2 - Labor Law and Social Legislation - Green Notes PDF

DE LA SALLE UNIVERSITY COLLEGE OF LAW
Lasallian Commission on Bar Operations
LABOR LAW AND SOCIAL LEGISLATION

Green Notes 2019
Green Notes 2019 Labor Law
BARGAINING REPRESENTATIVE ....................................................... 59

RIGHTS OF LABOR ORGANIZATIONS ............................................. 63
Table of Contents CHECK OFF, ASSESSMENTS, AND AGENCY FEES ................. 64
COLLECTIVE BARGAINING ........................................................... 65
GENERAL PROVISIONS............................................................................... 1 UNFAIR LABOR PRACTICES ................................................................ 70
BASIC POLICY ON LABOR ...................................................................... 1 NATURE, ASPECTS ........................................................................... 70
CONSTRUCTION IN FAVOR OF LABOR ............................................. 1 ULP BY EMPLOYERS ......................................................................... 71
CONSTITUTIONAL AND CIVIL PROVISIONS RELATING TO ULP BY LABOR ORGANIZATIONS.................................................73
LABOR LAW.................................................................................................2 PEACEFUL CONCERTED ACTIVITIES ..............................................75
STRIKES ................................................................................................75
PRE-EMPLOYMENT .....................................................................................4
PICKETING ......................................................................................... 79
RECRUITMENT AND PLACEMENT OF LOCAL AND MIGRANT
LOCKOUTS ......................................................................................... 80
WORKERS ....................................................................................................4
ASSUMPTION OF JURISDICTION BY THE DOLE SECRETARY
ILLEGAL RECRUITMENT AND OTHER PROHIBITED
................................................................................................................. 81
ACTIVITIES ............................................................................................ 7
INJUNCTIONS .................................................................................... 83
LIABILITY OF LOCAL RECRUITMENT AGENCY AND
FOREIGN EMPLOYER ........................................................................ 11 POST EMPLOYMENT ................................................................................ 84
TERMINATION OF CONTRACT OF MIGRANT WORKERS EMPLOYER-EMPLOYEE RELATIONSHIP ....................................... 84
WITHOUT JUST OR VALID CAUSE............................................... 12 TESTS TO DETERMINE RELATIONSHIP ................................... 84
BAN ON DIRECT HIRING................................................................. 12 KINDS OF EMPLOYMENT .............................................................. 85
EMPLOYMENT OF NON-RESIDENT ALIENS ................................. 13 LEGITIMATE SUBCONTRACTING VERSUS LABOR-ONLY
CONTRACTING ................................................................................. 88
LABOR STANDARDS ................................................................................... 15
TERMINATION BY EMPLOYER .......................................................... 90
CONDITIONS OF EMPLOYMENT ...................................................... 15
JUST CAUSES ...................................................................................... 91
COVERAGE .......................................................................................... 15
AUTHORIZED CAUSES .................................................................... 95
HOURS OF WORK .............................................................................. 16
DUE PROCESS .................................................................................. 101
WEEKLY REST PERIODS ................................................................ 20
TERMINATION BY EMPLOYEE ........................................................ 103
HOLIDAYS ........................................................................................... 22
RESIGNATION VS CONSTRUCTIVE DISMISSAL ................... 104
SERVICE INCENTIVE LEAVES .................. Error! Bookmark not PREVENTIVE SUSPENSION .............................................................. 105
defined.5 RELIEFS FROM ILLEGAL DISMISSAL ............................................. 105
13TH MONTH PAY .............................................................................. 26 MONEY CLAIMS ARISING FROM EMPLOYER-EMPLOYEE
SERVICE CHARGES ...........................................................................27 RELATIONSHIP ...................................................................................... 107
WAGES ...................................................................................................... 28 RETIREMENT .......................................................................................... 107
PAYMENT OF WAGES ..................................................................... 28
PROHIBITIONS REGARDING WAGES ........................................ 29 MANAGEMENT PREROGATIVE .......................................................... 109
WAGE DISTORTION; CONCEPT .................................................. 34 DISCIPLINE ............................................................................................ 109
NON-DIMINUTION OF BENEFITS .............................................. 34 TRANSFER OF EMPLOYEES .............................................................. 109
LEAVES ...................................................................................................... 35 PRODUCTIVITY STANDARD ............................................................. 109
SERVICE INCENTIVE LEAVE ......................................................... 35 BONUS ...................................................................................................... 110
MATERNITY LEAVE .......................................................................... 35 CHANGE OF WORKING HOURS ...................................................... 110
PATERNITY LEAVE ........................................................................... 36 BONA FIDE OCCUPATIONAL QUALIFICATIONS ........................ 110
SOLO PARENT LEAVE ..................................................................... 36 POST-EMPLOYMENT RESTRICTIONS ........................................... 110
LEAVE BENEFITS FOR WOMEN WORKERS UNDER SPECIAL
LAWS .....................................................................................................37 JURISDICTION AND REMEDIES ..... Error! Bookmark not defined.
SPECIAL GROUPS OF EMPLOYEES .................................................. 39 LABOR ARBITER ................................ Error! Bookmark not defined.
WOMEN ............................................................................................... 39 NATIONAL LABOR RELATIONS COMMISSION Error! Bookmark
MINORS ............................................................................................... 40 not defined.
KASAMBAHAY ..................................................................................... 41 JUDICIAL REVIEW OF LABOR RULINGS .........................................114
HOMEWORKERS............................................................................... 43 BUREAU OF LABOR RELATIONS .......................................................114
NIGHT WORKERS ............................................................................. 43 NATIONAL CONCILIATION AND MEDIATION BOARD ..............114
APPRENTICES AND LEARNERS .................................................... 45 DOLE REGIONAL DIRECTORS ...........................................................115
PERSONS WITH DISABILITIES ......................................................47 DOLE SECRETARY .................................................................................115
GRIEVANCE MACHINERY .................................................................. 116
SOCIAL WELFARE LEGISLATION ......................................................... 49 VOLUNTARY ARBITRATION .............................................................. 116
SSS LAW .................................................................................................... 49 PRESCRIPTION OF ACTIONS ............................................................. 117
COVERAGE AND EXCLUSIONS .................................................... 49 MONEY CLAIMS ................................................................................ 117
DEPENDENTS AND BENEFICIARIES .......................................... 50 ILLEGAL DISMISSAL ........................................................................ 117
BENEFITS ............................................................................................. 51 UNFAIR LABOR PRACTICES .......................................................... 117
GSIS LAW .................................................................................................. 51 OFFENSES UNDER THE LABOR CODE ...................................... 117
COVERAGE AND EXCLUSIONS ..................................................... 51 ILLEGAL RECRUITMENT ................................................................ 117
DEPENDENTS AND BENEFICIARIES ........................................... 51
BENEFITS ............................................................................................. 51
DISABILITY AND DEATH BENEFITS .................................................. 51
LABOR CODE ...................................................................................... 51
POEA STANDARD EMPLOYMENT CONTRACT ....................... 52
LABOR RELATIONS ................................................................................... 53

