Labor Law I Reviewer

(Final Exam)

1. Labor standards refer to the legally prescribed minimum requirements concerning terms and
conditions of employment, wages, monetary and welfare benefits, as well as occupational,
safety, and health standards, whereas, labor relations pertain to the legal framework
governing the individual and collective bargaining or interaction between employers and
employees, including their attendant rights and duties.
2. Social justice is the humanization of laws and the equalization of social and economic forces
by the State for the common good and general welfare of the people. Its basic tenet states that
“those who have less in life must have more in law.” It is the aim, reason, and justification of
labor laws.
3. "Labor-only" contracting exists when the person supplying workers to an employer does
not have substantial capital or investment in the form of, inter alia, machineries and
equipment, and the workers recruited by such person are performing activities which are
directly related to the principal business of such employer. In such cases, the person or
intermediary shall be considered merely as an agent of the employer who shall be responsible
to the workers in the same manner and extent as if the latter were directly employed by him.
4. Permissible job contracting or subcontracting refers to an arrangement whereby a principal
agrees to put out or farm out to a contractor or subcontractor the performance or completion
of a specific job, work or service within a definite or predetermined period, regardless of
whether such job, work or service is to be performed or completed within or outside the
premises of the principal. A person is considered engaged in legitimate job contracting or
subcontracting if the following conditions concur:
a) The contractor or subcontractor carries on a distinct and independent business and
undertakes to perform the job, work or service on its own account and under its own
responsibility according to its own manner and method, and free from the control and
direction of the principal in all matters connected with the performance of the work
except as to the results thereof;
b) The contractor or subcontractor has substantial capital or investment; and
c) The agreement between the principal and contractor or subcontractor assures the
contractual employees entitlement to all labor and occupational safety and health
standards, free exercise of the right to self-organization, security of tenure, and social
and welfare benefits.
In contrast, labor-only contracting, a prohibited act, is an arrangement where the contractor
or subcontractor merely recruits, supplies or places workers to perform a job, work or service
for a principal. In labor-only contracting, the following elements are present:
a) The contractor or subcontractor does not have substantial capital or investment to
actually perform the job, work or service under its own account and responsibility; and
b) Employees recruited, supplied or placed by such contractor or subcontractor are
performing activities which are directly related to the main business of the principal.
5. To be legally designated as an independent contractor, an individual must (1) be free from
the control of the client, (2) be able to exercise his/her judgment as to the manner and
methods to accomplish the end-result and (3) be responsible for the end-result only under the
terms of the contract.

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6. Labor Dispute includes any controversy or matter concerning terms and conditions of
employment or the association or representation of persons in negotiating, fixing,
maintaining, changing or arranging the terms and conditions of employment, regardless of
whether the disputants stand in the proximate relation of employer and employee.
7. Apprentice – a worker covered by a written apprenticeship agreement who is undertaking a
DOLE approved on-the-job training with a compensation of not less than 75% of the
applicable minimum wage.
8. Learners are persons hired as trainees in semi-skilled and other industrial occupations which
are non-apprenticeable and which may be learned through practical training on the job for a
period not exceeding three months.
9. Handicapped workers are those whose earning capacity is impaired by age or physical or
mental deficiency or injury.
10. The existence of ER-EE relationship is determined by the following tests (SWDC):
a) the selection and engagement of employee;
b) payment of wages;
c) power of dismissal; and
d) power to control employee’s conduct (control test).
10. Under the control test an employer-employee relationship exists where the person for whom
the services are performed reserves the right to control not only the end to be achieved, but
also the manner and means to be used in reaching the end.
11. Article 279. Security of tenure. In cases of regular employment, the employer shall not
terminate the services of an employee except for a just cause or when authorized by this Title.
An employee who is unjustly dismissed from work shall be entitled to reinstatement without
loss of seniority rights and other privileges and to his full backwages, inclusive of allowances,
and to his other benefits or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual reinstatement.
12. Article 280. Regular and casual employment. “The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an employment
shall be deemed to be regular where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employer,
except where the employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the engagement of the
employee (project employee) or where the work or service to be performed is seasonal in
nature and the employment is for the duration of the season (seasonal employee).
An employment shall be deemed to be casual if it is not covered by the preceding paragraph:
Provided, That any employee who has rendered at least one year of service, whether such
service is continuous or broken, shall be considered a regular employee with respect to the
activity in which he is employed and his employment shall continue while such activity
exists.”
13. In accordance with the intent and spirit of the law under Article 280, the status of regular
employment attaches to the casual worker on the day immediately after the end of his first
year of service.
14. The second paragraph of Article 280 of the Labor Code, quoted above, providing that an
employee who has served for at least one (1) year, shall be considered a regular employee,
relates to casual employees, not to project employees.
15. Requisites of a valid contract for term employment as exception to Article 280:

