approval of DOLE, the following
must be complied with:
i. The employment does not involve
advertisement or commercials
promoting alcoholic beverages,
intoxicating drinks, tobacco and
its by-products or exhibiting
violence
ii. There is a written contract
approved by DOLE
iii. The conditions provided in the
first instance are met
(Sec. 12, Art. VIII, RA 7610)
B. Above 15 but below 18 – May be employed in
any non-hazardous work.
C. Above 18 – No prohibition.
Employment Conditions
Such conditions must be strictly followed:
1. The total number of hours worked shall be in
accordance with Sec. 15 of DO No. 65-04;
2. The employment does not endanger the child’s
life, safety, health and morals, nor impair the
child’s normal development;
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Normal Development of the child refers to
physical, emotional, mental, and spiritual
growth of a child within a safe and nurturing
environment where he/she is given adequate
nourishment, care and protection and the
opportunity to perform tasks appropriate at
each stage of development.
3. The child is provided with at least the
mandatory elementary or secondary
education; and
4. The Er secures a work permit for the child.
(Section 8 to 12, Ibid.)
Non-Hazardous Work
It is any work or activity in which the Ee is not
exposed to any risk which constitutes an imminent
danger to his safety and health.
Hazardous Workplaces
1. Nature of work exposes the workers to
dangerous environmental elements,
contaminants or work conditions;
2. Workers are engaged in construction work,
logging, fire-fighting, mining, quarrying,
blasting, stevedoring, dock work, deep-sea
fishing, and mechanized farming;
3. Workers are engaged in the manufacture or
handling of explosives and other pyrotechnic
products;
4. Workers use or are exposed to heavy or
power-driven tools.
ACT AGAINST CHILD LABOR (R.A. 9231) AND
CHILD ABUSE LAW (R.A. 7610)
Child Labor
Any work or economic activity performed by a
child that subjects him or her to any form of
exploitation or is harmful to his or her health and
safety or physical, mental or psychosocial
development.
Working Child
Any child engaged as follows:
1. When the child is below 18 years of age in a
work or economic activity that is not child
labor; or
2. When the child is below 15 years of age:
a. 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
b. In public entertainment or information
ANTI- AGE DISCRIMINATION IN EMPLOYMENT
ACT (RA 10911)
Prohibition of Discrimination in Employment
on Account of Age
It shall be unlawful for Er to:
1. Print or publish in any form of media any
notice of advertisement relating to
employment suggesting references, limitations,
specifications and discrimination based on age.
2. Require the declaration of age or birth date
during the application process.
3. Decline any employment application because
of the individual’s age
4. Discriminate against an individual in terms of
compensation, terms and conditions and
14 UST L A W B A R O P E R A T I O N S
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 UST LAW PRE-WEEK NOTES 2019
privileges of employment on account of the 10. Right to terminate employment based on just
individual’s age cause; and
5. Deny any Ee’s or worker’s promotion or 11. Right to exercise religious beliefs and cultural
opportunity for training because of age practices. (Sec. 1, Rule IV, IRR of RA 10361)
6. Forcibly lay-off an Ee or worker because of old
age EMPLOYMENT OF HOMEWORKERS
7. Impose early retirement on the basis of the
Ee’s age. Homeworkers

XPNs: They are those who perform in or about his own

It is lawful for an Er to set age limitations in
employment if:
1. BFOQ;
2. The intent is to observe the terms of bona fide
seniority system or retirement plan, provided
that such retirement plan is in accordance with
the LC;
3. The action is duly certified by the Secretary of
DOLE.
Penalty: fine or imprisonment
home any processing or fabrication of goods or
materials, in whole or in part, which have been
furnished directly or indirectly, by an Er and sold
thereafter to the latter.
Industrial Homework
It is a system of production under which work for
an Er or contractor is carried out by a homeworker
at his/her home. Materials may or may not be
furnished by the Er or contractor.

EMPLOYMENT OF HOUSEHELPERS Househelpers vs. Homeworkers (BAR 2017)

Persons Covered by R.A. 10361 Otherwise HOUSEHELPERS HOMEWORKERS

Known As “Batas Kasambahay” Performs in or about his
own home any processing
All kasambahay engaged in domestic work, Minister to the or fabrication of goods or
whether on a live-in or live-out arrangement, such personal needs and materials, in whole or in
as, but not limited to, the following: comfort of his Er in part, which have been
1. General househelp; the latter’s home furnished directly or
2. Nursemaid or Yaya; indirectly, by an Er and sold
3. Cook; thereafter to the latter.
4. Gardener;
5. Laundry person; NIGHT WORK (R.A. 10151)
6. Working children or domestic workers 15
years and above but below 18 years of age; or NOTE: RA No. 10151 inserted Chapter V (Art. 154-
7. Any person who regularly performs domestic 161) under Book 3, Title III of the LC.
work in one household on an occupational
basis (live-out arrangement). (Sec. 3(d), R.A. Night Work
10361)
Night work is at least seven consecutive hours of
Persons Not Covered By the Batas Kasambahay work between 10:00pm and 6:00am. (D.O. No. 119-
12)
1. Service providers
2. Family drivers Night Worker
3. Children under foster family arrangement; and
4. Any other person who performs work Any employed person whose work covers the
occasionally or sporadically and not on an period from ten o’clock in the evening to six o’clock
occupational and regular basis. the following morning, provided that the worker
performs no less than seven (7) consecutive hours
Mandatory Benefits of a Kasambahay of work. (D.O. No. 119-12)

1. Monthly minimum wage; Persons Covered By the Provisions on Night

2. Daily rest period of 8 (total) hours; Work
3. Weekly rest period of 24 (uninterrupted)
hours GR: All persons who shall be employed or
4. 5 days annual service incentive leave with pay; permitted or suffered to work at night.
5. 13th month pay;
6. SSS benefit; XPN: Those employed in agriculture, stock
7. PhilHealth benefit; and raising, fishing, maritime transport and inland
8. Pag-IBIG benefit navigation, during a period of not less than 7
consecutive hours, including the interval from
Other Rights and Privileges Of A Kasambahay midnight to five (5) o’clock in the morning, to be
determined by the SOLE after consulting the
1. Freedom from Er’s interference in wage workers’ representatives/labor organizations and
disposal; Ers. (Art. 154, LC as added by RA 10151 approved on
2. Standard of treatment; June 21, 2011)
3. Board, lodging, and medical attendance;
4. Right to privacy; Right of the Workers to Health Assessment
5. Access to outside communication;
6. Access to education and training; At their request, workers shall have the right to
7. Right to be provided a copy of the undergo health assessment without charge and to
employment contract; receive advice on how to reduce or avoid health
8. Right to Certificate of Employment; problems associated with their work:
9. Right to form, join, or assist labor 1. Before taking up an assignment as a night
organization; worker;

UNIVERSITY OF SANTO TOMAS 15 UST L A W B A R O P E R A T I O N S

FACULTY OF CIVIL LAW ACADEMICS COMMITT EE 2019
 Labor Law and Social Legislation
2. At regular intervals during such an obliged to employ the apprentice after the
assignment; and completion of his training.
3. If they experience health problems during such
an assignment which are not caused by factors Conditions for Employment of an Apprentice
other than the performance of night work. (Art.
155 of LC) 1. Should be an apprenticeable trade as
determined by TESDA
Worker Found to be Medically Unfit for Night 2. Prior approval by the DOLE of the proposed
Work apprenticeship program is a condition sine qua
non before an apprenticeship agreement can
Night workers who are certified as unfit for night be validly entered into. (Nitto Enterprises v.
work, due to health reasons, shall be transferred, NLRC, 248 SCRA 654)
whenever practicable, to a similar job for which
they are fit to work. NOTE: One of the objectives of Title II (Training
and Employment of Special Workers) of the LC is to
If such transfer to a similar job is not practicable, or establish apprenticeship standards for the
the workers are unable to render night work for a protection of apprentices. An apprenticeship
continuous period of not less than six months upon program should first be approved by the DOLE
the certification of a competent public health before an apprentice may be hired, otherwise a
authority, these workers shall be granted the same person hired will be considered a regular Ee.
benefits as other workers who are unable to work, (Century Canning Corp. v. CA, G.R. No. 152894,
or to secure employment during such period. (D.O. August 17, 2007)
No. 119-12)
Period of Apprenticeship
APPRENTICES AND LEARNERS
Apprenticeship must not exceed 6 months.
Apprenticeship
Status of an Apprentice after the Lapse of the
It is practical training on the job supplemented by Period of Apprenticeship
related theoretical instruction involving a contract
between an apprentice and an Er on an approved He is deemed a regular Ee. He cannot be hired as a
apprenticeable occupation probationary Ee since the apprenticeship is deemed
the probationary period.
Requisites for Employment of Apprentices
Learners
1. The Er should be engaged in a business that is
considered a highly technical industry; 1. They are persons hired as trainees in semi-
2. The job which the apprentice will work on skilled and other industrial occupations
should be an apprenticeable occupation. 2. Which are non-apprenticeable and
- It is no longer the SOLE, but the 3. Which may be learned through practical
TESDA, who approves apprenticeable training on the job in a relatively short period
occupations. (Azucena, Vol. 1, 2016, p. of time
147) 4. Which shall not exceed 3 months
5. Whether or not such practical training is
Apprentice supplemented by theoretical instructions. (IRR,
Book II, Rule VII, Sec. 1[a])
Any worker who is covered by a written
apprenticeship agreement with an individual Er or Employment of learners
any of the entities recognized under the LC.
Learners may be employed when:
GR: Apprenticeship programs shall be primarily 1. No experienced worker is available
voluntary. 2. It is necessary to prevent curtailment of
employment opportunities; and
XPNs: Compulsory Apprenticeship: 3. Employment does not create unfair
1. National security or economic development so competition in terms of labor costs or impair
demand, the President may require or lower working standards.
compulsory training in certain trades,
occupations, jobs or employment levels where Learnership vs. Apprenticeship (BAR 2017)
shortage of trained manpower is deemed
critical as determined by the SOLE; BASIS Learnership Apprenticeship
2. Services of foreign technicians are utilized by Training on the
private companies in apprenticeable trades. job in semi- Training in
(Art. 70 of LC) skilled and trades which
other industrial are
Apprenticeable Occupation occupation or apprenticeable,
trades which that is, practical
Any trade, form of employment or occupation are non- training on the
which requires more than three (3) months of apprenticeable job
practical training with theoretical instruction Nature and which may supplemented
officially endorsed by the tripartite body and be learned thru by related
approved for apprenticeship by the TESDA. practical theoretical
training on the instruction for
Employment Status of Apprentices job in a more than 3
relatively short months.
They are contractual workers whose length of period of time.
service depends on the term provided for in the Duration of Min: 3 months
apprenticeship agreement. Thus, the Er is not Max: 3 months
training Max: 6 months

UNIVERSITY OF SANTO TOMAS 16 UST L A W B A R O P E R A T I O N S

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 UST LAW PRE-WEEK NOTES 2019
With 1. Equal opportunity for employment - No PWD
commitment to shall be denied access to opportunities for
employ the suitable employment. Five percent (5%) of all
learner as a No commitment casual emergency and contractual positions in
Commitment
regular Ee if he to hire the DSWD, Health, Education and other
to employ
desires upon government agencies, offices or corporations
completion of engaged in social development shall be reserved
learnership for PWDs. (Section 5, Chapter 1, Title II, RA 7277)
Considered a
regular Ee if XPN: Bona Fide Occupational Qualification
In case pre-
of pre- termination 2. Sheltered employment - The Government shall
Worker not endeavour to provide them work if suitable
termination occurs after 2
considered as
of contract months of employment for disabled persons cannot be
regular Ee. found through open employment
training and the
dismissal is 3. Apprenticeship - PWD may be hired as
without fault of apprentices or learners if their disability is not
the Learner. such as to effectively impede the performance
Highly technical of job operations in the particular occupations
Coverage Semi- industries and for which they are hired. (LC, Art. 81)
skilled/Industri only in 4. Vocational rehabilitation - To develop the skills
al occupations industrial and potentials of disabled workers and enable
occupation them to compete in the labor market
There is a list of 5. Vocational guidance and counselling
List learnable
No list INCENTIVES FOR ERS
trades by
TESDA
Requires Requires Incentives of Er Who Are Employing Disabled
Written Workers
learnership apprenticeship
agreement
agreement agreement
1. Entitled to an additional deduction, from their
PERSONS WITH DISABILITY gross income, equivalent to 25% of the total
(R.A. 7277 as amended by R.A. 9442) amount paid as salaries and wages to disabled
persons
DEFINITION
Provided, however, that such entities present
Persons with Disability (PWD) proof as certified by the DOLE that disabled
persons are under their employ
Those whose earning capacity is impaired by:
1. Physical deficiency Provided further, that the disabled Ee is
2. Age accredited with the DOLE and the Department
3. Injury of Health as to his disability, skills and
4. Disease qualifications.
5. Mental deficiency
6. Illness 2. Private entities that improve or modify their
physical facilities in order to provide
Qualified Disabled Ee reasonable accommodation for disabled
persons shall also be entitled to an additional
It provides for Equal Opportunity for Employment by deduction from their net taxable income,
stating that no disabled person shall be denied access equivalent to 50% of the direct costs of the
to opportunities for suitable employment. improvements or modifications. (R.A. 7277,
Sec. 8)
A qualified disabled Ee shall be subject to the same
terms and conditions of employment and the same The financial incentive, if any, granted by law to
compensation, privileges, benefits, fringe benefits, SPQ Garments whose cutters and sewers in its
incentives or allowances as a qualified able-bodied garments-for-export operations are 80% staffed by
person. deaf and deaf-mute workers is additional
deduction from its gross income equivalent to 25%
A qualified individual with disability is an of amount paid as salaries to persons with
individual with disability who, with or without disability (2013 Bar). Basis: Magna Carta for
reasonable accommodation, can perform the Disabled Persons.
essential functions of the employment position that
such individual holds or desires. POST-EMPLOYMENT

Employment of PWD EMPLOYER-EMPLOYEE RELATIONSHIP

1. When their employment is necessary to TESTS TO DETERMINE EXISTENCE

prevent curtailment of employment
opportunities; and FOUR- FOLD TEST
2. When it will not create unfair competition in
labor costs or lower working standards. (LC, Factors determining the existence of an
Art. 79) employer-employee relationship

RIGHTS OF PERSONS WITH DISABILITY The four–fold test (indicia of determination):

1. Selection and engagement of the employee;
Rights and Privileges of PWD 2. Payment of wages;
3. Power of dismissal; and