RIGHT TO SELF-ORGANIZATION .................................................... 53
COVERAGE ......................................................................................... 53
INELIGIBILITY OF MANAGERIAL EMPLOYEES; RIGHT OF
SUPERVISORY EMPLOYEES .......................................................... 54
EFFECT OF INCLUSION AS EMPLOYEES OUTSIDE OF THE
BARGAINING UNIT ........................................................................... 56
NON-ABRIDGEMENT ...................................................................... 56
BARGAINING UNIT ................................................................................ 56
Green Notes 2019 General Provisions
(Section 3, Art. XIII, Constitution)

The State shall afford full protection to labor,
local and overseas, organized and unorganized,
and promote full employment and equality of employment
opportunities for all.
It shall guarantee the rights of all workers to self-
organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike
in accordance with law. They shall be entitled to security
of tenure, humane conditions of work, and a living wage.
They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be
provided by law.
The State shall promote the principle of shared
responsibility between workers and employers and the
preferential use of voluntary modes in settling disputes,
including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.
The State shall regulate the relations between
workers and employers, recognizing the right of labor to
its just share in the fruits of production and the right of
enterprises to reasonable returns to investments, and to
expansion and growth.
Section 3, Labor Code

The State shall afford protection to labor,
promote full employment, ensure equal work
opportunities regardless of sex, race or creed, and regulate
the relations between workers and employers. The State
shall assure the rights of workers to self-organization,
collective bargaining, security of tenure, and just and
humane conditions of work.
General Rule:
Social justice in favor of labor
Where the evidence may be reasonably interpreted in two
divergent ways, one prejudicial and the other favorable to
him, the balance must be tilted in his favor (labor)
consistent with the principle of social justice.(HFS Phil. Inc
v. Pilar, 2009)
The law, in protecting the rights of the employees,

authorizes neither oppression nor self-destruction of the
employer – there may be cases where the circumstances
warrant favoring labor over the interests of management
but never should the scale be so tilted as to result in an
injustice to the employer. (One Shipping Corp. v. Peñafiel,
2015)
Exceptions:
When the employer is in the right
The constitutional policy of providing full protection to
labor is not intended to oppress or destroy management.
The commitment of the Supreme Court to the cause of
labor does not prevent the High Tribunal from sustaining
the employer when it is in the right. (Garcia v. NLRC, 1994)
Lasallian Commission on Bar Operations 1

