Professional Documents
Culture Documents
ETC. ........................................................................... 25
GSIS.......................................................................... 62
BUREAU OF LABOR RELATIONS (BLR) – MED
COVERAGE ................................................................... 62
ARBITERS ................................................................. 92
EXCLUSIONS FROM COVERAGE ........................................... 62
JURISDICTION (ORIGINAL AND APPELLATE) .......................... 92
BENEFITS ..................................................................... 62
BENEFICIARIES .............................................................. 63
NATIONAL CONCILIATION AND MEDIATION BOARD
(NCMB) .................................................................... 92
LIMITED PORTABILITY LAW ...................................... 63
NATURE OF PROCEEDINGS ................................................ 92
COVERAGE ................................................................... 63
CONCILIATION VS. MEDIATION ........................................... 92
PROCESS ..................................................................... 63
WHY? ......................................................................... 63
DOLE REGIONAL DIRECTORS ................................... 93
JURISDICTION ............................................................... 93
DOLE SECRETARY..................................................... 93
VISITORIAL AND ENFORCEMENT POWERS.............................. 93
POWER TO SUSPEND EFFECTS OF TERMINATION ..................... 93
ASSUMPTION OF JURISDICTION .......................................... 94
APPELLATE JURISDICTION ................................................ 94
VOLUNTARY ARBITRATION POWERS .................................... 94
ANNEX A................................................................... 97
Fundamental Principles and economic growth; hence, the need to weigh and balance
the rights and welfare of both the employee and employer.
Article II, Section 10. The State shall promote social justice The Constitution is primarily a document of social justice,
in all phases of national development. and although it has recognized the importance of the
private sector, it has not embraced fully the concept of
General definition laissez-faire or relied on pure market forces to govern the
Social Justice is neither communism, nor despotism, nor economy. [Employees Confederation of the Philippines vs.
atomism, nor anarchy, but the humanization of laws and NWPC, 1991]
the equalization of social and economic forces by the State
so that justice in its rational and objectively secular ARTICLE III, SECS. 1, 4, 8.
conception may at least be approximated. [Calalang vs. Article III, Section 1. No person shall be deprived of life,
Williams, 1940] liberty, or property without due process of law, nor shall
any person be denied the equal protection of the laws.
Welfare State
The welfare state concept is found in the constitutional
Due Process
clause on the promotion of social justice to ensure the
Due process requirements are two-fold – substantive
well-being and economic security of all the people, and in
[dismissal should be for a valid and authorized cause as
the pledge of protection to labor with specific authority to
provided by law] and procedural (due notice and hearing).
regulate the relations between landowners and tenants
[Salaw vs. NLRC, 1991]
and between labor and capital. [Alalayan vs. National
Power Corporation, 1968]
Labor as Property Right
One’s employment is a property right, and the wrongful
Article II, Section 11. The State values the dignity of every interference therewith is an actionable wrong. [Sibal vs.
human person and guarantees full respect for human Notre Dame of Greater Manila, 1990]
rights.
Article III, Section 4. No law shall be passed abridging the
Article II, Section 13. The State recognizes the vital role of freedom of speech, of expression, or of the press, or the
the youth in nation-building and shall promote and protect right of the people peaceably to assemble and petition the
their physical, moral, spiritual, intellectual, and social well- government for redress of grievances.
being. It shall inculcate in the youth patriotism and
nationalism, and encourage their involvement in public
Article III, Section 8. The right of the people, including those
and civic affairs.
employed in the public and private sectors, to form unions,
associations, or societies for purposes not contrary to law
Article II, Section 14. The State recognizes the role of shall not be abridged.
women in nation-building, and shall ensure the
fundamental equality before the law of women and men. ART. XIII, SECS. 1, 2, 3, 13, 14.
Article XIII, Section 1. The Congress shall give highest
Article II, Section 18. The State affirms labor as a primary priority to the enactment of measures that protect and
social economic force. It shall protect the rights of workers enhance the right of all the people to human dignity,
and promote their welfare. reduce social, economic, and political inequalities, and
remove cultural inequities by equitably diffusing wealth
and political power for the common good.
Article II, Section 20. The State recognizes the
indispensable role of the private sector, encourages private
To this end, the State shall regulate the acquisition,
enterprise, and provides incentives to needed investments.
ownership, use, and disposition of property and its
increments.
Limits of Social Justice
Social justice should be used only to correct an injustice. It
must be founded on the recognition of the necessity of Article XIII, Section 2. The promotion of social justice shall
interdependence among diverse units of a society, and of include the commitment to create economic opportunities
the protection that should be equally and evenly extended based on freedom of initiative and self-reliance.
to all groups as a combined force in our social and
economic life. As partners in nation-building, labor and Article XIII, Section 3. The State shall afford full protection
management need each other to foster productivity and to labor, local and overseas, organized and unorganized,
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and promote full employment and equality of employment of the Labor Code. [University of Immaculate Concepcion
opportunities for all. Inc v Sec of Labor, 2005]
It shall guarantee the rights of all workers to self-
organization, collective bargaining and negotiations, and Article II, Section 13. The State recognizes the vital role of
peaceful concerted activities, including the right to strike in the youth in nation-building and shall promote and protect
accordance with law. They shall be entitled to security of their physical, moral, spiritual, intellectual, and social well-
tenure, humane conditions of work, and a living wage. being. It shall inculcate in the youth patriotism and
They shall also participate in policy and decision-making nationalism, and encourage their involvement in public
processes affecting their rights and benefits as may be and civic affairs.
provided by law.
The State shall promote the principle of shared Article XIII, Section 14. The State shall protect working
responsibility between workers and employers and the women by providing safe and healthful working conditions,
preferential use of voluntary modes in settling disputes, taking into account their maternal functions, and such
including conciliation, and shall enforce their mutual facilities and opportunities that will enhance their welfare
compliance therewith to foster industrial peace. and enable them to realize their full potential in the service
of the nation.
The State shall regulate the relations between workers and
employers, recognizing the right of labor to its just share in CIVIL CODE
the fruits of production and the right of enterprises to ARTICLE 19
reasonable returns to investments, and to expansion and Art. 19. Every person must, in the exercise of his rights and
growth. in the performance of his duties, act with justice, give
everyone his due, and observe honesty and good faith.
Participation in Decision-Making Process
Verily, a line must be drawn between management ARTICLE 1700
prerogatives regarding business operations per se and
Art. 1700. The relations between capital and labor are not
those which affect the rights of the employees. In
merely contractual. They are so impressed with public
treating the latter, management should see to it that its
interest that labor contracts must yield to the common
employees are at least properly informed of its decisions or
good. Therefore, such contracts are subject to the special
modes action. Indeed, industrial peace cannot be achieved
laws on labor unions, collective bargaining, strikes and
if the employees are denied their just participation in the
lockouts, closed shop, wages, working conditions, hours of
discussion of matters affecting their rights. [Phil. Airlines
labor and similar subjects.
Inc. vs. NLRC, 1993]
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(i) "Company union" means any labor organization whose as well as the immediate vicinity actually used by
formation, function or administration has been assisted picketing strikers in moving to and fro before all points
by any act defined as unfair labor practice by this of entrance to and exit from said establishment.
Code.
ARTICLE 255
(j) "Bargaining representative" means a legitimate labor Art. 255. Exclusive bargaining representation and workers’
organization whether or not employed by the participation in policy and decision-making. The labor
employer.
organization designated or selected by the majority of the
employees in an appropriate collective bargaining unit
(k) "Unfair labor practice" means any unfair labor practice
shall be the exclusive representative of the employees in
as expressly defined by the Code.
such unit for the purpose of collective bargaining.
However, an individual employee or group of employees
(l) "Labor dispute" includes any controversy or matter
shall have the right at any time to present grievances to
concerning terms and conditions of employment or the their employer.
association or representation of persons in negotiating,
fixing, maintaining, changing or arranging the terms
Any provision of law to the contrary notwithstanding,
and conditions of employment, regardless of whether workers shall have the right, subject to such rules and
the disputants stand in the proximate relation of
regulations as the Secretary of Labor and Employment
employer and employee.
may promulgate, to participate in policy and decision-
making processes of the establishment where they are
(m) "Managerial employee" is one who is vested with the
employed insofar as said processes will directly affect their
powers or prerogatives to lay down and execute rights, benefits and welfare. For this purpose, workers and
management policies and/or to hire, transfer, suspend, employers may form labor-management councils:
lay-off, recall, discharge, assign or discipline
Provided, That the representatives of the workers in such
employees. Supervisory employees are those who, in labor-management councils shall be elected by at least
the interest of the employer, effectively recommend
the majority of all employees in said establishment. [As
such managerial actions if the exercise of such
amended by Section 22, Republic Act No. 6715, March 21,
authority is not merely routinary or clerical in nature 1989]
but requires the use of independent judgment. All
employees not falling within any of the above
ARTICLE 277
definitions are considered rank-and-file employees for
purposes of this Book. Article 277. Miscellaneous provisions.
(a) All unions are authorized to collect reasonable
(n) "Voluntary Arbitrator" means any person accredited by membership fees, union dues, assessments and fines
the Board as such or any person named or designated and other contributions for labor education and
in the Collective Bargaining Agreement by the parties research, mutual death and hospitalization benefits,
to act as their Voluntary Arbitrator, or one chosen with welfare fund, strike fund and credit and cooperative
or without the assistance of the National Conciliation undertakings. [As amended by Section 33, Republic Act
and Mediation Board, pursuant to a selection No. 6715, March 21, 1989]
procedure agreed upon in the Collective Bargaining
Agreement, or any official that may be authorized by (b) Subject to the constitutional right of workers to security
the Secretary of Labor and Employment to act as of tenure and their right to be protected against
Voluntary Arbitrator upon the written request and dismissal except for a just and authorized cause and
agreement of the parties to a labor dispute. without prejudice to the requirement of notice under
Article 283 of this Code, the employer shall furnish the
(o) "Strike" means any temporary stoppage of work by the worker whose employment is sought to be terminated
concerted action of employees as a result of an a written notice containing a statement of the causes
industrial or labor dispute. for termination and shall afford the latter ample
opportunity to be heard and to defend himself with the
(p) "Lockout" means any temporary refusal of an employer assistance of his representative if he so desires in
to furnish work as a result of an industrial or labor accordance with company rules and regulations
dispute. promulgated pursuant to guidelines set by the
Department of Labor and Employment. Any decision
(q) "Internal union dispute" includes all disputes or taken by the employer shall be without prejudice to the
grievances arising from any violation of or right of the worker to contest the validity or legality of
disagreement over any provision of the constitution his dismissal by filing a complaint with the regional
and by laws of a union, including any violation of the branch of the National Labor Relations Commission.
rights and conditions of union membership provided The burden of proving that the termination was for a
for in this Code. valid or authorized cause shall rest on the employer.
The Secretary of the Department of Labor and
(r) "Strike-breaker" means any person who obstructs, Employment may suspend the effects of the
impedes, or interferes with by force, violence, coercion, termination pending resolution of the dispute in the
threats, or intimidation any peaceful picketing affecting event of a prima facie finding by the appropriate official
wages, hours or conditions of work or in the exercise of of the Department of Labor and Employment before
the right of self-organization or collective bargaining. whom such dispute is pending that the termination
may cause a serious labor dispute or is in
(s) "Strike area" means the establishment, warehouses, implementation of a mass lay-off. [As amended by
depots, plants or offices, including the sites or premises Section 33, Republic Act No. 6715, March 21, 1989]
used as runaway shops, of the employer struck against,
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(c) Any employee, whether employed for a definite period Code. [As amended by Section 33, Republic Act No.
or not, shall, beginning on his first day of service, be 6715, March 21, 1989]
considered as an employee for purposes of
membership in any labor union. [As amended by (i) To ensure speedy labor justice, the periods provided in
Section 33, Republic Act] No. 6715] this Code within which decisions or resolutions of labor
relations cases or matters should be rendered shall be
(d) No docket fee shall be assessed in labor standards mandatory. For this purpose, a case or matter shall be
disputes. In all other disputes, docket fees may be deemed submitted for decision or resolution upon the
assessed against the filing party, provided that in filing of the last pleading or memorandum required by
bargaining deadlock, such fees shall be shared equally the rules of the Commission or by the Commission
by the negotiating parties. itself, or the Labor Arbiter, or the Director of the Bureau
of Labor Relations or Med-Arbiter, or the Regional
(e) The Minister of Labor and Employment and the Director.
Minister of the Budget shall cause to be created or
reclassified in accordance with law such positions as Upon expiration of the corresponding period, a
may be necessary to carry out the objectives of this certification stating why a decision or resolution has
Code and cause the upgrading of the salaries of the not been rendered within the said period shall be
personnel involved in the Labor Relations System of issued forthwith by the Chairman of the Commission,
the Ministry. Funds needed for this purpose shall be the Executive Labor Arbiter, or the Director of the
provided out of the Special Activities Fund Bureau of Labor Relations or Med-Arbiter, or the
appropriated by Batas Pambansa Blg. 80 and from Regional Director, as the case may be, and a copy
annual appropriations thereafter. [Incorporated by thereof served upon the parties.
Batas Pambansa Bilang 130, August 21, 1981]
Despite the expiration of the applicable mandatory
(f) A special Voluntary Arbitration Fund is hereby period, the aforesaid officials shall, without prejudice to
established in the Board to subsidize the cost of any liability which may have been incurred as a
voluntary arbitration in cases involving the consequence thereof, see to it that the case or matter
interpretation and implementation of the Collective shall be decided or resolved without any further delay.
Bargaining Agreement, including the Arbitrator’s fees, [Incorporated by Section 33, Republic Act No. 6715,
and for such other related purposes to promote and March 21, 1989]
develop voluntary arbitration. The Board shall
administer the Special Voluntary Arbitration Fund in
accordance with the guidelines it may adopt upon the
recommendation of the Council, which guidelines shall
be subject to the approval of the Secretary of Labor Recruitment and Placement
and Employment. Continuing funds needed for this
purpose in the initial yearly amount of fifteen million RECRUITMENT OF LOCAL AND MIGRANT WORKERS
pesos (P15,000,000.00) shall be provided in the 1989 ILLEGAL RECRUITMENT
annual general appropriations acts. License vs. Authority
A license is a document issued by the Department of Labor
The amount of subsidy in appropriate cases shall be and Employment (DOLE) authorizing a person or entity to
determined by the Board in accordance with operate a private employment agency, while an authority is
established guidelines issued by it upon the a document issued by the DOLE authorizing a person or
recommendation of the Council. association to engage in recruitment and placement
activities as a private recruitment agency. [Art. 13(d) and (f),
The Fund shall also be utilized for the operation of the Labor Code]
Council, the training and education of Voluntary
Arbitrators, and the Voluntary Arbitration Program. [As License Authority
amended by Section 33, Republic Act No. 6715, March 21,
1989]
Authorize an entity to Authorize an entity to
(g) The Ministry shall help promote and gradually develop, operate as a private operate as a private
with the agreement of labor organizations and employment agency recruitment entity
employers, labor-management cooperation programs
at appropriate levels of the enterprise based on the
shared responsibility and mutual respect in order to When a license is given, one Does not entitle a private
ensure industrial peace and improvement in is also authorized to collect recruitment entity to collect
productivity, working conditions and the quality of fees fees.
working life. [Incorporated by Batas Pambansa Bilang
130, August 21, 1981]
Entities disqualified from being issued a license
(h) In establishments where no legitimate labor
(1) Travel agencies and sales agencies of airline
organization exists, labor-management committees
companies. [Art. 26]
may be formed voluntarily by workers and employers
(2) Officers or members of the Board of any corporation or
for the purpose of promoting industrial peace. The
members in partnership engaged in the business of a
Department of Labor and Employment shall endeavor
travel agency.
to enlighten and educate the workers and employers
(3) Corporations and partnerships, when any of its officers,
on their rights and responsibilities through labor
members of the board or partners, is also an officer,
education with emphasis on the policy thrusts of this
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engage in recruitment and placement activities. The (g) To obstruct or attempt to obstruct inspection by the
absence of the necessary license or authority renders all of Secretary of Labor or by his duly authorized
accused-appellant’s recruitment activities criminal. [People representatives;
vs. Saulo, 2000] (h) To fail to file reports on the status of employment,
placement vacancies, remittance of foreign exchange
Note: To determine which law applies, the place of work is earnings, separation from jobs, departures and such
the determining factor: other matters or information as may be required by the
(1) If in the Philippines: Labor Code (LC) applies Secretary of Labor.
(2) If abroad: Migrant Worker’s Act [R.A. 8042, as amended (i) To substitute or alter employment contracts approved
by R.A. 10022]. and verified by the Department of Labor from the time
of actual signing thereof by the parties up to and
Illegal recruitment for local workers [governed by the labor including the periods of expiration of the same without
code] the approval of the Secretary of Labor;
Simple Illegal Recruitment (j) To become an officer or member of the Board of any
Elements: corporation engaged in travel agency or to be engaged
(1) The person charged with the crime must have directly or indirectly in the management of a travel
undertaken recruitment activities defined under Art. agency; and
13(b) or prohibited activities defined under Art. 34; and (k) To withhold or deny travel documents from applicant
(2) The said person does not have a license or authority to workers before departure for monetary or financial
do so. [Art. 38, LC] considerations other than those authorized under this
Code and its implementing rules and regulations. [Art.
Profit or lack thereof is immaterial 34, LC]
In 1996, LCL had no approved POEA license to recruit. C.F.
Sharp’s accreditation as LCL’s new manning agency was Offense involving Economic Sabotage (Large-Scale or by a
still pending approval at that time. Yet it entertained Syndicate)
applicants for LCL’s vessels, and conducted preparatory Illegal recruitment is considered economic sabotage when
interviews. Based on Art. 13 (b), this is a recruitment the commission thereof is attended by the ff. qualifying
activity. The fact that C.F. Sharp did not receive any circumstances:
payment during the interviews is of no moment. The act of (1) By a syndicate - if carried out by a group of 3 or more
recruitment may be "for profit or not." Notably, it is the persons conspiring and confederating with one
lack of the necessary license or authority, not the fact of another;
payment that renders the recruitment activity of LCL (2) In large scale - if committed against 3 or more persons
unlawful. [C.F. Sharp vs. Espanol, 2007] individually or as a group. [Art. 38(b), LC]
Accused must give the impression of ability to send Illegal recruitment by a syndicate
complainant abroad (1) The offender undertakes either any activity within the
It is well-settled that to prove illegal recruitment, it must meaning of "recruitment and placement" defined
be shown that appellant gave complainants the distinct under Article 13(b), or any of the prohibited practices
impression that she had the power or ability to send enumerated under Art. 34 of the Labor Code;
complainants abroad for work such that the latter were (2) He has no valid license or authority required by law to
convinced to part with their money in order to be enable one to lawfully engage in recruitment and
employed. [People v. Ochoa, 2011] placement of workers; and
(3) The illegal recruitment is committed by a group of
Prohibited practices three
It shall be unlawful for any individual, entity, licensee, or (4) or more persons conspiring or confederating with one
holder of authority: another. [People v. Gallo, 2010]
(a) To charge or accept, directly or indirectly, any amount
greater than that specified in the schedule of allowable Illegal recruitment in large scale
fees prescribed by the Secretary of Labor, or to make a The acts committed by the accused constituted illegal
worker pay any amount greater than that actually recruitment in large scale, whose essential elements are
received by him as a loan or advance; the following:
(b) To furnish or publish any false notice or information or (1) The accused engages in acts of recruitment and
document in relation to recruitment or employment; placement of workers defined under Article 13(b) of the
(c) To give any false notice, testimony, information or Labor Code or in any prohibited activities under Article
document or commit any act of misrepresentation for 43 of the Labor Code;
the purpose of securing a license or authority under (2) The accused has not complied with the guidelines
this Code. issued by the Secretary of Labor and Employment,
(d) To induce or attempt to induce a worker already particularly with respect to the securing of license or an
employed to quit his employment in order to offer him authority to recruit and deploy workers, either locally or
to another unless the transfer is designed to liberate overseas; and
the worker from oppressive terms and conditions of (3) The accused commits the unlawful acts against three
employment; or more persons individually or as a group.
(e) To influence or to attempt to influence any person or
entity not to employ any worker who has not applied Three or more complainants must be in a single case
for employment through his agency; When the Labor Code speaks of illegal recruitment
(f) To engage in the recruitment or placement of workers "committed against three (3) or more persons individually
in jobs harmful to public health or morality or to the or as a group," it must be understood as referring to the
dignity of the Republic of the Philippines; number of complainants in each case who are
complainants therein, otherwise, prosecutions for single
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crimes of illegal recruitment can be cumulated to make more persons shall be deemed so engaged. [Sec. 6, RA
out a case of large scale illegal recruitment. 8042 as amended]
In other words, a conviction for large scale illegal Other prohibited acts
recruitment must be based on a finding in each case of It shall likewise include the following acts, whether
illegal recruitment of three or more persons whether committed by any person, whether a non-licensee, non-
individually or as a group. [People vs. Reyes, 1995] holder, licensee or holder of authority:
(a) To charge or accept directly or indirectly any amount
Illegal recruitment vs estafa greater than that specified in the schedule of allowable
Illegal recruitment and estafa are entirely different fees prescribed by the Secretary of Labor and
offenses and neither one necessarily includes or is Employment, or to make a worker pay or acknowledge
necessarily included in the other. A person who is any amount greater than that actually received by him
convicted of illegal recruitment may, in addition, be as a loan or advance;
convicted of estafa by false pretenses or fraudulent acts
under Article 315, paragraph 2(a) of the Revised Penal Code. (b) To furnish or publish any false notice or information or
In the same manner, a person acquitted of illegal document in relation to recruitment or employment;
recruitment may be held liable for estafa. Double jeopardy
will not set in because illegal recruitment (c) To give any false notice, testimony, information or
is malum prohibitum, in which there is no necessity to document or commit any act of misrepresentation for
prove criminal intent, whereas estafa is malum in se, in the the purpose of securing a license or authority under the
prosecution of which, proof of criminal intent is Labor Code, or for the purpose of documenting hired
necessary. [Rosita Sy vs. People of the Philippines, 2010] workers with the POEA, which include the act of
reprocessing workers through a job order that pertains
One convicted for IR may still be convicted of estafa to nonexistent work, work different from the actual
In People v. Cortez the Court explained that: “In this overseas work, or work with a different employer
jurisdiction, it is settled that a person who commits illegal whether registered or not with the POEA;
recruitment may be charged and convicted separately of
illegal recruitment under the Labor Code and estafa under (d) To include or attempt to induce a worker already
par. 2(a) of Art. 315 of the Revised Penal Code. The offense employed to quit his employment in order to offer him
of illegal recruitment is malum prohibitum where the another unless the transfer is designed to liberate a
criminal intent of the accused is not necessary for worker from oppressive terms and conditions of
conviction, while estafa is malum in se where the criminal employment;
intent of the accused is crucial for conviction. Conviction
for offenses under the Labor Code does not bar conviction (e) To influence or attempt to influence any person or
for offenses punishable by other laws. Conversely, entity not to employ any worker who has not applied
conviction for estafa under par. 2(a) of Art. 315 of the for employment through his agency or who has
Revised Penal Code does not bar a conviction for illegal formed, joined or supported, or has contacted or is
recruitment under the Labor Code. It follows that one's supported by any union or workers' organization;
acquittal of the crime of estafa will not necessarily result in
his acquittal of the crime of illegal recruitment in large (f) To engage in the recruitment or placement of workers
scale, and vice versa.” [People v. Ochoa, 2011; People v. in jobs harmful to public health or morality or to the
Ocden, 2011] dignity of the Republic of the Philippines;
Illegal recruitment for migrant workers [governed by RA (g) To fail to submit reports on the status of employment,
8042, as amended by, RA 10022] placement vacancies, remittance of foreign exchange
Simple Illegal Recruitment earnings, separation from jobs, departures and such
1st type.— other matters or information as may be required by the
(1) Person charged undertakes any recruitment activity as Secretary of Labor and Employment;
defined in Art.13 (b) of the Labor Code; and
(2) Said person does not have a license or authority to do (h) To substitute or alter to the prejudice of the worker,
so. employment contracts approved and verified by the
Department of Labor and Employment from the time
2nd type.— of actual signing thereof by the parties up to and
(1) Person charged commits any of the enumerated acts including the period of the expiration of the same
under Sec. 6 of R.A. 8042, as amended by, R.A. 10022. without the approval of the Department of Labor and
(2) It is immaterial whether he is a holder or not of any Employment;
license or authority
(i) For an officer or agent of a recruitment or placement
Definition agency to become an officer or member of the Board of
Illegal recruitment shall mean any act of canvassing, any corporation engaged in travel agency or to be
enlisting, contracting, transporting, utilizing, hiring, or engaged directly or indirectly in the management of
procuring workers and includes referring, contract services, travel agency;
promising or advertising for employment abroad, whether
for profit or not, when undertaken by non-licensee or non- (j) To withhold or deny travel documents from applicant
holder of authority contemplated under Article 13(f) of workers before departure for monetary or financial
Presidential Decree No. 442, as amended, otherwise known considerations, or for any other reasons, other than
as the Labor Code of the Philippines: Provided, That any those authorized under the Labor Code and its
such non-licensee or non-holder who, in any manner, implementing rules and regulations;
offers or promises for a fee employment abroad to two or
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(k) Failure to actually deploy a contracted worker without penalties, especially for those that constitute economic
valid reason as determined by the Department of Labor sabotage. [People v. Ocden, 2011]
and Employment;
RA 8042 as amended by RA
(l) Failure to reimburse expenses incurred by the worker in Labor Code
10022
connection with his documentation and processing for
purposes of deployment, in cases where the Applicability
deployment does not actually take place without the Local Workers Migrant Workers
worker's fault. Illegal recruitment when committed by a
syndicate or in large scale shall be considered an Acts Punishable
offense involving economic sabotage; and Art. 13(b) Art. 34 Art. 13(b) Prohibited
Labor Code acts in Sec. 6
(m) To allow a non-Filipino citizen to head or manage a
licensed recruitment/manning agency. Who can be Punished
Non-licensee Non-licensee Non-licensee Licensee/Non-
In addition to the acts enumerated above, it shall also
licensee
be unlawful for any person or entity to commit the
following prohibited acts:
(1) Grant a loan to an overseas Filipino worker with Offense involving Economic Sabotage
interest exceeding eight percent (8%) per annum, (Large-Scale or by a Syndicate)
which will be used for payment of legal and allowable Illegal recruitment is deemed committed by a syndicate if
placement fees and make the migrant worker issue, carried out by a group of three (3) or more persons
either personally or through a guarantor or conspiring or confederating with one another. It is deemed
accommodation party, postdated checks in relation to committed in large scale if committed against three (3) or
the said loan; more persons individually or as a group.
(2) Impose a compulsory and exclusive arrangement Liabilities and penalties for illegal recruitment
whereby an overseas Filipino worker is required to avail Illegal Recruitment Involving Local Workers.—
of a loan only from specifically designated institutions, The penalty of life imprisonment and a fine of One
entities or persons; Hundred Thousand Pesos (P1000,000.00) shall be
imposed if illegal recruitment constitutes economic
(3) Refuse to condone or renegotiate a loan incurred by an sabotage as defined herein;
overseas Filipino worker after the latter's employment (a) Any licensee or holder of authority found violating or
contract has been prematurely terminated through no causing another to violate any provision of this Title or
fault of his or her own; its implementing rules and regulations shall, upon
conviction thereof, suffer the penalty of imprisonment
(4) Impose a compulsory and exclusive arrangement of not less than two years nor more than five years or a
whereby an overseas Filipino worker is required to fine of not less than P10,000 nor more than P50,000,
undergo health examinations only from specifically or both such imprisonment and fine, at the discretion
designated medical clinics, institutions, entities or of the court;
persons, except in the case of a seafarer whose medical
examination cost is shouldered by the (b) Any person who is neither a licensee nor a holder of
principal/shipowner; authority under this Title found violating any provision
thereof or its implementing rules and regulations shall,
(5) Impose a compulsory and exclusive arrangement upon conviction thereof, suffer the penalty of
whereby an overseas Filipino worker is required to imprisonment of not less than four years nor more than
undergo training, seminar, instruction or schooling of eight years or a fine of not less than P20,000 nor more
any kind only from specifically designated institutions, than P100,000 or both such imprisonment and fine, at
entities or persons, except for recommendatory the discretion of the court;
trainings mandated by principals/shipowners where
the latter shoulder the cost of such trainings; (c) If the offender is a corporation, partnership, association
or entity, the penalty shall be imposed upon the officer
(6) For a suspended recruitment/manning agency to or officers of the corporation, partnership, association
engage in any kind of recruitment activity including the or entity responsible for violation; and if such officer is
processing of pending workers' applications; and an alien, he shall, in addition to the penalties herein
prescribed, be deported without further proceedings;
(7) For a recruitment/manning agency or a foreign
principal/employer to pass on the overseas Filipino In every case, conviction shall cause and carry the
worker or deduct from his or her salary the payment of automatic revocation of the license or authority and all
the cost of insurance fees, premium or other insurance the permits and privileges granted to such person or
related charges, as provided under the compulsory entity under this Title, and the forfeiture of the cash
worker's insurance coverage. [Sec. 6, RA 8042 as and surety bonds in favor of the Overseas Employment
amended] Development Board or the National Seamen Board, as
the case may be, both of which are authorized to use
MWA expands the definition of illegal recruitment the same exclusively to promote their objectives. [Art.
The amendments to the Labor Code introduced by 39, LC]
Republic Act No. 8042, otherwise known as the Migrant
Workers and Overseas Filipinos Act of 1995, broadened the
concept of illegal recruitment and provided stiffer
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Illegal recruitment involving migrant workers.— Exporter and Promotion, Inc. v. Spouses Cuaresma, G.R.
(a) Any person found guilty of illegal recruitment shall 182978-79, April 7, 2009]
suffer the penalty of imprisonment of not less than
twelve (12) years and one (1) day but not more than (4) Foreign employer shall assume joint and solidary
twenty (20) years and a fine of not less than One liability with the employer for all claims and liabilities
million pesos (P1,000,000.00) nor more than Two which may arise in connection with the implementation
million pesos (P2,000,000.00). of the contract, including but not limited to payment of
wages, death and disability compensation and
(b) The penalty of life imprisonment and a fine of not less repatriation
than Two million pesos (P2,000,000.00) nor more
than Five million pesos (P5,000,000.00) shall be Theory of imputed knowledge
imposed if illegal recruitment constitutes economic This is a doctrine in agency which states that the principal
sabotage as defined therein. Provided, however, That is chargeable with and bound by the knowledge of or
the maximum penalty shall be imposed if the person notice to his agent received while the agent was acting as
illegally recruited is less than eighteen (18) years of age such. Simply put, notice to the agent is notice to the
or committed by a non-licensee or non-holder of principal. Since the local employment agency is
authority. considered the agent of the foreign employer, the
principal, knowledge of the former of existing labor and
(c) Any person found guilty of any of the prohibited acts social legislation in the Philippines is binding on the latter.
shall suffer the penalty of imprisonment of not less Consequently, notice to the former of any violation thereof
than six (6) years and one (1) day but not more than is notice to the latter.
twelve (12) years and a fine of not less than Five
hundred thousand pesos (P500,000.00) nor more Joint and Several Liability of Agent and Principal
than One million pesos (P1,000,000.00). Sec. 1. Requirements for Issuance of License.- Every
applicant for license to operate a private employment
If the offender is an alien, he or she shall, in addition to agency or manning agency shall submit a written
the penalties herein prescribed, be deported without application together with the following requirements:
further proceedings. (f) A verified undertaking stating that the applicant:
xxx
In every case, conviction shall cause and carry the (2) Shall assume full and complete responsibility for all
automatic revocation of the license or registration of claims and liabilities which may arise in connection with
the recruitment/manning agency, lending institutions, the use of license;
training school or medical clinic. [Sec. 7, RA 8042 as (3) Shall assume joint and solidary liability with the
amended by RA 10022] employer for all claims and liabilities which may arise in
connection with the implementation of the contract,
Common rules on liability including but not limited to payment of wages, death and
(1) Employees of a company corporation engaged in illegal disability compensation and repatriation;
recruitment may be held liable as principal, together with (4) Shall guarantee compliance with the existing labor
his employer, if it is shown that he actively and and social legislations of the Philippines and of the country
consciously participated in illegal recruitment. E.g. In of employment of recruited workers; and
this case the appellant was both the APSC Vice- (5) Shall assume full and complete responsibility for all
President-Treasurer and the Assistant General acts of its officials, employees and representatives done in
Manager. She was a high corporate officer who had connection with recruitment and placement; [POEA Rules,
direct participation in the management, Book II, Rule II, Sec. 1 (f)]
administration, direction and control of the business of
the corporation, and is thus liable under Sec. 6 of RA
8042. The terms “control, management or direction” Common Rules on Illegal Recruitment
broadly cover all phases of business operation,
[Local or Overseas]
including the aspects of administration, marketing and Venue: A criminal action arising from illegal recruitment
finances, among others. [People vs. Sagayaga, 2004].
shall be filed with the RTC of the province or city:
(1) where the offense was committed or
(2) Local Employment Agency is solidarily liable with foreign (2) where the offended party actually resides at the time of
principal. Severance of relations between local agent
the commission of the offense. [Sec. 9, R.A. 8042 [this
and foreign principal does not affect liability of local part was not amended by R.A. 10022]].
recruiter. Private employment agencies are held jointly
and severally liable with the foreign-based employer
Prescriptive Periods:
for any violation of the recruitment agreement or (1) Simple Illegal Recruitment – 5 years
contract of employment. This joint and solidary liability
(2) Illegal Recruitment involving Economic Sabotage – 20
imposed by law against recruitment agencies and
years. [Sec. 12, R.A. 8042 (this part was not amended by
foreign employers is meant to assure the aggrieved R.A, 10022)].
worker of immediate and sufficient payment of what is
due him. [Becmen Service Exporter and Promotion, Inc. Pre-Termination of Contract of Migrant Worker
v. Spouses Cuaresma, G.R. 182978-79, April 7, 2009] In case of termination of overseas employment without
just, valid or authorized cause as defined by law or
(3) If the recruitment/placement agency is a juridical contract, or any unauthorized deductions from the migrant
being, the corporate officers and directors and partners
worker's salary, the worker shall be entitled to the full
as the case may be, shall themselves be jointly and
reimbursement of his placement fee and the deductions
solidarily liable with the corporation or partnership for made with interest at twelve percent (12%) per annum,
the aforesaid claims and damages. [Becmen Service
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plus his salaries for the unexpired portion of his Who can suspend or cancel the license?
employment contract or for three (3) months for every year (1) DOLE Secretary
of the unexpired term, whichever is less. [Sec. 10, R.A. (2) POEA Administrator
8042, as amended by R.A. 10022]
The power to suspend or cancel any license or authority to
Rule before Serrano: 3-month salary rule applies recruit employees for overseas employment is concurrently
The employment contract involved in the instant case vested with the POEA and the Secretary of Labor. [People
covers a two-year period but the overseas contract worker v. Diaz, 259 SCRA 441 (1996)].
actually worked for only 26 days prior to his illegal
dismissal. Thus, the three months’ salary rule applies REGULATORY AND VISITORIAL POWERS
[Flourish Maritime Shipping v. Almanzor, G.R. No. 177948, OF THE DOLE SECRETARY
March 14, 2008]. See [Art. 35, LC]
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(a) To charge or accept, directly or indirectly, any amount government employees, including employees of GOCCs,
greater than that specified in the schedule of allowable are governed by the Civil Service rules and regulations, not
fees prescribed by the Secretary of Labor, or to make a by the Labor Code. But this exclusion DOES NOT refer to
worker pay any amount greater than that actually employees of government agencies and government
received by him as a loan or advance; corporations that are incorporated under the Corporation
(b) To furnish or publish any false notice or information or Code.
document in relation to recruitment or employment;
(c) To give any false notice, testimony, information or MANAGERIAL EMPLOYEES
document or commit any act of misrepresentation for Definition
the purpose of securing a license or authority under "Managerial Employees" – Refer to those whose primary
this Code. duty consists of the management of the establishment in
(d) To induce or attempt to induce a worker already which they are employed or of a department or subdivision
employed to quit his employment in order to offer him thereof, and to other officers or members of the
to another unless the transfer is designed to liberate managerial staff. [Art. 82, LC]
the worker from oppressive terms and conditions of
employment; Characteristics of managerial employees
(e) To influence or to attempt to influence any person or (b) Managerial employees are covered [by the exemption]
entity not to employ any worker who has not applied if they have the following characteristics:
for employment through his agency; (1) Their primary duty consists of the management of
(f) To engage in the recruitment or placement of workers the establishment in which they are employed or of
in jobs harmful to public health or morality or to the a department or sub-division thereof.
dignity of the Republic of the Philippines; (2) They customarily and regularly direct the work of
(g) To obstruct or attempt to obstruct inspection by the two or more employees therein.