UNIVERSITY OF SANTO TOMAS 17 UST L A W B A R O P E R A T I O N S

FACULTY OF CIVIL LAW ACADEMICS COMMITT EE 2019
 Labor Law and Social Legislation
4. Power of control.
It is the so-called “control test” that is the most
important element.
Control test
There is an Er-Ee relationship when the person for
whom the services are performed reserves the
right to control not only the end achieved but also
the manner and means used to achieve that end.
(Television and Production Exponents Inc. v.
Servana, 542 SCRA 578)
Not every form of control will have the effect of
establishing an employer-employee relationship.
Rules that merely serve as guidelines, which aims
ONLY to promote the result will not result
employer-employee relationship.
NOTE: However, in certain cases the control test is
not sufficient to give a complete picture of the
relationship between the parties, owing to the
complexity of such a relationship where several
positions have been held by the worker. The better
approach is to adopt the two-tiered test.
(Francisco v. NLRC, G.R. No. 170087, August 31,
2006)
ECONOMIC DEPENDENCY
(TWO-TIERED TEST)
This two-tiered test would provide us with a
framework of analysis, which would take into
consideration the totality of circumstances
surrounding the true nature of the relationship
between the parties.
Elements:
1. The putative Er’s power to control the Ee with
respect to the means and methods by which
the work is to be accomplished (Four-fold
test);
2. The underlying economic realities of the
activity or relationship (economic reality test).
Proper standard for economic dependence
The proper standard is whether the worker is
dependent on the alleged Er for his continued
employment in that line of business.
KINDS OF EMPLOYMENT
REGULAR EMPLOYMENT
Those who are hired for activities which necessary
or desirable in the usual business of the employer.
(Abad, Jr., 2015, p. 92)
Types of regular employment
1. As to nature of work – An employment shall
be deemed to be regular where the Ee has been
engaged to perform activities which are
usually necessary or desirable in the usual
business or trade of the Er, the provisions of
written agreements to the contrary
notwithstanding and regardless of the oral
agreements of the parties. (IRR, Book VI, Rule I,
Sec. 5 [a])
2. As to length of service – Any Ee who has
rendered at least one (1) year of service,
whether such service is continuous or broken,
shall be considered a regular Ee with respect
to the activity in which he is employed and his
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
employment shall continue while such activity
exists. (IRR, Book VI, Rule I, Sec. 5 [b])
Tests to determine regular employment
1. The primary standard of determining regular
employment is the reasonable connection
between the particular activity performed
by the Ee to the usual trade or business of
the Er. The test is whether the former is
usually necessary or desirable in the usual
business or trade of the Er. (De Leon v. NLRC,
G.R. No. 70705, August 21, 1989)
2. Also, the performance of a job for at least a
year is sufficient evidence of the job’s
necessity if not indispensability to the
business. This is the rule even if its
performance is not continuous and merely
intermittent. The employment is considered
regular, but only with respect to such activity
and while such activity exists. (Universal
Robina Corp. v. Catapang, G.R. No. 164736,
October 14, 2005)
Temporary Employee becoming regular
An employment may only be said to be
‘temporary’:
1. Where it has been fixed for a specific
undertaking the completion of which has been
determined at the time of the engagement of
the employee; or
2. Where the work or services to be performed is
seasonal in nature and the employment is for
the duration of the season
PROJECT EMPLOYMENT
Project employment
Project employment is employment that has been
fixed for:
1. Specific undertaking – a specific project or
undertaking the completion; or
2. Time-bound – termination of which has been
determined at the time of engagement of the
Ee. (IRR, Book VI, Rule I, Sec. 5[a])
The period is not the determining factor, so that
even if the period is more than 1 year, the Ee does
not necessarily become regular.
NOTE: Where the employment of a project Ee is
extended long after the supposed project has been
finished, the Ees are removed from the scope of
project Ees and considered as regular Ees.
Repeated hiring on a project-to-project basis is
considered necessary and desirable to the business
of the Er. The Ee is deemed regular. (Maraguinot v.
NLRC, G.R. No. 120969, July 22, 1998)
SEASONAL EMPLOYMENT
Employment where the job, work or service to be
performed is seasonal in nature and the
employment is for the duration of the season. [IRR,
Book VI, Rule I, Sec.5 (a)]
One year duration on the job is pertinent in
deciding whether a casual Ee has become regular
or not, but it is not pertinent to a Seasonal or
Project Ee. Passage of time does not make a
seasonal worker regular or permanent.
(Mercado v. NLRC, G.R. No. 78969, September 5,
1991)
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Seasonal Ees as Regular Ees
Seasonal Ees can be considered regular Ees. The
fact that Seasonal Ees do not work continuously for
one whole year but only for the duration of the
season does not detract from considering them in
regular employment. Seasonal workers who are
called to work from time to time and are
temporarily laid off during off-season are not
separated from service in that period, but merely
considered on leave until re-employed.
CASUAL EMPLOYMENT
It is an employment where the Ee is engaged in an
activity which is not usually necessary or desirable
in the usual business or trade of the Er, provided:
such employment is neither Project nor Seasonal.
(LC, Art. 295) He performs only an incidental job in
relation to the principal activity of the Er.
Employment is casual when it is irregular,
unpredictable, sporadic and brief in nature,
and outside the usual business of the employer.
(Caro v. Rilloraza, 102 Phil. 70, September 30, 1957)
Casual Ee becoming a regular Ee
If he has rendered at least 1 year of service,
whether such service is continuous or broken, he is
considered as regular Ee with respect to the
activity in which he is employed and his
employment shall continue while such activity
exists.
FIXED TERM EMPLOYMENT
It is an employment where a fixed period of
employment was agreed upon:
1. Knowingly and voluntarily by the parties;
2. Without any force, duress or improper
pressure being brought to bear upon the Ee
and business of Er. (Philips Semiconductor v.
Fadriquela, G.R. No. 141717, April 14, 2004)
Brent Doctrine
There can of course be no quarrel with the
proposition that where from the circumstances it is
apparent that periods have been imposed to
preclude acquisition of tenurial security by the
employee, they should be struck down or
disregarded as contrary to public policy, morals,
etc.
Q: OKS DesignTech, Inc. hired Caccam as an
accountant under a Contract of Employment for
a Fixed Period from January 21, 2008 to June
21, 2008. Thereafter, the contract was
renewed for the period June 22, 2008 to June
21, 2009. She received a letter on June 6,
informing her of the expiration of the contract
on June 21. Caccam filed a case for illegal
dismissal claiming the she is a regular
employee. Was she illegally dismissed?
A: NO. Caccam was hired as a fixed-term employee.
Having been hired under a valid fixed-period
employment contract, respondent's employment
was lawfully terminated upon its expiration on
June 21, 2009 without need of any further notice.
There is nothing essentially contradictory between
a definite period of employment and the nature of
the employee's duties. The decisive determinant in
fixed-term employment should not be the activities
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
that the employee is called upon to perform, but
the day certain agreed upon by the parties for the
commencement and termination of their
employment relationship. (OKS DesignTech, Inc. v.
Caccam, G.R. No. 211263, August 5, 2015, Penned by
Perlas-Bernabe, J.)
PROBATIONARY EMPLOYMENT
Probationary employment
Employment where the Ee, upon his engagement:
1. Is made to undergo a trial period
2. During which the Er determines his fitness to
qualify for regular employment,
3. Based on reasonable standards made known to
the Ee at the time of engagement. (IRR, Book VI,
Rule I, Sec 6)
Characteristics of probationary employment
1. It is an employment for a trial period;
2. It is a temporary employment status prior to
regular employment;
3. It arises through a contract with the following
elements:
a. The Ee must learn and work at a particular
type of work
b. Such work calls for certain qualifications
c. The probation is fixed
d. The Er reserves the power to terminate
during or at the end of the trial period
e. And if the Ee has learned the job to the
satisfaction of the Er, he becomes a regular
Ee.
Rules on probationary employment
1. Er shall make known to the Ee at the time he is
hired, the standards by which he will qualify as
a regular Ee;
2. Probationary employment must have been
expressly agreed upon; without such explicit
agreement, the employment is considered
regular;
3. An Ee allowed to continue work after the
probationary period shall be considered a
regular Ee;
4. During the probationary period, the Ee enjoys
security of tenure; his services can only be
terminated for just or authorized causes.
Period of probationary employment
GR: It shall not exceed 6 months.
XPNs:
1. Covered by an Apprenticeship or Learnership
agreement stipulating a different period;
2. Voluntary agreement of parties (especially
when the nature of work requires a longer
period)
3. The Er gives the Ee a second chance to pass the
standards set (Mariwasa Manufacturing, Inc. v.
Leogardo, Jr., G.R. No. 74246, January 26, 1989);
4. When the same is required by the nature of the
work, e.g. the probationary period set for
professors, instructors and teachers is 3
consecutive years of satisfactory service
pursuant to DOLE Manual of Regulations for
Private Schools;
5. When the same is established by company
policy.
Instances when extension of probationary
period is allowed
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 Labor Law and Social Legislation
Extension is allowed only when:
1. Nature of the job requires extensive training;
or
2. If it is a company policy that the period of
probationary employment should be an
extended period.
Grounds for terminating a probationary
employment
1. Just/authorized causes
2. When he fails to qualify as a regular Ee in
accordance with reasonable standards made
known by the Er to the Ee at the time of his
engagement. (ICMC v. NLRC, G.R. No. 72222,
January 30, 1989; LC, Art. 295)
Period of probationary employment of private
school teachers
The probationary employment of academic
teaching personnel shall not be more than a period
of 6 consecutive semesters or 9 consecutive
trimesters of satisfactory service, as the case may
be. (The Manual of Regulations for Private Higher
Education, Sec. 117)
For an academic personnel to acquire a regular and
permanent employment status, it is required that:
(a) he is considered a full-time employee; (b) he
has completed the required probationary period;
and (c) his service must have been satisfactory. (De
La Salle Araneta University, Inc. vs. Dr. Eloisa G.
Magdurulang, GR No. 224319, November 20, 2017,
Penned by Perlas-Bernabe, J.)
SECURITY GUARDS (D.O. No. 150-16)
Security Service Contractor (SSC) or Private
Security Agency (PSA) refers to any person
engaged in contracting, recruitment, training,
furnishing or posting of security guard and other
private security personnel to clients for the latter’s
security needs.
Employment Status (D.O. No. 150-16, Sec. 3)
The SSC/PSA is the employer of the security guards
and other private security personnel on duty detail
to a principal or client under a Service Agreement.
The DOLE Regional Office concerned can order the
parties to submit a copy of the service agreement.
The contract between the SSC/PSA and its security
guards and other private security personnel shall
be governed by Art. 294 and 295 of the LC. The
SSC/PSA shall provide his/her security guards and
other private security personnel a copy of the
employment contract.
Liabilities of SSC/PSA (D.O. No. 150-16, Sec. 9)
The SSC/PSA and its principal or client shall be
jointly and solidarily liable with each other in any
of the following circumstance
1. When the SSC/PSA fails to pay the
wages of its security guards and other
private security personnel, the
principal shall be considered an
“indirect employer’ and shall be
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
solidarily liable with the SSC/PSA to
the extent of the work performed bu
such security guards and other private
security personnel.
2. If there are wage
increases/adjustments after the
execution of the Service Agreement,
the increase shall be borne by the
principal and the Service Agreement
shall be deemed amended accordingly
(automatic crediting provision). In the
event the principal fails to pay, the
SSC/PSA shall be jointly and solidarily
liable with the principal. The
immediate recourse of the security
guards and other private security
personnel is with the SSC/PSA their
employer.
FLOATING/RESERVED STATUS
(D.O. No. 150-16, Sec. 10.3)
Security guard and/or other private security
personnel may be placed in a work pool or on
reserved status due to lack of service assignment
after the expiration or termination of the Service
Agreement with the principal where he/she is
assigned or due to the temporary suspension of
security service operations or due to valid relief
from the current place of work and no assignment
is available
No security guards and/or private security
personnel can be placed in a work pool or on
reserved status in any of the following:
A. After expiration of the service contract, if
there are other principals he/she can be
assigned
B. As a measure to constructively dismiss the
security guard
C. As an act of retaliation for filing any
complaint against the employer for
violation of labor laws
If after a period of six (6) months, the SSC/PSA
cannot provide work /give assignment to the
reserved security guard, the latter can be separated
from service and shall be entitled to separation
pay. An assignment of the security guard and other
private security personnel as a reliever for less
than one-month shall not be considered as an
interruption of the six (6) months period
CONTRACTING OR SUBCONTRACTING
Job Contracting or Subcontracting
This refers to an arrangement whereby a principal
agrees to put out or farm out to a contractor or
subcontractor the performance or completion of a
specific job, work or service within a definite or
predetermined period, regardless of whether such
job, work or service is to be performed or
completed within or outside the premises of the
principal.
Trilateral Relationship
There are three parties involved in these
arrangements: principal, contractor or
subcontractor and contractual workers
Elements of Legitimate Job Contracting
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or Subcontracting
1. The contractor or subcontractor carries on a
distinct and independent business and
undertakes to perform the job, work or service
on its own account and under its own
responsibility according to its own manner and
method, and free from the control and
direction of the principal in all matters
connected with the performance of the work
except as to the results thereof;
2. The contractor or subcontractor has
substantial capital or investment; and
3. The Service Agreement ensures compliance
with all the rights and benefits for all the
employees of the contractor or subcontractor
under the labor laws. (D.O. No. 174, Sec. 8, s.
2017)
Substantial Capital refers to paid-up capital
stocks/shares of at least PHP 5 Million in the case
of corporations, partnerships and cooperatives.
PHP 5 Million net worth in the case of a single
proprietorship. (Sec. 3, [L], DOLE D.O. No. 174 S.
2017)
The law does not require both substantial capital
and investments, it is sufficient that either of the
two is complied with. (Neri v. NLRC, G.R. Nos.
97008-09, July 23,1993)
Independent Contractor
Those who undertake “job-contracting.” They
exercise independent employment, contracting to
do a piece of work according to their own methods
and without being subject to control of their
employer except as to the result of their work.
(Villuga v. NLRC, G.R. No. 75038, August 23, 1993)
NOTE: Independent contractors often present
themselves to possess unique skills, expertise or
talent to distinguish them from ordinary
employees. (Sonza v. ABS-CBN, G.R. No. 138051,
June 10, 2004)
Indirect or Statutory Employer is one who enters
into a contract with an independent contractor for
the performance of any work, task, job, or project
not directly related to the employer’s business.
(Baguio v. NLRC, G.R. Nos. 79004-08, October 4,
1991)
“Labor-Only” Contracting
It is a prohibited act, an arrangement where the
contractor or subcontractor merely recruits,
supplies or places workers to perform a job, work
or service for a principal.
Essential Elements of Labor-Only Contracting
1. The contractor or subcontractor does not have
substantial capital or investment to actually
perform the job, work or service under its own
account and responsibility; and
2. The employees recruited, supplied or placed
by such contractor or subcontractor are
performing activities which are directly related
to the main business of the principal. (Sasan v.
NLRC, G.R. No. 176240, October 17, 2008)
NOTE: A finding that a contractor is a “labor-only”
contractor is equivalent to declaring that there is
an ER-EE relationship between the principal and
the employees of the “labor-only” contractor. (San
Miguel Corp. vs. MAERC Integrated Systems. G.R. No.
144672; July 10, 2003)
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Element of Control
Control over the manner or method of doing the
work characterizes employment. In contrast,
control only of the desired result of the work often
indicates a contracting arrangement. (1 Azucena,
2016, p. 371)
Activities: Directly Related to the Principal
Business of the Employer vs. Necessary or
Desirable in the Usual Business or Trade
1. Activities which are directly related to the
principal business of the employer.
- Governed by Art. 106.
- Refers to the standard used whether or not
labor-only contracting exists.
2. Activities necessary or desirable in the
usual business or trade.
- Governed by Art. 295.
- Used to determine regular or casual
employee.
NOTE: While the services may be considered
directly related to the principal business of the
employer; nevertheless, they are not necessary in
the conduct of the principal business of the
employer. (Neri v NLRC, G.R. Nos. 97008-09, July
23,1993)
Confirming Elements
To have labor-only contracting, the essential
element of supplying workers to another is not
enough. To it must be added either one of two
confirming elements:
One. Lack of substantial capital or investment and
performance of activities directly related or usually
necessary or desirable to the principal’s main
business; or
Two. The contractor does not exercise control over
the performance of the employees. (1 Azucena,
2016, p. 369)
NOTE: If the essential element is absent, there can
be no LOC. And even, if the essential element is
present, but confirming element one or two is
absent, there is still no LOC. (Ibid.)
Notwithstanding the absence of a direct employer-
employee relationship between the employer in
whose favor work had been contracted out by a
Labor-Only Contractor, and the employees, the
former has the responsibility, together with the
LOC for any valid labor claims, by operation of law.
The reason is that the LOC is considered merely an
agent of the employer, and liability must be
shouldered by either one or shared by both.
(Tabas, et al., v. California Manufacturing Company,
Inc. et al., G.R. No. 80680, January 26, 1989)
Job Contracting vs. Labor-only Contracting
Job Contracting Labor-only Contracting
The er/principal is The er/principal is treated
merely an indirect as direct employer of the
employer, by contractor’s employees in
operation of law, of all instances. (contractor =
his contractor’s agent of the employer)
employees.
the law creates an the statute creates an er-
er-ee relationship ee relationship for a
for a limited comprehensive purpose.
purpose.
The principal The principal becomes
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 Labor Law and Social Legislation
becomes solidarily solidarily liable with the the contractor, in the absence of proof that the
liable. The liability contractor not only for principal conspired with the contractor in the
however does not unpaid wages but also for commission of the illegal dismissal.
extend to the all the rightful claims of the
payment of employees under the Labor TERMINATION BY EMPLOYER
backwages or Code and ancillary laws.
separation pay of 2-Fold Requirements For Lawful Dismissal
employees who are
illegally dismissed. 1. Substantive – legality or illegality of the act of
Allowed by law Prohibited by law dismissal (just and authorized causes)
Presence of Absence of substantial 2. Procedural – legality or illegality of the
substantial capital capital or investment. manner of dismissal (due process; notice and
or investment. hearing)

Just Cause vs. Authorized Cause

Effect of Failure to Register by the Independent
Contractor with DOLE:
A Certificate of Registration shall be effective for
(2) two years, unless cancelled after due process.
Failure to register shall give rise to the
presumption that the contractor is engaged in
labor-only contracting. (Section 14, D.O. No. 174,
Series 2017)
Extent of employer’s liability in invalid
contracting
Where the contracting is found to be labor-only
contracting, the liability is immediately and
directly imposed upon the principal. The principal
shoulders all the obligations of an employer, not
just the payment of wages. The liability becomes
direct and total as that of a directly-hiring
employer.
Extent of principal’s liability in legitimate
contracting
The contractor or sub-contractor shall be
considered the employer of the contractual
employee for purposes of enforcing the provisions
of the Labor Code and other social legislation.
The principal shall be solidarily liable with the
contractor in the event of any violation of any
provisions of the Labor Code, including the failure
to pay wages. (D.O. No. 18-02 s. 2002)
For wages and money claims
In the event that the contractor or subcontractor
fails to pay the wages of his employees in
accordance with the Code, the employer shall be
jointly and severally liable with the 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. (LC, Art. 107)
For other violations
The court has interpreted the liability of the
principal under Article 109 as a qualified or limited
liability.
Liability:
1. For failure to pay the minimum wage or the
service incentive leave or other benefits-
the principal is equally liable with the
contractor as if the principal were the direct
employer.
2. With punitive character - such as an award
for backwages and separation pay because of
an illegal dismissal of the contractor’s
employee, the liability should be solely that of
JUST CAUSE
It is a termination initiated by the employee.
Procedural Requirements of Dismissal for Just
Causes:
1. Notice (two-notice rule) – the employer is
required to furnish an employee who is to be
dismissed with 2 written notices before such
termination:
a. Pre-notice – the notice to apprise the
employee of the particular acts or
omissions for which dismissal is sought
and is considered as the proper charge;
Note: 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. This should be
construed as a period of at least five (5)
calendar days from receipt of the
notice.
b. Post-notice – the notice informing the
employee of the employer’s decision to
dismiss him which notice must come only
after the employee is given a reasonable
period from receipt of the first notice
within which to answer the charge, and
ample opportunity to be heard and defend
himself.
2. Hearing (opportunity to be heard)
3. Judgement/Decision to Dismiss
JUST CAUSES FOR TERMINATION
1. Serious misconduct or willful disobedience
by the Ee of the lawful orders of his Er or
representative in connection with his work;
2. Gross and habitual neglect by the Ee of his
duties;
3. Fraud or willful breach by the Ee of the trust
reposed in him by his Er or duly organized
representative;
4. Commission of a crime or offense by the Ee
against the person of his Er or any immediate
member of his family or his duly authorized
representative;
5. Other causes analogous to the foregoing.
(LC, Art. 297, as renumbered)
Serious Misconduct
Elements:
1. It must be serious or of such a grave and
aggravated character;
2. Must relate to the performance of the Ees’
duties;