Social justice not to countenance wrongdoing of labor Under Article XIII (Social Justice and Human Rights):
The policy of social justice is not intended to countenance a. SECOND OF TWO PROTECTION-TO-
wrongdoing simply because it is committed by the LABOR CLAUSES:
underprivileged. At best, it may mitigate the penalty but it
certainly will not condone the offense. Compassion for the Section 3.
poor is an imperative of every humane society but only
when the recipient is not a rascal claiming an undeserved The State shall afford full protection to labor,
privilege. (PLDT v. NLRC, 1988) local and overseas, organized and unorganized, and
promote full employment and equality of employment
opportunities for all.
It shall guarantee the rights of all workers to self-
in accordance with law.
Under Article II (Declaration of Principles and State They shall be entitled to security of tenure,
Policies): humane conditions of work, and a living wage.
a. FIRST OF TWO PROTECTION-TO-LABOR They shall also participate in policy and decision-
CLAUSES: “Section 18. The State affirms labor as making processes affecting their rights and benefits as
a primary social economic force. It shall protect may be provided by law.
the rights of workers and promote their welfare. The State shall promote the principle of shared
responsibility between workers and employers and the
preferential use of voluntary modes in settling disputes,
Under Article III (Bill of Rights):
including conciliation, and shall enforce their mutual
a. Due process and equal protection of the law.
compliance therewith to foster industrial peace.
Note: This cannot be invoked by employees against
The State shall regulate the relations between
their employers in cases of termination of their
workers and employers, recognizing the right of labor to
employment.
its just share in the fruits of production and the right of
enterprises to reasonable returns to investments, and to
b. Freedom of speech, of expression, or of the expansion and growth.
press, or the right of the people peaceably to
assemble and petition the government for
What are the kinds of procedural due process that may be
redress of grievances.
asserted in labor cases?
Note: This freedom is relevant only in picketing
and not in strike.
The following are the kinds of procedural due process that
may be invoked in labor cases, to wit:
c. Right of public and private sector employees to
form unions, associations, or societies for
(1) Procedural due process that may be invoked against the
purposes not contrary to law shall not be
employer during the investigation of the employee’s
abridged.
administrative case at the company-level that may lead to
Note: This is known as “freedom of association.”
his dismissal:
This provision is the basisfor the employees’ right
to self-organization.
a. Statutory due process per Agabon
doctrine which refers to the due process
d. Non-impairment of obligations of contracts.
provision in the Labor Code (Article 277[b]); and
Note: The concept of this right in political law is
b. Contractual due process per Abbott Laboratories
similar in labor law.
doctrine which refers to the due
process prescribed in the Company Rules and
e. Right to speedy disposition of cases in judicial,
Regulations or Code of Conduct or Code of
quasi-judicial or administrative bodies.
Discipline.
Note: This can be invoked in labor
cases at all levels. Note: Constitutional due process under Article III section 1 of
the constitution cannot be invoked against a private party
f. Prohibitions against involuntary servitude.
like the employer. It can only be asserted against the state or
Note: This principle is relevant only in two (2)
government. Hence, the employee being investigated cannot
situations: namely: (1) resignation and (2) return-
invoke constitutional due process but only statutory and
to-work order in national interest cases. This
contractual due process.
means that:(1)an employee has the right to resign
since he cannot be forced to work against his will; (2) Procedural due process that may be invoked once a
(2) a striker can be ordered to return to work case has already been filed in the labor court, such as the
even against his will in national interest Labor Arbiter or the NLRC, and/or brought to higher
cases. Accordingly, it is not in violation of the courts:
involuntary servitude principle.
a. Constitutional due process under Section 1,
Article III of the Constitution since this

right cannot be invoked against the private

employer but only against the State or
government as represented by Labor Arbiters,
NLRC, CA and SC.
• When can an employee invoke constitutional due process

and right to equal protection of the laws?
As distinguished from company-level investigation
conducted by the employer where only STATUTORY and
CONTRACTUAL DUE PROCESS can be invoked, a
dismissed employee can invoke
constitutional due process only when he files an
illegal dismissal case in the labor court and he is deprived
due process by a government functionary like the Labor
Arbiter or the Commission (NLRC), or Court of Appeals on
Rule 65certiorari petition. The reason is that, at this stage,
the government is now involved through said labor
tribunals.
It is the Civil Code (1700-1712), not the Labor Code that

describes the nature of labor-management relations.
(Azucena)
Under the Civil Code, contracts of labor are explicitly

subject to the police power of the state because they are
not ordinary contracts but are impressed with public
interest. Inasmuch as, in this particular instance, the
contract in question would have been deemed in violation
of pertinent labor laws, the provisions of said laws would
prevail over the terms of the contract, and private
respondent would still be entitled to overtime pay. (PAL
Emplouees Savings and Loan Ass’n, Inc. v. NLRC, 1996)
In the interpretation of contracts, obscure words and

provisions shall not favor the party that caused the
obscurity. Consequently, the terms of the contract of
employment should be construed strictly against
petitioner, which prepared it. Indeed, a contract of
employment is impressed with public interest. For this
reason, provisions of applicable statutes are deemed
written into the contract. Hence, the parties are not at
liberty to insulate themselves and their relationships from
the impact of labor laws and regulations by simply
contracting with each other. Moreover, in case of doubt,
the terms of a contract should be construed in favor of
labor.(Innodata Philippines, Inc. v. Quejada-Lopez, 2006)