Secretary of Labor or by his duly authorized (3) They have the authority to hire or fire employees of
representatives; lower rank; or their suggestions and
(h) To fail to file reports on the status of employment, recommendations as to hiring and firing and as to
placement vacancies, remittance of foreign exchange the promotion or any other change of status of
earnings, separation from jobs, departures and such other employees, are given particular weight.
other matters or information as may be required by the
Secretary of Labor. Requisites for managerial staff
(i) To substitute or alter employment contracts approved to be covered under the exception
and verified by the Department of Labor from the time Officers or members of a managerial staff if they perform
of actual signing thereof by the parties up to and the following duties and responsibilities:
including the periods of expiration of the same without (1) The primary duty consists of the performance of work
the approval of the Secretary of Labor; directly related to management policies of their
(j) To become an officer or member of the Board of any employer;
corporation engaged in travel agency or to be engaged (2) Customarily and regularly exercise discretion and
directly or indirectly in the management of a travel independent judgment; and
agency; and (3) (a) Regularly and directly assist a proprietor or a
(k) To withhold or deny travel documents from applicant managerial employee whose primary duty
workers before departure for monetary or financial consists of the management of the establishment
considerations other than those authorized under this in which he is employed or subdivision thereof; or
Code and its implementing rules and regulations. [Art. (b) execute under general supervision work along
34, LC] specialized or technical lines requiring special
training, experience, or knowledge; or (c) execute,
under general supervision, special assignments
and tasks; and
Labor Standards (4) Who do not devote more than 20 percent of their hours
worked in a work week to activities which are not
directly and closely related to the performance of the
COVERAGE work described in paragraphs (1), (2) and (3) above.
General rule: Shall apply to employees in all [IRR, Bk III, Rule 1, Sec. 2 (b) & (c): Exemption]
establishments and undertakings whether for profit or not.
[Art. 82, LC] The definition of ‘managerial employees’ in Article 82
covers more people than that in Article 212 (m) as Article
Exceptions (NOT Covered) GMFF-DPR: 82 also includes managerial staff. In effect, managerial
(1) Government employees [Art. 82; Art. 76] employees in Article 82 includes supervisors, but Article
(2) Managerial Employees including members of the 212(m) does not.
managerial staff [Art. 82]
(3) Field Personnel [Art. 82] It follows that under Book V, supervisors are allowed to
(4) Members of the family of the employer who are form, join or assist a labor union. Supervisors are not,
dependent on him for support [Art. 82]; however, entitled to the benefits under Book III Articles 83
(5) Domestic helpers and persons in personal service of through 96, being part of the exemption of managerial
another [Art. 141] employees as defined in Article 82. [Azucena]
(6) Workers who paid by result as determined by DOLE
regulation [Art. 82]. FIELD PERSONNEL
"Field personnel" shall refer to non-agricultural employees
GOVERNMENT EMPLOYEES who regularly perform their duties away from the principal
The terms and conditions of employment of all place of business or branch office of the employer and
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whose actual hours of work in the field cannot be Exclusivity of function required
determined with reasonable certainty. [Art. 82, LC] Note that the definition contemplates a domestic servant
who is employed in the employer’s home to minister
Field Personnel – are those whose performance of their exclusively to the personal comfort and enjoyment of the
job/service is not supervised by the employer or his employer’s family. [Azucena]
representative, the workplace being away from the
principal office and whose hours and days of work cannot Thus, it has been held that the following personnel are
be determined with reasonable certainty. NOT domestic employees:
(1) House personnel hired by a ranking company official
Legal Test: Field personnel but paid by the company itself to maintain a staff
The clause "whose time and performance is unsupervised house provided for the official. [Cadiz v. Philippine
by the employer" did not amplify but merely interpreted Sinter Corp, NLRC Case No. 7-1729, cited by Azucena]
and expounded the clause "whose actual hours of work in (2) A family cook, who is later assigned to work as a
the field cannot be determined with reasonable certainty." watcher and cleaner of the employer’s business
The former clause is still within the scope and purview of establishment, becomes an industrial worker entitled
Article 82 which defines field personnel. Hence, in deciding to receive the wages and benefits flowing from such
whether or not an EE's actual working hours in the field status. [Villa v. Zaragosa and Associates, OP Decision
can be determined with reasonable certainty, query must No. 0183, cited by Azucena].
be made as to whether or not such EE's time and
performance is constantly supervised by the employer. WORKERS PAID BY RESULT
[Union of Filipro Employees v. Vivar, 1992] The provisions of this Rule shall not apply to the following
persons if they qualify for exemption under the conditions
“Actual hours work in the field…” is to be read in set forth herein:
conjunction with Rule IV, Book III of the Implementing
Rules. Therefore field personnel are EEs whose time and Workers who are paid by results, including those who are
performance is unsupervised by the employer. [Salazar v. paid on piece-work, “takay,” “pakiao” or task basis, and
NLRC, 1996] other non-time work if their output rates are in accordance
with the standards prescribed under Section 8, Rule VII,
If required to be at specific places at specific times, Book Three of these regulations, or where such rates have
employees including drivers cannot be said to be field been fixed by the Secretary of Labor and Employment in
personnel, despite the fact that they are performing work accordance with the aforesaid Section. [Bk III, Rule 1, Sec. 2
away from principal office of EE. [Auto Bus Transport (e) of the IRR]
Systems, Inc. v. Bautista, 2005]
The philosophy underlying the exclusion of piece workers
The fishermen, although performing non-agricultural work from the 8-hour law is that said workers are paid
away from petitioner’s business offices, the fact remains depending upon the work they do irrespective of the
that throughout the duration of their work they are under amount of time employed in doing said work. [Red vs.
the effective control and supervision of petitioner through Coconut Products Ltd., v. CIR, 1966]
the vessel’s patron or master. Hence, the fishermen are not
“field personnel”. [Mercidar Fishing Corporation v. NLRC, HOURS OF WORK
1998] COVERAGE/EXCLUSIONS
Note: Please see previous section (Coverage) which deals
DEPENDENT FAMILY MEMBERS with the general rules of coverage and exclusions for the
Workers who are family members of the employer, and applicability of the Conditions of Employment provisions in
who are dependent on him for their support, are outside Book III of the Labor Code.
the coverage of this Title on working conditions and rest
periods. NORMAL HOURS OF WORK
General Rule: 8-Hour Labor Law
DOMESTIC HELPERS The normal hours of work of any employee shall not
"Domestic or household service" shall mean service in the exceed eight (8) hours a day. [Art. 83, LC]
employer’s home which is usually necessary or desirable
for the maintenance and enjoyment thereof and includes The law prescribes a maximum and not a minimum. Thus,
ministering to the personal comfort and convenience of the part-time work, or a day’s work less than eight hours, is not
members of the employer’s household, including services prohibited.
of family drivers. [Art. 141, LC]
Exception to the 8-Hour Law: Work Hours of Health Personnel
PERSONS IN PERSONAL SERVICE OF ANOTHER Health personnel in cities and municipalities with a
The provisions of this Rule shall not apply to the following population of at least one million (1,000,000) or in
persons if they qualify for exemption under the conditions hospitals and clinics with a bed capacity of at least one
set forth herein: hundred (100) shall hold regular office hours for eight (8)
hours a day, for five (5) days a week, exclusive of time for
Domestic servants and persons in the personal service of meals, except where the exigencies of the service require
another if they perform such services in the employer’s that such personnel work for six (6) days or forty-eight (48)
home which are usually necessary or desirable for the hours, in which case, they shall be entitled to an additional
maintenance and enjoyment thereof, or minister to the compensation of at least thirty percent (30%) of their
personal comfort, convenience, or safety of the employer regular wage for work on the sixth day.
as well as the members of his employer’s household. [Bk
III, Rule 1, Sec. 2(d) of the IRR: Exemption] For purposes of this Article, "health personnel" shall
include resident physicians, nurses, nutritionists, dietitians,
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pharmacists, social workers, laboratory technicians, which states that "when the work is not continuous, the
paramedical technicians, psychologists, midwives, time during which the laborer is not working and can leave
attendants and all other hospital or clinic personnel. [Art. his working place and can rest completely shall not be
38, LC] counted", finds no application in the present case, where
the laborer's work is continuous, and during the time that
Note: Medical secretaries are also considered clinic he is not working he cannot leave and completely rest
personnel. [Azucena] owing to the place and nature of his work. [State Marine
Corporation v. Cebu Seamen’s Association, 1963]
Compensable Hours of Work
Hours worked shall include (a) all time during which an On call
employee is required to be on duty or to be at a prescribed An employee who is required to remain on call in the
workplace; and (b) all time during which an employee is employer’s premises or so close thereto that he cannot use
suffered or permitted to work. [Art. 84, LC] the time effectively and gainfully for his own purpose shall
be considered as working while on call.
General principles in determining if time is considered as
hours worked An employee who is not required to leave word at his home
According to Book III, Rule 1, Sec. 4, “the following or with company officials where he may be reached is not
principles shall govern in determining whether the time working while on call. [IRR, Book III, Rule 1, Sec. 5(b)]
spent by an employee is considered hours worked for
purposes of this Rule:” Inactive due to work interruptions
(1) All hours are hours worked which the employee is The time during which an employee is inactive by reason of
required to give his employer, regardless of whether or interruptions in his work beyond his control shall be
not such hours are spent in productive labor or involve considered working time either if the imminence of the
physical or mental exertion. resumption of work requires the employee's presence at
(2) An employee need not leave the premises of the work the place of work or if the interval is too brief to be utilized
place in order that his rest period shall not be counted, effectively and gainfully in the employee's own interest.
it being enough that he stops working, may rest [IRR, Book III, Rule 1, Sec. 4(d)]
completely and may leave his work place to go
elsewhere, whether within or outside the premises of Work interruption due to brownouts
his work place. Brownouts of short duration, but not exceeding 20
(3) If the work performed was necessary, or it benefited the minutes, shall be treated as hours worked, whether used
employer, or the employee could not abandon his work productively by the employees or not. If they last more
at the end of his normal working hours because he had than 20 minutes, the time may not be treated as hours
no replacement, all time spent for such work shall be worked if the employees can leave their workplace or go
considered as hours worked, if the work was with the elsewhere whether within or without the work premises; or
knowledge of his employer or immediate supervisor. the employees can use the time effectively for their own
(4) The time during which an employee is inactive by interest. In this case, the employer may extend the working
reason of interruptions in his work beyond his control hours beyond the regular schedule on that day to
shall be considered working time either: compensate for the loss of productive man-hours without
(a) if the imminence of the resumption of work requires being liable for overtime pay. [Policy Instruction No. 36,
the employee’s presence at the place of work, or May 22, 1978]
(b) if the interval is too brief to be utilized effectively
and gainfully in the employee’s own interest. Note: The time during which an employee is inactive by
reason of work interruptions beyond his control is
Rest period – short duration or “coffee break” considered working time, either if the imminence of the
Rest periods of short duration during working hours shall resumption of work requires the employee’s presence at
be counted as hours worked. [Art. 84, par. 2, LC] the place of work or if the interval is too brief to be utilized
effectively and gainfully in the employee’s own interest.
Rest periods or coffee breaks running from five (5) to [Book III, Rule 1 Sec. 4-c OR]
twenty (20) minutes shall be considered as compensable
working time. [Bk III, Rule 1, Sec. 7, par. 2 of IRR] Work after normal hours
If the work performed was necessary, or it benefited the
Preliminary and Postliminary Activities employer, or the employee could not abandon his work at
Preliminary [before work] and postliminary [after work] the end of his normal working hours because he had no
activities are deemed performed during working hours if replacement, all the time spent for such work shall be
such activities are controlled or required by the employer considered as hours worked if the work was with the
and are pursued necessarily and primarily for the knowledge of his employer or immediate supervisor. [IRR,
employer’s benefit. Book III, Rule 1, Sec. 4(c)]
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the very nature of their duties, and it is for this reason that,
Note: in addition to their regular compensation, they are given
(1) Attendance in lectures, meetings, and training periods free living quarters to be on board. It could not have been
sanctioned by the employer are considered hours the purpose of the law to require their employers to pay
worked. them overtime pay even when they are not actually
(2) Attendance in CBA negotiations or grievance meeting working. The correct criterion in determining whether or
is compensable hours worked. not sailors are entitled to overtime pay is not, therefore,
(3) Attendance in hearings in cases filed by the employee whether they are on board and cannot leave ship beyond
is NOT compensable hours worked. the regular eight working number of hours, but whether
(4) Participation in strikes is NOT compensable working they actually rendered service in excess of said number of
time. hours. [Cagampan, et. al. v. NLRC, G.R. Nos. 85122-24,
March 2, 1991].
Idle time
The idle time that an employee may spend for resting & Hours worked: Proof of work
dining which he may leave the spot or place of work Entitlement to overtime pay must first be established by
though not the premises of his employer, is not counted as proof that said overtime work was actually performed,
working time only where the work is broken or is not before an employee may avail of said benefit. [Lagatic v.
continuous. [National Development Co. v. CIR, 1962] NLRC, 1998]
A laborer need not leave the premises of the factory, shop Hours worked: Burden of Evidence
or boat in order that his period of rest shall not be counted, When an employer alleges that his employee works less
it being enough that he "cease to work", may rest than the normal hours of employment as provided for in
completely and leave or may leave at his will the spot the law, he bears the burden of proving his allegation with
where he actually stays while working, to go somewhere clear and satisfactory evidence. [Prangan v. NLRC, et. al.,
else, whether within or outside the premises of said factory, G.R. No. 126529, April 15, 1998].
shop or boat. If these requisites are complied with, the period
of such rest shall not be counted. [Luzon Stevedoring Co. v. Compressed Work Week (CWW)
Luzon Marine Department Union, 1957] Note: SEE DOLE Advisory No. 02, Series of 2004
Under the CWW scheme, the normal workday goes beyond
Travel time eight hours without the corresponding overtime premium.
(1) Travel from home to work – An employee who travels
from home before his regular workday and returns to The total hours of work, however, shall not exceed 12 hours
his home at the end of the workday is engaged in a day or 48 hours a week, or the employer is obliged to pay
ordinary home-to-work travel which is NOT worktime the worker the overtime premium in excess of said work
except: hours.
(a) When called to travel during emergency;
(b) When travel is done through a conveyance Conditions for CWW
furnished by the employer; (1) The CWW scheme is undertaken as a result of an
(c) Travel is done under vexing and dangerous express and voluntary agreement of majority of the
circumstances; covered employees or their duly authorized
(d) Travel is done under the supervision and control of representatives. This agreement may be expressed
the employer. through collective bargaining or other legitimate
(2) Travel that is all in the day’s work – Time spent by an workplace mechanisms of participation such as labor
employee in travel from jobsite to jobsite during the management councils, employee assemblies or
workday, must be counted as hours worked. Where an referenda.
employee is required to report at a meeting place to (2) In firms using substances, chemicals and processes or
receive instructions or to perform other work there, the operating under conditions where there are airborne
travel from the designated place to the workplace is contaminants, human carcinogens or noise prolonged
part of the day’s work. exposure to which may pose hazards to employees’
(3) Travel away from home - Travel that keeps an health and safety, there must be a certification from an
employee away from home overnight is travel away accredited health and safety organization or
from home. Travel away from home is worktime when it practitioner from the firm’s safety committee that work
cuts across the employee’s workday. The time is hours beyond eight hours is within threshold limits or
worked not only on regular working hours but also tolerable levels of exposure, as set in the OSHS.
during the corresponding hours on non-working days. (3) The employer shall notify DOLE, through the Regional
[Department of Labor Manual]. Office having jurisdiction over the workplace, of the
adoption of the CWW scheme. The notice shall be in
Semestral Break of Private School Teachers DOLE CWW Report Form attached to this Advisory.
Regular full-time teachers are entitled to salary during [DOLE Advisory No. 02-04].
semestral breaks. These semestral breaks are in the nature
of work interruptions beyond the employees’ control. As Effects of CWW
such, these breaks cannot be considered as absences (1) Unless there is a more favorable practice existing in the
within the meaning of the law for which deductions may be firm, work beyond eight hours will not be compensable
made from monthly allowances. [University of the by overtime premium provided the total number of
Pangasinan Faculty Union v. University of Pangasinan, No. hours worked per day shall not exceed twelve (12)
L-63122, Feb. 20, 1984]. hours. In any case, any work performed beyond 12
hours a day or 48 hours a week shall be subject to
Work Hours of Seamen overtime premium.
Seamen are required to stay on board of their vessels by (2) Consistent with Art. 85 of the LC, employees under a
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Shorter meal period when allowed (less than 1 hour, but not Jurisprudence:
less than 20 min) (1) During meal period where the laborers are required to
A meal period of not less than twenty (20) minutes may be stand by for emergency work, or where said meal hour
given by the employer provided that such shorter meal is not one of complete rest, such period is considered
period is credited as compensable hours worked of the overtime. [Pan-American Airways v. Pan-American
employee: Employees Association, 1961]
(1) Where the work is non-manual work in nature or does (2) The eight-hour work period does not include the meal
not involve strenuous physical exertion; break. Employees are not prohibited from going out of
(2) Where the establishment regularly operates not less the premises as long as they return to their posts on
than sixteen (16) hours a day; time. [Phil. Airlines, Inc. v. NLRC, 1999]
(3) In case of actual or impending emergencies or there is
urgent work to be performed on machineries, WAITING TIME
equipment or installations to avoid serious loss which Waiting time spent by an employee shall be considered as
the employer would otherwise suffer; and working time if waiting is an integral part of his work or the
(4) Where the work is necessary to prevent serious loss of employee is required or engaged by the employer to
perishable goods. [IRR, Book III, Rule 1, Sec. 7] wait.[IRR, Book III, Rule 1, Sec. 5(a)]
(1) Waiting time spent by the employee shall be
Synthesis of the Rules considered as working time if waiting is an integral part
General Rule: Meal periods are NOT compensable.
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of his work or the employee is required or engaged by (5) Where the completion or continuation of the work
the employer to wait. started before the eighth hour is necessary to prevent
(2) An employee who is required to remain on call in the serious obstruction or prejudice to the business or
employer’s premises or so close thereto that he cannot operations of the employer. [Art. 89, LC]
use the time effectively and gainfully for his own
purpose shall be considered as working while on call. Overtime pay does not preclude night differential pay
[Sec. 5, Rule I, Book III, Labor Code Implementing Rules When the tour of duty of a laborer falls at nighttime
and Regulation] [between 10:00pm and 6:00am], the receipt of overtime
pay will not preclude the right to night differential pay. The
Legal test: Whether waiting time constitutes working time latter is payment for work done during the night while the
depends upon the circumstances of each particular case. other is payment for the excess of the regular eight-hour
The facts may show that the employer was engaged or was work. [Naric v. Naric Workers Union, 1959].
waiting to be engaged. The controlling factor is whether
waiting time spent in idleness is so spent predominantly Overtime Rate based on Regular Wage
for the employer’s benefit or for the employee’s. [Azucena Base of Computation: Regular wage or – means regular
citing Armour v. Wantock] base pay; it excludes money received in different concepts
such as Christmas bonus and other fringe benefits. [Bisig
OVERTIME WORK, OVERTIME PAY ng Manggagawa ng Philippine Refining Co. v. Philippine
Note: SEE ALSO: IRR of Labor Code, Sec. 7-10 Refining Co, G.R. No. L-27761, Sept. 30, 1981].
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difference between the wages paid the employee and following midnight. The premium pay for the night shift
the overtime compensation he or she is entitled to also starts or ends at midnight. However, the employment
receive. [Cruz v. Yee Sing, G.R. No. L-12046. Oct. 1959]. contract, company policy or CBA may provide that in the
case of night shift workers, days—including special days
Exception: When the waiver of overtime pay is in and regular holidays—shall begin on the night before a
consideration of benefits and privileges which may be calendar day.
more than what will accrue to them in overtime pay,
the waiver MAY be permitted. [Meralco Workers Union PART-TIME WORK
v. MERALCo, G.R. No. L-11876, May 29, 1959] Definition
A single, regular or voluntary form of employment with
(2) Composite or Package Pay NOT per se illegal – hours of work substantially shorter than those considered
Composite or “package pay” or “all-inclusive salary” is as normal in the establishment. [International Labor
an arrangement where the employee’s salary includes Organization]
the overtime pay. In other words, the overtime pay is
built-in. This excludes those forms of employment which, although
referred to as part-time work, are in particular, irregular,
The conditions for validity of the arrangement are: temporary or intermittent employment, or in cases where
(a) There is a clear written agreement knowingly and freely hours of work have been temporarily reduced for
entered by the employee; and economic, technical or structural reasons.
(b) The mathematical result shows that the agreed legal
wage rate and the overtime pay, computed separately, The wage and benefits of part-time worker are in
are equal to or higher than the separate amounts proportion to the number of hours worked.
legally due. [Damasco v. NLRC, G.R. No. 115755,
December 4, 2000]. CONTRACT FOR PIECE OF WORK
A contract for the delivery at a certain price of an article
NIGHT WORK, NIGHT SHIFT DIFFERENTIAL which the vendor in the ordinary course of his business
Note: See R.A. No. 10151 manufactures or procures for the general market, whether
the same is on hand at the time or not, is a contract of sale,
Night worker but if the goods are to be manufactured specially for the
‘Night worker’ means any employed person whose work customer and upon his special order, and not for the
requires performance of a substantial number of hours of general market, it is a contract for a piece of work. [Article
night work which exceed a specified limit. This limit shall 1467, CC]
be fixed by the Sec of Labor after consulting the workers’
representatives/labor organizations and employers. [Art. WAGES
154, RA 10151] GENERAL CONCEPT
Definition
Night shift differential (1) It is the remuneration or earnings, however designated,
The additional compensation of 10% of an employees capable of being expressed in terms of money,
regular wage for each hour of work performed between (2) whether fixed or ascertained on a time, task, piece, or
10pm and 6am. [Art. 86, LC] commission basis, or other method of calculating the
same,
Coverage (3) which is payable by an employer to an employee
This Rule (On night shift differential) covers all employees (4) under a written or unwritten contract of employment
except: for work done or to be done, or for services rendered or
(1) Those of the government and any of its political to be rendered and
subdivisions, including government-owned and/or (5) includes the fair and reasonable value, as determined
controlled corporations; by the Secretary of Labor and Employment, of board,
(2) Those of retail and service establishments regularly lodging, or other facilities customarily furnished by the
employing not more than five (5) workers; employer to the employee
(3) Domestic helpers and persons in the personal service (6) Fair and reasonable value - shall not include any profit
of another; to the employer, or to any person affiliated with the
(4) Managerial employees as defined in Book Three of this employer. [Art. 97(f)]
Code;
(5) Field personnel and other employees whose time and “No work no pay” principle
performance is unsupervised by the employer including General Rule: a fair day’s wage for a fair day’s labor or no
those who are engaged on task or contract basis, work no pay
purely commission basis, or those who are paid a fixed
amount for performing work irrespective of the time Exception: when the laborer was able, willing and ready to
consumed in the performance thereof. work but was illegally locked out, suspended or dismissed,
or otherwise illegally prevented from working. [Sugue v
Rest days (night-off) Triumph International (2009) and Aklan Electric
Night shift employees are entitled to a weekly night-off Cooperative, Inc. vs. NLRC (2000)]
[usually Saturday evening] or a weekly rest period of 24
hours beginning at the start of the night shift. “Equal Work for Equal Pay” Principle
Employees working in the Philippines, if they are
Work on special days performing similar functions and responsibilities under
Night shift employees are also entitled to the premium pay similar working conditions should be paid equally. If an
on special days and holidays. These days are reckoned as employer accords employees the same position and rank,
calendar days which start at midnight and end at the the presumption is that these employees perform equal
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work. [International School Alliance of Educators v. Hon. following may be exempted from the applicability of this
Quisumbing, G.R. No. 128845, June 1, 2000]. Order:
(1) Distressed establishments;
Coverage/Exclusions (FHN-CCB) (2) Retail/Service establishments regularly employing not
The Labor Code Title on wages shall not apply to the more than 10 workers;
following: [Art. 98 and BOOK 3, RULE VII, Sec 3 of the IRR] (3) Establishments whose total assets including those
(1) Farm tenancy or leasehold; arising from loans but exclusive of the land on which
(2) Household or domestic helpers, including family the particular business entity’s office, plant and
drivers and other persons in the personal service of equipment are situated, are not more than P3 Million;
another; and,
(3) Homeworkers engaged in needlework; (4) Establishments adversely affected by natural
(4) Workers in registered cottage industries who actually calamities. [Sec. 7, Wage Order No. 17, 2012]
work at home;
(5) Workers in registered cooperatives when so Basis
recommended by the Bureau of Cooperative The basis of the minimum wage rates prescribed by law
Development upon approval of the Secretary of Labor; shall be the normal working hours of 8 hours a day. [Sec 7,
(6) Workers in registered barangay micro business IRR of RA 6727]
enterprise [RA 9178].
Freedom to bargain
WAGE VS. SALARY Despite the minimum wage order, employees are not
Wages and salary are in essence synonymous. [Songco v. prevented from bargaining for higher wages with their
NLRC, 1990] employers.
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MINIMUM WAGE OF WORKERS PAID BY RESULTS wages. xxx While commissions are, indeed, incentives or
Workers paid by results forms of encouragement to inspire employees to put a
All workers paid by results, including homeworkers and little more industry on the jobs particularly assigned to
those who are paid on piece rate, takay, pakyaw, or task them, still these commissions are direct remunerations for
basis, shall receive not less than the prescribed minimum services rendered.
wage rates under the Regional Wage Orders for normal
working hours which shall not exceed 8 hours a day, or a Likewise, there is no law mandating that commissions be
proportion thereof. paid only after the minimum wage has been paid to the
employee. Verily, the establishment of a minimum wage
The wage rates of workers who are paid by results shall only sets a floor below which an employee’s remuneration
continue to be established in accordance with Art. 101 of cannot fall, not that commissions are excluded from wages
the LC, as amended, and its IRR. This will be done through: in determining compliance with the minimum wage law.
[Iran v. NLRC, 1998]
(1) Time and motion studies.
(2) Consultation with representatives of ERs’ and workers’ DEDUCTIONS FROM WAGES [ART. 113, LC]
organizations in a tripartite conference called by the General Rule: No employer, in his own behalf or in behalf of
DOLE Sec. any person, shall make any deduction from the wages of
his employees.
Request for the conduct of time and motion studies, to
determine whether the nontime EEs in an enterprise are Exceptions:
being paid fair and reasonable wage rates, may be filed (1) Employee is insured with his consent by the employer,
with the proper Regional Office. and the deduction is to recompense the employer for
the amount paid by him as premium on the insurance;
Where the output rates established by the ER do not (2) For union dues, in cases where the right of the worker
conform to the standards set under the foregoing methods or his union to check-off has been recognized by the
for establishing output rates, the EE shall be entitled to the employer or authorized in writing by the individual
difference between the amount he/she is entitled to worker concerned; and
receive and the amount paid by the ER. (3) In cases where the employer is authorized by law or
regulations issued by the Secretary of Labor and
The adjustment in the wage rates by reason of mandatory Employment, such as:
wage increase for workers paid by results shall be (a) Employee debt to employer is due and
computed in accordance with the following steps: demandable [CC 1706];
(b) Attachment or execution in cases of debts incurred
Minimum wage of apprentices and learners for necessities: food, shelter, clothing, medical
Wages of apprentices and learners shall in no case be less attendance [CC 1708];
than 75% of the applicable minimum wage rates. [Art. 61 & (c) Withholding tax;
75, LC] (d) Deductions of a legally established cooperative;
rd
(e) Payment to 3 parties upon written authority by
Note: employee;
Learners employed in piece or incentive-rate jobs during (f) Deductions for loss or damage;
the training period shall be paid in full for the work done. (g) SSS, Medicare, Pag-IBIG premiums;
[Art. 76, LC] (h) Deduction for value meals and other facilities.
The Secretary of Labor and Employment may authorize the It shall be unlawful to make any deduction from the wages
hiring of apprentices without compensation whose training of any Employee for the benefit of the Employer as
on the job is required by the school or training program consideration of a promise of employment or retention in
curriculum or as requisite for graduation or board employment. [Art. 117] or to retaliate against the Employee
examination. [Art. 72, LC] who filed a complaint. [Art. 118]
Minimum wage of persons with disability With Employee’s consent in Without Employee’s consent
A qualified disabled EE shall be subject to the same terms Writing
and conditions of employment and the same
compensation, privileges, benefits, fringe benefits or (1) SSS Payments (1) Worker’s insurance
allowances as a qualified able-bodied persons. [Sec 5, RA (2) PHILHEALTH payments acquired by the
7277/the Magna Carta for Disabled Persons] (3) Contributions to PAG-IBIG employer
Fund (2) Union dues, where the
(4) Value of meals and other right to check-off is
COMMISSIONS
facilities recognized by the
Definition
(5) Payments to third persons employer [provided in
Commissions have been defined as the recompense,
with employee’s consent the CBA]
compensation or reward of an agent, salesman, executor,
(6) Deduction of absences
trustee, receiver, factor, broker or bailee, when the same is
Debts of the employee to
calculated as a percentage on the amount of his
Union dues, where check-off is the employer that have
transactions or on the profit to the principal. [Philippine
not provided in the CBA. become due and
Duplicator’s, Inc. v. NLRC, 1993]
demandable
Commissions as part of minimum wage
Rationale: Prohibition seeks to protect the employee
The Court held that the definition of “wage” under Art. 97
against unwarranted practices that would diminish his
(f) of the LC explicitly includes commissions as part of
compensation without his knowledge and consent. [Radio
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(4) Employer cannot declare a lock-out; Employee cannot Where 278 261 days – ordinary working days
declare a strike because the law has provided for a days = 12 days – regular holidays
procedure for settling 5 days - special days (if
(5) The salary or wage differential does not need to be considered paid; if
maintained. [National Federation of Labor v. NLRC, actually worked, this is
1994] equivalent to 6.5 days)
National Conciliation and Mediation Board if [Sec. 6, Rules Implementing RA 6727, 1989]
unresolved COMPULSORY arbitration by the NLRC
Note: Under Proclamation No. 459 signed by Pres. Benigno
CBA vis-à-vis Wage Orders – CBA creditability Aquino on Aug. 16, 2012, there are 12 regular holidays and
In determining an employee’s regular wage, the pertinent 5 special days.
stipulations in the CBA are controlling, provided the result
is not less than the statutory requirement [Philippine REST DAY
National Bank vs. PEMA, 115 SCRA 507] Note: See IRR of Labor Code Book III, Rule III
Every employee regardless of the nature of his work is
DIVISOR TO DETERMINE DAILY RATE entitled to at least one whole day every week as his rest
Suggested formula for computing the Estimated Equivalent day. The rest day or day off shall be determined by the
Monthly Rate employer. However, in cases where the employee is
Estimated Equivalent Monthly Rate (EEMR)= required by his religious belief to rest on certain days, such
Applicable Daily Rate (ADR) x days/year belief shall be respected by the employer.