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 UST LAW PRE-WEEK NOTES 2019
3. Ee has become unfit to continue working for
the Er. (Philippine Aeolus Automotive United
Corp. v. NLRC, G.R. No. 124617, April 28, 2000)
Examples:
1. Sexual harassment;
2. Fighting within the company premises;
3. Uttering obscene, insulting, or offensive words
against a superior;
4. Falsification of time records;
5. Gross immorality.
Willful Disobedience
Requisites:
1. The Ees assailed conduct must have been
willful or intentional, the willfulness being
characterized by a wrongful and perverse
attitude; and
2. The disobeyed orders, regulations, or
instructions of the Er must be:
a. Reasonable and lawful
b. Sufficiently known to the Ee
c. In connection with the duties which the Ee
has been engaged to discharge. (Cosep v.
NLRC, G.R. No. 124966, June 16, 1998)
Valid Transfer
GR: Management has the right to transfer or
reassign an employee. The right of the employer to
transfer the employees in the interest of the
efficient and economic operation of its business
cannot be seriously challenged.
XPN: Where the transfer is vitiated by improper
motive and is merely a disguised attempt to
remove or punish the employee sought to be
transferred. (Associated Labor Unions v. NLRC, G.R.
Nos. 76916-17, March 31, 1983)
Invalid Transfer
In case of a constructive dismissal, the employer
has the burden of proving that the transfer and
demotion of an employee are for valid and
legitimate grounds such as genuine business
necessity. Particularly, for a transfer not to be
considered a constructive dismissal, the employer
must be able to show that such 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. Failure of the employer to overcome this
burden of proof, the employee's demotion shall no
doubt be tantamount to unlawful constructive
dismissal. (SIMIFRU v Baya, G.R. No. 188269,
April 17, 2017)
NOTE: The refusal to obey a valid transfer order
constitutes willful disobedience of a lawful order of
an employer.
Disobedience of an Inconvenient Transfer
GR: Inconvenience to the employee does not
necessarily invalidate a transfer order.
XPN: Inconvenience caused by unreasonableness
of the transfer order makes the order itself invalid,
and disobedience thereof is not a reason to dismiss
the worker
Gross and Habitual Negligence
It implies a want or absence of or failure to
exercise diligence that an ordinary prudent man
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
would use in his own affairs. However, such neglect
must not only be gross but must also be habitual in
character. (DOLE Manual)
Degree Of Negligence As A Just Cause For
Termination
GR:Gross and habitual negligence.
a. Gross neglect 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. (NBS vs. Court of Appeals. G.R. No.
146741; February 27, 2002)
b. Habitual neglect implies repeated failure to
perform one’s duties over a period of time,
depending upon the circumstance. (JGB and
Associates v. NLRC, GR No. 10939, March 7,
1996)
XPN:An employee who was grossly negligent in the
performance of his duty, though such negligence
committed was not habitual, may be dismissed
especially if the grossly negligent act resulted in
substantial damage to the company. (LBC Express
vs. Mateo. G.R. No. 168215; June 9, 2009)
Abandonment As A Just Cause For Termination
It means deliberate and unjustified refusal of an
employee to resume his employment.
Requirements For A Valid Finding Of
Abandonment
Two (2) factors must be present:
1. The failure to report for work, or absence
without valid or justifiable reason; and
2. A clear intention to sever Er-Ee relationship,
with the 2nd element as the more
determinative factor, being manifested by
some overt acts(Sta. Catalina College v. NLRC,
G.R. No. 144483, November 19, 2003).
Fraud or Willful Breach of Trust
Any act, omission, or concealment which involves a
breach of legal duty, trust, or confidence justly
reposed and is injurious to another.
Fraud must be committed against the employer or
representative and in connection with the
employee’s work. (Poquiz, 2012)
Loss Of Trust And Confidence As A Just Cause
For Termination:
1. It applies only to cases involving:
a. Ees occupying positions of trust and
confidence (confidential and
managerial Ee’s)–
b. Ees routinely charged with the care and
custody of the Er’s money or property
2. The loss of trust and confidence must be based
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
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 Labor Law and Social Legislation
inadvertently. (De la Cruz v. NLRC, G.R. No.
119536, February 17, 1997)
3. The act constituting the breach must be “work-
related” such as would show the Ee concerned
to be unfit to continue working for the Er.
(Gonzales v. NLRC, G.R. No. 131653, March 26,
2001)
4. It must be substantial and founded on clearly
established facts sufficient to warrant the Ee’s
separation from employment. (Sulpicio Lines
Inc. v. Gulde, G.R. No. 149930, February 22,
2002)
5. Fraud must be committed against the Er or his
representatives, e.g.:
a. Falsification of time cards
b. Theft of company property
c. Unauthorized use of company vehicle
Commission of a Crime or Offense
This refers to an offense committed by the Ee
against the person of his Er or any immediate
member of his family or his duly authorized
representative and thus, conviction of a crime
involving moral turpitude is not analogous thereto
as the element of relation to his work or to his Er is
lacking.
NOTE: A criminal case need not be actually filed.
Commission of acts constituting a crime itself is
sufficient. (National Labor Union, Inc. v. Standard
Vacuum Oil Company. G.R. No. L-48170, October 10,
1941). The conviction of an employee in a criminal
case is not indispensable to warrant his dismissal
by his employer. (Starlite Plastic Industrial
Corporation v. NLRC. G.R. No. 78491, March 16,
1989)
Analogous Cases
For an act to be included in analogous cases of just
causes of termination, it must be due to the
voluntary and/or willful act or omission of the Ee.
(Nadura v. Benguet Consolidated, G.R. No. L-17780,
August 24, 1962)
To fall within the ambit of “analogous cases” the act
or omission must have an element similar to those
found in the specific Just cause enumerated under
Art. 297. (International Rice Research Institute v.
NLRC, G.R. No. 97239, May 12, 1993)
Past offenses
Previous offenses may be so used as a valid
justification for dismissal from work ONLY if the
infractions are related to the subsequent offense
upon which the basis the termination of
employment is decreed. (Stellar Industrial Service
Inc. v. NLRC, G.R. No. 117418. Jan. 24, 1996)
AUTHORIZED CAUSES
Authorized causes – initiated by the employer’s
exercise of management prerogative, who shall be
liable to pay separation pay as mandated by law. It
does not usually require delinquency or culpability
on the part of the employee.
Authorized causes of termination by the Er:
1. Installation of labor-saving devices
2. Redundancy
3. Retrenchment
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
4. Closing or cessation of operation of the
establishment or undertaking
5. Disease
Installation of Labor-Saving Devices
(Automation)
Automation – is a management prerogative of
replacing manpower with machine power in order
to effect more economy and greater efficiency in
method of production
Requisites for a valid automation:
1. Written notice to the employee and to the
DOLE at least one (1) month before the
intended date of termination;
2. Payment of separation pay of at least one (1)
month for every year of service;
3. Good faith in the discharge of employees; and
4. Reasonable criteria to be used in implementing
automation
Redundancy
It is the superfluity in the performance of a
particular work. It exists where the services of an
Ee are in excess of what is reasonably demanded
by the actual requirements of the enterprise.
(Wiltshire File Co., Inc. v. NLRC, G.R. No. 82249,
February 7, 1991)
Requisites Of A Valid Redundancy
1. Written notice served on both the Ees and the
DOLE at least 1 month prior to separation from
work
2. Payment of separation pay equivalent to at
least 1 month pay or at least 1 month pay for
every year of service, whichever is higher.
3. Good faith in abolishing redundant position
4. Fair and reasonable criteria in ascertaining
what positions are to be declared redundant:
a. Less preferred status, e.g. temporary Ee
b. Efficiency and
c. Seniority (DAP v. Court of Appeals. G.R. No.
165811; December 14, 2005)
Retrenchment
It is the reduction of personnel usually due to poor
financial returns as to cut down on costs of
operations in terms of salaries and wages to
prevent bankruptcy of the company. (2 Poquiz,
2018, p. 560)
Requisites Of A Valid Retrenchment
1. Written notice served on both the Ee and the
DOLE at least 1 month prior to the intended
date of retrenchment;
2. Payment of separation pay equivalent to at
least one month pay or at least 1/2 month pay
for every year of service, whichever is higher;
3. Good faith in effecting retrenchement;
4. Proof of expected or actual losses;
5. To show that the employer first instituted cost
reduction measures in other measures in other
areas of production before undertaking
retrenchment as a last resort; and
6. The Er used fair and reasonable criteria in
ascertaining who would be retained among the
Ees, such as status, efficiency, seniority,
physical fitness, age, and financial hardship of
certain workers. (FASAP v. PAL, G.R. No.
178083, October 2, 2009)
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 UST LAW PRE-WEEK NOTES 2019
Criteria In Selecting Employees To Be health officer that the disease is incurable within 6
Retrenched months despite due to medication and treatment.

There must be fair and reasonable criteria to be Disease as a ground for dismissal
used in selecting Ees to be dismissed such as:
1. Less preferred status; When the Ee suffers from a disease, and:
2. Efficiency rating; 1. His continued employment is prohibited by
3. Seniority (Phil. Tuberculosis Society, Inc. v. law or prejudicial to his health or to the health
National Labor Union, G.R. No. 115414, August of his co-Ees. (IRR, Book VI, Rule I, Sec.8)
25, 1998) 2. With a certification by competent public health
authority that the disease is incurable within 6
Redundancy vs. Retrenchment months despite due medication and treatment.
(Solis v. NLRC, GR No. 116175, October 28,
REDUNDANCY RETRENCHMENT 1996)

Does not involve losses Involves losses, Rules on separation pay with regard to each
or the closing or closures or cessation of cause of termination:
cessation of operations operations of
of the establishment. establishment or CAUSE OF
undertaking due to SEPARATION PAY
TERMINATION
serious business losses Equivalent to at least 1
or financial reverses. month pay or at least 1
In preventive Automation month pay for every year
retrenchment, of service, whichever is
retrenchment may be higher
undertaken by the Equivalent to at least 1
employer before losses month pay or at least 1
are actually sustained. Redundancy month pay for every year
of service, whichever is
higher
Equivalent to 1 month pay
Closure of Business
Retrenchment or at least ½ month pay
Test for the validity of closure or cessation of
for every year or service
establishment or undertaking
Closures or
Equivalent to at least 1
cessation of
To be a valid ground for termination the following month pay or at least 1
operation not due
must be present: month pay for every year
to serious
1. There must be a decision to close or cease of service .(if due to severe
business
operation of the enterprise by the financial losses, no
losses/financial
management; separation pay
reverses
2. The decision was made in good faith; and
Equivalent to at least 1
3. There is no other option available to the
month pay or at least ½
employer except to close or cease operations.
Disease month pay for every year
(Sec. 5.4 .(d), D.O. No. 147, Series of 2015)
of service, whichever is
higher
Payment of separation pay in case of closure

Payment of separation pay is required only where

closure is neither due to serious business losses
nor due to an act of Government. (North Davao
Mining Corp v. NLRC, G.R. No. 112546, Mar. 13, 1996;
NFL v. NLRC, G.R. No. 127718, March 2, 2000)

Basis for computation: latest salary rate, unless

reduced by the employer to circumvent the law, in
which case, it shall be based on the rate before its
deduction. (Sec. 10, Rule 1, Book IV, Rules and
Regulations Implementing the Labor Code)

There is no obligation to pay separation pay:

1. When the closure of the business is due to

serious business loss
2. Where closure of business is by compulsion of
law because closure of business is not
attributed to Er’s will (e.g.: the land where the
building is situated was declared covered by
the Comprehensive Agrarian Reform Law)

Disease

It must be incurable within 6 months and the

continued employment is prohibited by law or
prejudicial to his health as well as to the health of
his co-Ees with a certification from the public

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 Labor Law and Social Legislation

Possible Situations Effect of termination Liability of ER

VALID NO Liability
a. With Just or Authorized Cause NOTE: Separation Pay if for
b. With Due Process Authorized Cause

INVALID Reinstatement + Full

a. Without Just or Authorized Backwages
Cause NOTE: If Reinstatement not
b. With Due Process possible —Separation Pay

INVALID Reinstatement + Full

a. Without Just or Authorized Backwages
Cause NOTE: If Reinstatement not
b. Without Due Process possible—Separation Pay

VALID Liable for noncompliance

a. With Just or Authorized Cause With procedural requirements
b. Without Due Process NOTE: Separation Pay if for
Authorized Cause

NOTE: The Agabon ruling was modified by JAKA Food Processing v. Pacot, G.R. No. 151378, March 28, 2005
where it was held that:
1. If based on just cause(LC, Art. 282) but the Er failed to comply with the notice requirement, the sanction to be
imposed upon him should be tempered because the dismissal process was, in effect, initiated by an act
imputable to the Ee; and
2. If based on authorized causes(LC, Art. 283) but the Er failed to comply with the notice requirement, the
sanction should be stiffer because the dismissal process was initiated by Er’s exercise of his management
prerogative.

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TERMINATION BY EMPLOYEE
RESIGNATION
Resignation refers the voluntary act of an
employee who finds himself in a situation where he
believes that personal reason cannot be sacrificed
in favour of the exigency of the service, then he has
no other choice but to dissociate himself from his
CONSTRUCTIVE DISMISSAL
Constructive dismissal occurs when there is
cessation of work because continued employment
is rendered impossible, unreasonable, or unlikely
as when there is a demotion in rank or diminution
in pay or when a clear discrimination, insensibility,
or disdain by an Er becomes unbearable to the Ee
leaving the latter with no other option but to quit
(The University of Immaculate Conception v. NLRC,
G.R. No. 181146, January 26, 2011)
.
Burden of proof on the employee
The employee who is complaining of constructive
dismissal has the burden of proof “to prove that
her resignation was not voluntary, but was actually
a case of constructive dismissal, with clear,
positive, and convincing evidence.” (Hechanova v.
Atty. Matorre, GR No. 198261, October 16, 2013)
MANAGEMENT PREROGATIVE
This privilege is inherent in the right of employers
to control and manage their enterprise effectively.
Such aspects of employment include hiring, work
assignments, working methods, time, place and
manner of work, tools to be used, processes to be
followed, supervision of workers, working
regulations, transfer of employees, lay-off of
workers and the discipline, dismissal and recall of
workers.
Limitations
1. Limitations imposed by: a) law; b) CBA; c)
employment contract; d) employer policy; e)
employer practice; and f) general principles of fair
play and justice.
2. It is subject to police power.
3.. Its exercise should be without abuse of
discretion.
4. It should be done in good faith and with due
regard to the rights of labor.
DISCIPLINE
Er's right to discipline his Ees
The Er has the prerogative to instill discipline in
his Ees and to impose reasonable penalties,
including dismissal, on erring Ees pursuant to
company rules and regulations (San Miguel
Corporation v. NLRC, G.R. No. 87277, May 12, 1989).
Limitation on the Er’s power to discipline
While management has the prerogative to
discipline its Ees and to impose appropriate
penalties on erring workers, pursuant to company
rules and regulations, however, such management
prerogative must be exercised in good faith for the
advancement of the Er’s interest and not for the
purpose of defeating or circumventing the rights of
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
the Ees under special laws and valid agreements.
(PLDT v. Teves, G.R. No. 143511, November 15, 2010)
TRANSFER OF EMPLOYEES
The exercise of the prerogative to transfer or
assign employees from one office or area of
operation to another is valid provided there is no
demotion in rank or diminution of salary, benefits
and other privileges.
The transfer should not be motivated by
discrimination or made in bad faith or effected as a
form of punishment or demotion without sufficient
cause.
The transfer of an employee may constitute
constructive dismissal when: 1) When the transfer
is unreasonable, inconvenient or prejudicial to the
employee; 2) When the transfer involves a
demotion in rank or diminution of salaries, benefits
and other privileges; and 3) When the employer
performs a clear act of discrimination, insensibility,
or disdain towards the employee, which forecloses
any choice by the latter except to forego his
continued employment.
Burden of proving that the transfer was
reasonable: The Er must be able to show that the
transfer is not unreasonable, inconvenient or
prejudicial to the Ee; nor does it involve a
demotion in rank or a diminution of his salaries,
privileges and other benefits. Should the Er fail to
overcome this burden of proof, the Ee’s transfer
shall be tantamount to constructive dismissal
(Blue Dairy Corporation v. NLRC, 314 SCRA 401).
PRODUCTIVITY STANDARD
The employer has the prerogative to prescribe the
standards of productivity which the employees
should comply.
The productivity standards may be used by the
employer as: 1. an incentive scheme; and/or 2. a
disciplinary scheme.
BONUS
Bonus, as a general rule, is an amount granted and
paid ex gratia to the employee. It 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 employees’ basic
salaries or wages. If there is no profit, there should
be no bonus. If profit is reduced, bonus should
likewise be reduced, absent any agreement making
such bonus part of the compensation of the
employees.
When does bonus become demandable?
It becomes demandable and enforceable: (1)If it
has ripened into a company practice; (2)If it is
granted as an additional compensation which the
employer agreed to give without any condition
such as success of business or more efficient or
more productive operation, hence, it is deemed
part of wage or salary.
(3) When considered as part of the compensation
and therefore demandable and enforceable, the
amount is usually fixed. If the amount thereof is
dependent upon the realization of profits, the
bonus is not demandable and enforceable.
E. CHANGE OF WORKING HOURS
Er’s right to change working hours
The working hours may be changed, at the
discretion of the company, should such change be
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 Labor Law and Social Legislation
necessary for its operations, and that employees
shall observe such rules as have been laid down by
the company. (Interphil Laboratories Union-FFW vs.
Interphil Laboratories, Inc., G.R. No. 142824,
December 19, 2001)

MARRIAGE BETWEEN EMPLOYEES OF

COMPETITOR-EMPLOYERS
The policy is not aimed at restricting a personal
prerogative that belongs only to the individual.
However, an Ee’s personal decision does not
detract the Er from exercising management
prerogatives to ensure maximum profit and
business success. It does not impose an absolute
prohibition against relationships between its Ees
and those of competitor companies. Its Ees are free
to cultivate relationships with and marry persons
of their own choosing. What the company merely
seeks to avoid is a conflict of interest between the
employee and the company that may arise out of
such relationships

POST-EMPLOYMENT BAN
Non – compete clause- A non-compete clause is
not necessarily void for being in restraint of trade
as long as there are reasonable limitations as to
three (3) things: time, place and trade