Green Notes 2019 Pre-Employment
RECRUITMENT AND PLACEMENT, defined
Any act of canvassing, enlisting, contracting, transporting,

utilizing, hiring or procuring of 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. [Art. 13(b), LC]
The proviso in Article 13 (b) raises a presumption that the

individual or entity is engaged in recruitment and
placement of workers whenever he or it is dealing with two
or more persons to whom, in consideration of a fee, an
offer or promise of employment is made in the course of
the “canvassing, enlisting, contracting, transporting,
utilizing, hiring or procuring of workers.”1
The number of persons dealt with is not an essential

requisite of the act of recruitment and placement of
workers.
ALLOWED ENTITIES TO ENGAGE IN RECRUITMENT

AND PLACEMENT OF WORKERS
1. Private employment agencies [Sec. 25, LC];

2. Private recruitment entities [Sec. 25, LC];
3. Public employment offices [Sec. 16, LC];
4. Shipping or manning agents or representatives;
5. The POEA [EO 797];
6. The construction contractors if authorized to
operate by DOLE and the Construction Industry
Authority;
7. Members of the Diplomatic Corps [Sec. 18, LC];
8. International Organizations [Sec. 18, LC]; and
9. Name Hirees [POEA Rules].
Private Employment Agency
Private fee-charging employment agency, defined.

Any person or entity engaged in recruitment and
placement of workers for a fee which is charged, directly
or indirectly, from the workers or employers or both. (Art.
13 (c), Labor Code)
License, defined.
A document issued by the Department of Labor
authorizing a person or entity to operate a private
employment agency. (Art. 13 (d), Labor Code)
Private Recruitment Entity
Private recruitment entity, defined.

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. [Art. 13(e), LC]
1
People vs. Panis, 1986

Among the principal functions of the POEA are the

Authority, defined. formulation, implementation, and monitoring of the
A document issued by the Department of Labor overseas employment of Filipino workers and the
authorizing a person or association to engage in protection of their rights to fair and equitable employment
recruitment and placement activities as a private practices. It also participates in the deployment of Filipino
recruitment entity. (Art. 13 (f), LC) workers through government-to-government hiring.
(Azucena)
Private Employment Agency and Private Recruitment RA 8042, as amended by RA 10022, is known as the “Migrant
Agency, distinguished Workers and Overseas Filipino Act of 1995.”
Bar 2002 The law institutes the policies on overseas employment and
Type Definition Requires establishes a higher standard of protection and promotion
of the welfare of migrant workers, their families, and of
Private Any person or License - a
overseas Filipinos in distress.3
Employment entity engaged document issued
It requires certain guarantee of protection for the overseas
Agency in recruitment by the Department
workers before they are deployed in countries that meet
and placement of Labor
some criteria.4
of workers for a authorizing a
fee from the person or entity to
workers or operate a private POEA Rules and RA 8042 only apply to migrant
employment workers/overseas workers.
employers or
both. agency.
Private Any person or Authority - a The State shall deploy overseas Filipino workers only in
Recruitment association document issued countries where the rights of Filipino migrant workers are
Agency engaged in the by the Department protected. The government recognizes any of the
recruitment and of Labor following as guarantee on the part of the receiving country
placement of authorizing a for the protection of the rights of overseas Filipino
workers, locally person or workers:
or overseas, association to a. It has existing labor and social laws protecting
without charging engage in the rights of migrant workers;
recruitment and b. It is a signatory to multilateral conventions,
any fee from the
placement declarations or resolutions relating to the
workers or
activities as a protection of migrant workers;
employers
private c. It has concluded a bilateral agreement or
recruitment arrangement with the government protecting
entity. the rights of overseas Filipino workers; and
d. It is taking positive, concrete measures to
protect the rights of migrant workers, in
Public Employment Offices
furtherance of any of the guarantees under
subparagraphs (a), (b) and (c) hereof.
To pursue its responsibility to promote employment
opportunities, the DOLE carries out programs for local and
overseas employment. In the absence of a clear showing that any of the
aforementioned guarantees exists in the country of
Effective allocation of manpower resources in local destination of the migrant workers, no permit for
employment is assigned to the BLE (Bureau of Local deployment shall be issued by the Philippine Overseas
Employment) and to POEA (Philippine Overseas Employment Administration (POEA).5
Employment Administration) for overseas employment.
(Id.) Notwithstanding the above-mentioned, in pursuit of the
national interest or when public welfare so requires, the
The POEA shall recruit and place workers to service the POEA Governing Board, after consultation with the
requirements for trained and competent Filipino workers Department of Foreign Affairs, may, at any time, terminate
by foreign governments and their instrumentalities and or impose a ban on the deployment of migrant workers.6
such other employers as public interest may require.2
International Organizations (Sec. 18, LC)
POEA (E.O. 797)
No employer may hire a Filipino worker for overseas
employment except through the Boards and entities
Philippine Overseas Employment Administration (POEA)
authorized by the Secretary of Labor. Direct hiring by
was created by EO 7979 and was reorganized by EO 247.
members of the diplomatic corps, international
2 4
Sec. 3(f), Powers and Functions, EO No. 247 (1986) Reorganizing the Id.
5
Philippines Overseas Employment Administration and For Other Purposes, as Sec. 4, Deployment of Migrant Workers, RA 8042
6
amended by RA 10022 Sec. 5, Deployment of Migrant Workers, RA 8042
3
RA 8042, as amended by RA 10022, is known as the “Migrant Workers and
Overseas Filipino Act of 1995.”