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 a) there’s no intention to circumvent the law;
b) there’s no vitiated consent;
c) that the contracting parties are on equal footing (more or less equal terms with no
moral dominance).
16. An employment ceases to be co-terminus with specific projects (project employment) when
the employee is repeatedly and continuously rehired due to the demands of the employer's
business and re-engaged for many more projects without interruption.
17. If the employer’s work depends on the availability of contracts or "projects" secured from
other companies, necessarily the duration of the employment of its work force is not
permanent but coterminous with the projects to which they are assigned and from whose
payrolls they are paid.
18. Article 281. Probationary employment. Probationary employment shall not exceed six (6)
months from the date the employee started working, unless it is covered by an apprenticeship
agreement stipulating a longer period. The services of an employee who has been engaged on
a probationary basis may be terminated for a just cause or when he fails to qualify as a
regular employee in accordance with reasonable standards made known by the employer to
the employee at the time of his engagement. An employee who is allowed to work after a
probationary period shall be considered a regular employee.
19. A probationary employee is one who for a given period of time, is under observation and
evaluation to determine whether or not he is qualified for permanent employment.
20. Article 282. Termination by employer. An employer may terminate an employment for any
of the following causes:
a) Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;
b) Gross and habitual neglect by the employee of his duties;
c) Fraud or willful breach by the employee of the trust reposed in him by his employer or
duly authorized representative;
d) Commission of a crime or offense by the employee against the person of his employer
or any immediate member of his family or his duly authorized representatives; and
e) Other causes analogous to the foregoing.
21. Article 283. Closure of establishment and reduction of personnel. The employer may also
terminate the employment of any employee due to the installation of labor-saving devices,
redundancy, retrenchment to prevent losses or the closing or cessation of operation of the
establishment or undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers and the Ministry of Labor
and Employment at least one (1) month before the intended date thereof. In case of
termination due to the installation of labor-saving devices or redundancy, the worker affected
thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to
at least one (1) month pay for every year of service, whichever is higher. In case of
retrenchment to prevent losses and in cases of closures or cessation of operations of
establishment or undertaking not due to serious business losses or financial reverses, the
separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay
for every year of service, whichever is higher. A fraction of at least six (6) months shall be
considered one (1) whole year.
22. Article 284. Disease as ground for termination. An employer may terminate the services of
an employee who has been found to be suffering from any disease and whose continued