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Social Welfare Legislation
Basis Social Security Act of 1997 Government Service Insurance Act of 1997
(RA 8282)
Dependents 1. Legal spouse entitled to support;
2. Child, whether legitimate, legitimated, legally adopted or illegitimate;
3. Parents dependent on support
Funding 1. Er’s contribution
2. Ee’s / member’s contribution
Exemption from tax, Property, assets, revenues of SSS and GSIS are all exempt from taxes, and all benefits
legal processes, lien paid by SSS or GSIS shall likewise be exempt from taxes, assessments, fees, charges
and duties of all kinds.
Basis Social Security Act of 1997 (RA 8282)
1. Employer – Any person, natural or
judicial, domestic, or foreign who carries
on in the Philippines any trade, business,
industry, undertaking or activity of any
kind and uses the services of another
person who is under his orders as regards
employment
Who are Exempt employer– Government and any
covered of its political subdivisions, branches and
instrumentality, including GOCCs, i.e. those
under GSIS
2. Employee – any person who performs
services for an employer who receives
compensation for such services, where
there is an Er-Ee relationship
3. Self-employed– considered both Er and
Ee
Conditions for 1. Unmarried;
child to be 2. Not gainfully employed;
considered 3. Has not reached 21 years of age; OR
dependent 4. Incapable of supporting himself either
physically or mentally prior to 21 years of
age or age of majority, as the case may be
1.Primary
a. Dependent Spouse until remarriage
AND
b. Dependent Legitimate or Legitimated or
Legally Adopted and Illegitimate Children
Beneficiaries 2. Secondary
a. Dependent Parents
b. Absent any primary and secondary
beneficiaries, any other person designated
by member as secondary beneficiary
1. Sickness Benefits
2. Permanent Disability Benefits
3. Maternity Benefits
4. Retirement Benefits
Benefits 5. Death Benefits
6. Funeral Benefits
7. Loan Grant
1.Compulsory
a. All Ees not over sixty (60) years of age
and their Ers; compulsory coverage of the
Ers shall take effect on the first day of his
operation and that of the Ee on the day of
his employment
b. Self-employed persons as may be
determined by the Commission, including
but not limited to: all self-employed
UNIVERSITY OF SANTO TOMAS 29
FACULTY OF CIVIL LAW
(RA 8291)
Government Service Insurance Act of
1997 (RA 8291)
1. Employer– the National Government, its
political subdivisions, branches, agencies, or
instrumentalities, including GOCCs, and
financial institutions with original charters,
the Constitutional Commissions, and the
Judiciary
2.Employee – any person receiving
compensation while in service of an Er as
defined herein, whether by election or
appointment, regardless of the status of
employment, including Barangay and
Sanggunian Members
1. Unmarried;
2. Not gainfully employed;
3. Not over the age of majority; OR
4. Incapable of supporting himself either
physically or mentally prior to 21 years of
age or age of majority, as the case may be
1.Primary
a. Legal dependent spouse until remarriage
AND
b. Dependent Children
2. Secondary
a. Dependent parents AND
b. Legitimate descendants, subject to
restrictions on dependent children,
legitimate descendants
1. Separation Benefits
2. Retirement Benefits
3. Permanent Disability Benefits
4. Temporary Disability Benefits
5. Survivorship Benefits
6. Funeral Benefits
7. Life Insurance Benefits
XPN: The members of the Judiciary and
Constitutional Commissions shall have life
insurance only.
Compulsory for all employees receiving
compensation who have not reached
compulsory retirement age, irrespective of
employment status
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 Labor Law and Social Legislation
professionals; partners and single-
proprietors of business; actors and
actresses, directors, scriptwriters, and
news correspondents not employees;
professional athletes, coaches, trainers
and jockeys, and individual farmers and
fishermen, upon their registration with
the SSS.
Coverage
c. Domestic workers who has rendered at
least one (1) month of service, 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(Section 30, RA No. 10361
or Batas Kasambahay).

d. Individual farmers and fishermen under

SSS rules and regulation.

2. Voluntary
a. Filipinos recruited by foreign-based Ers
for employment abroad

b. Ees separated from employment to

maintain his right to full benefits

c. Self-employed who realizes no income

for a certain month

d. Spouses who devote full time to

managing household and family affairs
unless specifically mandatorily covered
1. Employment purely casual and not for 1. Members of the AFP
purpose, occupation, or business of the Er.
2. Members of the PNP
Exceptions 2. Services performed on or in connection
from coverage with alien vessel, if employed when such 3. Contractual Ees, who have no Er-Ee
vessel is outside of the Philippines. relationship with the agency they serve

3. Ees of Philippine Government or 4. Members of Judiciary and Constitutional

instrumentality or agency thereof. Commissions covered by life insurance only

4. Service performed in the employ of a

foreign government, or international
organizations, or wholly owned
instrumentality employing workers in the
Philippines or employing Filipinos outside
of the Philippines.

5. Services performed by temporary Ees

and other Ees excluded by SSS regulation;
Ees of bona fide independent contractors
shall not be deemed Ees of the Er engaging
the services of an independent contractor
All actual remuneration for employment, The basic pay or salary received by an Ee,
including the mandated COLA, as well as pursuant to his election/appointment,
Compensation the cash value of any remuneration paid in EXCLUDING per diems, bonuses, overtime
any medium other than cash EXCEPT that pay, honoraria, allowances and any other
part of the remuneration in excess of the emoluments received in addition to the
maximum salary credit basic pay
1. Er’s contribution on his account ceases; A member separated from the service shall
continue to be a member, and shall be
Effects of 2. Ee’s obligation to contribute also ceases entitled to whatever benefits he has
separation at the end of the month of separation; qualified to in the event of any contingency
from compensable under the GSIS Act.
employment
3. Ee shall be credited with all
contributions paid on his behalf and
entitled to benefits according to the
provisions of the SSS Act.

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LIMITED PORTABILITY LAW workman’s claim is based is PROBABLE.

(R.A. 7699)
Contributions to the State Insurance Fund
Limited portability rule
Contributions under this Title shall be paid in their
entirety by the Er and any contract or device for
A covered worker who transfers employment from
the deduction of any portion thereof from the
one sector to another or is employed on both
wages or salaries of the Ees shall be null and void
sectors, shall have creditable services or
[LC, Art.189(c)].
contributions on both Systems credited to his
service or contribution record in each of the
COVERAGE
Systems and shall be totalized for purposes of old-
age, disability, survivorship, and other benefits in
Coverage
either or both Systems (R.A. 7699, Sec. 3).
1. Every Er.
Totalization
a.
Public sector covered by the GSIS,
comprising the National Government,
Refers to the process of adding up the periods of
including GOCCs, Philippine Tuberculosis
creditable services or contributions under each of
Society, the Philippine National Red Cross,
the Systems, SSS or GSIS, for the purpose of
and the Philippine Veterans Bank; and
eligibility and computation of benefits [Sec. 2 (e),
b. Private sector covered by the SSS,
R.A. 7699].
comprising all Ers other than those defined
in the immediately preceding paragraph.
Portability
2. Every Ee not over 60 years of age.
3. An Ee over 60 years of age if he had been
Refers to the transfer of funds for the account and
paying contributions to the System prior to age
benefit of a worker who transfers from one system
60 and has not been compulsory retired.
to the other [Sec. 2 (b), R.A. 7699].
The Ee may belong to either the:
The totalization shall not apply to following
a. Public sector comprising the employed
instances:
workers who are covered by the GSIS,
1. If a worker is not qualified for any benefits
including the members of the AFP, elective
from both Systems; or
officials who are receiving regular salary and
2. If a worker in the public sector is not qualified
any person employed as casual emergency,
for any benefits from the GSIS; or
temporary, substitute or contractual;
3. If the worker in the private sector is not
b. Private sector comprising the employed
qualified for any benefits from the SSS.
workers who are covered by the SSS.

Effectivity of the compulsory coverage

EMPLOYEES’ COMPENSATION PROGRAM
Employees’ compensation program
It is the program provided for in Arts. 172 to 215 of
the LC whereby a fund known as the State
Insurance Fund is established through premium
payments exacted from Ers and from which the Ees
and their dependents in the event of work-
connected injury, disability, or death, may
promptly secure adequate income benefit, and
medical or related benefits.
NOTE: The claimant under the Employee’s
Compensation Program is required to present
proof of casual relation or aggravation, if the cause
or origin of the disease is still unknown. The law,
however, does not require a direct casual relation.
It is enough that the hypothesis on which the
1. Employer– On the first day of operation
2. Employee– On the day of his employment
WHEN COMPENSABLE
In general
1. Injury and the resulting disability or death
must be the result of an employment accident
satisfying all the following grounds:
a. Ee must have been injured at the place
where his work requires him to be;
b. Ee must have been performing his official
functions; and
c. If injury is sustained elsewhere, the Ee
must have been executing an order for the
Er [Amended Rules on EC, Rule III, Sec.
1(a)].