organizations and such other employers as may be allowed Other Rules and Regulations on License/Authority:11
by the Secretary of Labor is exempted from this provision.7 1. Only the person or entity to whom the license or
authority was issued, can use it;
Name Hires 2. The license or authority may only be used in the
place stated thereto; Recruitment and
‘Name Hirees’ or those individual workers who are able to placement should only be made in that place and
secure contracts for overseas employment on their own nowhere else;
efforts and representation without the assistance or 3. License or authority cannot be transferred,
participation of any agency.8 conveyed nor assigned to any person or entity;
Are there prohibited entities to engage in recruitment and 4. Any transfer of business address, appointment or
placement of workers? Yes, those not included in the designation of any agent or representative
‘allowed entities’ above are prohibited. including the establishment of additional offices
anywhere shall be subject to the prior approval
QUALIFICATIONS TO ENGAGE IN THE BUSINESS OF of the Department of Labor;
RECRUITMENT AND PLACEMENT OF FILIPINO 5. Provincial recruitment and/or job fairs are
WORKERS FOR OVERSEAS EMPLOYMENT: allowed only upon written authority from
POEA;12
1. Filipino citizens, partnerships or corporations at 6. Overseas employment licenses are valid for 4
least seventy-five percent (75%) of the authorized years from the date of issuance unless sooner
and voting capital stock of which is owned and cancelled, revoked, or suspended;
controlled by Filipino citizens; 7. Local employment licenses are valid only for 2
years from the date of issuance;
2. A minimum capitalization for: 8. Provisional licenses are valid for 1 year within
Private employment agency for local which the applicant should be able to comply
employment…9 with its undertaking to deploy 100 workers to its
new principal; Compliance thereto shall result in
 Two Hundred Thousand Pesos
upgrade to full license, while failure leads to its
(P200,000.00) in case of a single
expiration;
proprietorship or partnership;
9. In case of death of the sole proprietor-license
 Minimum paid-up capital of Five Hundred
holder, the license may be extended upon the
Thousand Pesos (P2,000,000.00) in case of
request of the heirs, to continue only upon for
a corporation.
the purpose of winding up business operations.
Private recruitment or manning agency for
DISQUALIFIED ENTITIES TO ENGAGE IN
overseas employment…10
RECRUITMENT AND PLACEMENT OF WORKERS
 Two Million Pesos (P2,000,000.00) in case
of a single proprietorship or partnership;
 Minimum paid-up capital of Two Million Bar 2006
Pesos (P2,000,000.00) in case of a Travel agencies and sales agencies of airline companies
corporation; Provided that those with are prohibited from engaging in the business of
existing licenses shall, within four years recruitment and placement of workers for overseas
from effectivity hereof, increase their employment whether for profit or not.13
capitalization or paid up capital, as the case
may be, to Two Million Pesos DISQUALIFICATION
(P2,000,000.00) at the rate of Two Hundred
Fifty Thousand (P250,000.00) every year; The following are not qualified to engage in the business
of recruitment and placement of Filipino workers
3. Those not otherwise disqualified by law or other overseas:
government regulations to engage in the 1. Travel agencies and sales agencies of airline
recruitment and placement of workers for companies;
overseas employment [seafarers]. 2. Officers or members of the Board of any
corporation or members in a partnership
Licenses are non-transferrable because engaged in the business of a travel agency;
1. It can only be used by the person it was issued 3. Corporations and partnerships, when any of its
to; officers, members of the board or partners, is
2. It can only be used at the place designated also an officer, member of the board or partner
therein of a corporation or partnership engaged in the
business of a travel agency;
7
Art. 18 Ban on Direct Hiring, Labor Code Section 1(b), Rule I, Part II, POEA Rules and Regulations Governing the
8
Part III, Rule III, POEA Rules Governing the Overseas Employment as Recruitment and Employment of Seafarers (2003)
11
amended Sec. 6, 8, Rule II, Rules and Regulations Governing Private Recruitment and
9
Sec. 1(b), Rule II, Rules and Regulations Governing Private Recruitment and Placement Agency for Local Employment; Sec. 5-7, Rule II, 2002 POEA Rules
Placement Agency for Local Employment and Regulations on the Recruitment and Employment of Land-Based Workers
10 12
Sec. 1(b) Rule I, Part II, POEA Rules and Regulations Governing the Part I, Rule VI, 2002 POEA Rules
13
Recruitment and Employment of Land-Based Overseas Workers (2002); Article 26, Travel Agencies Prohibited To Recruit, LC