-------------------------------------------------
12 WEEKLY REST DAY
It shall be the duty of every employer, whether operating
For monthly-paid EEs: for profit or not, to provide each of his employees a rest
Monthly-paid employees are those who are paid every day period of not less than twenty-four (24) consecutive hours
of the month, including unworked rest days, special days, after every six (6) consecutive normal work days. [Art. 91
and regular holidays. (a)]
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(6) However, employer must consider the religious reasons (6) Last Day of the Year - December 31
for the choice of a rest day.
Special Holiday (for all schools)
HOLIDAY PAY/PREMIUM PAY EDSA Revolution Anniversary – February 25 (Monday)
HOLIDAYS
Note: Art. 94 (c) was superseded by E.O. 203, which was P.D. 1083 [Code of Muslim Personal Laws] SEE: Arts. 169-173
subsequently amended by RA 9177, 9256, 9492, and Muslim Holidays
Proclamation No. 459.
Specifically for the Muslim Areas P.D. 1083, in its Book V,
Title, recognizes five (5) Muslim Holidays, namely:
Holiday pay is a one-day pay given by law to an employee
even if he does not work on a regular holiday. This gift of a
(1) Amun Jadid (New Year) which falls on the first (1st) day
day’s pay is limited to each of the 12 regular holidays. of the lunar month of Muharram;
(2) Mauli-un-Nabi (Birthday of the Prophet Muhammad)
COVERAGE
which falls on the twelfth (12th) day of the third (3rd)
General Rule: All employees lunar month of Rabi-ul-Awwal;
Exceptions:
(3) Lailatul Isra Wal Mi Rai (Nocturnal Journey and
(1) Those of the government and any of the political Ascencion of the Prophet Muhammand) which falls on
subdivision, including government-owned and
the twenty-seventh [27th] day of the seventh (7th)
controlled corporation;
lunar month of Rajab;
(2) Those of retail and service establishments regularly (4) Id-ul-Fitr (Hari Raja Pausa) which falls on the first (1st)
employing less than 10 workers;
day of the tenth (10th) lunar month of Shawwal
(3) Domestic helpers and persons in the personal service commemorating the end of the fasting season; and
of another; (5) Id-ul-Adha (Hari Raha Haji) which falls on the tenth
(4) Managerial employees as defined in Book III
(10th) of the twelfth (12th) lunar month of Dhu’l-Hijja.
(5) Field personnel and other employees whose time and
performance is unsupervised by the employer including
Note:
those who are engaged on task or contract basis,
Id-ul-Fitr (Eid’l Fitr) and Id-ul-Adha (Eid’l Adha) have been
purely commission basis, or those who are paid a fixed added to the list of national legal holidays.
amount for performing work irrespective of the time
consumed in the performance thereof. [Sec. 1, Rule IV of There should be no distinction between Muslims & non-
the IRR] Muslims as regards to the payment of benefits for Muslim
holidays. Wages & other emoluments granted by law to the
"Retail Establishment" is one principally engaged in the working man are determined on the basis of the criteria
sale of goods to end-users for personal or household use;
laid down by laws & not on worker’s faith. Art. 3(3), PD
1083 states that nothing herein shall be construed to
"Service Establishment" is one principally engaged in the operate to the prejudice of a non-Muslim. [San Miguel Corp
sale of service to individuals for their own or household use
vs. CA, 2002]
and is generally recognized as such. [IRR of RA 6727/the
Wage Rationalization Act]
HOLIDAY PAY COMPUTATION
REGULAR HOLIDAYS
See: Art. 94 Labor Code, Book III, Rule IV of IRR, RA 9424
Proclamation No. 459 signed by President Aquino on 16 and DOLE Memorandum Circular 1 Series of 2004
August 2012, provides for the observance of the regular
holidays and special [non-working] days for the year 2013 General Rule: An employer may require an employee to
on the following dates: work on any holiday but such employee shall be paid a
compensation equivalent to twice his regular rate. [Art.
94(b)]
Regular Holidays
(1) New year’s Day - January 1 (Tuesday) According to the LC, IRR and Memo:
(2) Maundy Thursday – March 28
Work on any regular holiday,
(3) Good Friday – March 29 200% of regular daily wage
(4) Araw ng Kagitingan – April 9 (Tuesday) not exceeding 8 hours
(5) Labor Day – May 1 (Wednesday)
(6) Independence Day – June 12 (Wednesday) Work on any regular holiday, 200% of regular daily wage
(7) National Heroes Day – August 26 (Last Monday of if it exceeds 8
st
(for the 1 8 hours)
August) hours/overtime + 30% of hourly rate on said
(8) Bonifacio Day – November 30 (Saturday) day
(9) Christmas Day - December 25
(10) Rizal Day - December 30 (Monday) Work on any regular holiday 200% of regular daily wage
(11) Eid’l Fitr – date to be determined later which falls on the scheduled + 30% of such amount
(12) Eid’l Adha – date to be determined later rest day, not exceeding 8
hours
Special (Non-Working Days) Work on any regular holiday Regular holiday-on-rest day
(1) Black Saturday – March 30 which falls on scheduled rest rate (200% of regular daily
(2) Ninoy Aquino Day - August 21 (Wednesday) day, if it exceeds 8 wage plus 30% of such
(3) All Saints Day - November 1 (Friday) hours/overtime amount) + 30% of hourly
(4) Additional special (Non-working) days – November 2 rate on said day.
(Saturday) Work on special holiday not Regular daily wage + 30%
(5) December 24 (Tuesday) exceeding 8 hours thereof
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Work on special holiday Regular daily wage + 50% (2) Furthermore as stated in the Wellington case [see
thereof below], a legal holiday falling on a Sunday does not
create a legal obligation to pay extra, aside from the
usual holiday pay, to monthly-paid employees
Note:
[Azucena].
(1) According to DOLE Memo Circular 1-04, a “special
holiday”/”special day” includes the National Special
Holidays falling on a Sunday
Days, and declared special days such as Special Non-
[Wellington Investment and Manufacturing Corporation vs.
working Holiday, Special Public Holiday and Special
Trajano 1995]:
National Holiday. Such days are entitled to the rates
(a) Supreme Court ruled that the Regional Director erred
prescribed above. These days are not the same as a
in saying that if a holiday fell on Sunday, an extra day
special working holiday.
of pay was created; thus, an employer should pay twice
(2) A special working holiday is considered an ordinary
the amount of holiday pay on that day.
working day, so there is no premium pay.
(b) In fixing the salary, Wellington simply deducted 51
Sundays from the 365 days normally comprising a year
Double holiday pay and used the difference, 314, as divisor for determining
According to “DOLE Explanatory Bulletin on Worker’s the monthly salary. The monthly salary thus fixed
Entitlement to Holiday Pay on 9 April 1993,” if two holidays actually covers payment for 314 days of the year,
fall on the same day: including regular and special holidays.
(c) No provision of law requires any employer to make
(1) If unworked, 200% of basic wage. adjustments in the monthly salary rate set by him to
(2) If worked, 300% of basic wage. [Azucena] take account of legal holidays falling on Sundays in a
given year, otherwise to reckon a year at more than 365
Double Holiday Rule for Monthly-paid employees – For days.
covered employees whose monthly salaries are computed
based on 365 days and for those other employees who are Non-working/scheduled rest day
paid using factor 314, or 262, or any other factor which Where the day immediately preceding the holiday is a non-
already considers the payment for the 11 regular holidays, working day in the establishment or the scheduled rest day
NO additional payment is due them. [BWC-WHSD Opinion of the employee, he shall not be deemed to be on leave of
No. 053, s. 1998]. absence on that day, in which case he shall be entitled to
the holiday pay if he worked on the day immediately
Successive holiday pay preceding the non-working day or rest day. [IRR, Book III,
According to IRR, Rule IV, Sec. 10, Employee entitled to Rule V, Sec 6 (c)]
holiday pay for both days, IF:
(1) He is present on day immediately preceding first Example:
holiday; or If a holiday falls on Monday, and Sunday is a non-working
(2) He works on first holiday, which entitles him to pay on day in the establishment or is the scheduled rest day of the
second holiday. employee, the employee shall be entitled to holiday pay if
he worked on Saturday (which is the day immediately
Note: SEE IRR Book III, Rule IV, Sec. 10 preceding Sunday, the non-working day or rest day).
Divisors RIGHT TO HOLIDAY PAY
Divisor assumes important role in determining whether or In case of absences
not holiday pay is already computed. All covered employees shall be entitled to the benefit
(1) Monthly paid employees are not entitled to the holiday provided herein when they are on leave of absence with
pay if their total annual income is divided by 365 days pay.
resulting in a wage which is beyond the minimum wage
per day because they are considered paid everyday of Employees who are on leave of absence without pay on the
the year including holidays, rest days, and other non- day immediately preceding a regular holiday may not be
working days. The 365 days are as follows: paid the required holiday pay if he has not worked on such
365 days = 296 days – ordinary days regular holiday. [IRR, Book III, Rule IV, Sec 6(a)]
52 days – rest days
12 days – regular holidays Note:
5 days – special holidays (1) If an employee is on leave of absence with pay on the
(2) As a general rule, for a company with a 6-day working day immediately preceding a regular holiday, he is
schedule, the divisor 313 already means that the legal entitled to holiday pay.
holidays are included in the monthly pay of the (2) If an employee is on leave of absence without pay on
employee. The divisor is arrived at by subtracting all the day immediately preceding a regular holiday, he is
Sundays from the total number of calendar days in a not entitled to holiday pay unless he works on such
year. regular holiday.
(3) As a general rule for a company with a 5-day working
schedule, the divisor 278 means that the holiday pay is In case of temporary cessation of work
already included in the monthly salary of the employee. (a) In cases of temporary or periodic shutdown and
temporary cessation of work of an establishment, as
Sundays when a yearly inventory or when the repair or cleaning
Letter of Instruction No. 1087: of machineries and equipment is undertaken, the
(1) When a holiday falls on a Sunday, the following regular holidays falling within the periods shall be
Monday will not be considered a holiday unless a compensated in accordance with this Rule.
proclamation says so.
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(b) The regular holiday during the cessation of operation 11.C, Standard Terms and Conditions Governing the
of an enterprise due to business reverses as Employment of Filipino Seafarers on Board Ocean-Going
authorized by the Secretary of Labor may not be paid Vessels]
by the employer. [IRR, Book III, Rule IV, Sec 7]
Seasonal workers
An employee is entitled to holiday pay for the regular Seasonal workers who do not work during off-season are
holidays falling within the period in cases of temporary not entitled to pay for the regular holidays occurring
shutdowns or cessation of work, when: during their off-season. Workers assigned to “skeleton
(1) an annual inventory; or crews” that work during the off-season have the right to be
(2) repair or cleaning of machineries and equipment is paid on regular holidays falling in that duration.
undertaken.
Premium Pay
The employer may not pay his employees for the regular Definition
holidays during the suspension of work if: the cessation of Premium pay refers to the additional compensation for
operation is due to business reverses, and is authorized by work performed within 8 hours on nonwork days, such as
the Secretary of Labor. rest days and special days.
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Conditions for entitlement the victim's body, forcing her/him to watch obscene
A solo parent employee shall be entitled to the parental publications and indecent shows or forcing the
leave under the following conditions: woman or her child to do indecent acts and/or
(1) He/she has rendered at least one (1) year of service, make films thereof, forcing the wife and
whether continuous or broken; mistress/lover to live in the conjugal home or sleep
(2) He/she has notified his/her employer that he/she will together in the same room with the abuser;
avail himself/herself of it, within a reasonable period of (b) acts causing or attempting to cause the victim to
time; and engage in any sexual activity by force, threat of
(3) He/she has presented to his/her employer a Solo force, physical or other harm or threat of physical or
Parent Identification Card, which may be obtained from other harm or coercion;
the DSWD office of the city or municipality where (c) Prostituting the woman or child.
he/she resides.
"Psychological violence" refers to acts or omissions causing
Availment or likely to cause mental or emotional suffering of the
The parental leave is an additional benefit which shall be victim such as but not limited to intimidation, harassment,
for seven (7) working days every year, with full pay, stalking, damage to property, public ridicule or
consisting of basic salary and mandatory allowances. humiliation, repeated verbal abuse and mental infidelity. It
includes causing or allowing the victim to witness the
Grant of flexible work schedule physical, sexual or psychological abuse of a member of the
The employer shall provide for a flexible working schedule family to which the victim belongs, or to witness
for solo parents: Provided, That the same shall not affect pornography in any form or to witness abusive injury to
individual and company productivity: Provided, further, pets or to unlawful or unwanted deprivation of the right to
That any employer may request exemption from the above custody and/or visitation of common children.
requirements from the DOLE on certain meritorious
grounds. [Section 6] "Economic abuse" refers to acts that make or attempt to
make a woman financially dependent which includes, but
Protection against work discrimination is not limited to the following:
No employer shall discriminate against any solo parent (a) withdrawal of financial support or preventing the victim
employee with respect to terms and conditions of from engaging in any legitimate profession,
employment on account of his/her status. [Section 7] occupation, business or activity, except in cases
wherein the other spouse/partner objects on valid,
Termination of the benefit serious and moral grounds as defined in Article 73 of
A change in the status or circumstance of the parent the Family Code;
claiming the benefit under the law, such that he/she is no (b) deprivation or threat of deprivation of financial
longer left alone with the responsibility of parenthood, resources and the right to the use and enjoyment of the
shall terminate his/her eligibility for this benefit. conjugal, community or property owned in common;
(c) destroying household property;
LEAVES FOR VICTIMS OF VIOLENCE AGAINST WOMEN (d) controlling the victims' own money or properties or
[RA 9262] solely controlling the conjugal money or properties.
[Section 3, RA 9262]
Coverage and purpose
VAWC leave is granted to women employees who are Requirement for entitlement
victims of violence, as defined in RA 9262. The leave To be entitled to the leave benefit, the only requirement is
benefit covers the days that the women employee has to for the victim-employee to present to her employer a
attend to medical or legal concerns. certification from the barangay chairman or barangay
councilor or prosecutor or the Clerk of Court, as the case
Definition of Terms may be, that an action relative to the matter is pending.
"Violence against women and their children" refers to any
act or a series of acts committed by any person against a Benefit
woman who is his wife, former wife, or against a woman In addition to other paid leaves under existing labor laws,
with whom the person has or had a sexual or dating company policies, and/or CBA, the qualified victim-
relationship, or with whom he has a common child, or employee shall be entitled to a leave of up to 10 days with
against her child whether legitimate or illegitimate, within full pay, consisting of basic salary and mandatory
or without the family abode, which result in or is likely to allowances fixed by the Regional Wage Board, if any.
result in physical, sexual, psychological harm or suffering,
or economic abuse including threats of such acts, battery, Usage of the benefit
assault, coercion, harassment or arbitrary deprivation of The usage of the 10-day leave shall be at the option of the
liberty. woman employee. In the event that the leave benefit is not
availed of, it shall not be convertible into cash and shall
VAWC includes, but is not limited to, the following acts: not be cumulative.
(1) “Physical Violence" refers to acts that include bodily or
physical harm; A victim of VAWC who is employed shall be entitled to a
(2) "Sexual violence" refers to an act which is sexual in paid leave of up to ten (10) days in addition to other paid
nature, committed against a woman or her child. It leaves under the Labor Code and Civil Service Rules and
includes, but is not limited to: Regulations and other existing laws and company policies:
(a) rape, sexual harassment, acts of lasciviousness, (1) At any time during the application of any protection
treating a woman or her child as a sex object, order, investigation, prosecution and/or trial of the
making demeaning and sexually suggestive criminal case, extendible when the necessity arises as
remarks, physically attacking the sexual parts of specified in the protection order.
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More liberal existing or similar benefits cannot be The basis of the amount to be integrated shall be the
withdrawn or reduced by reason of the mandate of RA average monthly share of each employee for the past
9710. twelve (12) months immediately preceding the abolition of
withdrawal of such charges. [Sec. 5, Rule VI, Book 3,
The term “similar or equal benefits” refers to leave benefits sentence 2]
which are of the same nature and purpose as that of the
SLB. Synthesis of the Rules
(1) Service charges must be pooled;
Mode of payment (2) Where a restaurant or similar establishment does not
The SLB is a leave privilege. The woman employee shall collect service charges but has a practice or policy of
not report for work for the duration of the leave but she will monitoring and pooling tips given voluntarily by its
still receive her salary covering said period. The employer, customers to its employees, the pooled tips should be
in its discretion, may allow said employee to receive her monitored, accounted for and distributed in the same
pay for the period covered by the approved leave before or manner as the services charges. [DOLE Handbook on
during the surgery. The computation of her “pay” shall be Workers’ Statutory Monetary Benefits, 2006 ed., p. 27].
based on her prevailing salary at the time of the surgery. (3) The amount collected is divided between the company
(15%) and employees (85%);
Non-commutation of the benefit (4) It shall be given twice a month with intervals of not
The SLB shall be non-cumulative and non-convertible to more than 15 days;
cash unless otherwise provided by a CBA (5) If discontinued, removed, or stopped, the average share
of the employees of their service charge or tips shall be
SERVICE CHARGES integrated with their basic wage.
COVERAGE
TH
Employers THIRTEENTH (13 ) MONTH PAY
This rule shall apply only to establishments which collect AND OTHER BONUSES
service charges such as: Revised Guidelines on the Implementation of the 13th Month
(1) Hotels, restaurants, lodging houses, night clubs, Pay Law and PD 851
cocktail lounge, massage clinics, bars, casinos and
gambling houses and similar enterprises RATIONALE
(2) Including those entities operating primarily as private (1) To further protect the level of real wages from the
subsidiaries of the Government [Sec 1, Rule VI, Book 3] ravage of world-wide inflation;
(2) There has been no increase in the legal minimum wage
Employees rates since 1970;
Shall apply to ALL employees of covered employers (3) The Christmas season is an opportune time for society
(1) Regardless of their positions, designations, or to show its concern for the plight of the working
employment status, masses so they may properly celebrate Christmas and
(2) Irrespective of the method by which their wages are New Year.
paid. [Sec 2, Rule VI, Book 3]
COVERAGE
EXCEPTIONS General Rule: ALL EMPLOYERS are hereby required to pay
Managerial employees – or one who is vested with powers all their rank and file employees a 13th month pay not later
or prerogatives to lay down and execute managerial than Dec 24 of every year,
policies and/or hire, transfer, suspend, layoff, recall, (a) Provided that they have worked for at least one (1)
discharge, assign or discipline employees or to effectively month during a calendar year.
recommend such managerial actions. All employees not
falling within this definition shall be considered rank and EXCLUSIONS/EXEMPTIONS FROM COVERAGE
file employees. Exempted Employers:
(1) Government, its political subdivisions, including GOCCs
DISTRIBUTION except those operating essentially as private
Service charges are distributed in accordance with the subsidiaries of the Government;
following percentage of sharing: (2) Employers already paying their employees a 13th
(1) Eighty-five percent (85%) for the employees to be month pay or more in a calendar year or its equivalent
distributed equally among them; and The shares shall at the time of this issuance;
be distributed to employees not less than once every 2 (3) Employers of household helpers and persons in the
weeks or twice a month at intervals not exceeding 16 personal service of another relation to such workers;
days. [Sec 4, Rule VI, Book 3] and
(2) Fifteen percent (15%) for the management to answer (4) Employers of those who are paid on purely
for losses and breakages and, at the discretion of the commission, boundary or task basis and those who are
management, distribution to managerial employees. paid a fixed amount for performing specific work,
[Sec 3, Rule VI, Book 3] irrespective of the time consumed in the performance
thereof (except those workers who are paid on piece-
Note: The P2,000.00 salary ceiling for entitlement thereto rate basis, in which case their employer shall grant
th
is no longer applicable. them 13 month pay).
INTEGRATION Note:
In case service charge is abolished: “Equivalent” includes:
shares of covered employees shall be considered (a) Christmas bonus, mid-year bonus, cash bonuses
integrated in their wages. [Art 96, par. 2] (b) and other payments amounting to not less than 1/12 of
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the basic salary before the time for payment of the 13th month pay is
(c) but shall NOT INCLUDE cash and stock dividends, cost entitled to this monetary benefit in proportion to the
of living allowances and all other allowances regularly length of time he worked during the year, reckoned
enjoyed by the employee as well a non-monetary from the time he started working during the calendar
benefits. year up to the time of his resignation or termination
from service.
Workers paid on a piece-rate basis (6) Wage Difference: The difference between the minimum
Those who are paid a standard amount for every piece or wage and the actual salary received by the Employee
th
unit of work produced that is more or less regularly cannot be deemed as his 13 month pay as such
replicated, without regard to the time spent in producing difference is not equivalent to or of the same import as
the same. the said benefit contemplated by law. [JPL Marketing
Promotions vs. CA, 2005]
NATURE OF THE 13TH MONTH PAY (7) Terminated Employees: the payment of the 13th month
Amount and Date of Payment pay may be demanded by the employee upon the
Minimum Amount: 1/12 of the total basic salary earned by cessation of employer-employee relationship. [Archilles
an employee within a calendar year for the year 1987 Manufacturing Corp. vs. NLRC, 1995]
Base Amount, which is the basic salary shall include: Additional Rules:
(1) cost of living allowances (COLA) integrated into the (1) Commissions: If the commissions may be properly
basic salary of a covered employee pursuant to EO 178. considered part of the basic salary, then they should be
(2) all remunerations or earnings paid by this employer for INCLUDED. If they are not an integral part of the basic
services rendered. salary, then they should be EXCLUDED. [Phil.
(3) But not the allowances and monetary benefits which Duplicators Inc. vs. NLRC, 1995]
are not considered or integrated as part of the regular (2) Substitute Payment not allowed: benefits in the form of
or basic salary, such as the cash equivalent of: food or free electricity, assuming they were given, were
(a) unused vacation and sick leave credits, not a proper substitute for the 13th month pay required
(b) overtime, by law. Neither may year-end rewards for loyalty and
(c) premium, service be considered in lieu of 13th month pay.
(d) night differential, [Framanlis Farms, Inc. v. MOLE, 1989]
th
(e) holiday pay and, and (3) 14 Month Pay is not mandated: Employers already
(f) cost-of-living allowances. paying their employees a 13th month pay or its
equivalent are not covered by this Decree. [Kamaya
Time of payment Port Hotel v. NLRC, 1989]
General Rule: paid not later than Dec 24 of each year.
Commissions vis-à-vis 13th month pay
Exception: ER may give to his employees half (½) of the The Rule on Productivity Bonuses. The so-called
required 13th Month Pay before the opening of the regular commissions “paid to or received by medical
school year and the other half on or before the 24th of representatives of Boie-Takada Chemicals or by the rank-
December every year. and-file employees of Philippine Fuji Xerox Co., were
(a) The frequency of payment of this monetary benefit may excluded from the term “basic salary” because these were
be the subject of agreement between the employer and paid to the medical representatives and rank-and-file
the recognized CBA of the employees. employees as “productivity bonuses.” These have no clear
direct or necessary relation to the amount of work actually
13THE MONTH PAY IN SPECIAL CASES done by each individual employee. More generally, a bonus
(1) Paid by Results: Employees who are paid on piece work is an amount granted and paid ex gratia to an employee. If
basis are, by law, entitled to the 13th Month Pay. an employer cannot be compelled to pay a productivity
(2) Employees who are paid a fixed or guaranteed wage bonus to its employees, it should follow that such
plus commission are entitled to 13th month pay [not productivity bonus, when given, should not be deemed to
purely commission]; the basis for computation shall be fall within the “basic salary” of employees when the time
th
both their fixed or guaranteed wage and commission. comes to compute their 13 month pay [Boie Takada v de la
(3) Those with Multiple Employers: Government Employees Serna, 228 SCRA 329; 1993]
working part time in a private enterprise, including
private educational institutions, as well as Employees The decision in Boie Takada and the doctrine enunciated in
working in two or more private firms, whether on full or this case in fact co-exist with the other. The two cases
part time bases, are entitled to the required 13th Month present quite different factual situations (although the
Pay from all their private Employers regardless of their same word “commissions” was used or invoked) the legal
total earnings from each or all their Employers. characterizations of which must accordingly differ.
(4) Private School Teachers: Private school teachers,
including faculty members of universities and colleges, In the instant case, there is no question that the sales
are entitled to the required 13th month pay, regardless commission earned by the salesmen who make or close a
of the number of months they teach or are paid within sale of duplicating machines constitute part of the
a year, if they have rendered service for at least one (1) compensation or remuneration paid to salesmen for
month within a year. serving as salesmen, and hence as part of the “wage” or
(a) Overload pay is NOT included in the computation salary of petitioner’s salesmen. It appears that petitioner
th
for 13 month pay; overload is not overtime as it is pays its salesmen a small fixed or guaranteed wage; the
additional work done within the normal shift greater part of the salesmen’s wages or salaries being
[Letran Calamba Faculty vs. NLRC, 2008] composed of the sales or incentive commissions earned on
(5) Resigned or Separated Employee: an Employee who has actual sales closed by them. The sales commissions were
resigned or whose services were terminated at any time an integral part of the basic salary structure. They are not
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overtime payments, or profit sharing payments or any (2) Redundancy, as when the position of the EE has been
other fringe benefit. [Phil. Duplicators vs. NLRC, 227 SCRA found to be excessive or unnecessary in the operation
747; 1995] of the enterprise;
(3) Impossible reinstatement of the EE to his/her former
CBA vis-à-vis 13th month pay position or to a substantially equivalent position for
th
In order to exempt the employer from paying 13 month reasons not attributable to the fault of the ER, as when
pay, a bonus stipulation in the CBA should be general in the reinstatement ordered by a competent authority
scope, applicable to all employees, not only a few, for the cannot be implemented due to closure of cessation of
legal obligation benefits all employees regardless of their operations of the establishment/ER, or the position to
designation or employment status so long as they have which he/she is to be reinstated no longer exists and
worked at least one month during the calendar year. there is no substantially equivalent position in the
[Marcopper Mining Corp. vs. Ople] establishment to which he/she can be assigned. [Gaco
v. NLRC, 1994]
SEPARATION PAY
[Art. 283 & 284, LC] NOTICE OF TERMINATION
From the DOLE Handbook on Worker’s Statutory Monetary The ER may terminate the employment of any EE due to
Benefits, 2010] the above-mentioned authorized causes by serving a
written notice on the EE and the DOLE through its regional
DEFINITION office having jurisdiction over the place of business at least
Separation pay is defined as the amount that an employee 1 month before the intended date thereof.
receives at the time of his severance from the service and is
designed to provide the employee with the wherewithal BASIS OF SEPARATION PAY
during the period that he is looking for another The computation of separation pay of an EE shall be based
employment. [A’ Prime Security Services v. NLRC, et al., on his/her latest salary rate.
1993]
INCLUSION OF REGULAR ALLOWANCE IN THE COMPUTATION
GENERAL RULE In the computation of separation pay, it would be error not
The rule embodied in the Labor Code is that a person to integrate the allowance with the basic salary. The salary
dismissed for cause as defined therein [see Art, 282] is not base properly used in computing the separation pay
entitled to separation pay. [PLDT v. NLRC, 1988] should include not just the basic salary but also the regular
allowances that an EE has been receiving. [Planters’
EXCEPTION Products, Inc. v. NLRC, 1989]
Considerations of equity as in the cases of Filipro, Inc. v.
NLRC, Metro Drug Corp. v. NLRC, Engineering Equipment, RETIREMENT PAY
Inc. v. NLRC, San Miguel Corp v. NLRC. RATIONALE
RA 7641 is undoubtedly a social legislation. The law has
An employee who voluntarily resigns is not entitled to been enacted as a labor protection measure and as a
separation unless stipulated in the employment contract, curative statute that absent a retirement plan devised by,
or the collective bargaining agreement, or is sanctioned by an agreement with, or a voluntary grant from, an employer
established practice or policy of the employer. [Phimco can respond, in part at least, to the financial well-being of
Industries v. NLRC, 1997; Hinatuan Mining Corp v. NLRC, workers during their twilight years soon following their life
1997 cited in JPL Marketing Promotions v. CA, 2005] of labor. There should be little doubt about the fact that
the law can apply to labor contracts still existing at the
AMOUNT time the statute has taken effect, and that its benefits can
One-Half (1/2) Month Pay per Year of Service be reckoned not only from the date of the law's enactment
An EE is entitled to receive separation pay equivalent to ½ but retroactively to the time said employment contracts
month pay for every year of service, a fraction of at least six have started. [Enriquez Security Services, Inc. v. Cabotaje,
(6) months being considered as one whole year, if his/her 2006]
separation from the service is due to any of the following
authorized causes: Pursuant thereto, this Court imposed two (2) essential
(1) Retrenchment to prevent losses [i.e. reduction of requisites in order that R.A. 7641 may be given retroactive
personnel effected by management to prevent losses]; effect: (1) the claimant for retirement benefits was still in
(2) Closure or cessation of operation of an establishment the employ of the employer at the time the statute took
not due to serious losses or financial reverses; and, effect; and (2) the claimant had complied with the
(3) When the EE is suffering from a disease not curable requirements for eligibility for such retirement benefits
within a period of six (6) months and his/her continued under the statute. [Universal Robina Sugar Milling Corp. v.
employment is prejudicial to his/her health or to the Cabanella, 2008]
health of his/her co-employees
In no case will an EE get less than one (1) month ELIGIBILITY
separation pay if the separation is due to the above stated All employees in the private sector, regardless of their
causes and he/she has served for at least six (6) months. position, designation, or status, and irrespective of the
method by which their wages are paid [Sec 1, RA 7641]
One-Month Pay per Year of Service
An EE is entitled to separation pay equivalent to his/her The only exceptions are:
one-month pay for every year of service, a fraction of at (1) employees covered by the Civil Service Law;
least 6 months being considered as one whole year, if (2) domestic helpers and persons in the personal service of
his/her separation from service is due to any of the another, and
following:
(1) Installation by ER of labor-saving devices;
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(3) employees in retail, service and agricultural every year of service, a fraction of at least six (6) months
establishments or operations regularly employing not being considered as one whole year. The benefits under this
more than ten employees law are other than those granted by the SSS or the GSIS.
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(2) That the retirement benefits shall be availed of by an Discrimination [Art 135, RA 9710]
official or employee only once; and, See previous section
(3) That in case of separation of an official or employee
from the service of the employer due to death, sickness Stipulation against marriage [Art 136]
or other physical disability or for any cause beyond the See previous section
control of the said official or employee, any amount
received by him or by his heirs from the employer as a Discharge to prevent enjoyment of benefits [Art 137(a)(1)]
consequence of such separation shall likewise be To deny any woman employee the benefits provided for in
exempt as hereinabove provided. this Chapter or to discharge any woman employed by him
for the purpose of preventing her from enjoying any of the
"Reasonable private benefit plan" means a pension, benefits provided under this Code.
gratuity, stock bonus or profit sharing plan maintained by
an employer for the benefit of some or all of his officials Discharge on account of pregnancy [Art 137(a)(2)]
and employees, wherein contributions are made by such To discharge such woman on account of her pregnancy,
employer or officials and employees, or both, for the while on leave or in confinement due to her pregnancy.
purpose of distributing to such officials and employees the
earnings and principal of the fund thus accumulated, and Discharge on account of testimony [Art 137(a)(3)]
wherein it is provided in said plan that at no time shall any To discharge or refuse the admission of such woman upon
part of the corpus or income of the fund be used for, or be returning to her work for fear that she may again be
diverted to, any purpose other than for the exclusive pregnant.
benefit of the said officials and employees.
[Book III, Rule XII, Sec 13(d)] It shall be unlawful for any
WOMEN WORKERS employer: …to discharge any woman or child or any other
PROVISIONS AGAINST DISCRIMINATION employee for having filed a complaint or having testified or
It shall be unlawful for any employer to discriminate being about to testify under the Code
against any woman employee with respect to terms and
conditions of employment solely on account of her sex. Expulsion of Women faculty/ female student
due to pregnancy outside of marriage
The following are acts of discrimination: [Sec 13c RA 9710 Magna Carta of Women]
(1) Payment of a lesser compensation, including wage, (c) Expulsion and non-readmission of women faculty due
salary or other form of remuneration and fringe to pregnancy outside of marriage shall be outlawed.
benefits, to a female employees as against a male No school shall turn out or refuse admission to a
employee, for work of equal value; and female student solely on the account of her having
(2) Favoring a male employee over a female employee contracted pregnancy outside of marriage during her
with respect to promotion, training opportunities, study term in school.
and scholarship grants solely on account of their sexes.
[Art. 135 LC] ANTI-SEXUAL HARASSMENT ACT [RA 7877]
Note: SEE RA 7877: Anti-Sexual Harassment Act of 1995
STIPULATION AGAINST MARRIAGE
It shall be unlawful for an employer to require as a Unlawful Forms of Sexual Harassment
condition of employment or continuation of employment Employment or Work Related
that a woman employee shall not get married, or to (1) The sexual favor is made as a condition (HFR)
stipulate expressly or tacitly that upon getting married a (a) in the hiring or in the employment, re-employment
woman employee shall be deemed resigned or separated or continued employment of said individual or
or to actually dismiss, discharge, discriminate or otherwise (b) in granting said individual favorable compensation,
prejudice a woman employee merely by reason of her terms, conditions, promotions, or privileges, or
marriage. [Art. 136, LC] (c) in the refusal to grant the sexual favor results in
limiting, segregating or classifying the EE which in
Bona fide occupational qualification exception any way would discriminate, deprive or diminish
When the employer can prove that the reasonable employment opportunities or otherwise adversely
demands of the business require a distinction based on affect said employee;
marital status and there is no better available or (2) The above acts would either:
acceptable policy which would better accomplish the (a) impair the employee’s rights or privileges under
business purpose, an ER may discriminate against an EE existing labor laws; or
based in the identity of the EE’s spouse. [Star Paper Corp. (b) result in an intimidating, hostile, or offensive
vs. Simbol, 2006] environment for the employee.