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 Labor Law and Social Legislation
2. For sickness and the resulting disability or
death, the sickness must be the result of an
occupational disease listed under the IR with
the conditions set therein satisfied.
XPN: Proof must be shown that the risk of
contracting the disease is increased by the
working conditions [Amended Rules on EC, Rule
III, Sec. 1(b)].
Injury
Any harmful change in the human organism from
any accident arising out of and in the course of
employment [Art. 173 (k), LC].
Sickness
“Any illness definitely accepted as an occupational
disease listed by the Commission, or any illness
caused by employment, subject to proof that the
risk of contracting the same is increased by
working conditions” [Art. 173 (l), LC].
Occupational Disease
One which results from the nature of the
employment, and by nature is meant conditions
which all Ees of a class are subject and which
produce the disease as a natural incident of a
particular occupation, and attach to that
occupation a hazard which distinguishes it from
the usual run of occupations and is in excess of the
hazard attending the employment in general.
To be occupational, the disease must be wholly due
to causes and conditions which are normal and
constantly present and characteristic of the
particular occupation.
Theory of Increased Risk
The term “sickness” as defined in Art. 173(l) of the
LC is recognition of the theory of increased risk. To
establish compensability under the same, the
claimant must show substantial proof of work-
connection, but what is required is merely a
reasonable work-connection and not a direct
causal relation. Proof of actual cause of the ailment
is not necessary. The test of evidence of relation of
the disease with the employment is probability and
not certainty (Jimenez v. Employees’ Compensation
Commission, G.R. No. L-58176, Mar. 23, 1984;
Panotes vs. ECC, G.R. No. L-64802, Sept. 23, 1985).
An illness not listed by the Employees’
Compensation Commission as an occupational
disease is compensable provided that it is
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
established that the risk of contracting the same is
increased by working conditions.
BENEFITS
Benefits under the State Insurance Fund
1. Medical Benefits
2. Disability Benefits
3. Death Benefits
4. Funeral Benefits
Persons entitled to benefits under the
Employees’ Compensation Program
The covered Ee, his dependents, and in case of his
death, his beneficiaries.
BENEFICIARIES
Primary beneficiaries
1. Dependent spouse until he remarries
2. Dependent children
Secondary beneficiaries
1. In absence of primary beneficiaries, the
dependent parents
2. Subject to the restrictions imposed on
dependent children, the illegitimate children,
and legitimate descendants. Provided, that the
dependent acknowledged natural child shall be
considered as a primary beneficiary when there
are no other dependent children who are
qualified and eligible for monthly income
benefit (LC, Art. 173, as amended by Sec. I, P.D.
1921).
Recovery from the State Insurance Fund does
not bar a claim for benefits under the SSS Law
As expressly provided for in Art. 179 of the LC,
payment of compensation under the State
Insurance Fund shall not bar the recovery of
benefits under the SSS Law. Benefits under the
State Insurance Fund accrue to the Ees concerned
due to hazards involved and are made a burden on
the employment itself. On the other hand, social
security benefits are paid to SSS members by
reason of their membership therein for which they
contribute their money to a general fund (Ma-ao
Sugar Central Co., Inc. vs. CA, G.R. No. 83491, Aug. 27,
1990).
POEA STANDARD EMPLOYMENT CONTRACT
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DISABILITY BENEFITS FOR INJURY
OR ILLNESS
The elements required for an injury to be
compensable are:
1. The injury or illness is work-related;
2. It occurred during the term of the
seafarer’s contract.
NOTE: For an occupational disease and the
resulting disability or death to be compensable, all
of the following conditions must be satisfied:
1. The seafarer's work must involve the risks
described herein;
2. The disease was contracted as a result of
the seafarer's exposure to the described
risks;
3. The disease was contracted within a
period of exposure and under such other
factors necessary to contract it; and
4. There was no notorious negligence on the
part of the seafarer. (Benedict Romana vs.
Magsaysay Maritime Corporation, G.R. No.
192442, August 2, 2017)
Permanent/Total Disability
Permanent disability is the inability of a worker
to perform his job for more than 120 days,
regardless of whether or not he loses the use of any
part of his body. Total disability means the
disablement of an employee to earn wages in the
same kind of work of similar nature that he was
trained for, accustomed to perform, or any kind of
work which a person of his mentality and
attainments could do. A total disability does not
require that the employee be completely disabled,
or totally paralyzed. What is necessary is that the
injury must be such that the employee cannot
pursue his or her usual work and earn from it. A
total disability is considered permanent if it lasts
continuously for more than 120 days. (Maersk
Filipinas Crewing, Inc./ Maersk Services Ltd. Vs
Mesina, G.R. No. 200831, June 5, 2013)
When a seafarer may be allowed to pursue and
action for total or permanent disability
benefits:
The Court enumerated the following instances
when a seafarer may be allowed to pursue an
action for total and permanent disability benefits,
to wit:
1. The company-designated physician failed
to issue a declaration as to his fitness to
engage in sea duty or disability even after
the lapse of the 120-day period and there
is no indication that further medical
treatment would address his temporary
total disability, hence, justify an extension
of the period to 240 days;
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
2. 240 days had lapsed without any
certification issued by the company-
designated physician;
3. The company-designated physician
declared that he is fit for sea duty within
the 120-day or 240-day period, as the case
may be, but his physician of choice and the
doctor chosen under Section 20-B(3) of
the POEA-SEC are of a contrary opinion;
4. The company-designated physician
acknowledged that he is partially
permanently disabled but other doctors
who he consulted, on his own and jointly
with his employer, believed that his
disability is not only permanent but total
as well;
5. The company-designated physician
recognized that he is totally and
permanently disabled but there is a
dispute on the disability grading;
6. The company-designated physician
determined that his medical condition is
not compensable or work-related under
the POEA-SEC but his doctor-of-choice and
the third doctor selected under Section 20-
B(3) of the POEA-SEC found otherwise and
declared him unfit to work;
7. The company-designated physician
declared him totally and permanently
disabled but the employer refuses to pay
him the corresponding benefits; and
8. The company-designated physician
declared him partially and permanently
disabled within the 120-day or 240-day
period but he remains incapacitated to
perform his usual sea duties after the lapse
of said periods. (C.F. Sharp Crew
Management, Inc. vs. Joel D. Taok, G.R. No.
193679, July 18, 2012)
Need For Definite Assessment Within 120/240
Days
The court summarized the rules regarding the
company-designated physician's duty to issue a
final medical assessment on the seafarer's
disability grading, as follows:
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 fails to give his
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 assessment within the 120 days with a
sufficient justification (e.g., seafarer required
further medical treatment or seafarer was
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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
.iustification 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.
Case law states that without a valid final and
definitive assessment from the company-
designated physician within the 120/240-day
period, the law already steps in to consider
petitioner's disability as total and permanent. 90
Thus, a temporary total disability becomes total
and permanent by operation of law. (Oscar Gamboa
vs. Maunlad Trans., Inc., G.R. No. 232905, August 20,
2018)
NOTE: A temporary total disability lasting
continuously for more than 120 days, except as
otherwise provided, is considered as a total and
permanent disability. The exception pertains to a
situation when the sickness "still requires medical
attendance beyond the 120 days but not to exceed
240 days" in which case the temporary total
disability period is extended up to a maximum of
240 days. However, for the company-designated
physician to avail of the extended 240-day period,
he must first perform some significant act to justify
an extension; otherwise, the seafarer's disability
shall be conclusively presumed to be permanent
and total. (Robelito Malinis Talaroc vs. Arpaphil
Corporation, et. al., G.R. No. 223731, August 30,
2017)
Third-Doctor Referral
If the physician appointed by the seafarer
disagrees with the company-designated physician's
assessment, the opinion of a third doctor may be
agreed jointly between the employer and the
seafarer to be the decision final and binding on
them. Non-compliance with this procedure would
lead to the conclusion that the determination of the
company-designated physician would prevail.
(Jakerson Gargallo vs. Dohle Seafront Crewing, G.R.
No. 215551, August 17, 2016)
DEATH BENEFITS
Death Benefit Under Section 20(B) of the 2010
POEA-SEC:
While the general rule is that the seafarer’s death
should occur during the term of his employment,
the seafarer’s death occurring after the termination
of his employment due to his medical repatriation
on account of a work-related injury or illness
constitutes an exception thereto. This is based on a
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
liberal construction of the 2000 POEA-SEC as
impelled by the plight of the bereaved heirs who
stand to be deprived of a just and reasonable
compensation for the seafarer’s death,
notwithstanding its evident work-
connection.(Canuel vs. Magsaysay Maritime
Corporation, G.R. No. 190161, 13 October 2014)
Invalid Side Agreement
An aggrement that diminishes the employee;s pay
and benefits as contained in the POEA-aproved
contract is void, unless such subsequent agreement
is approved by the POEA. (Azucena, Vol. 1, 2016, p.
69)
Period To File OFW Claims
The POEA-SEC states in Sec. 28 that claims under
the contract shall be filed within 1 year from the
date of the seafarer’s return to the point of hire. On
the other hand, Art. 291 of the LC provides for 3
years to file money claims arising from employer-
employee relations. The LC provision prevails over
Sec. 28 of the SEC and the latter is declared “null
and void.” (Azucena, Vol. 1, 2016, p. 70)
LABOR RELATIONS
RIGHT TO SELF-ORGANIZATION
Refers to the right of workers and employees to
form, join or assist unions, organizations or
associations for purposes of collective bargaining
and/or for mutual aid and protection, including the
right to engage in peaceful concerted activities and
participate in policy-decision making processes
affecting their rights and benefits.
Purpose of exercise of right to self-organization
1. Collective bargaining; and
2. Mutual aid and protection (LC, Art. 257)
Registration of a Union
A labor organization may be registered or not. If
registered, it is considered “legitimate labor
organization” (LLO). But the reverse is not true,
that is, a labor organization is not “illegitimate” just
because it is unregistered. It is still a lawful
organization but it has no legal personality to
demand collective bargaining with the employer.
(2, Azucena, 2016, p. 186-187)
COVERAGE
Who may unionize for purposes of collective
bargaining
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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. (LC, Art. 253)
Who cannot form, join or assist labor
organizations
1. Managerial employees
2. Confidential employees (in the field of labor
relations)
3. Employees of international organizations
4. Employee-members of a cooperative
5. Foreign workers
6. Religious objectors; INC members
7. Members of AFP, police officers, policemen,
firemen, and jail guards
8. High level government employees
Managerial employees
Managerial employees are not eligible to join, assist
or form any labor organization. (LC, Art. 255)
The rationale for the inhibition is that if managerial
employees would belong to or be affiliated with a
union, the latter might not be assured of their
loyalty to the union in view of evident conflict of
interests. The union can become company-
dominated with the presence of managerial
employees in the union membership. (Bulleting
Publishing Co., Inc. v. Hon. Sanchez)
Confidential employees (in the field of labor
relations)
A confidential employee is one who assists and acts
in a confidential capacity to, or has access to
confidential matters of, persons who exercise
managerial functions in the field of labor relations.
(Philips Industrial Development v. NLRC, G. R. No.
88957, June 25, 1992)
NOTE: The phrase “in the field of labor relations” is
important because it stresses the labor nexus, that
is, the confidentiality of the position should relate
to labor relations matters.
Doctrine of necessary implication
The doctrine of necessary implication states that
what is implied in a statute is as much a part
thereof as that which is expressed.
The reason for ineligibility of managerial
employees to form, assist or join a labor union
equally applies to confidential employees. While
the Labor Code singles out managerial employees
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
as ineligible to join, under the doctrine of necessary
implication, confidential employees are similarly
disqualified. (National Association of Trade Unions -
Republic Planters Bank Supervisors Chapter v. Hon.
Torres, G. R. No. 93468, December 29, 1994)
Employee-Members of a Cooperative
An employee of a cooperative who is also 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. (San Jose Electric Service Cooperative, Inc.
v. Ministry of Labor, G. R. No. 77231, May 31, 1989)
Foreign workers
GR: Foreigners are prohibited from engaging in all
forms of trade union activities.
XPN: However, the alien working in the country
with a valid working permit may exercise the right
to self-organization if they are nationals of a
country which grants the same or similar right to
Filipino workers (reciprocity).
Government employees
GR: Government employees can form, join or assist
labor organizations of their own choosing.
XPNs: AFP, police officers, policemen, firemen, jail
guards, and high level government employees.
COMMINGLING AND MIXTURE OF
MEMBERSHIP
Categories of Employees (in the Private Sector)
1. Managerial
2. Supervisory
3. Rank-and-file
Categories of Employees (in the Government)
1. High level or managerial
2. Rank-and-file
Managerial Employees
Managerial employee refers to those who are
vested with power to lay down and execute
management policies and/or to hire, transfer,
suspend, lay-off, recall, discharge, assign or
discipline employees. [LC, Art. 219 (m)]
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
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 Labor Law and Social Legislation
nature but requires the use of independent
judgment.
Rank-and-file Employees
All employees not falling within the definition of
managerial or supervisory employees are
considered rank-and-file employees.
Supervisory employees cannot join union of
rank-and-file employees
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 organization of their own. (LC, Art.
255)
Supervisory employees may join the same
federation or national union of rank-and-file
employees
The rank-and-file union and the supervisors’ union
operating within the same establishment may join
the same federation or national union. (LC, Art.
255)
Affiliation/Disaffiliation
A local union may affiliate with or disaffiliate from
a federation. This is an exercise of the right of
association recognized by the Constitution.
Between the chapter and the federation, affiliation
or disaffiliation is a contractual relation. Hence,
even if disaffiliation is a matter of right, the local
must comply with the obligations under the CBL
such as manner and period of notice.
Disaffiliation of local union from the federation
GR: A labor union may disaffiliate from the mother
union to form an independent union only during
the 60-day freedom period immediately preceding
the expiration of the CBA.
XPN: Even before the onset of the freedom period,
disaffiliation may still be carried out, but such
disaffiliation must be effected by the majority of
the union members in the bargaining unit.
Disaffiliation must be decided by the entire
membership through secret balloting in
accordance with Article 250(d).
This happens when there is a substantial shift in
allegiance on the part of the majority of the
members of the union. In such a case, however, the
CBA continues to bind the members of the new or
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
disaffiliated and independent union to determine
the union which shall administer the CBA may be
conducted. (ANGLO-KMU v. Samahan ng
Manggagawang Nagkakaisasa Manila Bay Spinning
Mills at J.P. Coats, G.R. No.118562, July 5, 1996)
Disaffiliation must be by majority decision
Disaffiliation has to be decided by the entire
membership through secret balloting in
accordance with Art. 250 (d).
Substitutionary Doctrine
This doctrine holds that the employees cannot
revoke the validly executed collective bargaining
contract with their employer by the simple
expedient of changing their bargaining agent. The
new agent must respect the contract. The
employees, thru their new bargaining agent, cannot
renege on the collective bargaining contract, except
to negotiate with the management for the
shortening thereof. (Elisco-Elirol Labor Union,
December 29, 1977)
The "substitutionary" doctrine, [however] cannot
be invoked to support the contention that a newly
certified collective bargaining agent automatically
assumes all the personal undertakings — like the
no-strike stipulation here — in the collective
bargaining agreement made by the deposed union.
When EBR bound itself and its officers not to
strike, it could not have validly bound also all the
other rival unions existing in the bargaining units
in question. (Benguet Consolidated Incvs BCI
Employees and Workers Union- Paflu, G.R. L-24711,
April 30, 1968)
BARGAINING UNIT
.
Collective Bargaining Unit (CBU)
Refers to a group of employees sharing mutual
interests within a given employer unit. (D.O. No.
40-03)
There may be two or more certified bargaining
agents serving different interests. [Herrera- Veloso
amendment. (UP v. Ferrer-Calleja, July 14,1992)
Tests to determine the appropriate bargaining
unit
1. Community or mutuality of interest
2. Will of the employees or “Globe Doctrine”
3. Collective bargaining history
4. Similarity of employment status
Will of the employees or “Globe Doctrine”
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The desires of the employees are relevant to the
determination of the appropriate bargaining unit.
While the desires of employees with respect to
their inclusion in bargaining unit is not controlling,
it is a factor which would be taken into
consideration in reaching a decision. [Globe
Machine & Stamping Co., 3 NLRB 294 (1937)]
BARGAINING REPRESENTATIVE
Three (3) methods of determining the exclusive
bargaining representative:
1. SEBA Certification
2. Certification Election
3. Consent Election
SEBA CERTIFICATION
SEBA Certification
Process where a union requests the DOLE regional
director to recognize and certify the union as the
SEBA (sole and exclusive bargaining agent) of the
BU it purports to represent for purposes of
collective bargaining with the employer.
Conditions:
1. The bargaining unit is not unionized;
2. The requesting union is the only union in that
bargaining unit;
3. The CBU majority are members of the union.
Effect of the Issuance of the Certification as
SEBA
a. The certified union shall enjoy all the
rights and privileges of an exclusive
bargaining agent of all the employees in
the covered bargaining unit.
b. Certification Bar Rule. The issuance of the
SEBA Certification as SEBA bars the filing
of a petition election by any labor
organization for a period of one (1) year
from the date of issuance.
CERTIFICATION ELECTION
It is the process of determining through secret
ballot the sole and exclusive representative of the
Ees in an appropriate bargaining unit, for purposes
of CB or negotiation. [IRR, Book V, Rule I, Sec. 1 (h)]
Purpose of a certification election
It is a means of determining the worker’s choice of:
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
1. Whether they want a union to represent them
for CB or if they want no union to represent
them at all.
2. And if they choose to have a union to represent
them, they will choose which among the
contending unions will be the sole and
exclusive bargaining representative of the Ees
in the appropriate bargaining unit.
Filing a petition for certification election (PCE)
The following may file a PCE:
1. Any LLO
2. A national union or federation which has
already issued a charter certificate to its local
chapter participating in the CE
3. A local chapter which has been issued a
charter certificate
4. An Er only when requested to bargain
collectively in a bargaining unit where no
registered CBA exists. (IRR as amended by D.O.
40-F-03, Book V, Rule VIII, Sec. 1)
Time to File PCE
It would depend if the Bargaining Unit has a CBA or
none.
If there is none: Petition may be filed anytime
except within the 12 months of a previous election,
if any.
If there is a CBA: Petition may only be filed within
the “freedom period” of the representational aspect
of the CBA.
Where to file the PCE
A petition for certification election shall be filed
with the Regional Office which issued the
petitioning union’s certificate of registration or
certificate of creation of chartered local
The petition shall be heard and resolved by the
Med-Arbiter.
IN AN UNORGANIZED ESTABLISHMENT
Unorganized Establishment
An unorganized establishment is a bargaining unit
with no recognized or certified bargaining agent. It
does not necessarily refer to an entire company.
NOTE: It may happen that the rank-and-file unit
has a bargaining agent while the supervisory unit
still does not have such agent; thus, the former is
already an “organized establishment” while the
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 Labor Law and Social Legislation
latter remains, in the same company, an
unorganized establishment.
Requirement for certification election in
unorganized establishments
The certification election shall be automatically
conducted upon the filing of a PCE by a LLO.
IN AN ORGANIZED ESTABLISHMENT
Requisites for certification election in an
Organized Establishment
The Mediator-Arbiter is required to automatically
order the conduct of a CE by secret ballot in an
organized establishment as soon as the following
requisites are met:
1. A petition questioning the majority status of
the incumbent bargaining agent is filed before
the DOLE within the 60-day freedom period;
2. Such petition is verified;
3. The petition is supported by the written
consent of at least 25% of all the Ees in the
bargaining unit. (LC, Art. 268; TUPAS-WFTU v.
Laguesma, G.R. No. 102350, June 30, 1994)
Filing of 25% consent signature in the petition
for certification election
Ideally, the signature should be filed together with
the petition. However, it may be filed after the
petition within a reasonable period of time.
Effect if the petition for certification election
was not accompanied by the requisite 25%
consent signatures
Under the Implementing Rules, absence or failure
to submit the written consent of at least 25% of all
the Ees in the bargaining unit to support the
petition is a ground for denying the said petition.
Notwithstanding the provision of the IRR, that
failure to submit the required 25% consent
signature is a ground for the denial of the petition.
The Supreme Court ruled that, it is within the
discretion of the Med-Arbiter whether to grant or
deny the petition despite absence of the required
25% written consent. (Port Workers Union v.
Bienvenido Laguesma, G.R. Nos. 94929-30, March 18,
1992) If the petition, however, is accompanied by
the 25% consent signatures, then the holding of the
CE becomes mandatory. (California Manufacturing
Corp. v. Laguesma, G.R. No. 97020, June 8, 1992)
Rules prohibiting the filing of petition for
certification election (Bar rules)
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
A. General rule
The general rule is that in the absence of a CBA
duly registered in accordance with Article 237 of
the Labor Code, a petition for certification election
may be filed at any time.
B. Bar rules
No certification election may be held under the
following rules:
1. Certification year bar rule;
2. Negotiations bar rule;
3. Bargaining deadlock bar rule; or
4. Contract bar rule
Certification year bar rule
Under this rule, a petition for certification election
may not be filed within one (1) year from the date
a valid certification, consent, run-off or re-run
election has been conducted within the bargaining
unit. This is also called as the 12-month Bar rule.
NOTE: In case of failure of elections, a re-run
election will be held within six (6) months. Also,
when the election held is invalid.
Negotiation bar rule
Under this rule, no petition for certification
election should be entertained while the sole and
exclusive bargaining agent and the employer have
commenced and sustained negotiations in good
faith within the period of one (1) year from the
date of a valid certification, consent, run-off, re-run
or from the date of voluntary recognition.
If after the lapse of 12 months and they failed to
commence the negotiation, the employees’ wish to
have a CBA is defeated. Hence, another union can
petition again for a certication election to replace
the unproductive bargaining agent. (Azucena,
2016)
Bargaining deadlock bar rule
Under this rule, a petition for certification election
may not be entertained when a bargaining
deadlock to which an incumbent or certified
bargaining agent is a party has been submitted to
conciliation or has become the subject of a valid
notice of strike or lockout.
Artificial Deadlock
A deadlock pre-arranged or preserved by collusion
of the employer and the majority union. Signs of
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Artificial Deadlock includes failure of the union to
resort to conciliation, failure to charge the Er ULP
or failure to file a notice of strike despite the
deadlock.
Contract bar rule
Under this rule, a petition for certification election
may not be filed when a CBA between the
employer and a duly recognized or certified
bargaining agent has been registered with the
Bureau of Labor Relations (BLR) in accordance
with the Labor Code. Where the CBA duly
registered, a petition for certification election may
be filed within the 60-day freedom period prior to
its expiry.
The purpose of this rule is ensure stability in the
relationship of the workers and the employer by
preventing frequent modifications of any CBA
entered into by them in good faith and for the
stipulated original period.
NOTE: To bar a certification election, it is no longer
necessary that the CBA be “certified”; it is enough
that it is registered in accordance with Article 237.
(Azucena, 2016)
Requisites of Contract Bar
1. It must contain substantial terms and
conditions of employment sufficient to
stabilize the bargaining relationship;
2. It must be signed by the parties; and
3. The effective date and expiration date must be
readily discernible on the face of the contract
Contract bar rule applied on extended CBA
under deadlock
No petition for certification election may be filed
before the onset of the freedom period nor after
such period. The old CBA is extended until a new
one is signed.
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.
Denial; Other grounds:
1. Non-appearance: When petitioner does not
appear in two (2) successive conferences
called by the Med-Arbiter, the petition may be
dismissed.
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
2. Illegitimacy – Unregistered union: When the
petitioning union is not listed in DOLE’s list of
LLOs or if its registration has been cancelled.
3. Illegitimacy – No charter: When the union
fails to submit a duly issued charter certificate
of the chapter at the time the union files its
PCE, it will cause the dismissal of the PCE.
4. Absence of employment relationship:
Employees right to unionize is founded on the
existence of Er-Ee relationship. If there is none,
there would be no basis.
5. Lack of support (25% signature
requirement): When the union filing a PCE
does not have the support of 25% of the
bargaining unit manifested through their
signatures, the PCE may be denied. Reason:
without this minimum support, the challenge
to the incumbent union looks like a nuisance. It
must appear that a sizeable portion of the
employees desires to have a union.
This requirement only applies to organized
establishments. In unorganized establishments, it
is merely directory.
Appeal of grant or denial of PCE
It would depend if the establishment is organized
or unorganized.
1. In case of organized establishment, it is
appealable.
2. In case of unorganized establishment, it is not
appealable, except if the petition is denied.
Double Majority rule (certification election)
1. Valid election (1st majority) – majority of
eligible voters shall have validly cast their
votes (First Majority rule).
2. Winning Union (2nd majority) – the winner
who obtained majority of the valid votes casts
shall be declared as the bargaining agent in the
bargaining unit (Second Majority rule).
Employer as a Bystander (Bystander Rule)
In all cases, whether the PCE is filed by an Er or a
LLO, the Er shall not be considered a party thereto
with a concomitant right to oppose a PCE. The Er’s
participation in such proceedings shall be limited
to:
1. Being notified or informed of petitions of such
nature; and
2. Submitting the list of Ees during the pre-
election conference should the Mediator-
Arbiter act favorably on the petition. (Republic
v. Kawashima Textile, G.R. No. 160352, July 23,
2008)
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Sama-samangNagkakaisangManggagawasa FVC-
Solidarity of Independent and General Labor
Certification Election Union Election Organizations, G.R. No. 176249, November 27, 2009)
The process, ordered Held pursuant to the
and supervised by union’s constitution and Illegally dismissed employees of the company
DOLE, of determining, by-laws, and the right to may participate in the certification election
through secret ballot, vote in it is enjoyed only
whether or not a by union members It is now well-settled that Ees who have been
majority of the improperly laid off but who have at present an
employees wish to be unabandoned right to or expectation of re-
represented by a labor employment, are eligible to vote in CEs. Thus, and
union and, if so, by to repeat, if the dismissal is under question, as in
which union the case now at bar whereby a case of illegal
All employees whether Only members of that dismissal and/or ULP was filed, the Ees concerned
union members or not, union may vote unless could still qualify to vote in the elections (Phiippine
who belongs to the otherwise authorized by Fruits &Vegetables Industries v. Torres, G.R. No.
bargaining unit can vote the union constitution 92391, July 3, 1992).
and by-laws
Held according to the Procedure is governed Employees whose services were terminated are
Labor Code and its by the union by-laws still entitled to vote during the certification
implementing rules election
The winner in a Winners in a union
certification election is election become officers Provided that there is a pending illegal dismissal
an entity, a union, and representatives of case filed by them in the proper forum. While the
which becomes the the union only case is still pending, the Er-Ee relationship is not
representative of the yet severed.
whole bargaining unit
that includes even the Run-off Election
members of the
defeated union A run-off election refers to an election between the
labor union receiving the two highest votes in a
Q: Who can vote in the CE? certification election or consent election with three
or more unions in contention, where such
A: All employees who are members of the certification election or consent election results in
appropriate BU three (3) months prior to the filing none of the contending unions receiving the
of PCE including those dismissed from work but majority of the valid votes cast; provided, that the
has contested the legality of the dismissal in a total number of votes for all contending unions, if
proper forum. The Code does not make any added is at least fifty percent (50%) of the number
distinction as to the employment status. of valid votes cast. (LC, Article 268, as renumbered)