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 employment is prohibited by law or is prejudicial to his health as well as to the health of his
co-employees: Provided, That he is paid separation pay equivalent to at least one (1) month
salary or to one-half (1/2) month salary for every year of service, whichever is greater, a
fraction of at least six (6) months being considered as one (1) whole year.
23. Repeated invocation of serious business losses is not a defense to payment of labor standard
benefits. The employer cannot exempt himself from liability to pay minimum wages because
of poor financial condition of the company. The payment of minimum wages is not
dependent on the employer's ability to pay.
24. When an employer customarily furnishes his employee board, lodging or other facilities, the
fair and reasonable value thereof, as determined by the Secretary of Labor and Employment,
is included in the “wage." But in determining whether a privilege is a facility, the criterion is
not so much in its kind but in its purpose.
25. Facility - includes articles or services for the benefit of the employee or his family but
excluding tools of the trade or articles or service primarily for the benefit of the employer or
necessary to the conduct of the employer's business.
26. If commission is added on top of the guaranteed basic wage, the same is not included in the
“wage." If the guaranteed basic wage comes from the commission but if the commission will
not amount to the required minimum wage, the employer will have to fill in the difference. In
such case, the commission is considered a “wage."
27. Article 110. Worker preference in case of bankruptcy. In the event of bankruptcy or
liquidation of an employer’s business, his workers shall enjoy first preference as regards
their wages and other monetary claims, any provisions of law to the contrary
notwithstanding. Such unpaid wages and monetary claims shall be paid in full before claims
of the government and other creditors may be paid.
28. A mortgage credit is a lien on an identified immovable property which is superior to a
worker’s preference under Article 110. In other words, concurrence and preference of credits
still put labor on top of the list but liens must be satisfied first.
29. Article 113 of the Code prohibits deductions from the employees’ wages, except for the
following:
a) Insurance premiums;
b) Union dues; and
c) Those items authorized by law.
30. The term 'househelper' as used herein is synonymous to the term 'domestic servant' and shall
refer to any person, whether male or female, who renders services in and about the employer's
home and which services are usually necessary or desirable for the maintenance and
enjoyment thereof, and ministers exclusively to the personal comfort and enjoyment of the
employer's family. The criterion is the personal comfort and enjoyment of the family of the
employer in the home of said employer.
31. Article 83. Normal hours of work. The normal hours of work of any employee shall not
exceed eight (8) hours a day. Health personnel ………..shall hold regular office hours for
eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where the
exigencies of the service require that such personnel work for six (6) days or forty-eight (48)
hours, in which case, they shall be entitled to an additional compensation of at least thirty
percent (30%) of their regular wage for work on the sixth day……….
32. Article 84. Hours worked. Hours worked shall include (a) all time during which an employee
is required to be on duty or to be at a prescribed workplace; and (b) all time during which an

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 employee is suffered or permitted to work. Rest periods of short duration during working
hours shall be counted as hours worked.
33. Article 85. Meal periods. Subject to such regulations as the Secretary of Labor may prescribe,
it shall be the duty of every employer to give his employees not less than sixty (60) minutes
time-off for their regular meals.
34. Article 86. Night shift differential. Every employee shall be paid a night shift differential of
not less than ten percent (10%) of his regular wage for each hour of work performed between
ten o’clock in the evening and six o’clock in the morning.
35. Article 87. Overtime work. Work may be performed beyond eight (8) hours a day provided
that the employee is paid for the overtime work, an additional compensation equivalent to his
regular wage plus at least twenty-five percent (25%) thereof. Work performed beyond eight
hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate
of the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof.
36. Meal hour shall be one of complete rest; otherwise, the same shall be counted as work hour.
In other words, if the employees have to be on ready call, or if they are required to stand by
for emergency work during their meal hour, such period shall be considered as work hour, and
henceforth, shall be counted as overtime work.
37. (Omnibus Rules, Book III, Rule I) Section 5. Waiting time. — (a) Waiting time spent by an
employee shall be considered as working time if waiting is an integral part of his work or the
employee is required or engaged by the employer to wait. (b) An employee who is required to
remain on call in the employer's premises or so close thereto that he cannot use the time
effectively and gainfully for his own purpose shall be considered as working while on call. An
employee who is not required to leave word at his home or with company officials where he
may be reached is not working while on call. (Note: This is considered as work hour, hence,
compensable).
38. The thirty (30)-minute assembly time prior to the start of the scheduled working hours for
briefing and work assignment purposes may be considered as waiting time within the purview
of the above-quoted provision if the employees are subject to the absolute control of the
company during such period, and if failure to report therein is subject to disciplinary action.
39. The Court once declared that “a laborer need not leave the premises of the factory shop or
boat in order that his period of rest shall not be counted, it being enough that he "cease to
work", may rest completely and leave or may leave at his will the spot where he actually
stays while working, to go somewhere else, whether within or outside the premises of said
factory, shop or boat.” If these requisites are complied with, the period of such rest shall not
be counted, thus, cannot be considered as “hours of work” for the seamen to be entitled to
overtime pay.
40. Entitlement to overtime and rest day pay must first be established by proof that said overtime
and rest day work were actually performed, before an employee may avail of said benefits.
41. If the employee needs to work overtime, consent by the employee must be given. The
employer has no authority to compel the employee to work overtime since the law is explicit
which states that “work is only for eight hours a day.” It is like amending a contract which
needs mutual consent by both parties.
42. The practice of offsetting the overtime with the undertime should not be countenanced for it
would place the schedule for working hours dependent on the employee. It is better to deduct
the undertime from the employee’s accrued leave.