The Court sustained the validity of employer policy Education or Training environment
prohibiting an employee from having a personal or marital In an education or training environment, sexual
relationship with an employee of a competitor. The harassment is committed: (CECI)
prohibition was reasonable under the circumstances (a) Against one who is under the care, custody or
because relationships of such nature might compromise supervision of the offender
the interests of the company. [Duncan Association of (b) Against one whose education, training, apprenticeship
Detailmen vs. Glaxo Wellcome, 2004] or tutorship is entrusted to the offender;
(c) When the sexual favor is made a condition to the giving
PROHIBITED ACTS [ART. 137, LC] of a passing grade, or the granting of honors and
Note: Nightwork/ Exception [Art 130-131] – No more scholarships, or the payment of a stipend, allowance or
nightwork prohibition under R.A. 10151. other benefits, privileges, or considerations; or
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(d) When the sexual advances result in an intimidating, employee, male or female, may rightfully cry "foul" provided
hostile or offensive environment for the result, trainee or the claim is well substantiated. Strictly speaking, there is no
apprentice. time period within which he or she is expected to complain
through the proper channels. The time to do so may vary
Persons who may be liable depending upon the needs, circumstances, and more
(1) Any employer, employee, manager, supervisor, agent importantly, the emotional threshold of the employee.
of the employer, teacher, instructor, professor, coach,
trainer or any other person, regardless of whether the Not many women are made of the stuff that can endure
demand, request for requirement for submission is the agony and trauma of a public, even corporate, scandal.
accepted by the object of said act having authority, If petitioner corporation had not issued the third
influence or moral ascendancy over another in a work or memorandum that terminated the services of private
training or education environment, who demands, respondent, we could only speculate how much longer she
requests or otherwise requires any sexual favor from would keep her silence. Perhaps, to private respondent's
another, mind, for as long as she could outwit her employer's ploys
(2) Any person who directs or induces another to commit she would continue on her job and consider them as mere
any act of sexual harassment as herein defined. OR occupational hazards. [Phil. Aelous Automotive United
(3) Any person who cooperates in the commission by Corp. v. NLRC, 2000]
another without which it would NOT have been
committed, shall also be held liable under this Act MINOR WORKERS [RA 7610, RA 9231]
CONSTITUTIONAL BASIS
Role of the employer or Head of Office Art II, Sec. 13 of the 1987 Constitution
The Employer or Head of Office shall have the duty: (1) The State recognizes the vital role of the youth in
(1) to prevent the commission of such acts and nation-building and shall promote and protect their
(2) to lay down the procedure for the resolution, physical, moral, spiritual, intellectual, and social well-
settlement or prosecution of committed acts. being.
(2) It shall inculcate in the youth patriotism and
He shall be solidarily liable for damages: nationalism, and encourage their involvement in public
(1) if he is informed of such acts by the offended party and and civic affairs.
(2) no immediate action is taken thereon.
General Rule: Children below 15 shall NOT be employed
Independent Action for Damages
The victim of work, education or training-related sexual
Legal Basis: Art. 139(a) of the Labor Code and Sec. 12 to 16
harassment can institute a separate and independent of RA 7610 as amended by RA 7658 and RA 9231
action for damages and other affirmative relief.
Exceptions
Sanctions (1) Child works directly under the sole responsibility of his
(1) Criminal: imprisonment of 1 month to mos. Or fine of
parents or legal guardian and where only members of
P10k to P20k or both the ER’s family are employed, provided:
Prescription of such action is in 3 years. (2) his employment does NOT endanger his life, safety,
(2) Termination
health and morals,
(3) nor impairs his normal development, and
As a managerial employee, petitioner is bound by more
(a) the parent or legal guardian shall provide the said
exacting work ethics. When such moral perversity is
minor child with the prescribed primary and/or
perpetuated against his subordinate, he provides a secondary education; [Sec. 12 of RA 7610 as
justifiable ground for his dismissal for lack of trust and
amended by RA 7658]
confidence. It is the right, nay the duty of every employer (4) child’s employment or participation in public
to protect its employees from oversexed superiors. [Libres entertainment or information through cinema, theater,
v. NLRC, 1999]
radio or television is essential, provided that: [Sec. 12 of
RA 7610 as amended by RA 7658]
Cortez’s plant manager manifested a special liking for her,
(a) employment does NOT involve ads or commercials
so much so that she was receiving special treatment from
promoting alcohol, tobacco and its by-products or
him who would oftentimes invite her "for a date," which violence [Sec. 14 of RA 7610]
she would as often refuse.
(b) the employment contract is concluded by the child’s
parents or guardian, and approved by DOLE
On many occasions, he would make sexual advances - (c) The ER shall ensure the protection, health, safety
touching her hands, putting his arms around her
and morals of the child
shoulders, running his fingers on her arms and telling her (d) The ER shall institute measures to prevent the
she looked beautiful. The special treatment and sexual
child’s exploitation or discrimination taking into
advances continued during her employment for four (4)
account the system and level of remuneration, and
years but eventually, he made her understand that if she the duration and arrangement of working time
would not give in to his sexual advances he would cause
(e) The ER shall formulate and implement, subject to
her termination from the service; and he made good his the approval and supervision of competent
threat when he started harassing her. authorities, a continuing program for training and
skills acquisition of the child. [Sec. 12 of RA 7610 as
Public respondent appears baffled why it took private amended by RA 7658]
respondent more than four years to expose William Chua's
alleged sexual harassment. The gravamen of the offense in
EMPLOYMENT OF CHILDREN FROM 15 TO 18 - allowed but
sexual harassment is not the violation of the employee's restricted to non-hazardous undertakings.
sexuality but the abuse of power by the employer. Any
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Age Bracket Prohibited Hours Right against assignment to non-household work at a wage
rate lower than that mandated for agricultural or non-
Below 15 y 8 pm to 6 am (10 hrs) agricultural enterprises depending on the case. [Art 145]
15 to below 18 10 pm to 6 am (8 hrs)
Opportunity for education if househelper is below 18 years
EMPLOYMENT OF HOUSEHELPERS [Art 146; NCC 1691]
DEFINITION
(1) ER shall provide for at least elementary education;
"Domestic or household services" shall mean service in the (2) cost shall be part of the EE’s compensation UNLESS
ER's home, which is usually necessary or desirable for the otherwise agreed upon.
maintenance and enjoyment thereof and includes
ministering to the personal comfort and convenience of the Just and humane treatment [Art 147; NCC 1694]
members of the ER's household, including services of The employer shall treat the househelper in a just and
family drivers. [Art. 141, LC] humane manner. In no case shall physical violence be used
upon the househelper [Art. 147]
The term “househelper” as used herein is synonymous to
the term “domestic servant” and shall refer to any person, Board, lodging and medical attendance shall be furnished
whether male or female, who renders services in and about by employer [Art 148; NCC 1690]
the employer’s home and which services are usually
necessary or desirable for the maintenance and enjoyment Household work - Non-hazardous work for persons
thereof, and ministers exclusively to the personal comfort between 15-18 years old. [DO 4-99 Sec. 4]
and enjoyment of the employer’s family. [IRR Rule XII
Sec.1(b)] Contract for Domestic Service shall NOT exceed 2 years but
renewable annually [Art 142; NCC1692]
A househelper or a laundry woman, as well as a gardener,
driver, or a houseboy who work in the staff house of a Hours of Work - House helpers shall NOT be required to
company are NOT househelpers. The criterion is not the work more than ten hours a day. [NCC 1695]
nature of the work but the personal comfort and
enjoyment of the family of the employer in the home of Vacation with Pay - Shall be allowed 4 paid vacation days
said employer. [Apex Mining Co. v. NLRC, 1991] per month [NCC 1695]
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Conditions under which children below 15 may be employed Employment of Apprentices: When applicable:
Children below fifteen (15) years of age shall not be (1) Only employers in highly technical industries may
employed except: employ apprentices; and
(1) When a child works directly under the sole (2) Only in apprenticeable occupations approved by the
responsibility of his parents or legal guardian and Secretary of Labor. [Art. 60]
where only members of the employer's family are
employed: Provided, however, That his employment Terms and conditions
neither endangers his life, safety, health and morals, Apprenticeship agreements, including the wage rates of
nor impairs his normal development: Provided, further, apprentices, shall conform to the rules issued by the
That the parent or legal guardian shall provide the said Secretary of Labor and Employment.
minor child with the prescribed primary and/or
secondary education; or The period of apprenticeship shall not exceed six months.
(2) Where a child's employment or participation in public
entertainment or information through cinema, theater, Apprenticeship agreements providing for wage rates below
radio or television is essential: Provided, The the legal minimum wage, which in no case shall start
employment contract is concluded by the child's below 75 percent of the applicable minimum wage, may
parents or legal guardian, with the express agreement be entered into only in accordance with apprenticeship
of the child concerned, if possible, and approval of the programs duly approved by the Secretary of Labor and
Department of Labor and Employment: and Provided, Employment. [LC, Art. 61]
That the following requirements in all instances are
strictly complied with: The Secretary of Labor and Employment may authorize the
(a) The employer shall ensure the protection, health, hiring of apprentices without compensation whose training
safety, morals and normal development of the on the job is required by the school or training program
child; curriculum or as requisite for graduation or board
(b) The employer institute measures to prevent the examination. [Art. 72, LC]
child's exploitation or discrimination taking into
account the system and level of remuneration and Note: Wage Order No. NCR-17, May 17, 2012 also provides
the duration and arrangement of working time; and that the wages of apprentices and learners shall in no case
(c) The employer shall formulate and implement, be less than seventy-five percent (75%) of the applicable
subject to the approval and supervision of minimum wage rates.
competent authorities, a continuing program for
training and skills acquisition of the child. Enforcement
No person shall institute any action for the enforcement of
In the above exceptional cases where any such child may any apprenticeship agreement or damages for breach of
be employed, the employer shall first secure, before any such agreement, unless he has exhausted all available
engaging child, a work permit from the Department of administrative remedies. [Art. 67, LC]
Labor and Employment which shall ensure observance of
the above requirements. Incentives for employers
An additional deduction from taxable income of one-half
The Department of Labor and Employment shall (1/2) of the value of labor training expenses incurred for
promulgate rules and regulations necessary for the developing the productivity and efficiency of apprentices
effective implementation of this Section. [RA 7160, Sec. 12 shall be granted to the person or enterprise organizing an
as amended by RA 7658, Sec. 1] apprenticeship program: Provided, That such program is
duly recognized by the Department of Labor and
Qualifications of apprentice Employment: Provided, further, That such deduction shall
(b) Possess vocational aptitude and capacity for not exceed ten (10%) percent of direct labor wage: and
appropriate tests; and Provided, finally, That the person or enterprise who wishes
(c) Possess the ability to comprehend and follow oral and to avail himself or itself of this incentive should pay his
written instructions. [Art. 59, LC] apprentices the minimum wage. [LC Art. 71]
Summary of Rules:
(1) The apprentice must be paid not less than 75% of the
prescribed minimum salary [Art. 61];
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Exception: The employer MAY NOT pay any wage if the (3) The wages or salary rates of the learners which shall
apprenticeship training is: begin at not less than seventy-five percent (75%) of the
(a) part of the school curriculum, applicable minimum wage; and
(b) a requirement for graduation, or (4) A commitment to employ the learners if they so desire,
(c) a requirement for board examination [Art. 72] as regular employees upon completion of the
(2) The apprenticeship agreement must be approved by learnership. All learners who have been allowed or
the DOLE Secretary (without such one shall be deemed suffered to work during the first two (2) months shall
a regular employee) [Nitto Enterprises v. NLRC, G.R. No. be deemed regular employees if training is terminated
114337, Sept. 29, 1995]; by the employer before the end of the stipulated period
(3) The employer is not compelled to continue one’s through no fault of the learners.
employment upon termination of apprenticeship; (5) The learnership agreement shall be subject to
(4) One-half (1/2) of the value of labor training expenses inspection by the Secretary of Labor and Employment
incurred for developing the productivity and efficiency or his duly authorized representative. [Art. 75, LC]
of apprentices of the training cost is deducted from the
employer’s income tax but it shall not exceed 10% of Note: Learners employed in piece or incentive-rate jobs
direct labor wage [Art. 71] during the training period shall be paid in full for the work
done. [Art. 76, LC]
Requisites of the deduction:
(a) Apprenticeship program must be duly approved by the Summary of Rules
DOLE; (1) The duration of learnership shall not exceed 3 months
(b) Deduction shall NOT exceed 10% of direct labor wage; [Art. 73];
(c) Employer must pay his apprentices the minimum (2) If the learnership of 3 months is completed, the
wage. employer may be compelled to continue with the
services of the learner as a regular employee [Art.
Working scholars – there is no employer-employee 75(d)];
relationship between students on one hand, and schools, (3) There is a commitment from the employer to employ
colleges or universities on the other, where there is written the learners if they so desire, as regular employees
agreement between them under which the former agree to upon completion of the learnership [Art. 75(d)];
work for the latter in exchange for the privilege to study (4) If the learner is dismissed from service without just and
free of charge, provided, the students are given real valid cause and without due process after 2 months of
opportunities, including such facilities as may be service, he will be deemed as regular employee; and
reasonable and necessary to finish their chosen courses (5) The wages or salary rates of the learners which shall
under such agreement. [Sec. 14, Rule X, IRR] begin at not less than 75% of the applicable minimum
wage.
LEARNERS
Definition Distinctions between Learnership and Apprenticeship
"Learners" refers to persons hired as trainees in semi- Apprenticeship Learnership
skilled and other industrial occupations which are non-
apprenticeable. Learnership programs must be approved Highly technical industries Semi-skilled industrial
by the authority. [RA 7796, Sec. 4] occupations
(Occupations) which may be learned through practical Practical training Practical training whether or
training on the job in a relatively short period of time which supplemented by related not such practical training is
shall not exceed three (3) months. [Art. 73, sentence 2, LC] theoretical instruction supplemented by theoretical
instructions
Allowed employment Apprenticeable occupations Non-apprenticeable
Learners may be employed when no experienced workers approved by the SOLE occupations
are available, the employment of learners is necessary to
prevent curtailment of employment opportunities, and the Written apprentice agreement Learnership agreement
employment does not create unfair competition in terms of ratified by the appropriate
labor costs or impair or lower working standards. [Art. 74, committees
LC] More than three months, shall Shall not exceed 3 months
not exceed six months
When learners may be hired
(1) No experienced workers are available; (1) The person is at least (1) When no experienced
(2) The employment of learners being necessary to fifteen (15) years of age, workers are available;
prevent the curtailment of employment opportunities; provided those who are at (2) The employment of
and least fifteen (15) years of learners is necessary to
(3) The employment will neither create unfair competition age but less than prevent curtailment of
in terms of labor costs nor impair working standards. eighteen (18) may be employment
eligible for apprenticeship opportunities; and
Terms and conditions of employment only in non-hazardous (3) The employment does not
Any employer desiring to employ learners shall enter into a occupation; create unfair competition
learnership agreement with them, which agreement shall (2) The person is physically fit in terms of labor costs or
include: for the occupation in impair or lower working
(1) The names and addresses of the learners; which he desires to be standards.
(2) The duration of the learnership period, which shall not trained;
exceed three (3) months; (3) The person possesses
vocational aptitude and
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HANDICAPPED WORKERS [RA 7277] – DIFFERENTLY- In this light, the Magna Carta for Disabled Persons
ABLED WORKERS mandates that a qualified disabled EE should be given the
DEFINITIONS same terms and conditions of employment as a qualified
“Disabled Persons” are those suffering from restriction or able-bodied person. Since the Magna Carta accords them
different abilities, as a result of a mental, physical or the rights of qualified able-bodied persons, they are thus
sensory impairment, to perform an activity in the manner covered by Article 280 of the Labor Code. In the present
or within the range considered normal for a human being case, the handicap of petitioners [deaf-mutes] is NOT a
hindrance to their work. The eloquent proof of this
“Impairment” is any loss, diminution or aberration of statement is the repeated renewal of their employment
psychological, physiological, or anatomical structure or contracts. [Bernardo v. NLRC, 1999]
function
Discounts and other privileges
“Disability” shall mean: (a) Persons with disability shall be entitled to the
(1) physical or mental impairment that substantially limits following:
one or more psychological, physiological or anatomical (b) At least 20% discount from all establishments relative
function of an individual or activities of such individual; to the utilization of all services in hotels and similar
(2) a record of such an impairment; lodging establishments; restaurants and recreation
(3) or being regarded as having such an impairment centers for the exclusive use or enjoyment of persons
with disability;
“Handicap” refers to a disadvantage for a given individual, (c) A minimum of 20% discount on admission fees
resulting from an impairment or a disability, that limits or charged by theaters, cinema houses, concert halls,
prevents the function or activity, that is considered normal circuses, carnivals and other places of culture, leisure
given the age and sex of the individual. and amusement for the exclusive use or enjoyment of
persons with disability;
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(d) At least 20% discount for the purchase of medicines in employment. The following constitute acts of
all drugstores for the exclusive use or enjoyment of discrimination:
persons with disability; (1) Limiting, segregating or classifying a disabled job
(e) At least 20%% discount on medical and dental services applicant in such a manner that adversely affects his
including diagnostic and laboratory fees such as, but work opportunities
not limited to, x-rays, computerized tomography scans (2) Using qualification standards, employment tests or
and blood tests, in all government facilities, subject to other selection criteria that screen out or tend to screen
guidelines to be issued by the DOH in coordination out a disabled person unless such standards, tests or
with the PHILHEALTH. other selection criteria are shown to be related for the
(f) At least 20% discount on medical and dental services position in question and are consistent with business
including diagnostic and laboratory fees and necessity;
professional fees of attending doctors in all private (3) Utilizing standards, criteria, or methods of
hospitals and medical facilities, in accordance with the administration that:
rules and regulations to be issued by the DOH, in (a) have the effect of discrimination on the basis of
coordination with PHILHEALTH; disability; or
(g) At least 20% discount on fare for domestic air and sea (b) perpetuate the discrimination of others who are the
travel for the exclusive use or enjoyment of persons subject to common administrative control.
with disability; (4) Providing less compensation, such as salary, wage or
(h) At least 20% discount in public railways, skyways, and other forms of remuneration and fringe benefits, to
bus fare for the exclusive use and enjoyment of persons qualified disabled employee, by reason of his disability,
with disability. than the amount to which a non-disabled person
(i) Educational assistance to persons with disability, for performing the same work is entitled;
them to pursue primary, secondary, tertiary, post (5) Favoring a non-disabled employee over a qualified
tertiary, as well as vocational or technical education, in disabled employee with respect to promotion, training
both public and private schools, through the provision opportunities, study and scholarship grants, solely on
of scholarships, grants, financial aids, subsidies and account of the latter's disability;
other incentives to qualified persons with disability, (6) Re-assigning or transferring a disabled employee to a
including support for books, learning materials and job or position he cannot perform by reason of his
uniform allowance to the extent feasible; Provided, disability;
That persons with disability shall meet minimum (7) Dismissing or terminating the services of a disabled
admission requirements; employee by reason of his disability unless the
(j) To the extent practicable and feasible, the continuance employer can prove that he impairs the satisfactory
of the same benefits and privileges given by the GSIS, performance of the work involved to the prejudice of
SSS, and PAG-IBIG, as the case may be, as are enjoyed the business entity; Provided, however, That the
by those in actual service; employer first sought to provide reasonable
(k) To the extent possible, the government may grant accommodations for the disabled persons;
special discounts in special programs for persons with (8) Failing to select or administer in the most effective
disability on purchase of basic commodities, subject to manner employment tests which accurately reflect the
guidelines to be issued for the purpose by the DTI and skills, aptitude or other factor of the disabled applicant
the DA; and or employee that such test purports to measure, rather
(l) Provision of express lanes for persons with disability in than the impaired sensory, manual or speaking skills of
all commercial and government establishments; in the such applicant or employee, if any; and
absence thereof, priority shall be given to them. [Sec (9) Excluding disabled persons from membership in labor
32, RA 7277, as amended by RA 9442] unions or similar organizations.
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The benchmark of economic reality in analyzing possible Indeed, the employer has the right or is at liberty to choose
employment purposes ought to be the economic as to who will be hired and who will be declined. It is
dependence of the worker on his employer. within the exercise of this right to select his employees that
the employer may set or fix a probationary period within
The standard of “economic dependence” is whether the which the latter may test and observe the conduct of the
worker is dependent on the alleged employer for his former before hiring him permanently. The right of a
continued employment in that line of business. [Orozco v. laborer to sell his labor to such persons as he may choose
CA, GR No. 155207, 13 August 2008]. is, in its essence, the same as the right of an employer to
purchase labor from any person whom it chooses. The
KINDS OF EMPLOYMENT employer and the employee have thus an equality of right
Probationary Employment guaranteed by the Constitution. [Grand Motors Corp. vs.
Legal basis MOLE, 1984]
Probationary employment shall not exceed 6 months from
the date the employee started working, unless it is covered Duration
by an apprenticeship agreement stipulating a longer Generally, the probationary period of employment is
period. The services of an employee who has been limited to six (6) months. The exception to this general rule
engaged on a probationary basis may be terminated for a is when the parties to an employment contract may agree
just cause or when he fails to qualify as a regular employee otherwise, such as when the same is established by
in accordance with reasonable standards made known by company policy or when the same is required by the nature
the employer to the employee at the time of his of work to be performed by the employee. In the latter
engagement. An employee who is allowed to work after a case, there is recognition of the exercise of managerial
probationary period shall be considered a regular prerogatives in requiring a longer period of probationary
employee. [Art. 281, LC] employment, such as in the present case where the
probationary period was set for eighteen (18) months, i.e.
In all cases of probationary employment, the employer from May, 1980 to October, 1981 inclusive, especially where
shall make known to the employee the standards under the employee must learn a particular kind of work such as
which he will qualify as regular employee at the time of his selling, or when the job requires certain qualifications,
engagement. Where no standards are made known to the skills, experience or training. [Busier vs. Leogardo, 1984]
employee at the time of engagement, he shall be deemed
a regular employee. [IRR, Book VI, Rule 1, Sec. 6(d)] Honasan was certainly under observation during her three-
week on-the-job training. If her services proved
Definition unsatisfactory then, she could have been dropped as early
A probationary employee is one who is on trial by an as during that period. But she was not. On the contrary,
employer during which the employer determines whether her services were continued, presumably because they
or not he is qualified for permanent employment were acceptable, although she was formally placed this
[International Catholic Migration Comm. vs. NLRC, 1989] time on probation.
Termination - Can only be terminated for: Even if it be supposed that the probation did not end with
(1) Just causes; or the three-week period of on-the-job training, there is still
(2) Failure to qualify as a regular employee in accordance no reason why that period should not be included in the
with reasonable standards made known by the stipulated six-month period of probation. Honasan was
employer to the employee at the time of engagement. accepted for on-the-job training on April 15, 1991.
Assuming that her probation could be extended beyond
Note: The probationary employee is entitled to substantial that date, it nevertheless could continue only up to
and procedural due process before termination. October 15, 1991, after the end of six months from the
earlier date. Under this more lenient approach, she had
Limitations to termination become a regular employee of Holiday Inn and acquired
(1) It must be exercised in accordance with the specific full security of tenure as of October 15, 1991. [Holiday Inn
requirements of the contract Manila vs. NLRC, 1993]
(2) If a particular time is prescribed, the termination must
be within such time and if formal notice is required, Paras started reporting for work on May 27, 1996. The
then that form must be used; employers unanimously agreed that his performance was
(3) The employer’s dissatisfaction must be real and in unsatisfactory. On November 26, 1996, he received a
good faith, not feigned so as to circumvent the contract Notice of Termination dated November 25, 1996, Applying
or the law; Article 13 of the Civil Code, the probationary period of six
(4) There must be no unlawful discrimination in the (6) months consists of one hundred eighty [180] days. As
dismissal. [Manila Hotel Corporation v. NLRC, G.R. No. clearly provided for in the last paragraph of Article 13, in
53453, January 22, 1986]. computing a period, the first day shall be excluded and the
last day included. Thus, the one hundred eighty [180] days
commenced on May 27, 1996, and ended on November 23,
Purposes 1996. By the time Paras received the letter he was already
(1) Observance Period – for employer to determine if a regular employee of the petitioner under Article 281 of
employee is qualified and for employee to demonstrate the Labor Code. [Mitsubishi Motors vs. Chrysler Union,
to the ER his skills 2004]
(2) Restrictive- As long as the termination was made
before the expiration of the six-month probationary
period, the employer has a right to sever the employer-
employee relationship
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To reiterate, the rule on duration may be summarized as as the termination was made before the termination of the
follows: six-month probationary period, the employer was well
General Rule: Probationary employment shall not exceed within his rights to sever the employer-employee
six (6) months from the date the employee started relationship. A contrary interpretation would defect the
working. clear meaning of the term “probationary.” [De la Cruz, Jr.
vs. NLRC, 2004]
Exceptions:
(1) When the parties to an agreement contract otherwise: Private school teachers
(2) When the same is established by company policy; The provisions of Article 280 of the Labor Code are not
(3) When the s ame is required by the nature of the work applicable to the present case especially with respect to
performed by the employee; and the issue of respondent's acquisition of security of tenure. It
(4) When it is covered by an apprenticeship agreement is settled that questions respecting a private school
stipulating a longer period teacher’s entitlement to security of tenure are governed by
the Manual of Regulations for Private Schools and not the
Agreement to extend probationary period Labor Code. [Paragraph 75 of the 1970 Manual] [Aklan
If the extension was ex gratia, an act of liberality on the College vs. Guarino, 2007]
part of his employer affording him a second chance to
make good after having initially failed to prove his worth as Regular employment
an employee. Such an act cannot now unjustly be turned Definition
against said employer’s account to compel it to keep on its Regular employment is not synonymous with permanent
payroll one who could not perform according to its work employment, because there is no such thing as a
standards. [Mariwasa Manufacturing v. Leogardo, G.R. No. permanent employment. Any employee may be
74246, Jan. 26, 1989]. terminated for just cause.
Criteria for regularization must be disclosed A regular employee is one who is engaged to perform
In all cases of probationary employment, the employer activities which are necessary and desirable in the usual
shall make known to the employee the standards under business or trade of the employer as against those which
which he will qualify as a regular employee at the time of are undertaken for a specific project or are seasonal. There
his engagement. Where no standards are made known to are two separate instances whereby it can be determined
the employee at that time, he shall be deemed a regular that an employment is regular:
employee. Conversely, an employer is deemed to (1) if the particular activity performed by the employee is
substantially comply with the rule on notification of necessary or desirable in the usual business or trade of
standards if he apprises the employee that he will be the employer; and,
subjected to a performance evaluation on a particular date (2) if the employee has been performing the job for at
after his hiring. [Alcira vs. NLRC, 2004] least a year. [Pangilinan vs. Gen. Milling Corp., 2004]
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determined at the time of the engagement of the (4) The employee, while not employed and awaiting
employee or engagement, is free to offer his services to any other
(2) where the work or services to be performed is seasonal employer;
in nature and the employment is for the duration of (5) The termination of his employment in the particular
the season. project/undertaking is reported to the DOLE Regional
Office having jurisdiction over the workplace within 30
Quite to the contrary, the private respondent's work, that of days following the date of his separation from work,
"typist-clerk" is far from being "specific" or "seasonal", but using the prescribed form on employees’ terminations
rather, one "where the employee has been engaged to /dismissals /suspensions;
perform activities which are usually necessary or desirable (6) An undertaking in the employment contract by the
in the usual business." And under the Code, where one employer to pay completion bonus to the project
performs such activities, he is a regular employee, "(t)he employee as practiced by most construction
provisions of written agreement to the contrary companies. [Samson v. NLRC, G.R. No. 11366, Feb. 1,
notwithstanding …” 1996].
It is true that in Biboso vs Victorias Milling Company, Inc. we See Policy No. 2 of 1997 and D.O. 19 of 1993
recognized the validity of contractual stipulations as to the
duration of employment. But we cannot apply it here Samson vs. NLRC (1996):
because clearly, the contract-to-contract arrangement When the present action for regularization was filed on
given to the private respondent was but an artifice to November 5, 1989 and during the entire period of
prevent her from acquiring security of tenure and to petitioner's employment with private respondent prior to
frustrate constitutional decrees. [Beta Electric Corp. vs. said date, the rule in force then was Policy Instruction No.
NLRC, 1990] 20, which required the employer company to report to the
nearest Public Employment Office the fact of termination
Length of time involved of a project employee as a result of the completion of the
Length of time not controlling, merely serves as a badge of project or any phase in which he is employed.
regular employment. [Maraguinot vs. NLRC, 1998]
Furthermore, Department Order No. 19, which was issued
Project employment on April 1, 1993, did not totally dispense with the notice
Employment fixed on a specific project or undertaking, requirement. Instead, it made provisions and considered it
completion or termination of which is determined at the (i.e. the notice) as one of the "indicators" that a worker is a
time of engagement of the employee. project employee.
Whether or not the project has a direct relation to the Work pool employee
business of the ER is not important, BUT: A project EE or a member of a work pool may acquire the
(a) EE must be informed of the nature and duration of status of a regular employee when the following concur:
project (1) There is a continuous rehiring of project employees
(b) project and principal business of ER are two separate even after cessation of a project; and
things (2) The tasks performed by the alleged “project
(c) no attempt to deny security of tenure to the worker employee” are vital, necessary, and indispensable to
the usual business or trade of the employer. However,
Test of project employment the length of time during which the EE was
The principal test for determining whether employees are continuously rehired is not controlling, but merely
properly characterized as "project employees," as serves as a badge of regular employment.
distinguished from "regular employees," is whether or not
the project employees were assigned to carry out a A work pool may exist although the workers in the pool do
"specific project or undertaking," the duration and scope of not receive salaries and are free to seek other employment
which were specified at the time the employees were during temporary breaks in the business, provided, that the
engaged for that project. As defined, project employees are worker shall be available when called to report for a
those workers hired: project. Although primarily applicable to regular seasonal
(1) for a specific project or undertaking, and workers, this set-up can likewise be applied to project
(2) the completion or termination of such project or workers insofar as the effect of temporary cessation of
undertaking has been determined at the time of the work is concerned. [Maraguinot vs. NLRC, 1998]
engagement of the employee. [PNOC Energy Dev’t
Corp vs. NLRC, 2007] Members of a work pool from which a construction
company draws its project employees, if considered
Indicators of project employment employees of the construction company while in the work
(1) The duration of the specific/identified undertaking for pool, are non-project employees, or employees for an
which the worker is engaged is reasonably indefinite period. If they are employed in a particular
determinable; project, the completion of the project or any phase thereof
(2) Such duration, as well as the specific work/service to will not mean severance of the employer-employee
be performed, is defined in an employment agreement relationship. [Aguilar Corp. vs. NLRC, 1997]
and is made clear to the employee at the time of the
hiring; Rationale for project employment
(3) The work/service to be performed by the employee is in If a project has already been completed, it would be
connection with the particular project/undertaking for unjust to require the employer to maintain them in the
which he is engaged; payroll while they are doing absolutely nothing except
waiting until another project is begun, if at all. In effect,
these stand-by workers would be enjoying the status of
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privileged retainers, collecting payment for work not done, Continuous rehiring
to be disbursed by the employer from profits not earned. Despite the insistence of petitioner that they were project
[De Ocampo vs. NLRC, 1990] employees, the facts show that as masons, carpenters and
fine graders in petitioner’s various construction projects,
Examples of project employment they performed work which was usually necessary and
Private respondents, as well as the other 30 workers, were desirable to petitioner’s business which involves
needed as additional hands for the renovation work and construction of roads and bridges. It is not enough that an
not for ordinary upkeep and maintenance. The erection of employee is hired for a specific project or phase of work.
the fire escape and other small jobs after the renovation There must also be a determination of, or a clear
cannot be deemed maintenance but more of casual work. agreement on, the completion or termination of the project
[Phil. Jai-Alai and Amusement Corp. vs. Clave, 1983] at the time the employee was engaged. This second
requirement was not met in this case. [Chua vs. Court of
The corporation does not construct vessels for sale or Appeals, 2004]
otherwise which will demand continuous production of
ships and will need regular workers. It merely accepts The fact that the workers have been employed with the
contracts for ship-building or for repair of vessels from company for several years on various projects, the longest
third parties. It is only on occasion when it has work being nine (9) years, did not automatically make them
contract of this nature that it hires workers to do the job regular employees considering that the definition of
which, needless to say, lasts only for less than a year or regular employment in Article 280 of the Labor Code,
longer. Completion of their work or project automatically makes specific exception with respect to project
terminates their employment. [Sandoval Shipyards, Inc. vs. employment. The re-hiring of petitioners on a project-to-
NLRC, 1985] project basis did not confer upon them regular
employment status. The practice was dictated by the
Petitioner was engaged to perform data encoding and practical consideration that experienced construction
keypunching, and her employment was fixed for a specific workers are more preferred. It did not change their status
project or undertaking the completion or termination of as project employees. [C.E. Construction Corp vs. Cioco,
which had been determined at the time of her 2004]
engagement. This may be observed from the series of
employment contracts between petitioner and private Seasonal employment
respondent, all of which contained a designation of the Work or services to be performed are seasonal in nature,
specific job contract and a specific period of employment. employment is for the duration of the season.
[Imbuido vs. NLRC, 2000]
No continuing need for the worker.