Five-year representation status of a bargaining When to be conducted:

agent cannot be extended
While the parties may agree to extend the CBA’s
original five-year term together with all other CBA
provisions, any such amendment or term in excess
of five years will not carry with it a change in the
union’s exclusive CB status. Under Art. 265, LC, the
exclusive bargaining status cannot go beyond five
years and the representation status is a legal
matter not for the workplace parties to agree upon.
In other words, 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 60 days prior to the expiration of the CBA’s
first five years. (FVC Labor Union-Philippine
Transport and General Workers Organization v.
If conditions that justify the conduct of a run-off
election are present and there are no objections or
challenges which, if sustained, can materially alter
the election results, the Election Officer should
motu proprio conduct the run-off election within
ten days from the close of the election proceeding
between the labor unions receiving the two highest
number of votes cast.
Requirements for a run-off election
1. An election was conducted with three or more
choices
2. None of the contending union obtained the
required majority vote of 50% + 1 of the valid
votes cast

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3. There are no objections or challenges that can
alter the results materially
4. The number of votes received by all contending
unions when added together amounts to at least
50% of the total votes cast
NOTE: Thus if “no union” garnered the majority
vote, no run-off elections may be held.
Choices in a run-off election
The unions receiving the highest and 2nd highest
number of the votes cast. (IRR, Book V, Rule X, Sec.
2)
“No Union” is not a choice in the Run-off Election.
Posting of notice for run-off election
The notice should be posted by the Election Officer
at least five days before the actual date. (IRR, Book
V, Rule X, Sec. 1)
Re-run Election
There are three instances of Re-Run:
1. Failure on certification on election declared by
the election officer;
2. Tie between two union;
3. Tie between a union and no union.
In both instances, the “no union” is also a choice.
CONSENT ELECTIONS
Consent election is an election that is voluntarily
agreed upon by the parties with or without the
intervention of DOLE for the purpose of
determining the EBA.
EXCLUSIVE BARGAINING REPRESENTATION
AND WORKER’S PARTICIPATION IN POLICY
AND DECISION-MAKING
Rule on solicitation of questions, suggestions
and complaints by the Er from the Ees who are
represented by a union
GR: The Er may not solicit questions, suggestions
and complaints from Ees who are represented by a
union.
XPN:
1. The CB representative executes an agreement
waiving the right to be present on any occasion
when Ee grievances are being adjusted by the
Er; and
2. Er acts strictly within the terms of his waiver
agreement.
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Principle of Codetermination or co-sharing
(2007 Bar)
It refers to the right of workers to participate in
policy and decision-making process affecting their
rights and benefits. (PAL v. NLRC, G.R. No. 85985,
August 13, 1993; 1987 Constitution, Art. XIII, Sec. 3)
Individual Grievance
The presence of an employees’ organization (a
union, an LMC or other forum), does not replace
the individual employee’s right to pursue
grievances. Each employee retains the right to deal
with his or her employer, and vice-versa. (Article
267, LC)
RIGHTS OF LABOR ORGANIZATION
UNION DUES AND SPECIAL ASSESSMENTS
Legitimate labor organizations are authorized to
collect reasonable amount of the following:
1. Membership fees
2. Union dues
3. Assessments
4. Fines
5. Contribution for labor education and research,
mutual death and hospitalization benefits,
welfare fun, strike fund and credit and
cooperative undertakings [LC, Art. 292 (a),
renumbered]
6. Agency fees [LC, Art. 259 (e), renumbered]
Assessments
Payments used for a special purpose. Especially if
required only for a limited time. (2, Azucena, 2016,
p. 237)
Union dues
These are regular monthly contributions paid by
the members to the union in exchange for the
benefits given to them by the CBA and to finance
the activities of the union in representing the
union.
Check-off
It is a method of deducting from an Ee’s pay at a
prescribed period, the amounts due the union for
fees, fines and assessments.
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 Labor Law and Social Legislation
Deductions for union service fees are authorized by 1. The Ee is part of the bargaining unit
law and do not require individual check-off 2. He is not a member of the union
authorizations. (2, Azucena, 2016, p. 236) 3. He partook of the benefits of the CBA

REQUIREMENTS FOR VALIDITY Union dues vs. agency fees

Requisites of a valid check-off BASIS UNION DUES AGENCY FEES

Collected from Collected by
GR: No special assessments, attorney’s fees, union members the union from
negotiation fees or any other extraordinary fees non-members
may be checked off from any amount due to an belonging to
employee without individual written authorization From whom
the same
duly signed by the employee. collected
bargaining unit
who receive
The authorization should specify the: the benefits
1. Amount; under the CBA
2. Purpose; and There must be Can be
3. Beneficiary of the deduction. an individual assessed even
written without the
XPNs: Need for
authorization written
1. For mandatory activities under the LC; Written
by individual authorization
2. For Agency Fees; Authorization
members. of the
3. When non-members of the union avail of the employee
benefits of the CBA: concerned.
a. Non-members may be assessed union dues
equivalent to that paid by union members;
b. Only by board resolution approved by COLLECTIVE BARGAINING
majority of the members in general
meeting called for the purpose. Parties to collective bargaining:

Three (3) Requisites to Collect Special 1. Employer; and

Assessment 2. Employees represented by their labor union

1. Authorization by a written resolution of the NOTE: Where neither party is an employer nor an
majority of all members at the general employee of the other, no such duty would exist.
membership meeting duly called for that
purpose; Jurisdictional Preconditions of Collective
2. Secretary’s record of the minutes of the Bargaining:
meeting;
3. Individual written authorization for check-off 1. Possession of the status of majority
duly signed by the employee concerned. (ABS- representation of the employees’
CBN Supervisors Employees Union Members v. representative
ABS-CBN Corp., G. R. No. 106518, March 11, 2. Proof of majority representation
1999) 3. A demand to bargain.

NOTE: An employer’s duty to recognize and

Effect of failure to strictly comply with the
requirements set by law
It shall invalidate the questioned special
assessments.
AGENCY FEE
It is 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.
Requisites for assessment of agency fees
bargain collectively with a union does not arise
until the union requests the employer to bargain.
Q: When should bargaining begin and when
should it end?
A: When the three (3) jurisdictional preconditions
are present, the collective bargaining should begin
within the 12 months following the determination
and certification of the employees’ exclusive
bargaining representative. The period is known as
certification year. The law encourages
expeditious and good-faith negotiations but fixes

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 UST LAW PRE-WEEK NOTES 2019
no time limit for completion of the negotiation. The
law dictates no deadline. It depends upon the will
and agreement of the negotiating panels. (2,
Azucena, 2016, p. 382-383)
COLLECTIVE BARGAINING AGREEMENT
Refers to a contract executed upon request of
either the employer or the exclusive bargaining
representative of the employees incorporating the
agreement reached after negotiations with respect
to wages, hours of work and all other terms and
conditions of employment, including proposals for
adjusting any grievances or questions under such
agreement.
Registration
Within 30 days from execution of CBA, the parties
thereto shall submit the agreement to the DOLE
Regional Office where the bargaining union is
registered or where it principally operates. Multi-
employer collective bargaining agreements shall be
filed with the Bureau.
NOTE: Failure to register the CBA does not make it
invalid or unenforceable. Once it is duly entered
into and signed by the parties, a CBA becomes
effective as between the parties whether or not it
has been certified by the BLR. (Liberty Flour Mills
Employees Association v. Liberty Flour Mills, G.R.
Nos. 58768-70, December 29, 1989) However, its
non-registration renders the contract-bar rule
inoperative.
Ratification of the CBA
G.R. The agreement negotiated by the employees'
EBR should be ratified or approved by the majority
of all the workers in the bargaining unit. The
proper ratifying group is not the majority union
but the majority of all the workers in the
bargaining unit represented by the negotiation.
XPN: Ratification of the CBA by the employees is
not needed when the CBA is a product of an
arbitral award by a proper government authority
[LC, Art. 278 (g), renumbered] or a voluntary
arbitrator (LC, Art. 275, renumbered).
Zipper clause
It is a stipulation in a CBA indicating that issues
that could have been negotiated upon but not
contained in the CBA cannot be raised for
negotiation when the CBA is already in effect.
Effectivity
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
The effectivity date depends on whether the CBA is
the first CBA or a renegotiated CBA.
1. First CBA - Effectivity date depends upon the
agreement of the parties.
NOTE: The determining point is the date the
parties agreed, not the date they signed.
2. Renegotiated CBA - If within six (6) months
from the expiry date of the old CBA, then the
new CBA starts to take effect on the date
following such expiry date. If beyond six (6)
months, the retroaction date will have to be
agreed upon by the parties.
Duration of a CBA
1. Economic and Non-Economic Aspect – may
last for a maximum period of three years after
the execution of the CBA.
2. Representation Aspect – may last for five
years. It refers to the identity and majority
status of the union that negotiated the CBA as
the exclusive bargaining representative.
60-Day Freedom Period (Representative Aspect)
During the 60-day freedom period:
1. 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
five-year term of the CBA.
2. Either party can serve a written notice to
terminate or modify agreement at least 60
days prior to the expiration of the five-year
term of the CBA.
3. A PCE may be filed.
60 –Day Notice Period (Non-representative
aspect)
The freedom period under Article 265 & 268 is
different from the other 60-day period mentioned
in Article 264. The latter speaks of the right of the
parties to propose modifications to the existing
CBA, as an exception to the rule that the CBA
cannot be modified during its lifetime, within 60
days prior the expiration of its economic/non-
economic aspect. This 60-day period does not and
cannot refer to the representative status of the
incumbent union since the acquisition or loss of
representative status is to be resolved through CE.
Mandatory Provisions of the CBA
In order for a matter to be subject to mandatory
collective bargaining, it must materially or
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 Labor Law and Social Legislation
significantly affect the terms or conditions of Difference between Civil and Criminal aspect of
employment. ULP

CBA should include the mandatory provisions such Civil Aspect Criminal Aspect
as grievance procedure, “no strike-no lockout” Persons liable
clause, cooperative scheme, and Labor Officers and agents of Officers and agents who
Management Council (LMC). (Abad, 2015, pg. 201) employer or labor participated or
organizations authorized the act
Principle of CBA Continuity or “Automatic Jurisdiction
Renewal Clause” Labor Arbiter RTC or MTC as the case
may be. (concurrent
The automatic renewal clause means that although jurisdiction)
the CBA has expired, it continues to have legal Prescriptive Period
effects as between the parties until a new CBA has
One (1) year from One (1) year from
been entered into. (Pier &Arrastre Stevedoring
accrual of the ULP act accrual of the ULP act
Services, Inc. V. Confessor, G.R. No. 110854, February
Quantum of Proof
13, 1995) The rationale of the such clause to make
Substantial evidence Beyond reasonable
it the duty of the parties to keep the status quo and
doubt
to continue in full effect the terms and conditions
of the existing agreement until a new agreement is
reached by the parties (LC, Art. 264, renumbered).
ULP COMMITTED BY EMPLOYERS (ULP-ER)
Hold-over Principle
The following are the ULP committed by
It shall be the duty of both parties to keep the employers:
status quo and to continue in full force and effect
1. Interference, restraint, or coercion
the terms and conditions of the existing agreement
2. Yellow dog condition
during the 60-day period and/or until a new
3. Contracting out of services
agreement is reached by the parties. Despite the
4. Company unionism
lapse of the formal effectivity of the CBA the law
5. Discrimination for or against union
still considers the same as continuing in force and
membership
effect until a new CBA shall have been validly
6. Discrimination because of testimony
executed.
7. Violation of duty to bargain
UNFAIR LABOR PRACTICE 8. Paid negotiation
9. Gross violation of the CBA
ULP means any unfair labor practice as expressly
NOTE: The enumeration of ULP under Art. 259 is
defined by the Labor Code [LC, Art. 219 (k),
not exclusive. Other ULP acts can be found in other
renumbered].
provisions of the Labor Code.
ULP has a technical meaning. It only refers to acts
Interference, Restraint, or Coercion
that violate the right of employees to self-
To interfere with, restrain or coerce employees in
organization and the observance of the CBA. Thus,
the exercise of their right to self-organization. [Art.
not all unfair acts constitute as unfair labor
259 (a)]
practice. Without the element of self-organization,
an act, no matter how unfair, cannot be considered Test of Interference
as unfair labor practice.
Whether the employer has engaged in conduct
Elements of ULP which it may reasonably be said tends to interfere
with the free exercise of employees’ rights.
1. Existence of Er-Ee relationship between the
offender and offended party Totality of Conduct Doctrine
2. Act is expressly defined in the Code as ULP
An employer’s remarks must be evaluated not only
Aspects of ULP on the basis of their implications, but against the
background of and in conjunction with collateral
ULP has two aspects, namely: circumstances.
1. Civil; and
2. Criminal Expression of opinion by the employer, though
innocent in themselves, was frequently held to be

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culpable because of the circumstances under which
they were uttered.
Yellow Dog Doctrine
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)]
Contracting Out
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. [Art. 259
(c)]
Q: Is contracting out per se ULP?
A: NO. Contracting out, itself, is not ULP. It is the ill
intention that makes it so when it is motivated by a
desire to prevent his employees from organizing
and selecting a collective bargaining
representative, get rid of union men, or escape his
statutory duty to bargain collectively with his
employees’ bargaining representative.
Runaway shop
Refers to business relocation animated by anti-
union animus. It is a plant removed to a new
location in order to discriminate against employees
at the old plant because of their union activities.
Company Unionism
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[Art. 259 (d)].
Forms of company domination:
1. Initiation of the company union idea
2. Financial support to the union
3. Employer encouragement and assistance
4. Supervisory assistance
Discrimination For or Against Union
Membership
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. [Art. 259 (e)]
Discrimination v. Classification
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Discrimination is different from classification. For
instance, it is common management practice to
classify jobs and grant them varying levels of pay
or benefits package. These are valid
differentiations that recognize differences in job
requirements or contributions. They are not
necessarily discrimination classifiable as ULP.
Test of Discrimination
Whenever benefits or privileges given to one is not
given to the other under similar or identical
conditions when directed to encourage or
discourage union membership.
Discrimination Because of Testimony
Dismissing or prejudicing an employee who is
about to give or has given testimony under this
Code.
NOTE: The subject matter of the testimony is
anything under the Labor Code.
ULP also applies to refusal to testify
Violation of Duty to Bargain
It refers to acts that violate the duty to bargain
collectively as prescribed by the Code.
Four Forms of ULP in bargaining:
1. Failure or refusal to meet and convene:
Occurence of Refusal to Bargain
This occurs when the Er refuses or fails to
meet and convene with the majority of his Ees.
To bargain in good faith, an Er must not only
meet and confer with the union which
represents his Ees, but must also recognize the
union for the purpose of CB. (Azucena, 2010)
2. Evading mandatory subjects of bargaining
3. Bad faith in bargaining:
Boulwarism
It is a practice wherein one party gives an offer
to which no further revisions is intended to be
made. It is also known as the “Take-It-or-
Leave-It Bargaining”.
4. Gross violation of the CBA
Paid Negotiation
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 Labor Law and Social Legislation
The act of employer of paying negotiation or 4. Members of one union over members of
attorney’s fees to the union or its officers as part of another union.
the settlement of any issue in collective bargaining
or any other dispute. Arbitrary use of Union Security Clause

Gross Violation of the CBA
It is the flagrant and/or malicious refusal by a
party to comply with the economic provisions of
the CBA.
Individual Bargaining Considered As Unfair
Labor Practice
When the Er attempts to negotiate with individual
workers rather than with the certified bargaining
agent is considered as ULP. (Insular Life Assurance
Co.,Ltd., Employees Assoc.-NATU v. Insular Life
Assurance Co., Ltd., G.R. No. L-25291, January 30,
1971)
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. (Salunga v. CIR)
A union member may not be expelled from the
union, and consequently from his job, for personal
and impetuous reasons or for causes foreign to the
closed shop agreement. (Manila Mandarin
Employees Union v. NLRC)
Refusal to Bargain

NOTE: There is no legal prohibition for an Ee to It is the act of a union in refusing or violating its
bargain with his Er. duty to bargain collectively by entering
negotiations with a fixed purpose of not reaching
ULP OF LABOR ORGANIZATIONS (ULP-LO) an agreement or signing a contract.