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43. As provided under Article 91, each of the employees is entitled to a rest period of not less
than twenty-four (24) consecutive hours after every six (6) consecutive normal work days.
44. Dismissal or laying-off of employees is indubitably the sole prerogative of the management;
however, the exercise thereof must not be oppressive and without abuse of discretion for what
is at stake are not only the employees’ positions but also their means of livelihood.
45. Employer-employee relationship is not suspended when an employee is given a vacation leave
with pay. That the employee on vacation leave with pay is accorded his regular compensation,
attests to his continuous and regular service pursuant to the settled principle that the basis of
remuneration is actual work rendered.
46. Under Article 94, the employer may require an employee to work on any holiday but such
employee shall be paid a compensation equivalent to twice his regular rate.
47. Any employees’ existing benefit which have been ripened into company practice or policy
cannot be unilaterally withdraw, or diminish by the company.
48. Generally, commission is not part of the 13th month pay, but it is if the commission is part of
the employment minimum wage.
49. The employer’s practice of including non-basic benefits in the computation of their 13th-
month pay for at least two (2) years cannot be unilaterally withdrawn without violating the
prohibition on non-diminution of benefits. To be considered an employer practice which
cannot be unilaterally withdrawn, it should have been practiced over a long period of time and
must be shown to have been consistent and deliberate.
50. Payment of items that were expressly excluded by the law in the computation of the 13th
month pay constitutes a voluntary act and has ripened into a practice, could no longer be
withdrawn, reduced, diminished, discontinued or eliminated.
51. 13th month pay is based on basic pay. Pro-rating of 13th month pay applies only in cases of
resignation or termination.
52. The dismissal of an employee must be done with just cause and without abuse of discretion.
53. The right to labor is a constitutional as well as a statutory right which is deemed to be property
within the meaning of constitutional guarantees. That is his means of livelihood which cannot
be deprived of without due process of law.
54. Only grievances arising from the interpretation or implementation of the CBA are considered
grievance cases that must be submitted to the grievance machinery for adjustment and
resolution.
55. A formal or trial-type hearing is not at all times and in all instances essential as part of the due
process given to the erring employee. The requirements are satisfied where the parties are
afforded fair and reasonable opportunity to explain their side of the controversy at hand. What
is frowned upon is the absolute lack of notice and hearing.
56. Article 282. Termination by employer. An employer may terminate an employment for any of
the following causes:
a) Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;
b) Gross and habitual neglect by the employee of his duties;
c) Fraud or willful breach by the employee of the trust reposed in him by his employer or
duly authorized representative;
d) Commission of a crime or offense by the employee against the person of his employer
or any immediate member of his family or his duly authorized representatives; and
e) Other causes analogous to the foregoing.

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57. "Willful disobedience of the employer's lawful orders, as a just cause for the dismissal of an
employee, contemplates the concurrence of at least two (2) requisites, as follows:
a) the employee's assailed conduct must have been willful or intentional, the willfulness
being characterized by a 'wrongful and perverse attitude; and
b) the order violated must have been reasonable, lawful, made known to the employee
and must pertain to the duties which he has been engaged to discharge."
58. For abandonment to be a valid ground for dismissal, two requisites must be present, to wit:
a) the intention by an employee to abandon, coupled with
b) an overt act from which it may be inferred that the employee had no more intention to
resume his work.
There must be a deliberate unjustified refusal of the employee to resume his employment. This
refusal must be clearly shown. Mere absence is not sufficient; it must be accompanied by
unequivocal overt acts pointing to the fact that the employee simply does not want to work
anymore.
(Note: It is wiser to terminate an employee for gross habitual neglect of duty than for
abandonment because filing a case for illegal dismissal negates abandonment).
59. To be a valid ground for dismissal, loss of trust and confidence must be based on a willful
breach of trust.  Unless based on a ground provided by law and supported by substantial
evidence, dismissal will be disallowed, for what is at stake is not only the employee's position,
but also his means of livelihood.  Considering that private respondent was acting in good faith,
his dismissal would run counter to such established doctrinal rulings.
60. In numerous dismissal cases, loss of trust and confidence has been indiscriminately used by
employers to justify almost every instance of termination and as a defense against claims of
arbitrary dismissal. In one case the Court came up with the following guidelines for the
application of the doctrine of loss of confidence:
a) Loss of confidence which should not be simulated;
b) It should not be used as a subterfuge for causes which are improper, illegal or
unjustified;
c) It should not be arbitrarily asserted in the face of overwhelming evidence to the
contrary; and
d) It must be genuine, not a mere afterthought to justify earlier action taken in bad faith.
Loss of confidence applies only to cases involving employees who occupy positions of trust
and confidence, or to those situations where the employee is routinely charged with the care
and custody of the employer's money or property. But, in order to constitute a just cause for
dismissal, the act complained of must be “work-related” such as would show the employee
concerned to be unfit to continue working for the employer. In the dismissal due to loss of
trust and confidence, termination is the only penalty to be imposed.
61. While it is true that compassion and human consideration should guide the disposition of cases
involving termination of employment for it affects one's source or means of livelihood, it
should not be overlooked that the benefits accorded to labor do not include compelling an
employer to retain the services of an employee who has been shown to be a gross liability to
the employer. The law in protecting the rights of the employees authorizes neither oppression
nor self-destruction of the employer.
62. In the last ground for termination of employment, “analogous to the foregoing” means acts
which are based on the intentional act of the employee.