Employer obligation to make standards known
The law is clear that in all cases involving employees “Regular Seasonal” Employees after One Season
engaged on probationary' basis, the employer shall make Regular seasonal employees are those called to work from
known to the employee at the time he is hired, the time to time. The nature of their relationship with the
standards by which he will qualify as a regular employee. employer is such that during off season they are
temporarily laid off but during summer season they are
Nowhere in the employment contract executed between reemployed, or when their services may be needed. They
petitioner and respondent Grulla is there a stipulation that are not, strictly speaking, separated from the service but
the latter shall undergo a probationary period for three are merely considered as on leave of absence without pay
months before he can quality as a regular employee. until they are reemployed. Their employment relationship
is never severed but only suspended. As such those
There is also no evidence on record showing that the employees can be considered as in the regular
respondent Grulla had been apprised of his probationary employment of the employer. [Manila Hotel Co. v. CIR, G.R.
status and the requirements which he should comply in No. L-18875, Sept. 30, 1963].
order to be a regular employee. In the absence of these
requisites, there is justification in concluding that For respondents to be excluded from those classified as
respondent Grulla was a regular employee at the time he regular employees, it is not enough that they perform work
was dismissed by petitioner, and as such cannot be done or services that are seasonal in nature. They must have
without just and authorized cause. [A. M. Oreta and Co., been employed only for the duration of one season. While
Inc. vs. NLRC, 1989] the records sufficiently show that the respondents’ work in
the hacienda was seasonal in nature, there was, however,
Specified period no proof that they were hired for the duration of one
The Court has upheld the legality of fixed-term season only. In fact, the payrolls, submitted in evidence by
employment. It ruled that the decisive determinant in term the petitioners, show that they availed the services of the
employment should not be the activities that the employee respondents since 1991. Absent any proof to the contrary,
is called upon to perform but the day certain agreed upon the general rule of regular employment should, therefore,
by the parties for the commencement and termination of stand.
their employment relationship. But, this Court went on to
say that where from the circumstances it is apparent that The disparity in facts between the Mercado Sr., vs. NLRC
the periods have been imposed to preclude acquisition of case and the instant case is best exemplified by the fact
tenurial security by the employee, they should be struck that the farm laborers, work only for a definite period for a
down or disregarded as contrary to public policy and farm worker, after which they offer their services to other
morals. [Purefoods Corp. vs. NLRC, 1987] farm owners. In Mercado, although respondent constantly
availed herself of the petitioners’ services from year to year,
it was clear from the facts therein that they were not in her
regular employ. In other words, they worked for
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respondent, but were nevertheless free to contract their Requisites for validity
services with other farm owners. [Hacienda Bino vs. This arrangement does NOT circumvent Security of Tenure
Cuenca, 2005] when:
(1) Knowingly and voluntarily agreed upon by the parties
Casual employment without any force, duress, or improper pressure or any
When not regular, project or seasonal employee. other circumstances vitiating his consent; OR
Requirements to become Regular employee: (2) The employer and the employee dealt with each other
(1) one (1) year service, continuous or broken on more or less equal terms with no moral dominance
(2) with respect to activity employed exercised by the former or the latter. Brent Doctrine
(3) employment shall continue while such activity exists [Brent School v. Zamora, 1990; Romares v. NLRC, 1998;
Medenilla v. Phil. Veterans Bank, 2000]
Nature of work (3) If a contract is for a fixed term and the Employee is
What determines regularity or casualness is not the dismissed without just cause, he is entitled to the
employment contract, written or otherwise, but the nature payment of his salaries corresponding to the unexpired
of the job. If the job is usually necessary or desirable to the portion of the employment contract. [Medenilla v. Phil.
main business of the employer, then employment is Veterans Bank, 2000]
regular. [A. M. Oreta and Co., Inc. vs. NLRC, 1989]
JOB CONTRACTING
One-year service Article 106 to 109 of the Labor Code
The fact that the petitioners have been hired on a Article 106. Contractor or subcontractor. Whenever an
"temporary or seasonal" basis merely is no argument employer enters into a contract with another person for the
either. performance of the former’s work, the employees of the
contractor and of the latter’s subcontractor, if any, shall be
As held in Philippine Bank of Communications v. NLRC, a paid in accordance with the provisions of this Code.
temporary or casual employee, under Article 281 of the
Labor Code, becomes regular after service of one year, In the event that the contractor or subcontractor fails to
unless he has been contracted for a specific project. pay the wages of his employees in accordance with this
Code, the employer shall be jointly and severally liable
And we cannot say that merchandising is a specific project with his contractor or subcontractor to such employees to
for the obvious reason that it is an activity related to the the extent of the work performed under the contract, in the
day-to-day operations of California. same manner and extent that he is liable to employees
The records show that the petitioners had been given an directly employed by him.
initial six month contract, renewed for another six months.
Accordingly, under Article 281 of the Code, they had The Secretary of Labor and Employment may, by
become regular employees — of California — and had appropriate regulations, restrict or prohibit the
acquired a secure tenure. Hence, they cannot be separated contracting-out of labor to protect the rights of workers
without due process of law. [Tabas vs. California Marketing established under this Code. In so prohibiting or
Co., Inc., 1989] restricting, he may make appropriate distinctions between
labor-only contracting and job contracting as well as
Fixed term employment differentiations within these types of contracting and
Article 280 of the Labor Code does not proscribe or determine who among the parties involved shall be
prohibit an employment contract with a fixed period considered the employer for purposes of this Code, to
provided the same is entered into by the parties, without prevent any violation or circumvention of any provision of
any force, duress or improper pressure being brought to this Code.
bear upon the employee and absent any other
circumstance vitiating consent. There is "labor-only" contracting where the person
(1) It does not necessarily follow that where the duties of supplying workers to an employer does not have
the employee consist of activities usually necessary or substantial capital or investment in the form of tools,
desirable in the usual business of the employer, the equipment, machineries, work premises, among others,
parties are forbidden from agreeing on a period of time and the workers recruited and placed by such person are
for the performance of such activities. There is thus performing activities which are directly related to the
nothing essentially contradictory between a definite principal business of such employer. In such cases, the
period of employment and the nature of the person or intermediary shall be considered merely as an
employee's duties. agent of the employer who shall be responsible to the
(2) It goes without saying that contracts or employment workers in the same manner and extent as if the latter
govern the relationship of the parties. In this case, were directly employed by him.
private respondent's contract provided for a fixed term
of nine (9) months, from June 1, 1991 to March 31, 1992.
Such stipulation, not being contrary to law, morals, Article 107. Indirect employer. The provisions of the
good customs, public order and public policy, is valid, immediately preceding article shall likewise apply to any
binding and must be respected. [St. Theresa’s School person, partnership, association or corporation which, not
vs. NLRC 1998] being an employer, contracts with an independent
contractor for the performance of any work, task, job or
However, the Court upholds the principle that where from project.
the circumstances it is apparent that periods have been
imposed to preclude acquisition of tenurial security by the Article 108. Posting of bond. An employer or indirect
employee, they should be disregarded for being contrary to employer may require the contractor or subcontractor to
public policy. [Servidad vs. NLRC, 1999] furnish a bond equal to the cost of labor under contract, on
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condition that the bond will answer for the wages due the purported contractor [service or manpower placement
employees should the contractor or subcontractor, as the agency], assumes the act of paying the wage.
case may be, fail to pay the same.
The contract also provides that “any personnel found to be
Article 109. Solidary liability. The provisions of existing laws inefficient, troublesome, uncooperative and not observing
to the contrary notwithstanding, every employer or indirect the rules and regulations set forth by Burlingame shall be
employer shall be held responsible with his contractor or reported to F. Garil and may be replaced upon request.”
Corollary to this circumstance would be the exercise of
subcontractor for any violation of any provision of this
Code. For purposes of determining the extent of their civil control and supervision by Burlingame over workers
supplied by F. Garil in order to establish the nature of
liability under this Chapter, they shall be considered as
undesirable personnel.
direct employers.
Department Order No. 18-A, Series of 2011: Rules
Examples Implementing Articles 106 to 109 of the LC, as amended (14
Aboitiz Haulers vs. Dimapatoi (2006): November 2011)
The allegation of petitioner that Grigio is an independent Coverage
job contractor is without basis. The respondents, as This shall apply to:
checkers, were employed to check and inspect cargo, a task (1) all parties of contracting and subcontracting
which is clearly necessary for the petitioner’s business of arrangements where ER-EE relationships exist
forwarding and distributing cargo. Grigio did not (2) cooperatives engaging in contracting or subcontracting
undertake the performance of its service contract arrangements
according to its own manner and method, free from the
control and supervision of its principal. Contractors and subcontractors referred to in these rules
are prohibited from engaging in recruitment and
The work activities, shifts, and schedules of the placement activities as defined in Art. 13(b) of the LC
respondents, including time allowed for "recess" were set whether for local or overseas employment.
under the Written Contract of Services. This clearly
indicates that these matters, which consist of the means Definition of terms
and methods by which the work is to be accomplished, Cabo – a persons or group of persons or a labor groups
were not within the absolute control of Grigio. which, in the guise of a labor organization, cooperative or
any entity, supplies workers to an employer, with or
Petitioner’s allegation that Grigio retained control by without any monetary or other consideration, whether in
providing supervisors to monitor the performance of the the capacity of an agent of the employer or as an
respondents cannot be given much weight. Instead of ostensible independent contractor.
exercising their own discretion or referring the matter to
the officers of Grigio, its supervisors were obligated to refer Contracting or subcontracting – an arrangement whereby a
to petitioner’s supervisors any discrepancy in the principal agrees to put out or farm out with a contractor
performance of the respondents. the performance or completion of a specific job, work or
service within a definite or predetermined period,
Lastly, the law casts the burden on the contractor to prove regardless of whether such job, work or service is to be
that it has substantial capital, investment, tools etc. In this performed or completed within or outside the premises of
case, neither Grigio nor the petitioner was able to present the principal.
any proof that Grigio had substantial capital.
Contractor – any person or entity, including a cooperative,
Lakas vs. Burlingame (2007): engaged in a legitimate contracting or subcontracting
No proof was adduced to show F. Garil’s capitalization. The arrangement providing either services, skilled worker,
work of the promo-girls was marketing and selling, and temporary workers or a combination of services to a
thus directly related to the principal business or operation principal under a Service Agreement.
of Burlingame.
Contractor’s employee – includes one employed by a
Finally, F. Garil did not undertake the performance of its contractor to perform or complete a job, work, or service
service contract according to its own manner and method, pursuant to a Service Agreement with a principal.
free from the control and supervision of Burlingame. Based
on the contract, F. Garil was responsible in the hiring It shall also refer to regular EEs of the contractor whose
process only with respect to the screening, testing and pre- functions are not dependent on the performance or
selection of the personnel it provided to Burlingame. completion of a specific job, work or service within a
Actual hiring itself was done through the deployment of definite period of time i.e. administrative staff.
personnel to establishments by Burlingame.
In-house agency – a contractor which is owned,, managed,
The contract also stipulated that Burlingame shall pay F. or controlled directly or indirectly by the principal or one
Garil a certain sum per worker. F. Garil merely served as where the principal owns/represents any share of stock,
conduit in the payment of wages to the personnel. The and which operates solely or mainly for the principal.
interpretation would have been different if the payment
was for the job, project, or services rendered during the Net Financial Contracting Capacity (NFCC) – refers to the
month and not on a per worker basis. formula to determine the financial capacity of the
contractor to carry out the job, work or services sought to
The Court has taken judicial notice of the practice of be undertaken under a Service Agreement.
employers who do not issue payslips directly to employees.
Under current practice, a third person, usually the
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business or operation of the principal by reason of a is co-terminus with the service agreement, or for a specific
strike or lockout whether actual or imminent. job, work, or service, or phase thereof.
(6) Contracting out of a job, work or service being
performed by union members when such will Effect of termination of employment
interfere with, restrain or coerce EEs in the exercise The termination of the contractor EE prior to the expiration
of their rights to self-organization as provided in of the Service Agreement shall be governed by Arts. 282-
Art. 248(c) of the LC, as amended. 284 of the LC.
(7) Repeated hiring of EEs under an employment
contract of short duration or under a Service In case the termination is caused by the pre-termination of
Agreement of short duration with the same or the Service Agreement not due to authorized causes under
different contractors, which circumvents the LC Art. 283, the right of the contractor EE to unpaid wages
provisions on Security of Tenure. and other unpaid benefits including unremitted legal
(8) Requiring EEs under a subcontracting arrangement mandatory contributions, e.g., SSS, Philhealth, Pag-ibig,
to sign a contract fixing the period of employment ECC, shall be borne by the party at fault, without prejudice
to a term shorter than the term of the Service to the solidary liability of the parties to the Service
Agreement, unless the contract is divisible into Agreement.
phases for which substantially different skills are
required and this is made known to the EE at the Where the termination result from the expiration of the
time of the engagements. Service Agreement, or from the completion of the phase of
(9) Refusal to provide a copy of the Service Agreement the job, work or service for which the EE is engaged, the
and the employment contracts between the latter may opt for payment of separation benefits as may
contractor and the EEs deployed to work in the be provided by law or the Service Agreement, without
bargaining unit of the principal’s certified prejudice to his/her entitlement to the completion bonuses
bargaining agent to the sole and exclusive or other emoluments, including retirement benefits
bargaining agents. whenever applicable.
(10)Engaging or maintaining by the principal of
subcontracted EEs in excess of those provided in Mandatory registration
the applicable CBA or as set by the Industry It shall be mandatory for all persons or entities, including
Tripartite Council. cooperative, acting as contractors, to register with the
(B) Contracting out of jobs, works, or services analogous to Regional Office of the DOLE where it principally operates.
the above when not done in good faith and not justified
by the exigencies of the business. Failure to register shall give rise to the presumption that
the contractor is engaged in labor-only contracting.
Mafinco vs. Ople (1976): When an independent contractor
and not an employee: We recognize that contracting out is Contracting or subcontracting arrangements in the
not unlimited; rather, it is a prerogative that management Construction and other industries
enjoys subject to well-defined legal limitations. As we have Contracting or subcontracting arrangements in the
previously held, the company can determine in its best Construction Industry, under the licensing coverage of the
business judgment whether it should contract out the Philippine Construction Accreditation Board (PCAB), shall
performance of some of its work for as long as the be covered by the applicable provisions of these Rules and
employer is motivated by good faith, and shall continue to be governed by Dept Order No. 19, Series
(1) the contracting out must not have been resorted to to of 1993 [Guidelines Governing the Employment of Workers in
circumvent the law or the Construction Industry] Dept. Order No 13, Series of 1998
(2) must not have been the result of malicious or arbitrary [Guidelines Governing the Occupational Safety and Health in
action. [Manila Electric Co. v. Quisumbing, 1999] the Construction Industry]; DOLE-DPWH-DILG-DTI and
PCAB Memorandum of Agreement-Joint Administrative
We perceive at the outset the disposition of the NLRC that Order No. 1, Series of 2011 on coordination and
janitorial services are necessary and desirable to the trade harmonization of policies and programs on occupational
or business of petitioner Coca-Cola. But this is inconsistent safety and health in the construction industry.
with our pronouncement in Kimberly Independent Labor
Union v. Drilon where the Court took judicial notice of the Department Circular No. 01, Series of 2012: Clarifying the
practice adopted in several government and private Applicability of DO No. 18-A, 2011 to Business Processing
institutions and industries of hiring janitorial services on an Outsourcing (BPO)/Knowledge Process Outsourcing (KPO)
“independent contractor basis.” In this respect, although and the Construction Industry
janitorial services may be considered directly related to the Applicability to BPO
principal business of an employer, as with every business, DO 18-A speaks of a trilateral relationship that
we deem them unnecessary in the conduct of the characterizes the covered contracting/sub-contracting
employer’s principal business. [Coca-Cola Bottlers Phil. Inc. arrangement. Thus, vendor-vendee relationship for entire
vs. NLRC, 1999] business processes covered by the applicable provisions of
the Civil Code on Contracts is excluded.
Rights of contractor’s EEs
All contractor’s EEs, whether deployed or assigned ass DO 18-A contemplates generic or focused singular activity
reliever, seasonal, week-ender, temporary, or promo in one contract between the principal and the contractor
jobbers, shall be entitled to all the rights and privileges as (for example, janitorial, security, merchandising, specific
provided for in the LC, as amended. production work) and does not contemplate information
technology-enabled services involving an entire process
Security of tenure of contractor’s EEs (for example, BPO, KPO, legal process outsourcing,
It is understood that all contractor’s EEs enjoy security of hardware and/or software support, medical transcription,
tenure regardless of whether the contract of employment animation services, back office operations/support). These
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companies engaged in BPOs may hire employees in respect to this right of reimbursement that petitioners can
accordance with applicable laws, and maintain these EEs find support in the aforecited contractual stipulation.
based on business requirements, which may or may not be
for different clients of the BPOs at different periods of the Trilateral Relationship in contracting arrangements
EE’s employment. There are three parties involved:
(1) Principal – who decides to farm out a job, work or
Applicability to the Construction Industry service to a contractor;
Licensing and the exercise of regulatory powers over the (2) Contractor – who has the capacity to independently
construction industry is lodged with PCAB which is under undertake the performance of the job, work, or service;
the Construction Industry Authority of the Philippines and and
not with the DOLE or any of its regional offices. (3) Contractual workers – engaged by the contractor to
Thus, the DOLE, through its regional offices shall not accomplish the job, work or service. [Sec. 3 D.O. 18-A-11]
require contractors licensed by PCAB in the Construction
Industry to register under DO 18-A. Moreover, findings of In legitimate contracting there exists:
violation/s on labor standards and occupational health (1) An ER-EE relationship between the contractor and the
and safety standards shall be coordinated with PCAB for employees it engaged to perform the specific job, work
its appropriate action, including the possible or service being contracted
cancellation/suspension of the contractor’s license. (2) A contractual relationship between the principal and
the contractor as governed by the provisions of the CC.
Effects of finding that there is labor-only contracting
A finding by a competent authority of labor-only Note: In the event of any violation of any provisions of the
contracting shall render the principal jointly and severally LC (including failure to pay wages) there exists a solidary
liable with the contractor to the latter’s EEs, in the same liability on the part of the principal and the contractor for
manner and extent that the principal is liable to EEs purposes of enforcing the provisions of the LC and other
directly hired by him/her. social legislation, to the extent of the worked performed
under the employment contract. [Sec. 5, D.O. 18-A-11]
A finding of commission of any of the prohibited activities
in Sec. 7 or violation of either Secs. 8 or 9 hereof, shall DISMISSAL FROM EMPLOYMENT
render the principal the direct ER of the EEs of the Art. 279: in case of regular employment, the employer shall
contractor or subcontractor. [Sec. 27, DO 18-A, 2011] not terminate the services of an employee except for
(a) just cause [Art. 282]
If found to be labor-only contractor, it is equivalent to (b) authorized cause [Art. 283-284]
finding that there exists an employer-employee
relationship between the owner of the project and the SECURITY OF TENURE
employees of the ‘labor-only’ contractor since that Definition
relationship is defined and prescribed by the law itself. Right not be removed from one’s job without valid cause
[Industrial Timber Corporation vs. NLRC, 1997] and valid procedure. [Kiamco v. NLRC, 1999]
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(b) dissatisfaction of the Employer must be real and in (b) in connection with the employee's work. [Lakpue
good faith, not feigned so as to circumvent the Drug, Inc. vs. Belga, 2005]
contract or the law; (2) Shows that the Employee has become unfit to continue
(6) Project/seasonal Employees – limited extent; secured working for the Employer. [Philippine Aeolus
for the duration of the limited period of their Automotive United Corp. vs. NLRC]
employment
(7) Managerial Employees – may be dismissed upon loss Willful disobedience:
of confidence; entitled to security of tenure [Maglutac Requisites:
vs. NLRC, 1990]. (1) The employee’s assailed conduct has been willful or
(8) An employee cannot be arbitrarily dismissed at any intentional, the willfulness being characterized by a
time, and without cause as reasonably established in “wrongful and perverse attitude”; and
an appropriate investigation. [Inter Orient Maritime (2) The order violated must have been:
Enterprises, Inc. vs. NLRC, 1994] (a) Reasonable and lawful;
(9) Fixed-period Employees / Term Employment: this (b) Made known to the employee; and
arrangement does NOT circumvent Security of Tenure (c) In connection to the duties which he has been
when: engaged to discharge. [Acesite Corp. v. NLRC, G.R.
(a) knowingly and voluntarily agreed upon by the No. 152308, January 26, 2005].
parties without any force, duress, or improper
pressure or any other circumstances vitiating his Gross and habitual neglect of duties
consent; OR Gross negligence is want of even slight care, acting or
(b) Brent Doctrine: the employer and the employee omitting to act in a situation where there is a duty to act,
dealt with each other on more or less equal terms not inadvertently but willfully and intentionally with a
with no moral dominance exercised by the former conscious indifference to consequences insofar as other
or the latter. [Brent School v. Zamora, 1990; persons may be affected. [Tres Reyes v. Maxim's Tea House,
Romares v. NLRC, 1998; Medenilla v. Phil. Veterans 2003]
Bank, 2000]
(c) If a contract is for a fixed term and the Employee is Habitual neglect implies repeated failure to perform one's
dismissed without just cause, he is entitled to the duties for a period of time, depending upon the
payment of his salaries corresponding to the circumstances. [Chua v. NLRC, 2005]
unexpired portion of the employment contract.
[Medenilla v. Phil. Veterans Bank, 2000] Requisites
(1) Neglect of duty must be both gross and
CONFLICT WITH MANAGEMENT PREROGATIVES (2) Habitual
Management prerogatives
(1) Discipline [San Miguel v. NLRC, 1980] Fraud or willful breach of trust [loss of trust and confidence]
(2) Right to dismiss or otherwise impose disciplinary Requisites (AWWT)
sanctions upon an employee for just and valid cause, (1) Committed against the Employer or his representative;
pertains in the first place to the employer, as well as (2) willful since fraud implies wrongful intent;
the authority to determine the existence of said cause (3) EE concerned holds a position of trust and confidence;
in accordance with the norms of due process. [Makati and [Mabeza vs. NLRC, 1997]
Haberdashery, Inc. v. NLRC, 1989] (4) Act complained of must be work-related i.e. it must
(3) To Demote [Petrophil vs. NLRC, 1986] show the employee concerned to be unfit to continue
(4) To Dismiss – it is a measure of self protection [Reyes vs. working for the employer.
Ministry of Labor, 1989]
Proof beyond reasonable doubt not necessary
Requisites for the validity of management prerogative Uniwide Sales Warehouse Club v. NLRC (2008)
affecting security of tenure (1) It is sufficient that there is some basis for such loss of
(1) Exercised in good faith for the advancement of the confidence such as when the employer has reasonable
Employer's interest, and ground to believe that the employee concerned is
(2) NOT for the purpose of defeating or circumventing the responsible for the purported misconduct;
rights of the Employees under special laws or under (2) And the nature of his participation therein renders him
valid agreements [San Miguel vs. Ople, 1989] unworthy of the trust and confidence demanded of his
position
JUST CAUSES
No written notice to employer required Loss of confidence: managerial/confidential vs. rank-and-file
employees
Serious misconduct or willful disobedience
Managerial Rank-and-file
Misconduct
(a) improper or wrongful conduct Substantial evidence – Proof of involvement in the
(b) transgression of some established and definite rule of reasonable ground to believe alleged events in question
action, a forbidden act, a dereliction of duty, willful in Employee’s guilt; mere required; mere
character, and implies wrongful intent and not mere existence of a basis for the uncorroborated assertions
error in judgment. [Dept of Labor Manual, Sec. 4343.01; belief [Etcuban vs. Sulpicio and accusations
Hayuan Restaurant vs. NLRC, 2006] Lines, 2005] are not enough [Etcuban vs.
Sulpicio Lines, 2005]
Requisites Employment for a long time
(1) Serious – to be serious, misconduct must be: is counted against the
(a) of such grave and aggravated character Employee [Salvador v. Phil.
Mining Service Corp., 2003]
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General rule: “trust and Except: when rank-and-file (d) expiry of term employment period,
confidence” is restricted to position is reposed with trust (e) completion of project,
MANAGERIAL Employees and confidence [Coca-Cola (f) failure in probation, etc
[Fujitsu Computer Products vs. NLRC, 1989] e.g. care and
Corp. v. CA, 2005] custody of property Redundancy, retrenchment and closure
Redundancy
Dusit School Nikko v. NUWHRAIN (2005):
Abandonment of employment; elements that must concur
(1) [redundancy] exists where the service capability of the
Abandonment is the deliberate and unjustified refusal of
workforce is in excess of what is reasonably needed to
an Employee to resume his employment. [Nueva Ecija
meet the demands of the business enterprise;
Electric Cooperative v. NLRC, 2005]
(2) a reasonably redundant position is one rendered
superfluous by any number of factors, such as
Requisites:
overhiring of workers, decreased volume of business,
(1) Failure to report to work or absence w/o valid reason;
dropping of a particular product line previously
(2) Clear intent to sever the employer-employee
manufactured by the company, or phasing out of
relationship via overt acts [Floren Hotel v. NLRC, 2005]
service activity previously undertaken by the business
(a) Cannot be lightly inferred, much less legally
presumed from certain equivocal acts such as
Redundancy does not refer to duplication of work. That no
interim employment [Hacienda Dapdap v. NLRC,
other person was holding the same position which the
1998]
dismissed employee held prior to the termination of his
services does not show that his position had not become
Termination of employment pursuant to a union security
redundant. [Escareal v. NLRC, 1992]
clause
Art. 283 and 284 are not exhaustive; other authorized
Financial loss is not a requisite. [Escareal v. NLRC, 1992]
causes are:
(a) total and permanent disability,
Creation of positions with functions related or similar to
(b) disease incurable in 6 mos,
those of the abolished functions does not necessarily
(c) valid application of union security clause,
invalidate the declaration of redundancy—the old and new
(d) expiry of term employment period,
positions were different and the declaration was not
(e) completion of project,
maliciously motivated. [Santos v. CA, 2001]
(f) failure in probation, etc
Employer’s good faith in implementing a redundancy
Totality of infractions doctrine
program is not necessarily put in doubt by the availment of
The totality of infractions or the number of violations
services of an independent contractor. [Asian Alcohol Corp.
committed during the period of employment shall be
v. NLRC, 1999]
considered in determining the penalty to be imposed upon
an erring employee. The offenses committed by petitioner
Separation pay entitlement. — Employee is entitled to
should not be taken singly and separately. Fitness for
separation pay of 1 month pay or 1 month pay per year of
continued employment cannot be compartmentalized into
service, whichever is higher
tight little cubicles of aspects of character, conduct and
ability separate and independent of each other. While it
Retrenchment
may be true that petitioner was penalized for his previous
Retrenchment is the termination of employment effected
infractions, this does not and should not mean that his
by management during periods of business recession,
employment record would be wiped clean of his
industrial depressions, seasonal fluctuations, lack of work
infractions. After all, the record of an employee is a
or considerable reduction in the volume of the employer’s
relevant consideration in determining the penalty that
business. [AMA Computer College v. Ely Garcia, 2008]
should be meted out since an employee's past misconduct
and present behavior must be taken together in
General standards for when retrenchment is preventive
determining the proper imposable penalty. [Merin v. NLRC,
rather than curative (SINS). —
2008]
(a) Losses expected are (s)ubstantial and not merely de
minimis in extent;
AUTHORIZED CAUSES
(b) Apprehended losses are reasonably (i)mminent, can be
Recognized right
perceived objectively and in good faith;
The law recognizes the right of every business entity to
(c) Retrenchment must be reasonably (n)ecessary to
reduce its workforce if the same is made necessary by
prevent the expected losses—measure of last resort;
compelling economic factors which would endanger its
and
existence or stability.
(d) Expected or actual losses must be proved by
(s)ufficient and convincing evidence. [Lopez Sugar Corp.
The fundamental law itself guarantees, even during the
v. Federation of Free Workers, 1990]
process of tilting the scales of social justice towards
workers and employees, “the right of enterprises to
Reduction of work days may be considered constructive
reasonable returns of investment and to expansion and
retrenchment [International Hardware v. NLRC, 1989]
growth.” [Uichico v. NLRC, 1997]
Temporary retrenchment or temporary cessation or
Art. 283 and 284 are not exhaustive; other authorized
suspension of operations [Art. 286]
causes are:
(a) total and permanent disability,
A specific period that employees may remain temporarily
(b) disease incurable in 6 mos,
laid-off or in floating status. The temporary lay-off or bona
(c) valid application of union security clause,
fide suspension of operations of a business or undertaking
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wherein the employees likewise cease to work should not (5) financial hardship, or
last longer than 6 months. After 6 months, the employees (6) seniority. [Asian Alcohol Corp. v. NLRC, 1999]
should either be recalled to work or permanently
entrenched following the requirements of the law, and that Standards to be followed
failing to comply with this would be tantamount to Table: Comparison of Retrenchment, Redundancy and
dismissing the employees and the employer would thus be Closure
liable for such dismissal. [International Hardware v. NLRC, Retrenchment Redundancy Closure
1989]
Reduction of The service of an The reversal of the
Separation pay entitlement. — Employee is entitled to
personnel usually Employee is in fortune of the
separation pay of 1 month pay or 1/2 month pay per year of
due to poor excess of what is employer whereby
service, whichever is higher
financial returns so required by an there is a complete
as to cut down on enterprise cessation of
Closure
costs of operations business operations
Employer may close or cease his business operations or
in terms of salaries and/or actual
undertaking even if he is not suffering from serious
and wages locking-up of the
business losses or financial reverses, as long as he pays his
doors of the
employees their termination pay in the amount
establishment,
corresponding to their length of service. [Catatista v. NLRC,
usually due to
1995]
financial losses
It includes both the complete cessation of all business Resorted to To save production Aims to prevent
operations and the cessation of only part of a company’s primarily to avoid or costs further financial
business [Coca-Cola Bottlers, Inc. v. NLRC, 1991] minimize business drain upon the
losses Employer
Requirements. — Must de bona fide or in good faith
Disease or illness
Procedural steps required Separation pay entitlement
At least 1 month before the intended date of termination, Employee is entitled to separation pay of 1 month pay or ½
Employer is to serve written notice to: month pay per year of service, whichever is higher
(1) Affected employees; and
(2) DOLE [Art. 283] Requisites
(1) Employee has been found to be suffering from any
Requirements for valid retrenchment/redundancy.— disease;
Requisites: Redundancy (2) His continued employment is prohibited by law or is
(1) Written notice served on both the Employees and the prejudicial to his health as well as to the health of his
DOLE at least 1 month prior to the intended date; co-employees;
(2) Payment of separation pay equivalent to one month (3) Payment of separation pay;
pay or one month pay for every year of service, (4) A medical certification by a competent public health
whichever is higher; authority that the disease cannot be cured w/in 6
(3) Good faith in abolishing the redundant positions; and months even with proper medical treatment [IRR Book
(4) Fair and reasonable criteria in ascertaining what VI. Rule I. Sec. 8]
positions are to be declared redundant and accordingly (a) Medical certification cannot be dispensed with
abolished. The following are usually considered in [Manlyl Express, Inc. v. Payong, 2005]
redundancy: position itself, nature of the services (b) It must be issued by a competent public health
performed by the employee, and necessity of such authority and not the company physician [Cebu
position. [Edge Apparel v. NLRC, 1998] Royal Plant v. Deputy Minister of Labor, 1987]
Requisites: Retrenchment
(a) Necessary to prevent or minimize losses and such Just Causes Requisites
losses are proven; Serious Misconduct Serious
(b) There must be 1 month written notice to the DOLE and (a) Grave and aggravated character,
the employee; (b) In connection with work; and
(c) Separation pay is paid; Shows that Employee is unfit to work
(d) Exercised in good faith – the prerogative was exercised for Employer.
for the advancement of the employer’s interest and not
to defeat or circumvent the employee’s right to security Willful Willful conduct – wrongful and
of tenure; and Disobedience perverse attitude; and
(e) Fair and reasonable criteria in ascertaining who will be Order violated must be:
affected (a) Reasonable,
(b) Lawful,
Criteria in selecting employees for dismissal. — (c) Sufficiently known to Employee,
Fair and reasonable criteria in ascertaining who will be (d) In connection to the duties.
affected: Gross and Habitual Neglect must be both gross and
(1) preferred status [e.g. temporary, casual or regular Neglect habitual.
Employees],
(2) efficiency Fraud or Willful Loss of Confidence
(3) physical fitness, Breach of Trust (a) Committed against the Employer or
(4) age, his representative [direct];
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(b) willful since fraud implies wrongful ascertaining who will be affected
intent; (a) preferred status (e.g. temporary,
(c) EE concerned holds a position of casual or regular Employees)
trust and confidence [Mabeza vs. (b) efficiency,
NLRC, 1997]; (c) physical fitness,
(d) Act complained of must be work- (d) age,
related. (e) financial hardship, or
(f) seniority. [Asian Alcohol Corp. v.
Additional Guidelines NLRC, 1999]
(a) NOT simulated;
(b) NOT used as a subterfuge; General Standards: (SINS – for when
(c) NOT arbitrarily asserted; and retrenchment is preventive rather than
(d) genuine, NOT a mere afterthought curative
[Vitarich v. NLRC, 1999; Coca-Cola (a) Losses expected are substantial and
Bottlers, Phils., Inc. v. Kapisanan ng not merely de minimis in extent;
Malayang Manggagawa sa Coca- (b) Apprehended losses are reasonably
Cola, 2005] imminent;
Commission of a Crime against the (c) Retrenchment must be reasonably
crime or offense (a) Employer, necessary to prevent the expected
against Employer (b) Immediate member of employer’s losses; and
family, or (d) Expected or actual losses must be
(c) Employer’s duly authorized proved by sufficient and convincing
representative; and evidence. [Lopez Sugar Corp. vs.
Conviction or prosecution NOT Federation of Free Workers, 1990]
required. Closure or (a) Must be done in good faith [bona
Analogous causes Due to a voluntary and/or willful act or Cessation of fide]
omission by Employee [Nadura vs. Operations (b) 1 month written notice to DOLE and
Benguet Consolidated, 1962] Employee
(c) Separation pay equivalent to one
month pay or 1/2 month pay for
Authorized Causes Requisites every year of service, whichever is
higher.