4. Persons, partnerships or corporations which  There be at least 3 recruiters in case of

have derogatory records, such as but not limited syndicated illegal recruitment.
to the following:
a. Those certified to have derogatory Illegal Recruitment committed by a Non-Licensee or
record or information by the National Non-Holder
Bureau of Investigation or by the Anti-
Illegal Recruitment Branch of the 1. Any act of canvassing, enlisting, contracting,
POEA; transporting, utilizing, hiring, procuring workers
b. Those against whom probable cause or (CETCHUP) and includes referring, contact
prima facie finding of guilt for illegal services, promising or advertising for
recruitment or other related cases employment abroad, (CRAP) is committed; AND
exists; 2. Such act is committed by a non-license or non-
c. Those convicted for illegal recruitment holder of authority.
or other related cases and/or crimes
involving moral turpitude; and
d. Those agencies whose licenses have Illegal Recruitment regardless of whether a holder of
been previously revoked or cancelled
license/authority or not
by the Administration for violation of
RA 8042, PD 442 as amended and their
1. Any of the grounds under Sec. 6 of RA 8042 is
implementing rules and regulations as
committed (See Art. 34 above); AND
well as these rules and regulations.
2. It is committed by any person, whether a non-
licensee, non-holder, license or holder of
All applicants for issuance/renewal of license
authority.
shall be required to submit clearances from the
National Bureau of Investigation and Anti-Illegal
PROHIBITED ACTIVITIES
Recruitment Branch, POEA, including clearances
for their respective officers and employees.
It shall be unlawful for any individual, entity, licensee or
5. Any official or employee of the DOLE, POEA,
holder of authority: (Art. 34, LC)
OWWA, DFA and other government agencies
directly involved in the implementation of R.A.
a. To charge or accept, directly or indirectly, any
8042, otherwise known as Migrant Workers and
amount greater than that specified in the
Overseas Filipino Act of 1995 and/or any of
schedule of allowable fees prescribed by the
his/her relatives within the fourth civil degree of
Secretary of Labor, or to make a worker pay any
consanguinity or affinity; and
amount greater than that actually;
6. Persons or partners, officers and Directors of
b. To furnish or publish any false notice or
corporations whose licenses have been
information or document in relation to
previously cancelled or revoked for violation of
recruitment or employment;
recruitment laws. [POEA Rules and Regulations
c. To give any false notice, testimony, information
Governing the Recruitment and Employment of
or document or commit any act of
Seafarers14
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
Simple Illegal Recruitment person or entity not to employ any worker who
has not applied for employment through his
1. Undertakes any recruitment activity as defined agency;
under Article 13(b) or any prohibited practice f. To engage in the recruitment or placement of
enumerated under Article 34; AND workers in jobs harmful to public health or
2. Does not have a license or authority to engage in morality or to the dignity of the Republic of the
the recruitment and placement of workers. Philippines;
g. To obstruct or attempt to obstruct inspection by
The first two (2) elements for simple illegal recruitment as the Secretary of Labor or by his duly authorized
cited above apply to illegal recruitment involving representatives;
economic sabotage. A third element is added that: h. To fail to file reports on the status of
employment, placement vacancies, remittance
 There be at least 3 recruitees in case of large- of foreign exchange earnings, separation from
scale illegal recruitment; or jobs, departures and such other matters or
14
Sec. 2, Part II, Rule I, 2003 POEA Rules