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63. Employment may be validly terminated for just and authorized causes, with the latter being
provided under the following articles of the Code, viz:
a) Article 283. Closure of establishment and reduction of personnel. The employer
may also terminate the employment of any employee due to the installation of labor-
saving devices, redundancy, retrenchment to prevent losses or the closing or
cessation of operation of the establishment or undertaking unless the closing is for
the purpose of circumventing the provisions of this Title, by serving a written notice
on the workers and the Ministry of Labor and Employment at least one (1) month
before the intended date thereof. In case of termination due to the installation of
labor-saving devices or redundancy, the worker affected thereby shall be entitled to a
separation pay equivalent to at least his one (1) month pay or to at least one (1)
month pay for every year of service, whichever is higher. In case of retrenchment to
prevent losses and in cases of closures or cessation of operations of establishment or
undertaking not due to serious business losses or financial reverses, the separation
pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for
every year of service, whichever is higher. A fraction of at least six (6) months shall
be considered one (1) whole year.
b) Article 284. Disease as ground for termination. An employer may terminate the
services of an employee who has been found to be suffering from any disease and
whose continued employment is prohibited by law or is prejudicial to his health as
well as to the health of his co-employees: Provided, That he is paid separation pay
equivalent to at least one (1) month salary or to one-half (1/2) month salary for
every year of service, whichever is greater, a fraction of at least six (6) months being
considered as one (1) whole year.
64. Redundancy refers to a situation where the services of an employee are deemed in excess of
what is reasonably demanded by the actual requirements of the enterprise. As such, an
employer has no legal obligation to keep more employees than are necessary for the operation
of its business.
65. There must be fair and reasonable criteria to be used as standard in selecting employees to be
retrenched or dismissed, such as:
a) less preferred status (e.g. temporary employee);
b) efficiency rating; and
c) seniority.
66. Retrenchment - it is an act of the employer in dismissing employees due to business losses,
lack of work, and reduction on business volume.
67. The temporary lay-off of the employees under Article 286 should not last longer than six
months. After six months, the employees should either be recalled to work or permanently
retrenched following the requirements of the law under Article 283, to wit:
a) the retrenchment is necessary to prevent losses and such losses are proven; written
notice to the employees and to the Department of Labor and Employment at least one
month prior to the intended date of retrenchment; and
b) payment of separation pay equivalent to one month pay or at least 1/2 month pay for
every year of service, whichever is higher.
68. Under Article 283 of the Code, the employer is not obligated to pay separation benefits when
the closure or cessation of business operation is due to business losses or financial reverses.