Installation of (a) 1 month written notice to DOLE and
Labor Saving Employee Disease (a) Employee is suffering from any
Devices (b) separation pay equivalent to one disease;
month pay or one month pay for (b) His continued employment is
every year of service, whichever is prohibited by law or is prejudicial to
higher his health as well as as to the health
of his co-employees. [Art. 284]
Redundancy (a) 1 month written notice to DOLE and (c) Separation pay equivalent to at
Employee least one month pay or at least 1/2
(b) separation pay equivalent to one month pay for every year of service,
month pay or one month pay for whichever is higher; and
every year of service, whichever is (d) Medical certification by a competent
higher; public health authority that the
(c) Good faith in abolishing the disease cannot be cured within 6
redundant positions; and mos even with proper medical
(d) Fair and reasonable criteria in treatment. [IRR Book VI Rule I Sec.
choosing those affected [Asian 8]
Alcohol Corp. v. NLRC, 1999], such
as but not limited to: DUE PROCESS
(e) preferred status [e.g. temporary, Substantive Due Process
(f) casual or regular Dismissal for any of the just or authorized causes under
Employees]efficiency, or Arts. 282 – 284
(g) seniority. [Panlilio v. NLRC, 1997;
Golden Thread Knitting Industries, Right to counsel
Inc. v. NLRC, 1999] A very basic requirement of substantive due process; it has
Retrenchment Basic Requisites: (NNSGF) to be observed. Indeed, the rights to counsel and to due
(1) Necessary to prevent or minimize process of law are two of the fundamental rights
losses and such losses are proven guaranteed by the 1987 Constitution to any person under
(2) 1 month written notice to DOLE and investigation, be the proceeding administrative, civil, or
the Employees criminal. [Salaw v. NLRC, 1991]
(3) Separation pay equivalent to at
least one month pay or at least 1/2 Procedural Due Process
month pay for every year of service, Employee must be given notice with adequate opportunity
whichever is higher; to be heard before he/she is notified of his/her actual
(4) Exercise is in good faith; and dismissal for Cause. [Fujitsu v. CA, 2005]
(5) Fair and reasonable criteria in
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Hearing; meaning of opportunity to be heard Article 277(b) of the Labor Code provides that, in cases of
A formal or trial type hearing is not at all times and in all termination for a just cause, an employee must be given
instances essential to due process; it is enough to that the "ample opportunity to be heard and to defend himself."
parties are afforded fair and reasonable opportunity to Thus, the opportunity to be heard afforded by law to the
explain their side of the controversy. [Mendoza vs. NLRC, employee is qualified by the word "ample" which ordinarily
1991] means "considerably more than adequate or
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21
sufficient." In this regard, the phrase "ample opportunity
to be heard" can be reasonably interpreted as extensive General Rule: reinstatement is a matter of right to an
enough to cover actual hearing or conference. [Perez v. illegally dismissed Employee.
Philippine Telegraph and telephone Company, 2009]
Exceptions:
Burden of Proof. — (a) Closure of business [Retuya vs. Dumarpa, 2003]
Upon the employer. Employer must comply with due (b) Economic business conditions: The reinstatement
process requirements before any termination is done. remedy must always be adapted to economic-business
[Gothong Lines, Inc. v. NLRC, 1999] conditions. [Union of Supervisors, etc. v. Sec. of Labor,
(a) Unsubstantiated suspicions and baseless conclusions 1984]
by employers are not legal justification for dismissing (c) EE’s unsuitability [Divine World High School vs. NLRC,
employees. [Maranaw Hotel and Resort Corp. v. NLRC, 1986]
1999] (d) EE’s Retirement/Coverage [Espejo vs. NLRC, 1996]
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A dismissed employee who has accepted separation pay is had served the employer company for 21 years, it was her
not necessarily estopped from challenging the validity of first offense, and her leave to study the French language
his or her dismissal. Neither does it relieve the employer of would ultimately benefit the employer who no longer had
legal obligations. [Anino v. NLRC, 1998] to spend for translation services. The Court awarded the
said employee backwages limited to a period of two years,
BACKWAGES given that the employer acted without malice or bad faith
Definition in terminating the employee’s services.
(1) According to St. Theresa’s School of Novaliches
Foundation v. NLRC (1998): earnings lost by a worker (2) Delay of the EE in filing the case for illegal dismissal
due to his illegal dismissal; a form of relief that restores
the income lost by reason of such unlawful dismissal; Mercury Drug Co., Inc. v. CIR (1974)
(2) it is not private compensation or damages; nor is it a The employee filed his ULP charge with reinstatement and
redress of a private right; back wages about two years and fifteen days after his
(3) but, rather, in the nature of a command to the separation on April 10, 1961. The shortest prescriptive
employer to make a public reparation for illegally period for the filing of all other actions for which the
dismissing an employee. statute of limitations does not fix a period, is four years.
The period of delay in instituting this ULP charge with
Effect of failure to order backwages claim for reinstatement and back wages, although within
A “plain error” which may be rectified, even if employee did the prescriptive period, should be deducted from the
not bring an appeal regarding the matter [Aurora Land v. liability of the employer to him for back wages. In order
NLRC, 1997] that the employee however should be relieved from
proving his income during the period he was out of the
Computation service and the employer from submitting counter-proofs,
(1) Without deduction for their earnings elsewhere during which may delay the execution of the decision, the
the layoff [Bustamante v. NLRC, 1996] employer was directed to the employee back wages
(2) Awards including salary differentials are not allowed equivalent to one year, eleven months, and fifteen days
[Insular Life Assurance Co. v. NLRC, 1987] without further disqualifications.
(3) The salary base properly used should be the basic
salary rate at the time of dismissal plus the regular Rationale
allowances; allowances include: Feati University Club vs. Feati University (1974) adopted a
(a) Emergency cost of living allowances (ECOLA), consensus policy of pegging the amount of backwages to
th
transportation allowances, 13 month pay their total equivalent for three years (depending on the
[Paramount Vinyl Product Corp. v. NLRC, 1990] circumstances) without deduction or qualification.
(b) Also included are vacation leaves, service incentive The rationale for the policy was stated in the following
leaves, and sick leaves words:
(4) The effects of extraordinary inflation are not to be As has been noted, this formula of awarding
applied without an official declaration thereof by reasonable net backwages without deduction or
competent authorities [Lantion v. NLRC, 1990] qualification relieves the employees from proving or
disproving their earnings during their lay-off and the
Limited backwages employers from submitting counterproofs, and
General rule: An illegally dismissed employee is entitled to obviates the twin evils of Idleness on the part of the
full backwages. employee who would "with folded arms, remain
inactive in the expectation that a windfall would come
Exceptions to him" [Itogon Suyoc Mines, Inc. vs. Sangilo-Itogon
(1) The Court awarded limited backwages where the Workers Union (1968), as cited in Diwa ng Pagkakaisa
employee was illegally dismissed but the employer was vs. Filtex International Corp. (1972)] and attrition and
found to be in good faith. protracted delay in satisfying such award on the part
of unscrupulous employers who have seized upon the
Jurisprudence further proceedings to determine the actual earnings
San Miguel Corporation v. Javate, Jr. (1992) of the wrongfully dismissed or laid-off employees to
The Court affirmed the consistent findings and conclusions hold unduly extended hearings for each and every
of the Labor Arbiter, (NLRC), and CA that the employee employee awarded backwages and thereby render
was illegally dismissed since he was still fit to resume his practically nugatory such award and compel the
work; but the employer’s liability was mitigated by its employees to agree to unconscionable settlements of
evident good faith in terminating the employee’s services their backwages award in order to satisfy their dire
based on the terms of its Health, Welfare and Retirement need. [See La Campana Food Products, Inc. vs. CIR,
Plan. Hence, the employee was ordered reinstated to his (1969) and Kaisahan ng Mga Manggagawa vs. La
former position without loss of seniority and other Campana Food Products, Inc., (1970)].
privileges appertaining to him prior to his dismissal, but
the award of backwages was limited to only one year PREVENTIVE SUSPENSION
considering the mitigating circumstance of good faith DEFINITION
attributed to the employer. It is a disciplinary measure for the protection of the
company's property pending investigation of any alleged
Dolores v. NLRC (1992) malfeasance or misfeasance committed by the employee.
The employee was terminated for her continuous absence The employer may place the worker concerned under
without permission. Although the Court found that the preventive suspension if his continued employment poses
employee was indeed guilty of breach of trust and violation a serious and imminent threat to the life or property of the
of company rules, it still declared the employee’s dismissal employer or of his co-workers. [PAL v. NLRC, 1998]
illegal as it was too severe a penalty considering that she
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As held in PNB v. Velasco, 564 SCRA 512 (2008), the the employees must always be fair and reasonable and the
employer has the right to preventively suspend an corresponding penalties, when prescribed, commensurate
employee during the pendency of the administrative case to the offense involved and to the degree of the infraction.
against the latter as a measure of self-protection. In PAL v. [Consolidated Food Corporation vs. NRLC, 1999] [St.
NLRC, 292 SCRA 40 (1998), the Court explained that Michael’s Institute vs. Santos, 2001] 56
preventive suspension, by itself, does not signify that the
employer has already adjudged the employee guilty of the Right to dismiss or otherwise impose disciplinary sanctions
charges for which he was asked to answer and explain. upon an employee for just and valid cause, pertains in the
Such disciplinary measure is resorted to for the protection first place to the employer, as well as the authority to
of the company’s property or the life of the employer or of determine the existence of said cause in accordance with
the co-employees pending investigation of any alleged the norms of due process. [Makati Haberdashery, Inc. v.
malfeasance or misfeasance committed by the employee. NLRC, 1989]
If an employee was forced to remain without work or When the transfer is not unreasonable, or inconvenient, or
assignment for a period exceeding 6 months, then he is in prejudicial to the employee, and it does not involve a
effect constructively dismissed [Valdez v. NLRC, 1998] demonition in rank or diminution of salaries, benefits, and
other privileges, the employee may not complain that it
amounts to a constructive dismissal.
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productivity standards for its workers. In fact, non- In Tiu v. Platinum Plan Phils., Inc., 517 SCRA 101 (2007), the
compliance may be visited with a penalty even more severe Supreme Court decided a case involving a restrictive
than demotion. covenant contained in an employment agreement
prohibiting the employee from working for a competitor to
GRANT OF BONUS protect its interest. The Court ruled in favor of the
A bonus is "a gratuity or act of liberality of the giver which employer, saying that the non-compete or non-
the recipient has no right to demand as a matter of right" involvement clause has a time limit: two years from the
[Aragon vs. Cebu Portland Cement Co., 61 O.G. 4597]. "It is time the employee’s employment with the company
something given in addition to what is ordinarily received ended. The restriction was also limited since it only
by or strictly due the recipient." The granting of a bonus is prohibits the employee from engaging in any pre-need
basically a management prerogative which cannot be business akin to the employer’s.
forced upon the employer "who may not be obliged to
assume the onerous burden of granting bonuses or other
benefits aside from the employee's basic salaries or
wages" … [Kamaya Point Hotel vs. National Labor Relations
Commission, Federation of Free Workers and Nemia Social and Welfare
Quiambao, G.R. No. 75289, August 31, 1989]. [Traders Royal
Bank vs. NLRC, 1990] Legislation [PD 626]
With regard to the private respondents’ claim for the mid- SSS LAW [RA 8282]
year bonus, it is settled doctrine that a grant of a bonus is a COVERAGE
prerogative, not an obligation of the employer. The matter Compulsory
of giving a bonus over and above the worker’s lawful (1) Employers as defined above;
salaries and allowances is entirely dependent on the (2) Employees not over 60 years including domestic
financial capability of the employer to give it. [Kimberly- helpers with at least P1,000 monthly pay; and
Clark Philippines, Inc. vs. Dimayuga, 2009] (3) Self-employed as may be determined by the
Commission, but not limited to:
CHANGE OF WORKING HOURS (a) Self-employed professionals
Further, management retains the prerogative, whenever (b) Partners and single proprietors of businesses
exigencies of the service so require, to change the working (c) Actors and actresses, directors, scriptwriters, and
hours of its employees. So long as such prerogative is news correspondents who do not fall within the
exercised in good faith for the advancement of the definition of the term “employee” under Section 8
employer’s interest and not for the purpose of defeating or (d)
circumventing the rights of the employees under special (d) Professional athletes, coaches, trainers and jockeys
laws or under valid agreements, this Court will uphold (e) Individual farmers and fishermen
such exercise. [Sime Darby Pilipinas Inc. v. NLRC, 1998]
Voluntary
RULES ON MARRIAGE BETWEEN EMPLOYEES OF (1) Spouses who devote full time to managing household
COMPETITOR-EMPLOYERS and family affairs, unless they are also engaged in
In the recent case of Duncan Association of Detailman- other vocation or employment (which is subject of
PTGWO and Pedro Tecson v. Glaxo Wellcome Philippines, compulsory coverage);
Inc., we passed on the validity of the policy of a (2) OFWs recruited by foreign-based employers;
pharmaceutical company prohibiting its employees from (3) Employees (previously under compulsory coverage)
marrying employees of any competitor company. We held already separated from employment or those self-
that Glaxo has a right to guard its trade secrets, employed (also under compulsory coverage) with no
manufacturing formulas, marketing strategies and other realized income for a given month, who chose to
confidential programs and information from competitors. continue with contributions to maintain right to full
We considered the prohibition against personal or marital benefit.
relationships with employees of competitor companies
upon Glaxo’s employees reasonable under the Note: Foreign governments, international organizations or
circumstances because relationships of that nature might their wholly owned instrumentality employing workers in
compromise the interests of Glaxo. In laying down the the Philippines may enter into an agreement with the
assailed company policy, we recognized that Glaxo only Philippine government to include their employees in the
aims to protect its interests against the possibility that a SSS except those already covered by their civil service
competitor company will gain access to its secrets and retirement system.
procedures. [Star Paper Corp. vs. Simbol, 2006]
EXCLUSIONS FROM COVERAGE
POST-EMPLOYMENT BAN (1) Employment purely casual and not for the purpose of
In cases where an employee assails a contract containing a occupation or business of the employer;
provision prohibiting him or her from accepting (2) Service performed on or in connection with an alien
competitive employment as against public policy, the vessel by an employee if he is employed when such
employer has to adduce evidence to prove that the vessel is outside the Philippines;
restriction is reasonable and not greater than necessary to (3) Service performed in the employ of the Philippine
protect the employer’s legitimate business interests. The Government or instrumentality or agency thereof;
restraint may not be unduly harsh or oppressive in (4) Service performed in the employ of a foreign
curtailing the employee’s legitimate efforts to earn a government or international organization, or their
livelihood and must be reasonable in light of sound public wholly-owned instrumentalities; and
policy. [Rivera v Solidbank, 2006] (5) Services performed by temporary and other employees
which may be excluded by SSS regulation. Employees
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of bona fide independent contractors shall not be then 25/75 + 50/75 = 100% so treated as if it were
deemed employees of the employer engaging the permanent total disability.)
services of said contractors.
Death benefits
BENEFITS Eligibility requirement: 36 monthly contributions prior to the
Monthly pension semester of death.
Computation of monthly pension: the monthly pension
shall be the highest of the following amounts: Benefit – monthly pension to primary or secondary
(1) P300 + [20% x (ave. monthly credit)] + [2% x (ave. beneficiaries.
monthy credit) x (# of cash credited years of service in
excess of 10 years)]; or To those ineligible – lump sum benefit which shall be the
(2) 40% x [ave. monthly credit]; or higher between the two:
(3) P1,000; provided, that the monthly pension shall in no (a) (monthly pension) x 12; or
case be paid for an aggregate amount of less than 60 (b) (monthly pension) x (# of monthly contributions)
months.
(4) Notwithstanding the abovementioned, minimum Funeral benefits
pension is P1,200 for members with at least 10 years P12,000 in cash or in kind, upon death of member
credit service, P2,400 for those with 20 years.
Loan. — Social Security Commission Resolution No. 669.
Dependents’ pension Moreover, several SSS-issued circulars such as Circular No.
(a) Paid when member dies, retires or with permanent 21-P and No. 52 pertain to the treatment of salary loans,
total disability; sometimes providing for more flexible payment terms or
(b) Paid to each child conceived on or prior to contingency, condonation for delinquent payers; Santiago v. CA and
but not exceeding 5, beginning with the youngest and SSS, GR # L-39949 (1984) resolved an issue involving the
preferring the legitimate; treatment of salary loan repayments; SSS website also
(c) Amount is either P250 or 10% of the monthly pension shows loans
as computed above, whichever is higher.
Sickness benefits
Retirement benefits Eligibility requirements and other conditions
Eligibility requirements (1) Inability to work due to sickness or injury
(1) 120 monthly contributions; (2) Confined for at least 4 days either in a hospital or
(2) Age elsewhere with SSS approval;
(a) 65 years old; or (3) At least 3 months of contributions in the 12 month
(b) a member who has reached 60 years may also avail period immediately before the semester of sickness or
if he is already separated from employ-ment or has injury has been paid;
ceased to be self-employed. (4) All company sick leaves with pay for the current year
has been used up;
Benefit – entitlement to monthly pension from retirement (5) Maximum of 120 days per 1 calendar year [so maximum
until death. permissible for the same sickness and confinement is
240 days for 2 consecutive years];
Lump Sum Alternative (6) The employer has been notified, or, if a separated,
Member may opt to receive his first 18 monthly pensions in voluntary or self-employed member, the SSS directly
lump sum but such is discounted at a preferential rate of notified within 5 days of confinement;
interest. (7) Notice to employer or SSS not needed when
confinement is in a hospital; notice to employer not
To those ineligible – to the 60 year old with less than 120 required as well when Employee became sick or injured
monthly contributions who is no longer employed or self- while working or within premises of the employer.
employed, and who is not continuing contributions
independently, he is entitled to a lump sum equal to his Benefit: daily cash allowance paid for the number of days a
total contributions paid. member is unable to work due to sickness or injury
equivalent to 90% x (average daily salary credit)
Permanent disability benefits
(a) Eligibility requirement: 36 monthly contributions prior to Maternity leave benefits. — (limited only to first four
the semester of disability; same as death benefit; only deliveries or miscarriage)
difference is that the pension is paid directly to the
member. Note: All of these benefits are tax-exempt.
(b) In case the permanently disabled member dies, it
would be given the same treatment as a retiree dying. BENEFICIARIES
(c) For permanent partial disability, the pension is not Primary
lifetime. (e.g. loss of thumb entitles member to only 10 (a) Dependent spouse – until remarriage (see above);
months of pension, while loss of arm 50 months). (b) Dependent children (legitimate, legitimated, legally
(1) It shall be paid in lump sum if the period is less adopted, and illegitimate) (see above); illegitimate
than 12 months. children are entitled only to 50% of the share of
(2) For multiple partial disabilities, they shall be legitimate children unless there are no legitimate
additive when related or deteriorating – the children, in which case, they get 100%.
percentage shall be equal to the number of months
the partial disability is entitled to divided by 75 Secondary – shall only receive when the primary
months. (e.g. loss of sight in one eye 25/75; loss beneficiaries are absent
of arm 50/75; if both occur due to same cause, (a) Dependent parents
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(1) The monthly pension shall not exceed 90% of the Computation of benefits
average monthly compensation. (1) If member is in the service, benefit is:
(2) It shall not be less than P2,400 for those with 20 years
of service and not less than P1,300 for everyone else. Cash payment (CP) = Basic Monthly Pension (BMP) X nos.
of Permanent Partial Disability (PPD) months as
Retirement benefits recommended by the GSIS medical evaluator
Eligibility requirements
(1) 15 years service; (2) If the member is separated from the service but has
(2) 60 years of age; and paid 36 monthly contributions within the last 5 years
(3) Not receiving pension benefit from permanent total immediately preceding the disability or has paid at
disability. least 180 monthly contributions, benefit is:
Note: Retirement is compulsory for employees 65 years of CP = BMP X nos. of PPD months as recommended by the
age who have rendered at least 15 years of service; if GSIS medical evaluator
employee has less than 15 years of service, he may be
allowed to continue in accordance with civil service laws. Death Benefits
When member dies, the primary beneficiaries are entitled
Benefit: choice between to only one of the following:
(a) 60 x [basic monthly pension] lump sum payment at the (a) Survivorship pension (check G.1 above)
time of retirement plus basic monthly pension payable (1) If he was in the service when he died; or
monthly for life after expiry of the 5-year guaranteed (2) Even if separated from the service, he has at least 3
period which is already covered by the lump sum; or years of service and has paid 36 monthly
(b) Cash payment equivalent to 18 x [basic monthly contributions within the 5 years immediately
pension] plus monthly pension for life immediately but preceding death; or
with no 5-year guarantee (3) Even if separated from the service, he has paid 180
monthly contributions prior to death.
Permanent disability benefits (b) Survivorship pension plus cash payment of 100% ave.
Eligibility requirements for Permanent Total Disability monthly compensation for every year of service [so
(1) Disability not due to employee’s own grave essentially, pension plus total contributions made]
misconduct, notorious negligence, habitual (1) If he was in the service when he died; and
intoxication, or willful intention to kill himself or (2) With 3 years of service.
another; (c) Cash payment equivalent to 100% ave. monthly
(2) Employee is: in service at the time of disability; or b] even compensation for each year of service he paid
if separated, he has paid at least 36 monthly contributions or P12,000 whichever is higher
contributions within the 5-year period immediately prior (1) With 3 years of service; and
to disability or has paid a total of at least 180 monthly (2) He has failed to qualify in the prior 2 schemes.
contributions prior to disability; and
(3) Member is not enjoying old-age retirement benefit. Funeral benefits
Fixed by GSIS rules and regulations (currently at P20,000)
Injuries deemed as Permanent Total Disability
(1) Complete loss of sight of both eyes Entitled to this are the following:
(2) Loss of two limbs at one or above the anke or wrist (1) Active member;
(3) Permanent complete paralysis of two limbs
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Temporary disability benefits (similar to sickness) Secondary – shall only receive when the primary
beneficiaries are absent
Eligibility requirements and other conditions: (a) Dependent parents
(5) Employee must be (b) Legitimate descendants, subject to the restrictions on
(a) in service at the time of disability; or dependent children.
(b) if separated, he has rendered at least 3 years of
service and paid at least 6 monthly contributions in [See Annex B for Comparison between the SSS law and the
the 12 month period immediately prior to disability; GSIS Law]
(6) All sick leave credits including CBA sick leaves for the
current year has been used up; and LIMITED PORTABILITY LAW [RA 7699]
(7) Maximum of 120 days per 1 calendar year (so maximum COVERAGE
permissible for the same sickness and confinement is (1) Workers who transfer employment from one sector to
240 days for 2 consecutive years). another; or
(2) Those employed in both sectors (public and private).
Benefit
75% of the current daily compensation for every day or PROCESS
fraction thereof of disability or P70 whichever is higher. The covered worker shall have his credible services or
contributions in both Systems credited to his service or
Separation benefits contribution record in each of the Systems and shall be
Eligibility requirements totalized for purposes of old-age, disability, survivorship
(1) 60 years of age, or separation from service with at least and other benefits in case the covered member does not
3 years but not over 15 years served qualify for such benefits in either or both systems without
(2) Below 60 years of age, but at least 15 years of service totalization: Provided, however, That overlapping periods
rendered. of membership shall be credited only once for purposes of
totalization [Sec. 3]
Benefit
(1) For 60 years of age or separated from service with 3 to 15 “Totalization” shall refer to the process of adding up the
years of service: cash payment of 100% of ave. monthly periods of creditable services or contributions under each
compensation for each year of service (so essentially, of the Systems, for purposes of eligibility and computation
the total amount of all contributions paid) or P12,000 of benefits [Sec. 2e].
whichever is higher.
(2) Below 60 years of age and at least 15 years of service: Note:
cash payment equivalent to 18 x (monthly pension) at Overlapping periods of membership in case of those
the time of resignation or separation plus an old-age employed in both sectors at once are to be counted only
pension benefit equal to basic monthly pension. ONCE for purposes of totalization.
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(4) The term shall not be limited to the employees of a other employees in the civil service shall have the right to
particular employer, unless this code explicitly states. form associations for purposes not contrary to law. [Art.
(5) It shall include any individual whose work has ceased 244]
as a result of or in connection with any current labor
dispute or because of any unfair labor practice if he has All government employees can form, join, or assist
not obtained any other substantially equivalent and employees’ organizations of their own choosing for the
regular employment [Art 212(f)] furtherance and protection of their interests. They can also
form, in conjunction with appropriate government
Employer authorities, labor-management committees, work councils
"Employer" includes any person acting in the interest of an and other forms of workers’ participation schemes to
employer, directly or indirectly. The term shall not include achieve the same objectives. [EO 180 Section 2]
any labor organization or any of its officers or agents
except when acting as employer. [Art 212 (e)] Supervisory Employees
Supervisory employees are those who, in the interest of the
Rank-and-file employees employer, effectively recommend such managerial actions
“Rank-and-File Employee” refers to an employee whose if the exercise of such authority is not merely routinary or
functions are neither managerial nor supervisory in nature. clerical in nature but requires the use of independent
[Book V Rule I Sec. 1 (nn)] judgment. [Art. 212 (m)]
Art. 244 now allows employees of non-profit organizations The DFA provides the certification on the requirement of
to join, form and/or assist labor organizations. [FEU-Dr. reciprocity. [Book V, Rule II, Sec. 2, Par. 1, 3rd sentence]
Nicanor Reyes Medical Foundation Inc. v. Trajano, 1992]
Security Guards
Government Corporate Employees [Corporations created The security guards and other personnel employed by the
under the Corporation Code] security service contractor shall have the right:
The right to self-organization shall not be denied to (a) To form, join, or assist in the formation of a labor
government employees. [1987 Constitution, Art. IX-B, Sec. 2 organization of their own choosing for purposes of
(5)] collective bargaining and
(b) To engage in concerned activities which are not
Employees of government corporations established under contrary to law including the right to strike. [D.O. No. 14
the Corporation Code shall have the right to organize and Series of 2001 Guidelines Governing the Employment
to bargain collectively with their respective employers. All and Working Conditions of Security Guards and Similar
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Personnel in the Private Security Industry] assist or act in a fiduciary manner to managerial
employees and hence, are likewise privy to sensitive and
In Dec 1986, President Aquino issued EO No. 111 which highly confidential records. [Standard Chartered Bank
eliminated the provision on the disqualification of security Employees Union v SCB, 2008]
guards and with that security guards were thus free to join
a rank and file organization. Under the old rule, security Nomenclature not Controlling: Function Test
guards were barred from joining labor organizations of the The mere fact that an employee is designated “manager”
rank-and-file but under RA 6715, they may now freely join a does not ipso facto make him one. Designation should be
labor organization with the rank-and-file or the supervisory reconciled with the actual job description of the employee.
union, depending on their rank. [Manila Electric Co. v.Sec. of [Paper Indurstries Corp. of the Philippines. v. Laguesma
Labor, 1991] ,2000]
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Geography – Location other company and the physical plants, offices and
Geography and location only play a significant role if: facilities are in the same compound are NOT sufficient
(1) The separation between the camps and the different to justify piercing the corporate veil. In Umali vs CA,
kinds of work in each all militate in favor of the system legal corporate entity is disregarded only if it is sought
of separate bargaining units; to hold the officers and stockholders directly liable for
(2) When the problems and interests of the workers are a corporate debt or obligation.
peculiar in each camp or department;
(3) The system of having one collective bargaining unit in Spun-off corporations
each camp has operated satisfactorily in the past. The transformation of companies is a management
[Benguet Consolidated Inc. and Balatok Mining Co. v. prerogative and business judgment which the courts
Bobok Lumberjack Assn.,1958] cannot look into unless it is contrary to law, public policy or
morals. If, considering the spin-offs, the companies would
Policy of avoiding fragmentation of the bargaining unit consequently have their respective and distinctive concerns
It bears noting that the goal of the DOLE is geared towards in terms of nature of work, wages, hours of work and other
"a single employer wide unit which is more to the broader conditions of employment. The nature of their products
and greater benefit of the employees working force." The and scales of business may require different skills, volumes
philosophy is to avoid fragmentation of the bargaining unit of work, and working conditions which must necessarily be
so as to strengthen the employees’ bargaining power with commensurate by different compensation packages. [San
the management. To veer away from such goal would be Miguel Union v Confesor, 1996]
contrary, inimical and repugnant to the objectives of a
strong and dynamic unionism. [Phil. Diamond Hotel and VOLUNTARY RECOGNITION
Resort Inc v Manila Diamond Hotel and Employees Union, Definition
2006] “Voluntary Recognition” refers to the process by which a
legitimate labor union is recognized by the employer as
Since the confidential employees are very few in number the exclusive bargaining representative or agent in a
and are by practice and tradition identified with the bargaining unit, reported with the Regional office in
supervisors in their role as representatives of management accordance to Rule VII, Sec 2 of these Rules. [Book V, Rule
vis-à-vis the rank and file employees, such identity of 1, Sec 1 [bbb]
interest has allowed their inclusion in the bargaining of
supervisors for purposes of collective bargaining in turn as Substantial Requirements
employees in relation to the company as their employer. (1) Unorganized establishment;
This identity of interest logically calls for their inclusion in (2) Only one union asking for recognition;
the same bargaining unit and at the same time fulfills the (3) The members of the bargaining unit did not object to
law’s objective of insuring to them the full benefit of their the projected recognition of the union.
right to self organization and to collective bargaining,
which could hardly be accomplished if the respondent Procedural Requirements
association’s membership were to be broken up into five The notice of voluntary recognition shall be accompanied
separate ineffective tiny units. Creating fragmentary units by the original copy and two (2) duplicate copies of the
would not serve the interest of industrial peace. The following documents:
breaking up of bargaining units into tiny units will greatly (1) A joint statement under oath of voluntary recognition
impair their organizational value. [Filoil Refinery Corp. v attesting to the fact of voluntary recognition
Filoil Supervisory and Confidential Employees Union, 1972] (2) Certificate of posting of the joint statement of voluntary
recognition for fifteen (15) consecutive days in at least
Corporate Entities two (2) conspicuous places in the establishment or
GENERAL RULE: Two companies having separate juridical bargaining unit where the union seeks to operate;
personalities shall NOT be treated as a single bargaining (3) The approximate number of employees in the
unit. bargaining unit, accompanied by the names of those
who support the voluntary recognition comprising at
EXCEPTION: Pervasive Unitary Aspect of Management least a majority of the members of the bargaining unit;
Doctrine. – The cross-linking of the agencies command, and
control, and communication systems indicate their unitary (4) A statement that the labor union is the only legitimate
corporate personality. [Philippine Scouts Veterans v. Torres] labor organization operating within the bargaining
unit.
Principles in determining whether to establish separate
bargaining units: [Indophil Textile Mills Workers Union v. All accompanying documents of the notice for voluntary
Calica, 1992; Diatagon Labor Federation v. Ople, 1980] recognition shall be certified under oath by the employer
(1) The existence of a bonafide business relationship representative and president of the recognized labor
between the 2 companies is not proof of being a single union. [Book V Rule VII Sec 2]
corporate entity, especially when the services provided
by the other company are merely auxiliary. The employer may voluntarily recognize the representation
(2) The fact that there are as many bargaining units as status of a union in unorganized establishments. In this
there are companies in a conglomeration of companies case, however, the company (SLECC) was not an
is a positive proof that a corporation is endowed with a unorganized establishment when it voluntarily recognized
legal personality DISTINCTLY ITS OWN, independent SMSLEC as its exclusive bargaining representative. Prior
and separate from other corporations. to the voluntary recognition, another union (CLUP-SLECC)
(3) Separate legitimate purposes militate against treating has already filed a petition for certification election. Thus,
one corporation as an adjunct or alter ego of the other. the company’s voluntary recognition of SMSLEC is void.
(4) The fact that the businesses are related, that some of [SLECC v Sec. of Labor, 2009]
the employees are the same persons working in the
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The certification election is the best method of determining Thus it should not be circumvented. There should be no
the will of the workers on the crucial question of who shall obstacle in conducting the Certification election. [George &
represent them in their negotiations with the management Peter Lines, Inc. v. Associated Labor Union, 1985]
for a collective bargaining agreement that will best protect
and promote their interests. It is essential that there be no Who may vote?
collusion against this objective between an unscrupulous All employees whether union members or not, as long as
management and a union covertly supporting it while they belong to the appropriate bargaining unit can vote.
professing its loyalty to labor, or at least that the hopes of
labor be not frustrated because of its representation by a Who may file a petition for certification election
union that does not enjoy its approval and support. It is (1) Legitimate labor organization (registered w/ DOLE)
therefore sound policy that any doubt regarding the real (2) Unregistered local chapter with charter certificate from
representation of the workers be resolved in favor of the national union or federation
holding of the certification election. This is preferable to (3) National union or federation in behalf of its
the suppression of the voice of the workers through the local/chapter
prissy observance of technical rules that will exalt (4) Employer (when requested to bargain collectively and
procedure over substantial justice. [Port Workers Union of no existing CBA)
the Philippines v Laguesma, 1992]
Legitimate labor organization
Purpose "Legitimate labor organization" means any labor
The purpose of a certification election is precisely the organization duly registered with the Department of Labor
ascertainment of the wishes of the majority of the and Employment, and includes any branch or local thereof.
employees in the appropriate bargaining unit: to be or not [Art 212 (f)]
to be represented by a labor organization, and in the
affirmative case, by which particular labor organization. Unregistered local/chapter with charter certificate
[Reyes v Trajano, 1992] A duly registered federation or national union may directly
create a local chapter by issuing a charter certificate
Nature of proceeding indicating the establishment of the local chapter. The
It is not litigation, but a mere investigation of a non- chapter shall acquire legal personality only for purposes of
adversary character. The object of the proceedings is filing a petition for certification election from the date it
merely the determination of proper bargaining units and the was issued a charter certificate. [Art 234-A, introduced by
ascertainment of the will and choice of the employees in RA 9481]
respect of the selection of the bargaining representative. The
determination of the proceeding does not entail the entry National union/federation
of remedial orders or redress of rights, but culmination A national union of federation filing a petition in behalf of
solely in an official designation of bargaining units and an its local/chapter shall not be required to disclose the
affirmation of the employees expressed choice of names of the local/chapter’s officers and members, but
bargaining agent. [Young Men Labor Union Stevedores v shall attach to the petition the charter certificate issued to
CIR, 1965] its local/chapter. [Art. 257]
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process is when it is obliged to file a petition for determining whether or not a certification election must be
certification election on its workers’ request to bargain conducted. [Scout Albano Memorial College v. Noriel, 1978]
collectively pursuant to Art. 258. [Hercules Industries, Inc. v
Sec. of Labor, 1992] Effect of withdrawal of signatures
The employees’ withdrawal from a labor union made
Employer is a TOTAL STRANGER in the process of before the filing of the petition for certification election is
Certification Election. Employer has NO STANDING to file presumed voluntary, while withdrawal after the filing of
a MOTION TO DISMISS. [PT&T v Laguesma, 1993] such petition is considered to be involuntary and does not
affect the petition. [S.S. Ventures International vs. S.S.