information as may be required by the Secretary 4. Impose a compulsory and exclusive arrangement
of Labor. whereby an overseas Filipino worker is required
i. To substitute or alter employment contracts to undergo health examinations only from
approved and verified by the Department of specifically designated medical clinics,
Labor from the time of actual signing thereof by institutions, entities or persons, except in the
the parties up to and including the periods of case of a seafarer whose medical examination
expiration of the same without the approval of cost is shouldered by the principal/shipowner;
the Secretary of Labor; 5. Impose a compulsory and exclusive arrangement
j. To become an officer or member of the Board of whereby an overseas Filipino worker is required
any corporation engaged in travel agency or to to undergo training, seminar, instruction or
be engaged directly or indirectly in the schooling of any kind only from specifically
management of a travel agency; and designated institutions, entities or persons,
k. To withhold or deny travel documents from except for recommendatory trainings mandated
applicant workers before departure for by principals/shipowner where the latter
monetary or financial considerations other than shoulder the cost of such trainings;
those authorized under this Code and its 6. For a suspended recruitment/manning agency
implementing rules and regulations. to engage in any kind of recruitment activity
including the processing of pending workers'
Violation of those grounds (under Art. 34) by a holder of applications; and
license or authority is not illegal recruitment, but a 7. For a recruitment/manning agency or a foreign
prohibited recruitment practice. However, if these grounds principal/employer to pass on the overseas
are committed by non-holders of license or authority, then Filipino worker or deduct from his or her salary
it becomes illegal recruitment.15 the payment of the cost of insurance fees,
premium or other insurance related charges, as
Sec. 6 of RA 8042 considers these grounds as illegal provided under the compulsory worker's
recruitment. With the addition of ten (10) grounds: insurance coverage.
It shall likewise include the following acts, whether The persons criminally liable for the above offenses are the
committed by any person, whether a non-licensee, non- principals, accomplices and accessories. In case of juridical
holder, licensee or holder of authority: persons, the officers having control, management or
l. Failure to actually deploy without valid reasons direction of their business shall be liable. (Art. 38, LC)
as determined by the Department of Labor and
Employment; and
m. Failure to reimburse expenses incurred by the
workers in connection with his documentation Bar 2002, 2005
and processing for purposes of deployment, in
Kinds of illegal recruitment:
cases where the deployment does not actually
 Illegal recruitment under Art. 38 of Labor
take place without the worker's fault
Code; and
n. To allow a non-Filipino citizen to head or
 Illegal recruitment under Sec. 6 of RA 8042.
manage a licensed recruitment/manning
agency.
Art. 38 (b), Labor Code Sec. 6 of RA 8042
XXX Definition: “… any act of
In addition to the acts enumerated above, it shall also be canvassing, enlisting,
unlawful for any person or entity to commit the following Definition: “[a]ny contracting, transporting,
prohibited acts: recruitment activities, utilizing, hiring, procuring
1. Grant a loan to an overseas Filipino worker with including the workers and includes
interest exceeding eight percent (8%) per prohibited practices referring, contact services,
annum, which will be used for payment of legal enumerated under Art. promising or advertising for
and allowable placement fees and make the 34 of [the Labor Code], employment abroad, whether
migrant worker issue, either personally or to be undertaken by for profit or not, when
through a guarantor or accommodation party, non-licensees or non- undertaken by a non-license
postdated checks in relation to the said loan; holders of authority…” or non-holder of authority
2. Impose a compulsory and exclusive arrangement (Sec. 38a) contemplated under Article
whereby an overseas Filipino worker is required 13(f) of PD No. 442, as
to avail of a loan only from specifically amended (Labor Code)
designated institutions, entities or persons; Applies only to non- Both applies to holder or
3. Refuse to condone or renegotiate a loan incurred holder of non-holder of license or
by an overseas Filipino worker after the latter's license/authority authority
employment contract has been prematurely “It shall likewise include
terminated through no fault of his or her own; the following acts,
whether committed by

any person, whether a b. Illegal Recruitment as Economic Sabotage

non-licensee, non-holder,  Large Scale Illegal Recruitment
licensee or holder of  Syndicated Illegal Recruitment
authority xxx”
Local Employment Overseas Employment (1) Large Scale Illegal Recruitment if it is
Both have large-scale and syndicated illegal recruitment; committed against 3 or more persons
both recruitments are considered as offense involving individually or as a group.
economic sabotage
No express provision The persons criminally liable (2) Syndicated Illegal Recruitment if it is
regarding criminal for the above offenses are committed by 3 or more persons in conspiracy.
liability of accomplices the principals, accomplices
and accessories in and accessories. In case of Illegal Recruitment under the Labor Code is one of local
illegal recruitment juridical persons, the officers employment. If it is overseas employment, it is RA 8042 that
under Labor Code; but having control, management applies.
there is theory of or direction of their business
imputed knowledge; shall be liable. Illegal Recruitment under RA 8042
Doctrine of imputed knowledge applies to both (see
discussion below) a. Illegal Recruitment committed by a non-license
11 grounds (Art. 34, LC) 21 grounds (Sec. 6, RA 8042, as or non-holder
amended by 10022;
substantially the same with Any act of canvassing, enlisting, contracting,
Art. 34 but with two new transporting, utilizing, hiring, procuring workers
grounds) (CETCHUP) and includes referring, contact
services, promising or advertising for
Both the Labor Code and the Migrant Workers Act clearly employment abroad, (CRAP) whether for profit
show that illegal recruitment is an offense that is or not, when undertaken by a non-license or non-
essentially committed by non-licensee or non-holder of holder of authority contemplated under Article
authority.16 13(f) of Presidential Decree No. 442, as amended
(aka Labor Code). x x x17
Elements of Illegal Recruitment committed by a non-