NOTE: It is intended to insure that unions

ULP Committed By Labor Organizations
approach the bargaining table with the same
1. Restraint or coercion attitude of willingness to agree as the law requires
2. Union-induced discrimination of management.
3. Refusal to bargain
Featherbedding or Make-Work Arrangements
4. Featherbedding or Make-Work Arrangements
5. CBA deal with employer
Featherbedding refers to an employee practice
6. Gross violation of CBA
which creates or spreads employment by
Restraint or Coercion unnecessarily maintaining or increasing the
number of employees used, or the amount of time
Intereference by a Labor Organization is not consumed, to work on a particular job.
ULP
The practices are found to be economically
A labor organization can actually interfere with wasteful and without any legitimate employee
employees’ right to self-organization as long as it justification.
does not amount to restraint or coercion.
CBA Deal with Employer
Interfering in the exercise of right to organize is
itself a function of self-organizing. (2, Azucena,
Accepting for or accepting some “fee” from the
2016, p. 368)
employer as part of CBA or dispute settlement.
Union-Induced Discrimination Gross Violation of the CBA
This pertains to the attempt of the labor It is the flagrant and/or malicious refusal by a
organization to cause an employer to grant party to comply with the economic provisions of
advantages to: the CBA.
1. Members over non-members; NOTE: If the violation of the CBA is not gross, it is
2. Members in good standing over suspended or not ULP but a mere grievance.
expelled members;
3. Members of the executive board over more Reliefs available in ULP cases
senior employees; or
1. Cease and Desist Order

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 UST LAW PRE-WEEK NOTES 2019
2. Affirmative Order
3. Order to Bargain; or Mandated CBA
4. Disestablishment of the Company-Dominated
Union
Cease and Desist Order
A prohibitive order requiring a person found to be
committing ULP to cease and desist from such ULP
and take affirmative action as will effectuate the
policies of the law including (but not limited to)
reinstatement with or without back pay and
including rights of employees prior to dismissal,
including seniority.
Affirmative Order
It is an order directing either the reinstatement of
the discharged employee without prejudice to their
rights or, if new laborers have been hired, the
dismissal of the hired laborers to make room for
the returning employee.
Order to Bargain
It is an order to compel the respondent to bargain
with the bargaining agent. It can also be an
imposition of a collective bargaining contract upon
an employer who refuses to bargain with the union
of its employees which is known as “mandated
CBA”.
Disestablishment
It is an order directing the employer to withdraw
all recognition from the dominated labor union and
to disestablish the same.
ULP case is not subject to compromise
In view of the public interest involved, they are not
subject to compromise. (E. G. Gochangco Workers
Union v. NLRC) However, in the case of Reformist
Union of R. B. Liner, Inc. v NLRC, the court approved
a compromise agreement finally settling an illegal
strike case. The agreement was voluntarily entered
into and represents a reasonable settlement, thus it
binds the parties.
BLUE SKY BARGAINING
It is defined as making exaggerated or
unreasonable proposals. It connotes demands from
the union which the Er has no capacity to give.
Whether or not the union is engaged in blue-sky
bargaining is determined by the evidence
presented by the union as to its economic
demands. Thus, if the union requires exaggerated
or unreasonable economic demands, then it is
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
guilty of ULP. (Standard Chartered Bank v.
Confessor, G.R. No. 114974, June 16, 2004)
SURFACE BARGAINING
It is the act of “going through the motions of
negotiating” without any legal intent to reach an
agreement. (Standard Chartered Bank v. Confessor,
G.R. No. 114974, June 16, 2004)
Sweetheart Contract
It is when a labor organization asks for or accepts
negotiations or attorney’s fees from Ers as part of
the settlement of any issue in CB or any other
dispute.
Deadlock
It is synonymous with impasse or a standstill
which presupposes reasonable effort at good faith
bargaining but despite noble intentions does not
conclude an agreement between the parties.
Remedies In Case Of Deadlock
The parties, during renegotiation, may:
1. Call upon the NCMB to intervene for the
purpose of conducting conciliation or
preventive mediation;
2. Refer the matter for voluntary arbitration or
compulsory arbitration;
3. Declare a strike or lockout upon compliance
with the legal requirements (this remedy is a
remedy of last resort).
PEACEFUL CONCERTED ACTIVITIES
STRIKE
It means any temporary stoppage of work by the
concerted action of Ees as a result of an industrial
or labor dispute [IRR, Book V, Rule I, Sec. 1(uu)].
“Striking Employee” is still an employee
During a strike the Er-Er relationship is not
terminated but merely suspended as the work
stoppage is not permanent but only temporary.
Thus, a striking employee is still an employee.
However, the effects of employment are
suspended, hence a striking employee, as a rule, is
not entitled to his wage during the strike (2,
Azucena, 2016, p. 590).
Elements of strike
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1. Existence of established relationship between
the strikers and the person or persons against
whom the strike is called
2. Existence of an Er-Ee relationship
3. Existence of a labor dispute and the utilization
by labor of the weapon of concerted refusal to
work as a means of persuading, or coercing
compliance with the working men’s demands
4. Employment relation is deemed to continue
although in a state of belligerent suspension
5. Temporary work stoppage
6. Work stoppage is done through concerted
action
7. The striking group is a legitimate labor
organization; in case of a bargaining deadlock,
it must be the Ees’ sole bargaining
representative
Tests in determining the legality of strike
The following must concur:
1. Purpose test – The strike must be due to either
bargaining deadlock and/or the ULP
2. Compliance with the procedural and
substantive requirements of the law. (See
requisites of a valid strike)
3. Means employed test – It states that a strike
may be legal at its inception but eventually be
declared illegal if the strike is accompanied by
violence which is widespread, pervasive and
adopted as a matter of policy and not mere
violence which is sporadic and which normally
occurs in a strike area.
LOCKOUT
It means any temporary refusal of an Er to furnish
work as a result of an industrial or labor dispute
[LC, Art. 212 (p)]. It is an Er’s act of excluding Ees
who are union members from the plant. (Sta. Mesa
Slipways Engineering Co. vs. CIR, 48 O.G. 3353)
To constitute a lockout, the refusal to furnish
work must be:
1. Temporary; and
2. The result of a labor dispute. (Ungos, The
Fundamentals of Labor Law Review, page 237)
Lockout must be for a lawful purpose and carried
out through lawful means. A lockout is unlawful
where it is declared in order to defeat
organizational and bargaining rights of employees.
(Dingsalan vs, NLU, 98 Phil. 649)
Lockout amounting to ULP
A lockout, actual or threatened, as a means of
dissuading the Ees from exercising their rights is
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
clearly an ULP. However, to hold an Er guilty, the
evidence must establish that the purpose was to
interfere with the Ees exercise of their rights.
REQUISITES OF A LAWFUL STRIKE / LOCKOUT
1. It must be based on a valid and factual ground;
2. A strike or lockout notice shall be filed with the
NCMB at least 15 days before the intended date of
the strike or lockout if the issues raised are unfair
labor practices, or at least 30 days before the
intended date thereof if the issue involves
bargaining deadlock.
3. In cases 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
after the strike vote is conducted and the result
thereof submitted to the DOLE.
4. Notice of conduct of strike vote 24 hours before
the intended strike vote is filed with the DOLE
(compliance with the 24-hour prior notice rule).
5. A strike must be approved by a majority vote
of the members of the union and a lockout must be
approved by a majority vote of the members 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.
6. A strike or lockout vote shall be reported to
the NCMB-DOLE Regional Branch at least 7 days
before the intended strike or lockout subject to
the cooling-off period.
7. In the event the result of the strike/lockout
ballot is filed within the cooling-off period, the 7-
day requirement shall be counted from the day
following the expiration of the cooling-off period
(NSFW vs. Ovejera, G.R. No. 59743, May 31, 1982).
8. The dispute must not be the subject of an
assumption of jurisdiction by the President or the
SLE, a certification for compulsory arbitration, or
submission to compulsory or voluntary arbitration
or a subject of a pending case involving the same
grounds for the strike or lockout
PICKETING
It is the act of marching to and from the Er’s
premises which is usually accompanied by the
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display of placard and other signs, making known
the facts involved in a labor dispute. This is in the
hope of being able to persuade peacefully other
workers not to work in the establishment, and
customers not to do business there.
Requisites for lawful picketing
1. It should be peacefully carried out;
2. There should be no act of violence, coercion or
intimidation;
3. The ingress to (entrance) or egress from (exit)
the company premises should not be
obstructed;
4. Public thoroughfares should not be impeded.
NOTE: In picketing, there is no work stoppage
RIGHT TO STRIKE AND LOCKOUT
The right to strike or lockout is NOT absolute.
Instances where a strike or lockout CANNOT be
declared
1. Violations of CBAs, except flagrant and/or
malicious refusal to comply with economic
provisions
2. Inter-union disputes
3. Intra-union disputes
4. Failure to file a notice of strike or lockout or
lack of necessary strike or lockout vote
obtained and reported to the Board.
5. After assumption of jurisdiction by the
Secretary has been declared
6. After certification or submission of the dispute
to compulsory or voluntary arbitration
7. There is already a pending case involving the
same grounds for the strike or lockout
8. Execution and enforcement of final orders,
decisions, resolutions or awards in no. 7
9. Labor standards cases such as wage orders
(IRR, as amended by D.O. 40-03, Book V, Rule
XXII, Sec. 5)
10. Any issue covered by a no strike commitment
in a duly executed CBA
Declaration of a strike or lockout
The following may declare a strike or lockout:
1. Any certified or duly recognized bargaining
representative may declare a strike in cases of
bargaining deadlocks and ULP. The Er may
declare a lockout in the same cases.
2. In the absence of a certified or duly recognized
bargaining representative, any LLO in the
establishment may declare a strike but only on
grounds of ULP [IRR as amended by D.O. 40-03,
Book V, Rule XXII, Sec. 6].
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
A strike conducted by a minority union is patently
illegal because no labor dispute which will justify
the conduct of a strike may exist between the
employer and a minority union (United Restauror
vs. Torres, et al., 26 SCRA 435). The right to strike is
reserved for the EBR.
Grounds for declaration of strike or lockout
1. Collective Bargaining Deadlock – economic
2. ULP act (includes flagrant and/or malicious
refusal to comply with the economic
provisions of the CBA) – political
Conversion Doctrine
It is when a strike starts as economic and later, as it
progresses, it becomes a ULP, or vice versa.
Economic strike vs. ULP strike
REQUISITES FOR VALID
STRIKE/LOCKOUT
Requisites of a lawful strike/lockout
1. It must be based on a valid and factual
ground;
2. A strike or lockout notice shall be filed
with the NCMB at least 15 days before the
intended date of the strike or lockout if the
issues raised are unfair labor practices, or
at least 30 days before the intended date
thereof if the issue involves bargaining
deadlock.
3. In cases 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 after the strike vote is
conducted and the result thereof
submitted to the DOLE.
4. Notice of conduct of strike vote 24 hours
before the intended strike vote is filed
with the DOLE (compliance with the 24-
hour prior notice rule).
5. A strike must be approved by a majority
vote of the members of the union and a
lockout must be approved by a majority
vote of the members 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.
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 Labor Law and Social Legislation
6. A strike or lockout vote shall be reported
to the NCMB-DOLE Regional Branch at
least 7 days before the intended strike or
lockout subject to the cooling-off period.
7. In the event the result of the
strike/lockout ballot is filed within the
cooling-off period, the 7-day requirement
shall be counted from the day following
the expiration of the cooling-off period
(NSFW vs. Ovejera, G.R. No. 59743, May 31,
1982)
8. The dispute must not be the subject of an
assumption of jurisdiction by the
President or the SLE, a certification for
compulsory arbitration, or submission to
compulsory or voluntary arbitration or a
subject of a pending case involving the
same grounds for the strike or lockout.
Cooling-off Period
It is the period of time given by the NCMB to
mediate and conciliate the parties. It is the span of
time allotted by law for the parties to settle their
disputes in a peaceful manner before staging a
strike or lockout. The principles of improved offer
and reduced offer balloting apply during the
cooling-off period.
The start if the cooling-off period should be
reckoned not on the date the union or employer
prepared the notice of strike or lockout, as the case
may be, but from the time the notice of strike or
lockout is filed with the NCMB, a copy of said notice
having been served on the other party concerned.
Cooling-off Periods Provided By Law
a. In cases of CBD - 30 days
b. In cases of ULP - 15 days
NOTE: In the case of union busting the
cooling-of period need not be observed.
Tests in determining the legality of strike
The following must concur:
1. Purpose test - The strike must be due to
either bargaining deadlock and/or the ULP
2. Compliance with the procedural and
substantive requirements of the law. (See
requisites of a valid strike)
3. Means employed test – It states that a
strike may be legal at its inception but
eventually be declared illegal if the strike is
accompanied by violence which is
widespread, pervasive and adopted as a
matter of policy and not mere violence
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
which is sporadic and which normally
occurs in a strike area.
When Does Union Busting Exist ?
The codal definition has specific elements:
1. The union officers are being dismissed;
2. Those officers are the ones duly elected in
accordance with the union constitution and
by-laws; and
3. The existence of the union is threatened.
Q: Is the Strike Vote still necessary in case of
union-busting?
A: Yes. The time requirement of 15 days for the
filing of the Notice of Strike shall be dispensed with
but the strike vote requirement, being mandatory
in character, shall “in every case” be complied with.
Legality of No Strike/Lockout Clause
A no strike/lockout clause is legal but it is
applicable only to economic strikes, not ULP
strikes. As a provision in the CBA, it is a valid
stipulation although the clause may be invoked by
an Er only when the strike is economic in nature or
one which is conducted to force wage or other
concessions from the Er that are not mandated to
be granted by the law itself. It would be
inapplicable to prevent a strike which is grounded
on ULP. (Panay Electric Co. v. NLRC, G.R. No. 102672,
October 4, 1995); (Malayang Samahan ng mga
Manggagawa sa Greenfield v. Ramos, G.R. No.
113907, February 28, 2000)
Enjoinment of strike
GR: Strikes arising from a labor dispute may not be
enjoined.
XPNs:
1. Assumption order by SLE [LC, Art. 278(g)]
2. Enjoining or restraining any actual or
threatened commission of any unlawful act in
any labor dispute [LC, Art. 225(e)]
3. When innocent-by-standers are being
prejudiced
ASSUMPTION OF JURISDICTION BY THE DOLE
SECRETARY OR CERTIFICATION OF THE LABOR
DISPUTE TO THE NLRC FOR COMPULSORY
ARBITRATION
When DOLE Secretary may assume or certify a
labor dispute
The SLE may assume jurisdiction over a labor
dispute, or certify it to the NLRC for compulsory
arbitration, if, in his opinion, it may cause or likely
to cause a strike or lockout in an industry
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indispensable to the national interest. The The mere issuance of an assumption/certification
President may also exercise the power to assume order automatically carries with it a return-to-
jurisdiction over a labor dispute. work order, even if the directive to return to work
is not expressly stated therein. It is thus not
Effect of such assumption or certification of necessary for the DOLE Secretary to issue another
labor dispute to the NLRC order directing the strikers to return to work.
1. on intended or impending strike or
lockout – automatically enjoined even EFFECT OF DEFIANCE OF ASSUMPTION OR
if a Motion for Reconsideration is CERTIFICATION ORDERS
filed;
2. on actual strike or lockout – strikers The defiance by the union, its officers and
or locked out Ees should immediately members of the SLE’s assumption of jurisdiction or
return to work and Er should readmit certification order constitutes a valid ground for
them; and dismissal. [LC, Art. 263(g)]
3. on cases filed or may be filed – all
shall be subsumed/absorbed by the ILLEGAL STRIKE
assumed or certified case except when
the order specified otherwise. The A strike is illegal where:
parties to the case should inform the 1. It is contrary to specific prohibition of law,
SLE of pendency thereof. such as strike by Ees performing
governmental functions;
Issues that the SLE may resolve when he 2. Violates a specific requirement of law;
assumes jurisdiction over a labor dispute 3. Declared for an unlawful purpose, such as
inducing the Er to commit ULP against
1. Issues submitted to the SLE for non-union Ees;
resolution and such issues involved in 4. Employs unlawful means in the pursuit of
the labor dispute itself (St. its objective, such as widespread terrorism
Scholastica’s College v. Torres, G.R. No. of non-strikers;
100158, June 2, 1992). 5. Declared in violation of an existing
2. SLE may subsume pending labor cases injunction;
before LAs which are involved in the 6. Contrary to an existing agreement, such as
dispute and decide even issues falling a no strike clause or conclusive arbitration
under the exclusive and original clause
jurisdiction of LAs such as the
declaration of legality or illegality of LIABILITY OF UNION OFFICERS vs. LIABILITY
strike (Int’l. Pharmaceuticals v. SLE, OF ORDINARY WORKERS
G.R. Nos. 92981-83, January 9, 1992)
Basis Union Ordinary worker
Some principles on assumption/certification Officer
power of the DOLE Secretary:
May be Cannot be
declared to terminated
1. Prior notice and hearing are NOT required in
have lost his
the issuance of the assumption or certification
employment NOTE: The LC
order status protects ordinary,
2. The DOLE Secretary may seek the assistance of Knowingly rank-and-file union
law enforcement agencies like the Philippine
participating members who
National Police to ensure compliance with the in an illegal participated in
provision thereof as well as with such orders strike such a strike from
as he may issue to enforce the same
losing their jobs
3. Assumption or certification orders are provided that they
immediately executory and are to be strictly did not commit
complied with even during the pendency of a
illegal acts during
motion for reconsideration or petition
the strike.
questioning its validity. (St. Scholastica’s
Knowingly May be May be terminated
College v. Torres, G.R. No. 100158, June 2, 1992)
participating terminated
in the
Return-to-work order
commission
of illegal acts
during strike