Venue for filing the petition Ventures Labor Union]
BLR Regional Office which issued the petitioning union’s
certificate of registration or certificate of creation of If performed after the filing of the petition, the withdrawal
chartered local. is presumed to be involuntary and that it was procured
through duress, coercion, or for a valuable consideration.
Certification election in an unorganized establishment [Art. [Oriental Tin Can Labor Union v. Secretary of Labor and
257] Employment, 1998]
Procedure
(a) A petition for certification shall be filed by a legitimate Incumbent as forced intervenor
labor organization. The incumbent bargaining agent shall automatically be
(b) Upon filing of the petition, the Med- Arbiter shall one of the choices in the certification election as forced
automatically conduct a certification election. intervenor. [Book V Rule VIII sec. 7.]
69
Filing of petition is by A LEGITIMATE labor organization. It Substantial support not necessary in intervention
cannot be an unregistered labor organization. This is best The requisite written consent representing substantial
read in relation to Art. 242 which enumerates the rights support of the workers in the bargaining unit [as required
granted to a legitimate labor organization and one of in Art. 256 applies to petitioners for certification only, and
those rights is the right to be chosen as the exclusive not to motions for intervention. [PAFLU v Calleja, 1989]
bargaining representative. This is one way the law
encourages union registration. Appeal from order of Med-Arbiter holding certification
election
Venue: BLR Regional Office which issued the petitioning Appeal to Secretary of Labor on the ground that the rules
union’s certificate of registration or certificate of creation of and regulations or parts established by the Secretary of
chartered local. Labor for the conduct of election have been violated. [Art.
259]
Certification election in an organized establishment [Art.
256] Organized v. Unorganized Establishment
Procedure Art. 256: Organized Art. 257: Unorganized
(1) A verified petition questioning the majority status shall
be filed by a legitimate labor organization Bargaining Agent
(2) It must be filed within the 60-day period before
expiration of CBA (freedom period) Existing, has one None
(3) Supported by written consent of at least 25% of ALL Petition Filed
employees in the bargaining unit (substantial support)
Has to be a VERIFIED No need to be verified
Substantial support rule petition
In organized establishments, the incumbent sole Freedom Period
bargaining agent should not be easily replaced for that
would disturb industrial peace. To justify the disturbance, it No petition for Certification Not applicable.
must appear that at least a substantial number (25% election EXCEPT within 60
requirement) seeks to have a new exclusive bargaining days before the expiration of No freedom period.
unit. the collective bargaining Can file petition anytime.
agreement [See Art. 253 &
Note: A union that is merely filing a MOTION FOR 253-A]
INTERVENTION in a CE filed by another union need NOT
present substantial support. The substantial support is Take note how SC
only needed when filing for a petition for certification interpreted the term
election. [Port Workers Union v DOLE, 1992] “WITHIN”.
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Rationale for Non-Distinction Policy Consent election.— "Consent Election" means the election
Collective bargaining covers all aspects of the employment voluntarily agreed upon by the parties to determine the
relation and the resultant CBA binds all employees in the issue of majority representation of all the workers in the
bargaining unit. All rank and file employees, probationary or appropriate collective bargaining unit.
permanent, have a substantial interest in the selection of the
bargaining representative. [Reyes v. Trajano , 1992] The contending unions may agree to the holding of an
election. In which case, it shall be called a consent
Effect of Non-participation in previous election election. The Med-Arbiter shall forthwith call for the
Failure to take part in previous elections is no bar to the consent election reflecting the parties’ agreement and the
right to participate in future elections. No law,
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call in the minutes of the conference. [Book V RVIII Sec 10 interests. Admittedly, there are times when without
[as amended by DO 40-F-03 Series of 2008, Nov 8, 2008]] succor and support local unions may find it hard, unaided
by other support groups, to secure justice for themselves.
Certification Election v. Consent Election [Phil Skylanders v. NLRC, 2002]
Certification Election Consent Election
Nature of Relationship (Agency)
Purpose The mother union, acting for and in behalf of its affiliate,
had the status of an agent while the local remained the
Aimed at determining the sole Merely to determine the basic unit of the association, free to serve the common
and exclusive bargaining agent issue of majority interest of all its members, subject only to restraints
of all employees in an representation of all the imposed by the constitution and by the by-laws of the
appropriate bargaining unit for workers in the appropriate association. The same is true even if the local is not a
the purpose of collective collective bargaining unit legitimate labor organization. [Filipino Pipe and Foundry
bargaining Corp v. NLRC, 1998]
Chartered Local [Local Chapter] – a labor organization in The locals are separate and distinct units primarily
the private sector operating at the enterprise level that designed to secure and maintain an equality of bargaining
acquired legal personality through the issuance of a power between the employer and their employee-
charter certificate by a duly registered federation or members; and the association of the locals into the
national union, and reported to the Regional Office in national union was in furtherance of the same end. These
accordance with Rule III Sec. 2-E of the IRR. [Book V Rule 1 associations are consensual entities capable of entering
Sec. 1 (i)] into such legal relations with their member. The essential
purpose was the affiliation of the local unions into a
National Union or Federation – a group of legitimate labor common enterprise to increase by collective action the
unions in a private establishment organized for collective common bargaining power in respect of the terms and
bargaining or for dealing with employers concerning terms conditions of labor. [Tropical Hut Employees Union vs.
and conditions of employment for their member union or Tropical Hut Food Market, Inc ,1990]
for participating in the formulation of social and
employment policies, standards and programs, registered Disaffiliation Must be by a Majority Decision
with the BLR in accordance with Rule III Sec. 2-B of the Disaffiliation is a major policy question. Thus, it shall be
IRR. [Book V Rule 1 Sec. 1 [kk]] made by a majority decision of the entire membership,
after due deliberation, by secret ballot, unless, the nature
Purpose of affiliation of the organization or force majeure renders such secret
To foster the free and voluntary organization of a strong ballot impractical, in which case, the board of directors of
and united labor movement [Art 211, LC] the organization may make the decision. [Art. 241(d)]
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Special assessments. — Special assessments are payments Agency fees. — [Agency fee] is an amount, equivalent to
for a special purpose, especially if required only for a union dues, which a non-union member pays to the union 76
limited time. [Azucena] because he benefits from the CBA negotiated by the union.
[Azucena]
No special assessment or other extraordinary fees may be
levied upon the members of a labor organization unless Legal basis
authorized by a written resolution of a majority of all the Employees of an appropriate bargaining unit who are not
members of a general membership meeting duly called for members of the recognized collective bargaining agent
the purpose. [Art. 241 (n)] may be assessed a reasonable fee equivalent to the dues
and other fees paid by members of the recognized
Other than for mandatory activities under the Code, no collective bargaining agent, if such non-union members
special assessments, attorney’s fees, negotiation fees or accept the benefits under the collective bargaining
any other extraordinary fees may be checked off from any agreement: Provided, that the individual authorization
amount due to an employee without an individual written required under Article 242, paragraph (o) of this Code shall
authorization duly signed by the employee. The not apply to the non-members of the recognized collective
authorization should specifically state the amount, bargaining agent [Art. 248 (e)]
purpose and beneficiary of the deduction. [Art. 241 (o)]
Rationale for allowing agency fees
Requirements for validity of check off Avoiding unjust enrichment on the part of non-union
(1) Authorization by written resolution of majority of ALL members who benefit from the union's efforts without
the members at the general membership meeting paying any fee therefor, unlike the members of the
called for that purpose bargaining agent.
(2) Secretary’s record of the minutes of the meetings
attested to by the president. RIGHT TO COLLECTIVE BARGAINING
(3) Individual written authorization for check-off duly DUTY TO BARGAIN COLLECTIVELY
signed by the employees concerned. Legal Basis
The State shall guarantee the rights of workers to
Check-off.— A check-off is a process or device whereby the collective bargaining and negotiations.
employer, on agreement with the Union, recognized as the The State shall promote the principle of shared
proper bargaining representative, or on prior authorization responsibilities between workers and employers and the
from the employees, deducts union dues or agency fees preferential use of voluntary modes in settling disputes,
from the latter’s wages and remits them directly to the including conciliation, and shall enforce their mutual
Union. [Marino v Gamilla, 2009]
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compliance therewith to foster industrial peace. [1987 collectively in accordance with the provisions of this Code.
Constitution, Art. XIII, Sec. 3] [Art. 251]
It is the policy of the State: When there exists a collective bargaining agreement
To promote and emphasize the primacy of FREE The duty to bargain collectively shall also mean that
COLLECTIVE BARGAINING and negotiations, including neither party shall terminate nor modify such agreement
voluntary arbitration, mediation and conciliation, as modes during its lifetime.
of setting labor or industrial disputes. [Labor Code, Art 211
A] Exception: during the freedom period (60 days prior to
expiration of CBA) where either party may serve a written
It is the policy of the State to promote and emphasize the notice to terminate or modify the agreement.
primacy of free and responsible exercise of the right to The existing CBA continues in full force and effect during
self-organization and collective bargaining, either through the freedom period and/or until a new agreement is
single enterprise level negotiations or through the creation of reached by the parties. [Art. 253]
a mechanism by which different employers and recognized
certified labor unions in their establishments bargain Rights of the parties during bargaining
collectively. [Book V Rule XVI Sec. 1. Policy] The exclusive bargaining agent has the right to be
furnished by the employer, upon written request, with its
Definition annual audited financial statements, including the balance
Collective bargaining, which is defined as negotiations sheet and the profit and loss statement. [Art. 242 (c)]
towards a collective agreement, is one of the democratic
frameworks under the New Labor Code, designed to The parties may agree to make available such up-to-date
stabilize the relation between labor and management and financial information which is normally submitted to
to create a climate of sound and stable industrial peace. It relevant government agencies material and necessary for
is a mutual responsibility of the employer and the Union meaningful negotiations. They may also agree to the
and is characterized as a legal obligation. condition that the information be kept confidential. [Book
V Rule XVI Sec 2]
So much so that Article 249, par. (g) of the Labor Code
makes it an unfair labor practice for an employer to refuse Bargaining Procedure: [Book V, Rule XVI]
"to meet and convene promptly and expeditiously in good Private Procedure
faith for the purpose of negotiating an agreement with The parties may provide for their own procedures in
respect to wages, hours of work, and all other terms and collective bargaining. The law only requires that these
conditions of employment. [Kiok Loy v. NLRC, 1986] procedures be more expeditious than the procedure in Art.
250. [Art 251]
Nature and Purpose of Collective Bargaining
The institution of collective bargaining is a prime Rationale. — It is the policy of the state to promote the
manifestation of industrial democracy at work. The two primacy of free collective bargaining [Art. 211 (a)]
parties to the relationship, labor and management, make
their own rules by coming to terms to govern themselves in Labor Code Procedure [Art. 250]
matters that really count. [United Employees Union of (1) Written notice and statement of proposals. When a party
Gelmart Industries v. Noriel, 1975] desires to negotiate an agreement, it shall serve a
written notice upon the other party with a statement of
When employers may be compelled to bargain collectively its proposals.
(1) Majority representation by the representative labor (2) Reply. The other party shall make a reply thereto not
organization [exclusive bargaining agent] later than ten (10) calendar days from receipt of such
(2) Demand by the labor organization [Art. 250 par(a)] notice.
(3) Conference. Should differences arise on the basis of
An employer asked by a labor organization to bargain such notice and reply, either party may request for a
collectively may file a petition for certification election to conference which shall begin not later than ten (10)
ascertain the will of the bargaining unit or it may calendar days from the date of request.
voluntarily recognize the labor organization in proper (4) Board intervention and conciliation. If the dispute is not
circumstances. settled, the Board shall intervene upon request of
either or both parties or at its own initiative and
Waiver of right to collectively bargain immediately call the parties to conciliation meetings.
The right to free collective bargaining includes the right to The Board shall have the power to issue subpoenas
suspend it. [Rivera v. Espiritu, 2000] requiring the attendance of the parties to such
meetings. It shall be the duty of the parties to
Meaning of the duty to bargain collectively participate fully and promptly in the conciliation
It is the performance of a mutual obligation to meet and meetings the Board may call;
convene promptly and expeditiously in good faith for the (5) Voluntary arbitration. The Board shall exert all efforts to
purpose of negotiating an agreement. settle disputes amicably and encourage the parties to
However, the duty does not compel any party to agree to a submit their case to a voluntary arbitrator.
proposal or to make any concession. [Art. 252] (6) Prohibition against disruptive acts. During the
conciliation proceedings in the Board, the parties are
When there is no CBA prohibited from doing any act which may disrupt or
In the absence of an agreement or other voluntary impede the early settlement of the disputes.
arrangement providing for a more expeditious manner of
collective bargaining, it shall be the duty of employer and Period to reply; bad faith. — The period to reply is merely
the representatives of the employees to bargain procedural, and non-compliance cannot be automatically
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deemed to be an act of ULP. [National Union of Restaurant Test for Mandatory Bargainable Issues: NEXUS Between the
Workers vs. CIR, 1964] Nature of Employment and the Nature of the Demand. —
The “other terms and conditions of employment” to
Compare with. — More than a month after the proposals become a mandatory bargainable issue must have a
were submitted, the employer has not made any counter- connection between the proposal and the nature of the
proposals. The company’s refusal to make a counter- work.
proposal to the union’s proposed CBA is an indication of its
bad faith. Where the employer did not even bother to Importance of determining whether an issue is a mandatory
submit an answer to the bargaining proposals of the union, bargaining issue or only a permissive bargaining issue. —
there is a clear evasion of the duty to bargain collectively. "The question as to what are mandatory and what are
The employer’s actuations show a lack of sincere desire to merely permissive subjects of collective bargaining is of
negotiate, rendering it guilty of unfair labor practice. significance on the right of a party to insist on his position
[Colegio de San Juan de Letran vs. Association, 2000] to the point of stalemate. A party may refuse to enter into
a collective bargaining contract unless it includes a desired
Failure to reply as indicia of bad faith. — GMC’s failure to provision as to a matter which is a mandatory subject of
make a timely reply to the proposal sent by the union is collective bargaining. But a refusal to contract unless the
indicative of its utter lack of interest in bargaining with the agreement covers a matter which is not a mandatory
union. Its excuse that it felt the union no longer subject is in substance a refusal to bargain about matters
represented the workers was mainly dilatory as it turned which are mandatory subjects of collective bargaining; and
out to be utterly baseless. GMC’s refusal to make a it is no answer to the charge of refusal to bargain in good
counter-proposal is an indication of its bad faith. Where faith that the insistence on the disputed clause was not the
the employer did not even bother to submit an answer to sole cause of the failure to agree or that agreement was
the bargaining proposals of the union, there is a clear not reached with respect to other disputed clauses.”
evasion of the duty to bargain collectively. It is guilty of [Samahang Manggagawa sa Top Form v. NLRC, 1998]
ULP. [General Milling Corp. vs. CA , 2004]
Such refusal will not be deemed as an unfair labor
Conciliation / Preventive Mediation – Privileged practice. However, if a party refuses to contract based on
communication. — Information and statements made at an issue which is not a mandatory bargainable issue, the
conciliation proceedings shall be treated as privileged party will be guilty of ULP.
communication and shall not be used as evidence in the
Commission. MANDATORY PROVISIONS OF CBA
General Concepts
Conciliators and similar officials shall not testify in any Collective bargaining Agreement (CBA)
court or body regarding any matters taken up at A collective bargaining agreement refers to the negotiated
conciliation proceedings conducted by them. [Art. 233] contract between a legitimate labor organization and the
employer concerning wages, hours of work and all other
Rationale.— terms and conditions of employment in a bargaining unit,
(a) a person is entitled to ‘buy his or her peace’ without including mandatory provisions for grievances and
danger of being prejudiced in case his or her efforts fail arbitration machineries. [Book V Rule I Section 1(j)]
(b) offers for compromise are irrelevant because they are
not intended as admissions by the parties making CBA impressed with public policy
them [Pentagon Steel v. CA, 2009] A CBA, as a labor contract within the contemplation of
Article 1700 Civil Code which governs the relations
Mandatory bargainable issues. — between labor and capital, is not merely contractual in
(1) Wages nature but impressed with public interest, thus, it must
(2) Hours of work yield to the common good. [Davao Integrated Port
(3) All other terms and conditions of employment Stevedoring Services v. Abarquez, 1993]
including proposals for adjusting any grievances or
questions arising under such agreement [Art. 252] The relations between capital and labor are not merely
contractual. They are so impressed with public interest
Permissive Issues. — Unilateral benefits extended by the that labor contracts must yield to the common good.
employer [cf., Union of Filipro Employees-Drug v. Nestle, Therefore, such contracts are subject to the special laws on
2008] labor unions, collective bargaining, strikes and lockouts,
closed shop, wages, working conditions, hours of labor and
A collective bargaining agreement refers to the negotiated similar subjects. [Art. 1700, Civil Code]
contract between a legitimate labor organization and the
employer concerning wages, hours of work and all other Substandard CBA
terms and conditions of employment in a bargaining unit, A CBA that falls below the minimum standards required by
including mandatory provisions for grievances and law is prohibited. Nonetheless, RA 9481 removed
arbitration machineries. As in all other contracts, the substandard CBAs as a ground for the cancellation of
parties in a CBA may establish such stipulations, clauses, registration of union registration.
terms and conditions as they may deem convenient
provided they are not contrary to law, morals, good A substandard CBA cannot bar a petition for certification
customs, public order or public policy. [Manila Fashions v. election under the contract-bar rule.
NLRC, 1996]
Confidentiality of registered CBA or parts thereof
General rule: CBA is not confidential
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In this manner, the law prevents the existence of a gap in qualified separated employees in the filling of vacancies in
the relationship between the collective bargaining parties. the facilities of the purchaser. [Manlimos v. NLRC, 1995]
[Art. 253]
UNION SECURITY
The last sentence of Article 253, which provides for Union security is any form of agreement which imposes
automatic renewal pertains only to the economic upon employees the obligation to acquire or retain union
provisions of the CBA, and does not include membership as a condition affecting employment. [GMC v.
representational aspect of the CBA. An existing CBA Casio, 2010]
cannot constitute a bar to a filing of petition for
certification election. When there is a representational Legal basis
issue, the status quo provision insofar as the need to await Nothing in this Code or in any other law shall stop the
the creation of a new agreement will not apply. Otherwise, parties from requiring membership in a recognized
it will create an absurd situation where the union members collective bargaining agent as a condition for employment,
will be forced to maintain membership by virtue of the except those employees who are already members of
union security clause existing under the CBA and, another union at the time of the signing of the collective
thereafter, support another union when filing a petition for bargaining agreement. [Art. 248 (e)]
certification election. If we apply it, there will always be an
issue of disloyalty whenever the employees exercise their Purpose
right to self-organization. The holding of a certification To safeguard and ensure the existence of the union and
election is a statutory policy that should not be thus, promote unionism in general as a state policy.
circumvented, or compromised. [PICOP Resources, Inc. v.
Taneca et. al., 2010] Limitation to union security clauses
Employees who are already members of another union at
Arbitrated CBA.— In the absence of an agreement between the time of the signing of the collective bargaining
the parties, an arbitrated CBA takes on the nature of any agreement may not be compelled by any union security
judicial or quasi-judicial award. It operates and may be clause to join any union. [Art. 248 (e)]
executed only prospectively unless there are legal
justifications for its retroactive application. [Manila Electric Types of union security clauses
Company vs. Quisumbing, 1999] (1) Closed shop
(2) Maintenance of membership shop
CBA in this case, on the other hand, is part of an arbitral (3) Union shop
award. As such, it may be made retroactive to the date of (4) Modified union shop
expiration of the previous agreement. Therefore, in the (5) Agency shop
absence of a specific provision of law prohibiting
retroactivity of the effectivity of arbitral awards issued by Closed shop
the Secretary of Labor pursuant to Art. 263(g), the latter is A closed shop, on the other hand, may be defined as an
deemed vested with plenary and discretionary powers to enterprise in which, by agreement between the employer
determine the effectivity thereof. [Manila Central Line Corp. and his employees or their representatives, no person may
v. Manila Central Line Free Workers Union, 1998] be employed in any or certain agreed departments of the
enterprise unless he or she is, becomes, and, for the
CBA and 3rd Party Applicability.— Labor contracts such as duration of the agreement, remains a member in good
employment contracts and CBAs are not enforceable standing of a union entirely comprised of or of which the
against a transferee of an enterprise, labor contracts being employees in interest are a part. [GMC v. Casio, 2010]
in personam, is binding only between the parties. As a
general rule, there is no law requiring a bona fide Only union members can be hired by the company and
purchaser of the assets of an on-going concern to absorb they must remain as members to retain employment in the
in its employ the employees of the latter. However, company. [Azucena]
although the purchaser of the assets or enterprise is not
legally bound to absorb in its employ the employees of the Due process in termination under closed shop provision. .—
seller of such assets or enterprise, the parties are liable to The requirements laid down by the law in determining
the employees if the transaction between the parties is whether or not an employee was validly terminated must
colored or clothed with bad faith. [Sundowner Dev’t. Corp. v still be followed even if it is based on a closed-shop
Drilon, 1989] provision of a CBA, i.e. the substantive as well as the
procedural due process requirements. [Del Monte v.
General Rule: An innocent transferee of a business Saldivar, 2007]
establishment has no liability to the employees of the
transferor to continue employing them. Nor is the The employer, however, is not bound to immediately
transferee liable for past unfair labor practices of the terminate the employment of a worker who has lost his
previous owner. union membership pursuant to a union security clause in
the CBA. In General Milling Corp. v. Casio, 615 SCRA 13
Exception: (2010), the Supreme Court held that when asked by the
(1) when the liability therefore is assumed by the new union to terminate an employee under the union security
employer under the contract of sale, or clause of the CBA, the employer must conduct his own
(2) when liability arises because of the new owner's “separate and independent investigation” to determine the
participation in thwarting or defeating the rights of the sufficiency of the evidence supporting the expulsion of the
employees. employee. The employer cannot straight away accede to
the demand of the union to dismiss the employee.
The most that the transferee may do, for reasons of public
policy and social justice, is to give preference to the
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(2) disrupt industrial peace organization, including the giving of financial or other
(3) hinder the promotion of healthy and stable labor- support to it or its organizers or supporters;
management relations (e) To discriminate in regard to wages, hours of work and
(4) violations of the civil rights of both labor and other terms and conditions of employment in order to
management but are also criminal offenses [Art. 247] encourage or discourage membership in any labor
organization. Nothing in this Code or in any other law
Purpose of the policy against ULPs shall stop the parties from requiring membership in a
Protection of right to self-organization and/or collective recognized collective bargaining agent as a condition
bargaining: for employment, except those employees who are
(1) The employee is not only protected from the employer already members of another union at the time of the
but also from labor organizations. signing of the collective bargaining agreement.
(2) Employer is also protected from ULP committed by a Employees of an appropriate bargaining unit who are
labor organization. not members of the recognized collective bargaining
(3) The public is also protected because it has an interest agent may be assessed a reasonable fee equivalent to
in continuing industrial peace. the dues and other fees paid by members of the
recognized collective bargaining agent, if such non-
Employer-employee relationship required; exception union members accept the benefits under the
An unfair labor practice may be committed only within the collective bargaining agreement: Provided, that the
context of an employer-employee relationship [American individual authorization required under Article 242,
President Lines v. Clave, 1982] paragraph (o) of this Code shall not apply to the non-
members of the recognized collective bargaining
Exception: “yellow dog” condition: to require as a condition agent.
of employment that a person or an employee shall not join (f) To dismiss, discharge or otherwise prejudice or
a labor organization or shall withdraw from one to which discriminate against an employee for having given or
he belongs. [Art 248 (b)] being about to give testimony under this Code;
(g) To violate the duty to bargain collectively as prescribed
Parties not estopped from raising ULP by eventual signing of by this Code;
the CBA (h) To pay negotiation or attorney’s fees to the union or its
The eventual signing of the CBA does not operate to estop officers or agents as part of the settlement of any issue
the parties from raising unfair labor practice charges in collective bargaining or any other dispute; or
against each other. [Standard Chartered Bank Union v. (i) To violate a collective bargaining agreement.
Confesor, 2004]
The provisions of the preceding paragraph
ULP: Statutory Construction notwithstanding, only the officers and agents of
The Labor Code does not undertake the impossible task of corporations, associations or partnerships who have
specifying in precise and unmistakable language each actually participated in, authorized or ratified unfair labor
incident which constitutes an unfair labor practice. Rather, practices shall be held criminally liable. [Art. 248]
it leaves to the court the work of applying the law's general
prohibitory language in light of infinite combinations of Interference/ Restraint/ Coercion
events which may be charged as violative of its terms. The act of ULP must interfere with, restrain or coerce
[HSBC Employee Union V. NLRC , 1997] employees in the exercise of their right to self-organization.
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unfair labor practice. xxx The information obtained by Payment of negotiation or attorney's fees
means of espionage is invaluable to the employer and can Sweetheart contracts
be used in a variety of cases to break a union. [Insular Life Sweetheart contracts are favorable both to the union and
Assurance Co. Employees Assn. v. Insular Life Assurance Co. the employer at the expense of the employees. The
Ltd, 1971] settlement of bargaining issues must be made by fair
bargaining in good faith, and not through the payment of
Yellow dog contracts negotiation or attorney's fees which will ultimately lead to
Yellow dog contracts require as a condition of employment sweetheart contracts.
that a person or an employee shall not join a labor
organization or shall withdraw from one to which he To violate a collective bargaining agreement
belongs. Flagrant and/or malicious refusal required
Violations of collective bargaining agreements, except
Examples.— flagrant and/or malicious refusal to comply with its
(a) a representation by the employee that he is not a economic provisions, shall not be considered unfair labor
member of a labor organization practice and shall not be strikeable. [IRR]
(b) a promise by the employee that he will not join a union
(c) a promise by the employee that upon joining a labor ULP of Labor Organizations
organization, he will quit his employment (1) restraint, coercion
(2) discrimination
Contracting out (3) violation of duty to bargain collectively
General rule: contracting out is not ULP (4) featherbedding [exaction]
Exception: (5) asking or accepting negotiation or attorney's fees
(1) contracted-out services or functions are performed by (6) violation of collective bargaining agreement
union members AND
(2) contracting out will interfere with, restrain, or coerce Legal basis
employees in the exercise of their right to self- Unfair labor practices of labor organizations. - It shall be
organization. [Art. 248 (c)] unfair labor practice for a labor organization, its officers,
agents or representatives:
Company union (a) To restrain or coerce employees in the exercise of their
"Company union" means any labor organization whose right to self- organization. However, a labor
formation, function or administration has been assisted by organization shall have the right to prescribe its own
any act defined as unfair labor practice by this Code. [Art. rules with respect to the acquisition or retention of
212(i)] membership;
(b) To cause or attempt to cause an employer to
The employer commits ULP if it initiates, dominates, or discriminate against an employee, including
otherwise interferes with the formation or administration of discrimination against an employee with respect to
any labor organization. whom membership in such organization has been
denied or to terminate an employee on any ground
Example: giving out financial aid to any union's supporters other than the usual terms and conditions under which
or organizers. membership or continuation of membership is made
available to other members;
Discrimination – Encourage/Discourage Unionism (c) To violate the duty, or refuse to bargain collectively
General rule: it is ULP to discriminate in regard to wages, with the employer, provided it is the representative of
hours of work and other terms and conditions of the employees;
employment in order to encourage or discourage (d) To cause or attempt to cause an employer to pay or
membership in any labor organization. deliver or agree to pay or deliver any money or other
things of value, in the nature of an exaction, for services
Exception [union security clause]: Nothing in this Code or which are not performed or not to be performed,
in any other law shall stop the parties from requiring including the demand for fee for union negotiations;
membership in a recognized collective bargaining agent as (e) To ask for or accept negotiation or attorney’s fees from
a condition for employment. employers as part of the settlement of any issue in
Exception to exception: Those employees who are already collective bargaining or any other dispute; or
members of another union at the time of the signing of the (f) To violate a collective bargaining agreement.
collective bargaining agreement. [Art. 248 (e)]
The provisions of the preceding paragraph
Refer to Union Security Clauses notwithstanding, only the officers, members of governing
boards, representatives or agents or members of labor
Testimony associations or organizations who have actually
It is an act of ULP by an employer to dismiss, discharge or participated in, authorized or ratified unfair labor practices
otherwise prejudice or discriminate against an employee shall be held criminally liable. [Art. 249]
for having given or being about to give testimony under
this Code [Art. 248 (f)] Restraint, or coercion
“Interfere” is not included in Art. 249 simply because any
Violate duty to bargain collectively act of a labor organization amounts to interference to the
Please refer to section on Unfair Labor Practice In Collective right of self-organization.
Bargaining for some examples.
Discrimination Encourage/Discourage Unionism
General rule: it is ULP for a labor organization to cause an
employer to discriminate against an employee
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Labor Association of the Phil. v. Marsman and Company (2) any legitimate labor organization in the absence of #1,
1964] but only on grounds of ULP 95
(b) ULP strike – called against a company's unfair labor
practice to force the employer to desist from Who may declare a lockout [Book V, Rule XXII, Sec. 6]
committing such practices. (1) employer
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ULP.—In cases of unfair labor practice, the period of notice Effect of Illegal Lockout.—Any worker whose employment
shall be 15 days. [Art. 263(c)] has been terminated as a consequence of any unlawful
lockout shall be entitled to reinstatement with full
Note: the notice must be served to the employees through backwages. [Art. 264 (a), par. 3, 1st sentence]
the representative union.
REQUISITES FOR LAWFUL PICKETING
Contents of notice.— Prohibited activities in picketing [Art. 264]
(a) Names and addresses of the employer and the union (1) By any person. No person shall obstruct, impede, or
involved interfere with, by force, violence, coercion, threats or
(b) Nature of the industry to which the employer belongs intimidation, any peaceful picketing by employees
(c) Number of union members and of workers in the during any labor controversy or in the exercise of the
bargaining unit right to self-organization or collective bargaining, or
(d) Such other relevant data as may facilitate the shall aid or abet such obstruction or interference. [Art.
settlement of the dispute. 264 (b)]
(2) By police force. The police force shall keep out of the
Additional Requirements.— picket lines unless actual violence or other criminal
In cases of bargaining deadlocks acts occur therein: Provided, That nothing herein shall
(1) Statement of unresolved issues in the bargaining be interpreted to prevent any public officer from taking
negotiations any measure necessary to maintain peace and order,
(2) Written proposals of the union protect life and property, and/or enforce the law and
(3) Counterproposals of the employer legal order. [Art. 264 (d)]
(4) Proof of a request for conference to settle the (3) By person engaged in picketing. No person engaged in
differences. picketing shall commit any act of violence, coercion or
intimidation or obstruct the free ingress to or egress
In cases of ULP from the employer’s premises for lawful purposes, or
(1) Statement of acts complained of obstruct public thoroughfares. [Art. 264 (e)]
(2) Efforts taken to resolve the dispute amicably.
Picketing as part of freedom of speech/expression;
Action on notice.— limitations
(a) Upon receipt of a valid notice of strike or lockout, the General rule: picketing enjoys constitutional protection as
NCMB, through its Conciliator-Mediators, shall call the part of freedom of speech and/or expression.
parties to a conference the soonest possible time in
order to actively assist them to explore all possibilities Exceptions/limitations:
for amicable settlement. (1) when picketing is coercive rather than persuasive
(b) The Conciliator-Mediator may suggest/offer proposals [Security Bank Employees Union v. Security Bank]
as an alternative avenue for the resolution of their (2) when picketing is achieved through illegal means
disagreement/conflict which may not necessarily bind [Mortera v. CIR]
the parties. (3) courts may confine the communication/demonstration
(c) If conciliation/mediation fails, the parties shall be to the parties to the labor dispute [PCIB v. Philnabank
encouraged to submit their dispute for voluntary Employees Association]
arbitration. [Book V Rule XXII Sec. 9] (4) Innocent bystander rule. Courts may insulate
establishments or persons with no industrial
Observance of cooling-off periods connection or having interest totally foreign to the
Lockout cooling-off periods: context of the dispute [PCIB v. Philnabank Employees
(a) based on bargaining deadlock – 30 days Association]
(b) based on ULP – 15 days
Innocent bystander rule; test
Lockout vote An "innocent bystander," who seeks to enjoin a labor strike,
A decision to declare a lockout must be approved by a must satisfy the court that aside from the grounds
majority of the board of directors of the corporation or specified in Rule 58 of the Rules of Court, it is entirely
association or of the partners in a partnership, obtained by different from, without any connection whatsoever to,
secret ballot in a meeting called for that purpose. [Art. either party to the dispute and, its interests are totally
263(f)] foreign to the context thereof. [MSF Tire and Rubber Inc. v.