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69. General standards under which an employer may retrench or reduce the number of his
employees (SIN-Proof):
a) The losses expected should be substantial and not merely de minimis in extent. If the
loss purportedly sought to be forestalled by retrenchment is clearly shown to be
insubstantial and inconsequential in character, the bonafide nature of the retrenchment
would appear to be seriously in question.
b) The substantial loss apprehended must be reasonably imminent, as such imminence
can be perceived objectively and in good faith by the employer. There should, in other
words, be a certain degree of urgency for the retrenchment, which is after all a drastic
recourse with serious consequences for the livelihood of the employees retired or
otherwise laid-off.
c) Because of the far-reaching nature of retrenchment, it must be reasonably necessary
and likely to effectively prevent the expected losses.
d) The alleged losses if already incurred, and the expected imminent losses sought to be
forestalled, must be proved (proof) by sufficient and convincing evidence.
70. The law requires an employer to extend equal treatment to its employees. It may not, in the
guise of exercising management prerogatives, grant greater benefits to some and less to
others. Management prerogatives are not absolute prerogatives but are subject to legal limits,
collective bargaining agreements, or general principles of fair play and justice.
71. To be valid, a disease as ground for termination under Article 284 must be supported by a
medical certificate from a competent public health authority showing that such disease could
not be cured within a period of six months even with proper medical treatment.
72. In cases of merger or consolidation of company with another one, the new owner or transferee
shall not incur any liability if the transfer of ownership is done in good faith. Nor is the
transferee liable for past unfair labor practices of the previous owner. Likewise, the transferee
is under no legal duty to absorb the transferor's employees as there is no law compelling such
absorption.
73. Article 287. Retirement. Any employee may be retired upon reaching the retirement age
established in the collective bargaining agreement or other applicable employment contract. In
case of retirement, the employee shall be entitled to receive such retirement benefits as he may
have earned under existing laws and any collective bargaining agreement and other
agreements: Provided, however, That an employee’s retirement benefits under any collective
bargaining and other agreements shall not be less than those provided therein.
In the absence of a retirement plan or agreement providing for retirement benefits of
employees in the establishment, an employee upon reaching the age of sixty (60) years or
more, but not beyond sixty five (65) years which is hereby declared the compulsory retirement
age, who has served at least five (5) years in the said establishment, may retire and shall be
entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of
service, a fraction of at least six (6) months being considered as one whole year.
74. The above article provides for two types of retirement: (a) compulsory and (b) optional. The
first takes place at age 65, while the second is primarily determined by the collective
bargaining agreement or other employment contract or employer's retirement plan. In the
absence of any provision on optional retirement in a collective bargaining agreement, other
employment contract, or employer's retirement plan, an employee may optionally retire upon
reaching the age of 60 years or more, but not beyond 65 years, provided he has served at least
five years in the establishment concerned.

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75. The circumstances which must occur before the law could be given retroactive effect in favor
of labor:
a) the claimant for retirement benefits was still the employee of the employer at the time
the statute took effect; and
b) the claimant has complied with the requirements for eligibility under the statute for
such retirement benefits.
76. Not all waivers and quitclaims are invalid as against public policy. If the agreement was
voluntarily entered into and represents a reasonable settlement, it is binding on the parties and
may not later be disowned simply because of a change of mind. It is only where there is clear
proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of
settlement are unconscionable on its face, that the law will step in to annul the questionable
transaction. But where it is shown that the person making the waiver did so voluntarily, with
full understanding of what he was doing, and the consideration for the quitclaim is credible
and reasonable, the transaction must be recognized as a valid and binding undertaking. "Dire
necessity" is not an acceptable ground for annulling the releases.
(Note: The employee’s resignation is voluntary if the employee knows the consequences of his
action, and with full understanding of what he is doing).
77. The twin requirements of notice and hearing constitute essential elements of due process in
cases of employee dismissal:
a) the requirement of notice is intended to inform the employee concerned of the
employer's intent to dismiss and the reason for the proposed dismissal; and
b) the requirement of hearing affords the employee an opportunity to answer his
employer's charges against him and accordingly to defend himself therefrom before
dismissal is effected.
Neither of these two requirements can be dispensed with without running afoul of the due
process requirement of the Constitution.
78. Due process under the Labor Code involves two aspects:
a) Substantive -- the intrinsically authentic validity of the just and authorized causes of
termination of employment under the Labor Code; and
b) Procedural -- the manner, or the way and means of dismissal as provided under
Article 277 of the Labor Code.
79. The requirement for hearing (procedural) must be duly observed by affording employee
ample opportunity to defend himself and introduce evidence on his behalf. "Ample
opportunity" connotes every kind of assistance that management must accord the employee to
enable him to prepare adequately for his defense, including legal representation.
A formal trial-type hearing is not at all times and in all instances essential to due process. It is
enough that the parties are given a fair and reasonable opportunity to explain their respective
sides of the controversy and to present supporting evidence on which a fair decision can be
based. Where opportunity to be heard, either through oral arguments or pleadings, is
accorded, there is no denial of procedural due process.
80. A dismissal may not only be predicated on any of the just or authorized causes under the
Labor Code, but also on the union security clause in the CBA between the company and the
union. Stipulations in the CBA authorizing the dismissal of employees are of equal import as
the statutory provisions on dismissal under the Labor Code. The CBA may stipulate that all
present and subsequent employees shall be required to become a member of the union as a
condition of continued employment.