UNIVERSITY OF SANTO TOMAS 51 UST L A W B A R O P E R A T I O N S

FACULTY OF CIVIL LAW ACADEMICS COMMITT EE 2019
 Labor Law and Social Legislation
Rule on reinstatement of striking workers
Striking Ees are entitled to reinstatement,
regardless of whether or not the strike was the
consequence of the Er’s ULP because while out on
strike, the strikers are not considered to have
abandoned their employment, but rather have only
ceased from their labor; the declaration of a strike
is not a renunciation of employment relation.
Persons not entitled to reinstatement
1. Union officers who knowingly participate in
the illegal strike
2. Any striker or union who knowingly
participates in the commission of illegal acts
during the strike
LIABILITY OF EMPLOYER
Entitlement of strikers to their backwages or
strike duration pay
GR: Strikers are not entitled to their backwages or
strike duration pay even if such strike was legal.
XPNs:
1. Where the strikers voluntarily and
unconditionally offered to return to work,
but the Er refused to accept the offer –
Ers are entitled to backwages from the
date their offer was made
2. When there is a return-to-work order and
the Ees are discriminated against other
Ees, workers are entitled to backwages
from the date of discrimination
3. In case of a ULP strike, in the discretion of
the authority deciding the case
4. When the Ees were illegally locked out
and thus compel them to stage a strike.
REQUISITES FOR LABOR INJUNCTIONS
Injunction in Labor Disputes
GR: No temporary or permanent injunction or
restraining order in any case involving or growing
out of labor disputes shall be issued by any court.
(LC, Art. 266)
XPNs:
1. Injunction power of the NLRC (LC, Art. 225)
2. Prohibited activities during a strike or lockout
(LC, Art. 279)
3. Assumption or certification power of the SOLE
in national interest cases [LC, Art. 278(g)]
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Requisites in issuing an injunction in Labor
Cases
1. There is an actual or threatened commission of
any or all prohibited or unlawful acts in any
labor dispute;
2. There is a need to enjoin or restrain such acts
or to require the performance of a particular
act;
3. If not restrained or performed forthwith, may
cause grave or irreparable damage to any
party or render ineffectual any decision in
favor of such party. [LC, Art. 225(e)]
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 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.
INNOCENT BYSTANDER RULE
Innocent bystander
A third party in a picketing who has no existing
connection or interest with the picketing union.
(MSF Tire & Rubber v. CA, G.R. No. 128632, August 5,
1999)
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Required proof to be established by an
innocent bystander before a court enjoins a
labor strike
The innocent by stander must show:
1. Compliance with the grounds specified in Rule
58 of the Rules of Court, and
2. That it is entirely different from, without any
connection whatsoever to, either party to the
dispute and, therefore, its interests are totally
foreign to the context thereof. (MSF Tire &
Rubber v. CA, G.R. No. 128632, August 5, 1999)
When injunction on picketing is allowed
through the regular courts and not through the
NLRC
In situations where the picket affects not only the
Er but also the business operations of other
establishments owned by third parties, an
injunction may be secured by the latter from the
regular courts to enjoin the picket under the
“Innocent Bystander Rule.” Under this rule, the
third party Ers or “innocent bystanders” who have
no ER-Ee relationship with the picketing strikers,
may apply for injunction with the regular courts
(not with the NLRC) to enjoin the conduct of the
picket.
Because of the absence of such Er-Ee relationship,
the NLRC cannot entertain such application for
injunction from “innocent bystanders.” Only the Er
of the picketers can apply for injunctive relief from
the NLRC.
JURISDICTION AND REMEDIES
LABOR ARBITER
LAs only have original and exclusive jurisdiction.
They have no appellate jurisdiction.
Cases falling under the Labor Arbiters’
exclusive and original jurisdiction to hear and
decide:
1. ULP
2. Termination disputes
3. Those involving wages, rates of pay, hours of
work, and other terms and conditions of
employment, accompanied with a claim for
reinstatement.
4. Claims for actual, moral, exemplary and other
forms of damages arising from Er-Ee relations
5. Cases arising from any violation of Art. 279, LC
including questions involving the legality of
strikes and lockouts.
6. Monetary claims of overseas contract workers
arising from Er-Ee relations under the RA
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
10022 or Act Amending the Migrant Workers
and Overseas Filipinos Act of 1995.
7. Wage distortion disputes in unorganized
establishments not voluntarily settled by the
parties pursuant to Wage Rationalization Act
or RA 6727.
8. Enforcement of compromise agreements when
there is non-compliance by any of the parties
pursuant to Art. 233 of the LC, as amended;
and
9. Other cases as may be provided by law.
NOTE: Although the provision speaks of exclusive
and original jurisdiction of LAs, the cases
enumerated may instead be submitted to a
voluntary arbitrator by agreement of the parties
under Art. 275 of the LC. The law prefers voluntary
over compulsory arbitration.
Extent of the jurisdiction of the Labor Arbiter if
there are unresolved matters arising from the
interpretation of the CBA
Where the dispute is just in the interpretation,
implementation, or enforcement stage of the
termination, it may be referred to the grievance
machinery set up by the CBA or by voluntary
arbitration. Where there was already actual
termination, i.e., violation of rights, it is already
cognizable by the LA (Maneja v. NLRC, G.R. No.
124013, June 5, 1998)
NATIONAL LABOR RELATIONS COMMISSION
Kinds of jurisdiction of the NLRC
1. Exclusive Original Jurisdiction
a. Certified labor disputes causing or likely to
cause a strike or lockout in an industry
indispensable to national interest, certified
to it by the SLE or the President of the
Philippines for compulsory arbitration;
b. Injunction in ordinary labor disputes 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;
c. Injunction in strikes or lockouts under Art.
279 of the LC;
d. Contempt cases.
2. Exclusive Appellate Jurisdiction
a. All cases decided by the LA under Art.
224(b) of the LC and Sec. 10 of RA 8042
(Migrant Worker’s Act); and
b. Cases decided by the Regional Offices of
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 Labor Law and Social Legislation
DOLE in the exercise of its adjudicatory
function under Art.129 of the LC over
monetary claims of workers amounting to
not more than P5,000 and not accompanied
by claim for reinstatement.
263(g) of the LC does not require the existence of a
strike, but only of an industrial dispute.
[Government Service Insurance System Employees
Association (GSISEA), et al. v. Court of Industrial
Relations, G.R. No. L-18734, December 30, 1961]

Effect Of NLRC Reversal Of Labor Arbiter’s

Order Of Reinstatement BUREAU OF LABOR RELATIONS
Jurisdiction (Original and Appellate)
Dismissed employees may collect wages during Coverage of the BLR’s jurisdiction and functions
the period between the Labor Arbiter’s order of
reinstatement pending appeal and the NLRC’s The BLR no longer handles all labor management
decision overturning that of the LA’s disputes; rather its functions and jurisdiction
are largely confined to:
A dismissed employee whose case was favorably
decided by the LA is entitled to receive wages 1. Union matters;
pending appeal upon reinstatement, which 2. Collective bargaining registry; and
reinstatement is immediately executory. After the 3. Labor education.
LA’s decision is reversed by a higher tribunal, the
employer’s duty to reinstate the dismissed Kinds of cases that fall within BLR’s jurisdiction
employee is effectively terminated. The employee,
in turn, is not required to return the wages that he The BLR has original and exclusive jurisdiction
had received prior to the reversal of the LA’s over:
decision.
1. Inter-union disputes;
Remedies 2. Intra-union disputes;
3. Other related labor relations disputes.
Availability of judicial review of the NLRC’s
decision NATIONAL CONCILIATION AND MEDIATION
BOARD
Judicial review of NLRC’s decision is available
through a petition for certiorari (Rule 65) which Alternative modes of settlement of labor
should be initially filed with the CA in strict dispute
observance of the doctrine on the hierarchy of
courts as the appropriate forum for the relief 1. Voluntary Arbitration
desired. The CA is procedurally equipped to 2. Conciliation
resolve unclear or ambiguous factual finding, aside 3. Mediation
from the increased number of its component
divisions. (St. Martin Funeral Home v. NLRC, G.R. No. The proceedings are non-litigious.
130866, September 16, 1998)
All labor disputes are required to be submitted
Injunction or a temporary restraining order to mandatory conciliation-mediation
(TRO)
GR: All issues arising from labor and employment
The power of the NLRC to enjoin or restrain, any shall be subject to mandatory conciliation-
actual or threatened, commission of, any or all, mediation. The LA or the appropriate DOLE agency
prohibited or unlawful acts under Art. 218 of LC or office that has jurisdiction over the dispute shall
can only be exercised in labor disputes. entertain only endorsed or referred cases by the
duly authorized officer. [Labor Code as amended by
R.A. 103960, Art. 228(a)]
Certified Cases
XPNs:
These are cases certified or referred to the 1. Grievance machinery and Voluntary
Commission for compulsory arbitration under Art. Arbitration, in which case, their agreement will
263(g) of the LC dealing about national interest govern;
cases. 2. When excepted by the SLE. (Ibid.)

A national interest dispute may be certified to the NOTE: Any or both parties involved in the dispute
NLRC even before a strike is declared since Art. may pre-terminate the conciliation-mediation

UNIVERSITY OF SANTO TOMAS 54 UST L A W B A R O P E R A T I O N S

FACULTY OF CIVIL LAW ACADEMICS COMMITT EE 2019
 UST LAW PRE-WEEK NOTES 2019
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. [LC as amended by R.A. 103960, Art.
228(a)]
Preventive Mediation
Preventive mediation case
Preventive mediation case refers to the potential
labor dispute which is the subject of a formal or
informal request for conciliation and mediation
assistance sought by either or both parties or
upon the initiative of the NCMB to avoid the
occurrence of an actual labor dispute.
DOLE REGIONAL DIRECTOR
Jurisdiction of the DOLE Regional Directors
The Dole Regional Directors have original and
exclusive jurisdiction over the following cases:
1. Labor standards enforcement cases under
Article 128;
2. Small money claims cases arising from labor
standards violations in the amount not
exceeding P5,000.00 and not accompanied
with a claim or reinstatement under Article
129;
3. Occupational safety and health violation;
4. Registration of unions and cancellation
thereof, cases filed against unions and other
labor relations related cases;
5. Complaints against private recruitment and
placement agencies for local employment; and
6. Cases submitted to them for voluntary
arbitration in their capacity as Ex- Officio
Vouluntary Arbitrators under Department
Order No. 83 - 07, Series of 2007.
Money claims falling under the jurisdiction of
the DOLE Regional Directors
Under Art. 129 of the LC, the RDs or any of the duly
authorized hearing officers of DOLE have
jurisdiction over claims for recovery of wages,
simple money claims and other benefits, provided
that:
1. The claim must arise from Er-Ee relationship;
2. The claimant does not seek reinstatement; and
3. The aggregate money claim of each employee
does not exceed Php 5,000.00.
DOLE SECRETARY
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Visitorial Powers And Enforcement Powers
The DOLE issued D.O. No. 57-04, also called the
Labor Standards Enforcement Framework (LSEF).
The framework comprises three approaches:
1. Self-assessment;
2. Inspection;
3. Advisory service.
Visitorial power
It constitutes:
1. Access to Er’s records and premises at any
time of the day or night, whenever work is
being undertaken;
2. To copy from said records;
3. Question any Ee and investigate any fact,
condition or matter which may be necessary to
determine violations or which may aid in the
enforcement of the LC and of any wage order,
or rules and regulation issued pursuant
thereto.
Enforcement power
It is the power of the SOLE to:
1. Issue compliance orders
2. Issue writs of execution for the enforcement of
their orders, except in cases where the Er
contests the findings of the labor officer and
raise issues supported by documentary proof
which were not considered in the course of
inspection
3. Order stoppage of work or suspension of
operation when non-compliance with the law
or implementing rules and regulations poses
grave and imminent danger to health and
safety of workers in the workplace
4. Require Ers to keep and maintain such
employment records as may be necessary in
aid to the visitorial and enforcement powers
5. Conduct hearings within 24 hours to
determine whether:
a. An order for stoppage of work or
suspension of operations shall be lifted or
not; and
b. Er shall pay the concerned Ees their
salaries in case the violation is attributable
to his fault. (as amended by RA 7730; Guico
v. Secretary, G.R. No. 131750, November 16,
1998)
Assumption Of Jurisdiction
SOLE can assume jurisdiction over a labor
dispute
When there is a labor dispute causing or likely to
cause a strike affecting national interest, the SLE,
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 Labor Law and Social Legislation
on his own initiative or upon petition by any of the
parties, may either assume jurisdiction or certify
the dispute to the NLRC for compulsory arbitration.

Cases within the appellate jurisdiction of the

SLE

1. Appeal from and adverse decision of the POEA.

(2003 POEA Rules and Regulations, Rule V, Part
VII, Sec. 1; Eastern Mediterranean Maritime Ltd.
And Agemar Manning Agency Inc., v. Surio et.
al., G.R. No. 154213, August 23, 2012)

2. Appeal the order or results of a certification

election on the ground that the Rules and
Regulations or parts thereof established by the
SLE for the conduct of election have been
violated. (LC, Art. 259)

3. A review of cancellation proceedings decided

by the BLR in the exercise of its exclusive and
original jurisdiction. (Abbott Laboratories
Philippines, Inc. v. Abbott Laboratories
Employees Union, G.R. No.131374, January 26,
2000)

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 UST LAW PRE-WEEK NOTES 2019
4.
Powers of the Secretary of Labor and Employment vs. Regional Director vs. Labor Arbiter
Visitation and Enforcement
Power of Secretary of Labor
and Employment
a) Inspection of establishments;
and
b) Issuance of orders to compel
compliance with labor standards,
wage orders and other labor
laws
Enforcement of labor legislation
in general
Proceeding is an offshoot of
routine inspections
No jurisdictional requirements
Appealable to SLE (In case
compliance order is issued by
Regional Office)
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Regional Director
Adjudication of Ee’s claims for
wages and benefits
Limited to monetary claims
Initiated by sworn complaints
filed by any interested party
Jurisdictional requirements:
1) Complaint arises from Er-Ee
relationship
2) Claimant is an Ee or person
employed in domestic or
household service or a HH
3) Complaint does NOT include
a claim for reinstatement
4) Aggregate money claim of
EACH claimant does not
exceed P5,000
Appealable to NLRC
57
Labor Arbiter
LA exercises original and exclusive
jurisdiction on cases involving :
a. ULP ;
b. termination disputes ;
c. wages ;
d. rates of pay;
e. hours of work ;
f. other terms of employment, claims
for damages arising from Er-Ee
relationship, legality of strikes and
lockouts ; and
g. all other claims arising from Er-Ee
relationship involving an amount
exceeding Php 5,000.00
All other claims arising from Er-Ee
relations
LA decides case within 30 calendar
days after submission of the case by the
parties for decision
1) All other claims arising from Er-Ee
relations
2) Including those of persons in
domestic or household service
3) Involving an amount exceeding
P5,000
4) Whether or not accompanied with a
claim for reinstatement
Appealable to NLRC
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 Labor Law and Social Legislation
and shall be resolved as grievances under the
GRIEVANCE MACHINERY AND VOLUNTARY CBA
ARBITRATION 5. Any other labor disputes upon agreement by
the parties including ULP and bargaining
Grievance deadlock. (LC, Art. 275)

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
provision of the CBA, or company personnel
policies.
Grievance machinery
Effect of the award of voluntary arbitrator
The decision or award of the voluntary arbitrator
acting within the scope of its authority shall
determine the rights of the parties and their
decisions shall have the same legal effects as
judgment of the courts. Such matters on fact and
law are conclusive.

It refers to the mechanism for the adjustment and
resolution of grievances arising from the
interpretation or implementation of a CBA and
those arising from the interpretation or
enforcement of company personnel policies. It is
part of the continuing process of CB.
Q: What is the effect of absence of a grievance
machinery under the CBA, being considered as
a mandatory provision of the CBA?
Decisions of voluntary arbitrators appealable
GR: Decisions of VA are final and executory after
10 calendar days from receipt of the copy of the
award or decision by the parties. (LC, Art. 262-A)
XPN: Decisions of VA may still be subject to judicial
review.
Mode of appeal from VA to CA

A: The CBA cannot be registered with the DOLE
Regional Office. Despite non-registration, the CBA
will not be rendered invalid or unenforceable as
between parties but the contract bar rule will be
inoperative.
In the case of Samahan ng Manggawa sa HYATT v.
Bacungan, (G. R. No. 149050, Mar. 25, 2009), the
Supreme Court ruled that a decision or award of a
Voluntary arbitrator is appealable to the CA via
petition for review under Rule 43, not Rule 65.

Cases falling under the jurisdiction of the

Grievance Machinery

Any grievance arising from:

1. The interpretation or implementation of the
CBA; and
2. The interpretation or enforcement of company
personnel policies.

Jurisdiction of the Voluntary Arbitrators

Original and exclusive jurisdiction over:

1. All unresolved grievances arising from the:

a. Implementation or interpretation of the
CBA
b. Interpretation or enforcement of company
personnel policies
2. Wage distortion issues arising from the
application of any wage orders in organized
establishments
3. Those arising from interpretation and
implementation of productivity incentive
programs under R.A. 6971
4. Violations of CBA provisions which are not
gross in character are no longer treated as ULP

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 Labor Law and Social Legislation
PRESCRIPTION OF ACTIONS
Rules as regards to the prescriptive period
provided for in the LC and Special laws on
Labor
SUBJECT
Criminal Offenses penalized under the LC
and its IRR
ULP
Money Claims
[including incremental proceeds arising
from tuition fees under PD451 (MLQU
Association v. MLQU, G.R. No. 82312, 19
April 1989)]
All money claims accruing prior to the
effectivity of the LC
Illegal Dismissal
Claim for backwages
Workmen’s Compensation claims accruing
prior to the effectivity of the LC and
between Nov. 1, 1974-Dec. 31, 1974
Reinstatement
Simple Illegal Recruitment
Syndicated or Large-scale Illegal
Recruitment
Union funds
SSS Violations
GSIS Benefits
Employee’s Compensation Claims
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
PRESCRIPTIVE PERIOD
3years from the date of commission or discovery thereof
(People v. Duque, 212 SCRA 607)
1 year from accrual of such ULP; otherwise forever barred
(LC, Art. 290)
GR: 3 years from the time the cause of action accrued;
otherwise forever barred (LC, Art. 291)
XPN: Promissory Estoppel
Within 1 year from the date of effectivity, in accordance with
IRR; otherwise, they shall forever be barred
4 years. It commences to run from the date of formal
dismissal. [Mendoza v. NLRC, G.R. No. 122481, (1998)]
4 years – Since an award of backwages is merely consequent
to a declaration of illegal dismissal. (George A. Arriola v.
Pilipino Star Ngayon, Inc. and Miguel G. Belmonte, G.R. No.
175689, August 13, 2014)
Dec. 31, 1974 shall be filed not later than Mar. 31, 1975
before the appropriate regional offices of the DOLE. (LC, Art.
291)
4 years (Callanta v. Carnation, 145 SCRA 268)
5 years (Republic Act No. 8042)
20years (Republic Act No. 8042)
After 3 years from the date of submission of the annual
financial report to the DOLE or from the date the same should
have been submitted as required by law, whichever comes
earlier. (Omnibus Rules Implementing the LC, Book VII, Rule II,
Sec. 5)
20 years from the time of delinquency is known or the
assessment is made or the benefit accrues as the case may be
(Republic Act No. 8282)(Lo v. CA, G.R. No. 128667, 17 December
1999)
GR :4 years
XPN: Life and retirement benefits – Imprescriptible
3 years from accrual of cause of action
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