CA, 1999]
Duration of the validity of the lockout vote.—The decision
shall be valid for the duration of the dispute based on Picketing and libel
substantially the same grounds considered when the strike Libel laws are not applied strictly considering that there is
or lockout vote was taken. [Art. 263(f)] emotional tension in the picket lines and expected
discourteous and impolite exchanges between the
Report of lockout vote employees and the employer. [PCIB v. Philnabank
In every case, the union or the employer shall furnish the Employees Association, 1981]
Ministry the results of the voting at least seven days before
the intended strike or lockout, subject to the cooling-off Peaceful picketing is legal even in the absence of employer-
period herein provided. [Art. 263(f)] employee relationship
Picketing, peacefully carried out, is not illegal even in the
Observance of waiting period (7 days) absence of employer-employee relationship, for peaceful
See notes under strike. picketing is a part of the freedom of speech guaranteed by
the Constitution. [De Leon v. National Labor Union, 1957]
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ASSUMPTION OF JURISDICTION BY THE DOLE SECRETARY OR is not even considered violative of the right against
CERTIFICATION OF THE LABOR DISPUTE TO THE NLRC FOR involuntary servitude. [Kaisahan ng Mga Manggagawa sa
COMPULSORY ARBITRATION Kahoy v. Gotamco Sawmills, 1948]
Conditions for the assumption/certification powers
(1) labor dispute in an industry indispensable to the Immediately executory
national interest The assumption and certification orders are executory in
(2) such dispute is causing or is likely to cause a strike or character and must be strictly complied with by the
lockout parties. [Allied Banking v. NLRC, 1996]
Powers of the Secretary of Labor (alternative) Strikes and lockouts in hospitals, clinics and similar medical
(1) Assumption of jurisdiction. The Secretary of Labor will institutions [Art. 263 (g)]
decide the labor dispute himself/herself. Skeletal workforce requirement
(2) Certification for compulsory arbitration. The Secretary of It shall be the duty of the striking union or locking-out
Labor will certify the labor dispute to the NLRC for employer to provide and maintain an effective skeletal
compulsory arbitration. workforce of medical and other health personnel, whose
movement and services shall be unhampered and
Powers of the President (not precluded by the powers of the unrestricted, as are necessary to insure the proper and
Secretary of Labor) adequate protection of the life and health of its patients,
(1) determine the industries indispensable to the national most especially emergency cases, for the duration of the
interest strike or lockout.
(2) assume jurisdiction over any such labor dispute to
settle or terminate such dispute Immediate assumption/certification by the Secretary of Labor
In such cases, therefore, the Secretary of Labor and
Who determines industries indispensable to the national Employment may immediately assume, within twenty four
interest (24) hours from knowledge of the occurrence of such a
It is in the discretion of the Secretary of Labor to determine strike or lockout, jurisdiction over the same or certify it to
which industries are indispensable to the national interest. the Commission for compulsory arbitration.
However, the President may determine such industries
himself: Rationale
Highest respect accorded to the right of patients to life and
The foregoing notwithstanding, the President of the health.
Philippines shall not be precluded from determining the
industries that, in his opinion, are indispensable to the EFFECT OF DEFIANCE OF ASSUMPTION OR CERTIFICATION ORDERS
national interest, and from intervening at any time and Defiance results in a prohibited activity under Art. 264
assuming jurisdiction over any such labor dispute in order No strike or lockout shall be declared after assumption of
to settle or terminate the same. [Art. 263 (g), last sentence] jurisdiction by the President or the Minister or after
certification or submission of the dispute to compulsory or
NATURE OF ASSUMPTION ORDER OR CERTIFICATION ORDER voluntary arbitration or during the pendency of cases
(1) Automatic injunction involving the same grounds for the strike or lockout. [Art.
(2) Return-to-work and admission 264]
(3) Immediately executory
Strike/lockout becomes illegal
Automatic injunction of intended of impending strike or A strike undertaken despite the issuance by the Secretary
lockout of Labor of an assumption or certification order becomes a
Such assumption or certification shall have the effect of prohibited activity and thus, illegal, pursuant to Article 264
automatically enjoining the intended or impending strike (a) of the Labor Code. [Allied Banking v. NLRC, 1996]
or lockout as specified in the assumption or certification
nd
order. [Art. 263 (g), 2 sentence] See notes on liabilities of employer, union officers, and
ordinary workers under illegal strike.
Return-to-work and readmission if strike or lockout has
already taken place Summary of liabilities of participants in an illegal
If one has already taken place at the time of assumption or strike/lockout [Art. 264]
certification, all striking or locked out employees shall Employer in an illegal lockout – workers terminated due to
immediately return-to-work and the employer shall illegal lockout shall be entitled to reinstatement plus full
immediately resume operations and readmit all workers backwages.
under the same terms and conditions prevailing before the
rd
strike or lockout. [Art. 263 (g), 3 sentence] Union officers who participated in illegal strike – deemed to
have lost their employment
Nature of return-to-work order
It is also important to emphasize that the return-to-work Union officers who participated in illegal acts during a lawful
order not so much confers a right as it imposes a duty; and strike – deemed to have lost their employment.
while as a right it may be waived, it must be discharged as
a duty even against the worker's will. Returning to work in Ordinary workers – deemed to have lost their employment
this situation is not a matter of option or voluntariness but only if they participated in illegal acts.
of obligation. The worker must return to his job together
with his co-workers so the operations of the company can
be resumed and it can continue serving the public and
promoting its interest. That is the real reason such return
can be compelled. So imperative is the order in fact that it
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Stricter penalties for non-compliance with orders, Unlawful means and methods
prohibitions, and/or injunctions issued by the Secretary of Purpose and means test
Labor in strikes involving hospitals, clinics, and similar There must be concurrence between the validity of the
medical institutions purpose of the strike and the means of conducting it.
(1) immediate disciplinary action against both union and
employer A strike is a legitimate weapon in the universal struggle for
(2) dismissal/loss of employment for members of the existence. It is considered as the most effective weapon in
striking union protecting the rights of the employees to improve the
(3) payment by employer of backwages, damages, and terms and conditions of their employment. But to be valid,
other affirmative relief a strike must be pursued within legal bounds. The right to
(4) criminal prosecution against either or both the union strike as a means for the attainment of social justice is
and employer never meant to oppress or destroy the employer. The law
provides limits for its exercise. Among such limits are the
ILLEGAL STRIKE prohibited activities under Art. 264, particularly paragraph
(1) Prohibited by law (e), which states that no person engaged in picketing shall:
(2) Improper grounds (a) commit any act of violence, coercion, or intimidation or
(3) Noncompliance with procedural requirements (b) obstruct the free ingress to or egress from the
(4) Unlawful means and methods employer's premises for lawful purposes or
(5) Violation of injunction order (c) obstruct public thoroughfares. [Association of
(6) No strike/lockout provisions in the CBA Independent Unions in the Philippines (AIUP), et. al. v
NLRC, 1999]
Prohibited by law
Government employees. While the Constitution guarantees A legal strike may turn into an illegal strike
the right of government employees to organize, they are Even if the strike is valid because its objective or purpose is
otherwise not allowed to strike. lawful, the strike may still be declared invalid where the
means employed are illegal. [Phil. Diamond Hotel and
Improper grounds Resort, Inc. v. Manila Diamond Hotel Employees Union,
A legal strike must be based on a bargaining deadlock 2006]
and/or a ULP act only.
Examples of unlawful means and methods
Intra-union and inter-union disputes are not proper (1) Acts of violence and terrorism
grounds to strike. (2) Destruction of property
Good faith strike Guidelines and Balancing of Interest
Good faith may be used as a defense if the strike is held on (1) A strike otherwise valid, if violent in character, may be
the basis of an act of ULP by the employer even if it turned placed beyond the pale.
out that there was no act of ULP. However, the mandatory (2) Care is to be taken especially where an unfair labor
procedural requirements cannot be dispensed with [notice practice is involved, to avoid stamping it with illegality
of strike, cooling-off period, strike vote, strike vote report]. just because it is tainted by such acts. To avoid
[Grand Boulevard Hotel v. GLOWHRAIN, 2003] rendering illusory the recognition of the right to strike,
responsibility in such a case should be individual and
Good faith strike requires rational basis not collective.
A mere claim of good faith would not justify the holding of (3) A different conclusion would be called for if the
a strike under the aforesaid exception as, in addition existence of force while the strike lasts is pervasive and
thereto, the circumstances must have warranted such widespread, consistently and deliberately resorted to
belief. It is, therefore, not enough that the union believed as a matter of policy. It could be reasonably concluded
that the employer committed acts of ULP when the then that even if justified as to ends, it becomes illegal
circumstances clearly negate even a prima facie showing because of the means employed'.
to sustain such belief. [Interwood Employees Assoc. v. Int’l (4) This is not by any means to condone the utilization of
Hardwood, 1956] force by labor to attain its objectives. It is only to show
awareness that in labor conflicts, the tension that fills
Noncompliance with procedural requirements the air as well as the feeling of frustration and
See notes under procedural requirements of a valid strike. bitterness could break out in sporadic acts of violence.
A strike which does not strictly comply with the procedural If there be in this case a weighing of interests in the
requirements set by law and the rules is an balance, the ban the law imposes on unfair labor practices
unlawful/illegal strike. by management that could provoke a strike and its
requirement that it be conducted peaceably, it would be, to
Good faith strike must still comply with procedural repeat, unjustified, considering all the facts disclosed, to
requirements stamp the strike with illegality. It is enough that individual
Even if the union acted in good faith in the belief that the liability be incurred by those guilty of such acts of violence
company was committing an unfair labor practice, if no that call for loss of employee status. Such an approach is
notice of strike and a strike vote were conducted, the said reflected in our recent decisions. [Shell Oil Workers Union v.
strike is illegal. [Grand Boulevard Hotel v. GLOWHRAIN, Shell Co. of the Phils, 1971]
2003]
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Violation of injunction order However, as regards the strikers who decided to pursue
An automatic injunction under Article 263 (g) or a valid with the case, as in the case of the 114 strikers herein, the
injunction order under the exceptions to Article 254 must employer could not be deemed to have condoned their
be complied with. Otherwise, the strike becomes illegal. strike, because they had not shown any willingness to
normalize relations with it. [Philippine Inter-Fashion, Inc. v.
See notes under labor injunctions. NLRC, 1982]
No strike/lockout provisions in the CBA Considering the terms of the compromise agreement (the
A “no strike, no lock-out” is a valid provision in the CBA. parties merely agreed to maintain the status quo before the
However, it only applies to economic provisions. It cannot commencement of the complaints filed by them without
prevent a strike which is grounded on unfair labor practice. prejudice to the resolution by the Labor Arbiter), it cannot
[Malayang Samahan ng mga Manggagawa sa Greenfield v. thereby be concluded that the petitioner waived its right to
Ramos , 2000] assail the illegality of the strike staged by the respondent
and defend the validity of its termination of the
Liability of union officers employment of the members of the respondent who
Any union officer who knowingly participates in an illegal staged a strike. It must be underscored that a waiver to be
strike and any worker or union officer who knowingly valid and effective must be couched in clear and
participates in the commission of illegal acts during a unequivocal terms which leave no doubt as to the intention
strike may be declared to have lost his employment status. of a party to give up a right or benefit which legally
pertains to him. [Filcon Manufacturing Corp v. Lakas
Note: Mere participation in an illegal strike by a union Manggagawa sa Filcon-Lakas Manggagawa Labor Center
officer is sufficient ground to terminate his employment. In (LMF-LMLC)]
case of a lawful strike, the union officer must commit
illegal acts during a strike for him to be terminated. INJUNCTIONS
General rule: injunction prohibited
Liability of ordinary workers No temporary or permanent injunction or restraining order
General rule: Participation by a worker in a lawful strike is in any case involving or growing out of labor disputes shall
not ground for termination of his employment. be issued by any court or other entity, except as otherwise
provided in Articles 218 and 264 of this Code. [Art. 254]
Exception: When the worker participated in illegal acts
during the strike. Requisites for labor injunctions
The general rule is that injunctions are prohibited in labor
When the strike is or becomes illegal, the workers who disputes. The exceptions are provided in Art. 218 in
participate in it are not deemed to have lost their connection with Art. 264 of the Labor Code.
employment status by express omission in the second
sentence of the third paragraph of Art. 264. Only the union Requisites for injunction to issue [Art. 218(e) – Powers of the
officers are deemed to have lost their employment status. NLRC]
(a) actual or threatened commission of a prohibited or
Liability of employer unlawful act OR requirement of performance of a
Any worker whose employment has been terminated as a particular act in a labor dispute
consequence of any unlawful lockout shall be entitled to (b) if unrestrained or unperformed, the act will cause grave
reinstatement with full backwages. or irreparable damage to any party OR render
ineffectual any decision in favor of such party
Waiver of illegality of strike
When defense of illegality of strike is deemed waived.—In this Prohibited activities [Art.264]
case, the Company alleged that the strike was illegal as (a) No labor organization or employer shall declare a
the notice of intention to strike was not sent directly to it. strike or lockout without first having bargained
However, it reinstated its striking workers who expressed collectively in accordance with Title VII of this Book or
their desire to return to work. without first having filed the notice required in the
On the illegality of the strike, the Court declared: preceding Article or without the necessary strike or
xxx it is claimed that the strike was illegal. Admitting for lockout vote first having been obtained and reported to
the sake of argument that the strike was illegal for being the Ministry.
premature, this defense was waived by the Bisaya Land
Transportation Company, when it voluntarily agreed to No strike or lockout shall be declared after assumption
reinstate the radio operators. [Bisaya Land Transportation of jurisdiction by the President or the Minister or after
Co., Inc. v. CIR, 1957] certification or submission of the dispute to compulsory
or voluntary arbitration or during the pendency of cases
When defense of illegality of strike is not deemed waived.— involving the same grounds for the strike or lockout.
The ruling cited in the Bisaya case that the employer
waives his defense of illegality of the strike upon Any worker whose employment has been terminated
reinstatement of strikers is applicable only to strikers who as a consequence of any unlawful lockout shall be
signified their intention to return to work and were entitled to reinstatement with full backwages. Any
accepted back ... union officer who knowingly participates in an illegal
strike and any worker or union officer who knowingly
Truly, it is more logical and reasonable for condonation to participates in the commission of illegal acts during a
apply only to strikers who signified their intention to return strike may be declared to have lost his employment
and did return to work. The reason is obvious. These status: Provided, That mere participation of a worker in
strikers took the initiative in normalizing relations with a lawful strike shall not constitute sufficient ground for
their employer and thus helped promote industrial peace. termination of his employment, even if a replacement
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had been hired by the employer during such lawful (5) Cases arising from any violation of Art. 264 of this
strike. Code, including questions involving the legality of
strikes and lockouts;
(b) No person shall obstruct, impede, or interfere with, by (6) Except claims for Employees Compensation, Social
force, violence, coercion, threats or intimidation, any Security, Medicare and maternity benefits, all other
peaceful picketing by employees during any labor claims, arising from employer-employee relations,
controversy or in the exercise of the right to self- including those of persons in domestic or household
organization or collective bargaining, or shall aid or service, involving an amount exceeding five thousand
abet such obstruction or interference. pesos (P5,000) regardless of whether accompanied
with a claim for reinstatement. [Art. 217]
(c) No employer shall use or employ any strike-breaker, (7) Money claims arising out of employer-employee
nor shall any person be employed as a strike-breaker. relationship or by virtue of any law or contract,
involving claims for actual, moral, exemplary an other
(d) No public official or employee, including officers and forms of damages, as well as employment termination
personnel of the New Armed Forces of the Philippines of OFWs;
or the Integrated National Police, or armed person, (8) Wage distortion disputes in unorganized
shall bring in, introduce or escort in any manner, any establishments not voluntarily settled by the parties.
individual who seeks to replace strikers in entering or [Art. 124]
leaving the premises of a strike area, or work in place of (9) Enforcement of compromise agreements when there is
the strikers. The police force shall keep out of the non-compliance by any of the parties. [Art. 227]
picket lines unless actual violence or other criminal (10)Other cases as may be provided by law.
acts occur therein: Provided, That nothing herein shall
be interpreted to prevent any public officer from taking “Exclusive and Original” Jurisdiction subject to Articles 261
any measure necessary to maintain peace and order, and 262.
protect life and property, and/or enforce the law and A case under Art 217 may be lodged instead with a
legal order. voluntary arbitrator. The policy of the law is to give primacy
to voluntary modes of settling dispute.
(e) No person engaged in picketing shall commit any act
of violence, coercion or intimidation or obstruct the free Jurisdiction on Money Claims (Labor Arbiter vs. Regional
ingress to or egress from the employer’s premises for Director)
lawful purposes, or obstruct public thoroughfares. A money claim arising from employer-employee relations,
except SSS, ECC/Medicare claims, is within the jurisdiction
“Innocent bystander rule” of a labor arbiter if:
An innocent by-stander is entitled to injunction if it is (1) The claim, regardless of amount, is accompanied with
affected by the activities of a picketing union where no a claim of reinstatement; or
connection or interest exists between the union and the (2) The claim exceeds P5,000, whether or not there is a
innocent by-stander. claim for reinstatement.
The right [to picket] may be regulated at the instance of The Regional Director has jurisdiction if:
third parties or `innocent bystanders' if it appears that the (1) the money claim is not accompanied by reinstatement
inevitable result of its exercise is to create an impression AND
that a labor dispute with which they have no connection or (2) the claim does not exceed P5,000
interest exists between them and the picketing union or
constitute an invasion of their rights. [Liwayway Publishing Notes:
v. Permanent Concrete Worker's Union, 1981] (1) The money claim must arise from law or contracts
other than CBA.
Also, see notes on picketing. (2) Money arising from an implementation of the CBA –
Voluntary Arbitrator or Panel of Voluntary Arbitrators
have jurisdiction
(3) Money claims which does not arise from ER-EE
Procedure and Jurisdiction relations – Regular Courts have jurisdiction.
(4) Nature of Proceeding: Non-litigious. The Labor Arbiter
is not bound by the technical rules of procedure.
LABOR ARBITER (5) The Labor Arbiter shall use every and all reasonable
JURISDICTION means to ascertain the facts in each speedily and
Except as otherwise provided under the Code the Labor objectively. [Art. 221]
Arbiters shall original and exclusive jurisdiction to hear and (6) Employer-employee relationship is a jurisdictional
decide: requisite, absent of which, the NLRC has no jurisdiction
(1) Unfair labor practices cases; to hear and decide the case. [Hawaiian-Philippine
(2) Termination disputes; Company v. Gulmatico]
(3) If accompanied with a claim for reinstatement, those (7) Venue: Regional Arbitration Branch (RAB) having
cases that workers may file involving wages, rates of jurisdiction over the workplace of the complainant or
pay, hours of work and other terms and conditions of petitioner.
employment; (8) Workplace – place or locality where the employee is
(4) Claims for actual, moral, exemplary and other forms of regularly assigned at the time the cause of action
damages arising from the employer-employee arose.
relations; (9) In the case of field employees, ambulant or itinerant
workers, their workplace is (a) where they are regularly
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VOLUNTARY ARBITRATOR Note: Department Order No. 40-03 (2003) of the DOLE in
Jurisdiction Section 7, Rule XIX thereof, and the Revised Procedural
Exclusive and original jurisdiction over grievances Guidelines in the Conduct of Voluntary Arbitration
The VA or panel of VAs shall have original and exclusive Proceedings (2005) in Rule VII, Sections 6 and 7 thereof,
jurisdiction to hear and decide all unresolved grievances both provide that the decision of the Voluntary Arbitrator
(see definition). shall become final and executory after 10 calendar days
from receipt of a copy of the decision by the parties and
Violations of a CBA, except those which are gross in that the decision shall not be subject of a motion for
character, shall no longer be treated as ULP and shall be reconsideration. In short, the remedy is for the aggrieved
resolved as grievances under the CBA. party to elevate the case to the Court of Appeals on a
petition for review under Rule 43 of the Rules of Court. The
Note: Gross violations of CBA shall mean flagrant and/or Court of Appeals, in two cases involving Malayan Insurance
malicious refusal to comply with the economic provisions of Co., Inc. (2005 and 2006), upheld the aforementioned
such agreement. issuances and declared that a motion for reconsideration is
a prohibited pleading. But in Teng v. Pahagac, G.R. No.
The Commission, its Regional Offices and the Regional 169704, November 17, 2010, the Supreme Court held that
Directors of the DOLE shall not entertain disputes, a party aggrieved by the Voluntary Arbitrator’s decision
grievances or matters under the exclusive and original must first file a Motion for Reconsideration before going up
jurisdiction of the VA or panel of Vas and shall immediately to the Court of Appeals. It did not, however, say that
dispose and refer the same to the grievance machinery or Department Order No. 40-03 and the Revised Procedural
Voluntary Arbitration provided in the CBA. [Art. 261, LC] Guidelines are unlawful or illegal insofar as they proscribe
the filing of a Motion for Reconsideration. This,
Other labor disputes notwithstanding that the parties squarely raised the
The VA or panel of Vas, upon agreement of the parties, question concerning the validity thereof before the Court.
shall also hear and decide all other labor disputes
including ULP and bargaining deadlocks. [Art. 262, LC]
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Section 3. Petition for mandamus. — When any tribunal, All money claims accruing prior to the effectivity of this
corporation, board, officer or person unlawfully neglects Code shall be filed with the appropriate entities
the performance of an act which the law specifically established under this Code within one (1) year from the
enjoins as a duty resulting from an office, trust, or station, date of effectivity, and shall be processed or determined in
or unlawfully excludes another from the use and accordance with the implementing rules and regulations of
enjoyment of a right or office to which such other is the Code; otherwise, they shall be forever barred.
entitled, and there is no other plain, speedy and adequate
remedy in the ordinary course of law, the person aggrieved Workmen's compensation claims accruing prior to the
thereby may file a verified petition in the proper court, effectivity of this Code and during the period from
alleging the facts with certainty and praying that judgment November 1, 1974 up to December 31, 1974, shall be filed
be rendered commanding the respondent, immediately or with the appropriate regional offices of the Department of
at some other time to be specified by the court, to do the Labor not later than March 31, 1975; otherwise, they shall
act required to be done to protect the rights of the forever be barred. The claims shall be processed and
petitioner, and to pay the damages sustained by the adjudicated in accordance with the law and rules at the
petitioner by reason of the wrongful acts of the time their causes of action accrued.
respondent.
The Labor Code has no specific provision on when a
SUPREME COURT monetary claim accrues. Thus, again the general law on
Therefore, all references in the amended Section 9 of B.P. prescription applies. Article 1150 of the Civil Code provides
No. 129 to supposed appeals from the NLRC to the that –
Supreme Court are interpreted and hereby declared to
mean and refer to petitions for certiorari under Rule 65. Article 1150. The time for prescription for all kinds of
Consequently, all such petitions should hence forth be actions, when there is no special provision which ordains
initially filed in the Court of Appeals in strict observance of
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otherwise, shall be counted from the day they may be shall prescribe in three (3) years. All unfair labor practice
brought. arising from Book V shall be filed with the appropriate
agency within one (1) year from accrual of such unfair labor
The day the action may be brought is the day a claim practice; otherwise, they shall be forever barred.
started as a legal possibility. In the present case, the day
came when petitioner learned of Asiakonstrukt’s deduction Article 247. Concept of unfair labor practice and procedure
from his salary of the amount of advances he had received for prosecution thereof. [last par.]
but had, by his claim, been settled, the same having been No criminal prosecution under this Title may be instituted
reflected in his payslips, hence, it is assumed that he without a final judgment finding that an unfair labor
learned of it at the time he received his monthly paychecks. practice was committed, having been first obtained in the
[Anabe v Asian Const, et al., 2009] preceding paragraph. During the pendency of such
administrative proceeding, the running of the period of
ILLEGAL DISMISSAL prescription of the criminal offense herein penalized shall
In illegal dismissal cases, the employee concerned is given be considered interrupted: Provided, however, that the
a period of four years from the time of his dismissal within final judgment in the administrative proceedings shall not
which to institute a complaint. This is based on Article 1146 be binding in the criminal case nor be considered as
of the New Civil Code which states that actions based upon evidence of guilt but merely as proof of compliance of the
an injury to the rights of the plaintiff must be brought requirements therein set forth. [As amended by Batas
within four years. [Victory Liner, Inc. v Race, 2007] Pambansa Bilang 70, May 1, 1980 and later further amended
by Section 19, Republic Act No. 6715, March 21, 1989]
Article 1146. The following actions must be instituted within
four years:
(1) Upon an injury to the rights of the plaintiff; OFFENSES PENALIZED BY THE LABOR CODE AND IRR ISSUED
(2) Upon a quasi-delict; PURSUANT THERETO
Art. 290. Offenses. – Offenses penalized under this Code
However, when the action arises from or out of any act, and the rules and regulations issued pursuant thereto
activity, or conduct of any public officer involving the shall prescribe in three (3) years.
exercise of powers or authority arising from Martial Law
including the arrest, detention and/or trial of the plaintiff, PRESCRIPTIVE PERIOD OF ILLEGAL RECRUITMENT CASES
the same must be brought within one (1) year. [As amended Section 7. Prescription. Illegal recruitment cases under this
by PD No. 1755, Dec. 24, 1980.] Rule shall prescribe in five (5) years; Provided, however,
that illegal recruitment cases involving economic sabotage
UNFAIR LABOR PRACTICE
shall prescribed in twenty (20) years. [RA 8042]
Art. 290. Offenses. – Offenses penalized under this Code
and the rules and regulations issued pursuant thereto
PAGE 96
ANNEX A
Cause Terminable Examples Non-Terminable Examples
Serious Misconduct Teacher pressuring colleague to change a failing Borrowing Money: as a general rule, it is neither
grade to a passing one plus misrepresentation. dishonest, nor immoral, nor illegal, much less
[Padilla vs. NLRC, 1997] criminal [Medical Doctors, Inc. [Makati Medical
Center] v. NLRC] except
Obscene, insulting or offensive words against (a) it becomes a serious misconduct when
superior. [Asian Design and Manufacturing vs. Hon. reprehensible behavior such as the use of a
Deputy Minister of Labor, 1986] trust relationship as a leverage for borrowing
money is involved. [Pearl S. Buck Foundation,
Sleeping in post, gross insubordination, dereliction Inc. v. NLRC, 1990]
of duty, challenging a superior to a fight. [Luzon
Stevedoring vs. CIR, 1965] Love: teacher falling in love with student without a
showing that the former took advantage of her
Immorality / Immoral Conduct: conduct which is so position to court her student. Yielding to this gentle
willful, flagrant or shameless as to show and universal emotion is not to be so casually
indifference to the opinion of good and respectable equated with immorality. The deviation of the
members of the community; such conduct must be circumstances of their marriage from the usual
grossly immoral – so corrupt as to constitute a societal pattern cannot be considered as a defiance
crime or so unprincipled as to be reprehensible to a of contemporary social mores [Chua-Qua v. Clave,
high degree or committed under such scandalous 1990]
or revolting circumstances as to shock the common
decency. [Narag vs. Narag, 1998]; to be a valid
cause for dismissal, the immoral act must render
incapable performance of duties/services or
calculated at injuring employer’s business.
(a) When a teacher engages in extra-marital
relationship, especially when the parties are
both married. [Santos v. NLRC, 1998] 50
Willful Disobedience Violation of Company Rules: Company policies and Assertion of employee’s right not to be made to work
regulations, unless shown to be grossly oppressive outside of what he had been hired to do. [Tierra
or contrary to law, are generally valid and binding International Production Corp. v. NLRC, 1996]
on the parties and must be complied with until
finally revised or amended, unilaterally or Refusing a promotion, since promotion is in the
preferably through negotiation, by competent nature of a gift or reward. [PT&TC vs. CA, 2003]
authority. [Aparente, Sr. v. NLRC, 2000] (a) Disobeying an Invalid Order to Transfer: an invalid
transfer amounts to constructive dismissal; it is
Disobeying a Valid Order to Transfer invalid when it fails test of validity. (refer to the
(1) Test of Validity: adjacent column for the test)
(a) Not unreasonable
(b) Not inconvenient
(c) Not prejudicial
(d) No demotion in rank
(e) No diminution in salary, privileges or
benefits [Blue Dairy vs. NLRC, 1999]
(2) Mere inconvenience does not necessarily
invalidate a transfer order; unreasonable
inconvenience makes the order invalid.
[Homeowners Savings and Loan Assoc. vs. NLRC,
1996]
(3) Reasonableness pertains to the character of
orders and to the manner in which they are
made. [Escobin vs. NLRC, 1998]
Gross and Habitual Habitual tardiness and absenteeism [Manila Electric Simple negligence [RDS Trucking v. NLRC, 1998] or
Neglect Co. v. NLRC, 1996] unsatisfactory performance [Oreta vs. NLRC, 1989]
Abandonment – the deliberate and unjustified Mere involvement in an accident, absent any
refusal of an Employee to resume his employment. showing of fault or recklessness on the part of the
[Nueva Ecija Electric Cooperative v. NLRC, 2005] Employee, is NOT a valid ground for dismissal.
(1) Requisites: failure to report to work or absence [Paguio Transport Corp. v. NLRC, 1998]
w/o valid reason
(2) Clear intent to sever Employee–ER relationship Filing a complaint of illegal dismissal is inconsistent
via overt acts. [Labor v NLRC, 1995; Floren Hotel with abandonment;
v. NLRC, 2005; Leonardo v. NLRC, 2000] (a) Except when Employee prays for separation pay
(a) CANNOT be lightly inferred, much less instead of reinstatement [Jo vs. NLRC, 2000]
legally presumed from certain equivocal
acts such as interim employment. No Abandonment:
[Hacienda Dapdap v. NLRC, 1998] (a) Mere absence from work [Mendoza v. NLRC,
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1999]
Bank Employee delivered newly approved credit (b) Going home to have dinner; employees do not
cards to a total stranger without verification need to take their meals within the company
protocol. premises. [PAL v. NLRC, 1999]
(c) Leaving his workplace to relieve himself
[Dimabayo v. NLRC, 1999]
Fraud or Willful Breach Dishonesty: Employee is not in a position of trust and confidence.
of Trust (a) Custodian of petty cash fund reimbursed
another employee for services the latter did not
render. [Naguit v. NLRC, 2003]
(b) Falsification of time cards. [San Miguel vs. NLRC,
1989]
(c) Theft of company property. [Firestone Tire and
Rubber Co. vs. Lariosa, 1987] 51
Commission of a crime Theft; the employee here was convicted after she
or offense against won her case for illegal dismissal. In view of the
Employer employee’s conviction, the decision of the NLRC
which had already become final and executory
calling for her reinstatement and the payment of
back wages should not now be enforced.
Otherwise, she would in effect be undeservedly
rewarded when she should instead be punished for
her offense. [Sampaguita Garments Corp. v. NLRC,
1994]
Analogous Causes Quarrelsome – Bossy: an Employee's attitude Probable Cause: Although after preliminary
problem is a valid ground for dismissal, equivalent investigation probable cause has been found and
to loss of trust and confidence; an Employee who the accused has been detained, this is NOT legal
cannot get along with his fellow co-EEs is basis for immediate termination of employment.
detrimental to the company for he can upset and [Standard Electric Manufacturing Corp. v. Standard
restrain the working environment. [Heavylift Manila, Electric Union, 2005]
Inc. v. CA]
Conviction – Moral Turpitude: Conviction of a crime
Conviction – Moral Turpitude: Violation of a involving moral turpitude is not one of these
company rule prohibiting the infliction of harm or justifiable causes.
physical injury against any person under the (a) Not under fraud/willful breach since the crime
particular circumstances provided for in the same was unrelated to the performance of the
rule may be deemed analogous to serious employee's function.
misconduct. [Oania v. NLRC, 1995] (b) Not under commission of crime since it was not
directed at Employer or his family or
Gross inefficiency is closely related to gross neglect representative.
for both involve specific acts or omission on the part (c) Analogous causes must have an element
of the employee resulting in damage to the similar to those found in the specific just cause
employer or to his business. [Lim v. NLRC, 1996] enumerated under Article 282. Clearly lacking
in the ground invoked by petitioner is its relation
Past Offenses: Previous offenses may be so used as to his work or to his employer. [IRRI v. NLRC,
valid justification for dismissal from work only if the 1993]
infractions are related to the subsequent offense (d) In IRRI v. NLRC (1993), homicide outside IRRI
upon which basis the termination of employment is [employer] complex after office hours and
decreed. [Stellar Industrial Service, Inc. v. NLRC, against a non-IRRI employee.
1996; La Carlota Planters Assn. v. NLRC, 1998]
Courtesy Resignation – Resignation must be
Professional Training / Residency Training: a voluntary. Adding the word "courtesy" did not
residency or resident physician position in a medical change the essence of resignation. That courtesy
specialty is never a permanent one. Residency resignations were utilized in government
connotes training and temporary status. It is the reorganization did not give private respondent the
step taken by a physician right after post-graduate right to use it as well in its own reorganization and
internship [and after hurdling the Medical rehabilitation plan. [Batongbacal vs. Associated
Licensure Examinations] prior to his recognition as Bank, 1988]
a specialist or sub-specialist in a given field.
(a) right to security of tenure only to the extent that
they periodically make the grade.[Felix v.
Buenaseda, 1995]
PAGE 98
ANNEX B: COMPARISON BETWEEN SSS AND GSIS
SSS GSIS
Enabling Law
RA 1161 as amended by RA 8282: Social Security Act of 1997 RA 8291 amending PD 1146
Definition of Terms
Employer – any person, natural or juridical, domestic or Employer – National government, its political subdivisions,
foreign, who carries on in the Philippines any trade business, branches, agencies or instrumentalities, including government-
industry, undertaking, and uses the services of another person owned or controlled corporations and financial institutions with
who is under his orders as regards the employment, except original charters (GOCCs); constitutional commissions; and
those considered as employer under the GSIS. A self-employed judiciary
person shall be both employer and employee at the same
time. Employee – any person receiving compensation while in service of
an employer whether by election or appointment, irrespective of
Employee – any person who performs services for an employer status of appointment; baranggay officials; and sangguniang
in which either or both mental and physical efforts are used officials
and who receives compensation for such services, where there
is an employer—employee relationship; also, a self-employed Note: No counterpart for self-employed.
person who is both employee and employer at the same time
PAGE 100