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 Failure by the employer to observe procedural due process does not invalidate the dismissal
for a just or authorized cause. In Agabon case, however, the requirement of substantive due
process, which is essentially the existence of just cause provided by law for a valid dismissal,
was not discarded. Thus, the Agabon doctrine cannot be invoked to validate a dismissal in a
case wherein substantive due process, or the proper determination of just cause, was not
observed. As applied to the Labor Code, adherence to substantive due process is a requisite
for a valid determination that just or authorized causes existed to justify the dismissal. As
applied to the dismissals grounded on violations of the CBA, observance of substantial due
process is indispensable in establishing the presence of the cause or causes for dismissal as
provided for in the CBA.
81. The law is explicit that the dismissal of an employee must be for a just or authorized cause
and after due process. Hence, non-compliance therewith entitles the employee to
indemnification in the amount of P1,000.00, the measure of which depends on the facts of
each case and the gravity of the omission committed by the employer. It must be noted,
however, that failure to observe such procedural due process will not invalidate the dismissal
for a just or authorized cause.(This is a reversal of the long-standing rule enunciated in
WenPhil case)
82. The employer's failure to comply with the notice requirement does not constitute a denial of
due process but a mere failure to observe a procedure for the termination of employment
which makes the termination of employment merely ineffectual. The appropriate sanction for
such failure is the payment of backwages under Article 283 of the Code. (Serrano case)
83. AGABON DOCTRINE - The rule that if the dismissal is for just cause but statutory due
process was not observed, the dismissal should be upheld. While the procedural infirmity
cannot be cured, it should not invalidate the dismissal. However, an employer is liable to pay
indemnity in the form of nominal damages to an employee who has been dismissed without
the benefit of due process. This indemnity is intended not to penalize the employer but to
vindicate or recognize the employee's right to statutory due process which was violated by
the employer. (Agabon case)
84. In the subsequent JAKA case, the Court clarified the application of the Agabon doctrine and
held that:
a) if the dismissal is based on a just cause under Article 282 but the employer failed to
comply with the notice requirement, the sanction to be imposed upon him should be
tempered because the dismissal process was, in effect, initiated by an act imputable to
the employee; and
b) if the dismissal is based on an authorized cause under Article 283 but the employer
failed to comply with the notice requirement, the sanction should be stiffer because
the dismissal process was initiated by the exercise of the employer of his management
prerogative. Hence, the imposition of P50,000.00 as nominal damages.
85. Article 13. Definitions.
a. ”Worker” means any member of the labor force, whether employed or unemployed.
b. "Recruitment and placement" refers to any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and includes referrals, contract
services, promising or advertising for employment, locally or abroad, whether for profit or
not: Provided, That any person or entity which, in any manner, offers or promises for a fee,
employment to two or more persons shall be deemed engaged in recruitment and
placement.

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 c. "Private fee-charging employment agency" means any person or entity engaged in
recruitment and placement of workers for a fee which is charged, directly or indirectly,
from the workers or employers or both.
d. "License" means a document issued by the Department of Labor authorizing a person or
entity to operate a private employment agency.
e. "Private recruitment entity" means any person or association engaged in the recruitment
and placement of workers, locally or overseas, without charging, directly or indirectly, any
fee from the workers or employers.
f. "Authority" means a document issued by the Department of Labor authorizing a person or
association to engage in recruitment and placement activities as a private recruitment
entity.
g. "Seaman" means any person employed in a vessel engaged in maritime navigation.
h. "Overseas employment" means employment of a worker outside the Philippines.
i. "Emigrant" means any person, worker or otherwise, who emigrates to a foreign country by
virtue of an immigrant visa or resident permit or its equivalent in the country of
destination.
86. Article 34. Prohibited practices. It shall be unlawful for any individual, entity, licensee, or
holder of authority:
a. To charge or accept, directly or indirectly, any amount greater than that specified in the
schedule of allowable fees prescribed by the Secretary of Labor, or to make a worker pay
any amount greater than that actually received by him as a loan or advance;
b. To furnish or publish any false notice or information or document in relation to recruitment
or employment;
c. To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under this Code.
d. To induce or attempt to induce a worker already employed to quit his employment in order
to offer him to another unless the transfer is designed to liberate the worker from
oppressive terms and conditions of employment;
e. To influence or to attempt to influence any person or entity not to employ any worker who
has not applied for employment through his agency;
f. To engage in the recruitment or placement of workers in jobs harmful to public health or
morality or to the dignity of the Republic of the Philippines;
g. To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly
authorized representatives;
h. To fail to file reports on the status of employment, placement vacancies, remittance of
foreign exchange earnings, separation from jobs, departures and such other matters or
information as may be required by the Secretary of Labor.
i. To substitute or alter employment contracts approved and verified by the Department of
Labor from the time of actual signing thereof by the parties up to and including the periods
of expiration of the same without the approval of the Secretary of Labor;
j. To become an officer or member of the Board of any corporation engaged in travel agency
or to be engaged directly or indirectly in the management of a travel agency; and
k. To withhold or deny travel documents from applicant workers before departure for
monetary or financial considerations other than those authorized under this Code and its
implementing rules and regulations.

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87. How much is the premium pay of an employee? Plus 30% of the daily basic rate or a total of
130% for work performed on rest day or special day. Plus 50% of the daily basic rate or a
total of 150% for work performed on special day falling on the employee’s rest day. Plus
30% of the daily basic rate or a total of 260% for work performed on a regular holiday falling
on the employee’s rest day.
88. How much is the overtime pay of an employee? Plus 25% of the hourly rate for work
performed in excess of 8 hours on ordinary day. Plus 30% of the hourly rate for work
performed in excess of 8 hours on rest day, special day or regular holiday.
89. What is night shift differential? Night shift differential refers to the additional compensation
for work performed from 10:00 O’clock in the evening to 6:00 O’clock in the morning.
90. How much is the night differential of an employee? Plus 10% of the hourly rate for work
between 10:00 O’clock in the evening and 6:00 O’clock in the morning.
91. Regular Holidays - Every employee covered by the Holiday Pay Rule is entitled to the
minimum wage rate (daily basic wage and COLA). This means that the employee is entitled
to at least 100% of his/her minimum wage rate even if he/she did not report for work,
provided he/she is present or is on leave of absence with pay on the work day immediately
preceding the holiday. Work performed on that day merits at least twice (200%) the wage rate
of the employee.
On the other hand, work performed on special days merits additional compensation of at least
thirty percent (30%) of the basic pay or a total of one hundred thirty percent (130%). Where
the employee works on a special day falling on his rest day, he/she shall be entitled to an
additional compensation of at least fifty percent (50%) of his/her basic wage or a total of one
hundred fifty percent (150%).
92. Special Work Days - For work performed on a declared Special Work Day, an employee is
entitled only to his/her daily wage rate. No premium pay is required since work performed on
said day is considered work on an ordinary workday.
93. Premium Pay Rates - The COLA shall not be included in the computation of premium pay.
The minimum statutory premium pay rates are as follows:
a. For work performed on rest days or on special days:
- Plus 30% of the daily basic rate of 100% or a total of 130%.
 Sector/Industry Rate Amount
 Non-agriculture: P481.00
P481 x 130% = P625.30
 Retail/Service Establishment: P444.00
P444 x 130% = P577.20
b. For work performed on a rest day which is also a special day:
- Plus 50% of the daily basic rate of 100% or a total of 150%.
c. For work performed on a regular holiday which is also the employee’s rest day (not
applicable to employees who are not covered by the holiday-pay rule).

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