TYPES OF ILLEGAL RECRUITMENT UNDER license or non-holder
PHILIPPINE LAW 1. Any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring,
Illegal Recruitment under the Labor Code procuring workers (CETCHUP) and
includes referring, contact services,
a. Simple Illegal Recruitment or Illegal Recruitment promising or advertising for employment
w/o license abroad, (CRAP) is committed; AND
2. Such act is committed by a non-license or
Any recruitment activities, including the non-holder of authority.
prohibited practices enumerated under Article 34
of this Code, to be undertaken by non-licensees b. Illegal Recruitment committed regardless of
or non-holders of authority, shall be deemed whether a holder of license/authority or not
illegal and punishable under Article 39 of this
Code. It shall likewise include the following acts,
whether committed by any person, whether a
The Department of Labor and Employment or non-licensee, non-holder, license or holder of
any law enforcement officer may initiate authority: x x x (enumeration of ground follows)18
complaints under this Article. (Art. 38 (a), LC)
It is only under RA 8042 that a holder of
Elements of Simple Illegal Recruitment: license/authority may commit illegal
1. Undertakes any recruitment activity as recruitment.
defined under Article 13(b) or any prohibited
practice enumerated under Article 34; AND For enumeration of grounds, see Sec. 34 and
2. Does not have a license or authority to comments above.
engage in the recruitment and placement of
workers. Elements of Illegal Recruitment regardless of whether a
holder of license/authority or not:
All you need to prove is that the non-licensee is 1. Any of the grounds under Sec. 6 of RA 8042
practicing recruitment. is committed (See Art. 34 above); AND
16 18
People v Alvarez, 2002 Sec. 6, Par. 1, RA 8042
17
Sec. 6, Par. 1, RA 8042

2. It is committed by any person, whether a imprisonment shall be imposed if

non-licensee, non-holder, license or holder and fine, at the the person illegally
of authority. discretion of the recruited is less
court than eighteen (18)
c. Illegal Recruitment as Economic Sabotage years of age or
 Large Scale Illegal Recruitment committed by a
 Syndicated Illegal Recruitment non-licensee or
non-holder of
(1) Large Scale Illegal Recruitment - Illegal authority.
recruitment is deemed committed in Illegal The penalty of life
large scale if committed against three recruitment imprisonment and
(3) or more persons individually or as a when committed a fine of not less
group. by a syndicate or than five hundred
(2) Syndicated Illegal Recruitment - Illegal in large scale thousand pesos
recruitment is deemed committed by a shall be (P500,000.00) nor
syndicate if carried out by a group of considered an more than one
three (3) or more persons conspiring offense involving million pesos
and/or confederating with one another economic (P1,000,000.00)
in carrying out any unlawful or illegal sabotage and shall be imposed if
transaction, enterprise or scheme shall be penalized illegal recruitment
defined under the first paragraph in accordance constitutes
hereof, [i.e. Sec. 38(a)]. (Article 38 (b), Large Scale with Article 39 economic
LC) Illegal hereof. (Art. 38(b), sabotage as
Recruitmen LC) The penalty defined herein.
Both the Labor Code and RA 8042 have illegal recruitment t of life
as economic sabotage. Illegal Recruitment under RA 8042 imprisonment
is one of overseas employment. If it is local employment, it and a fine of One
is the Labor Code that applies. Hundred
Thousand Pesos
Failure of the prosecution to prove the guilt of the accused (P1000,000.00)
beyond reasonable doubt does not absolve the civil shall be imposed
obligation to return the money collected. if illegal
recruitment
constitutes
Penalties for Illegal Recruitment under economic
Article 39 and RA 8042 sabotage as
Article 39 defined herein
Was repealed by
RA 8042
implication by
RA 8042.
Imprisonment of Any person found
not less than four guilty of illegal Filing of Illegal Recruitment Case, Not a Bar to Filing of
years nor more recruitment shall Estafa Case
than eight years suffer the penalty
or a fine of not of imprisonment Illegal recruitment and estafa are entirely different
Illegal offenses and neither one necessarily includes or is
less than P20,000 of not less than six
Recruitmen necessarily included in the other. A person who is
nor more than (6) years and one
t w/o convicted of illegal recruitment may, in addition, be
P100,000 or both (1) day but not
License convicted of estafa by false pretenses or fraudulent acts
such more than twelve
imprisonment (12) years and a under Article 315, paragraph 2(a) of the Revised Penal Code.
and fine, at the fine not less than In the same manner, a person acquitted of illegal
discretion of the two hundred recruitment may be held liable for estafa. Double jeopardy
court. thousand pesos will not set in because illegal recruitment is malum
Imprisonment of (P200,000.00) nor prohibitum, in which there is no necessity to prove
not less than two more than five criminal intent, whereas estafa is malum in se, in the
years nor more hundred thousand prosecution of which, proof of criminal intent is
Illegal than five years or pesos necessary.19
Recruitmen a fine of not less (P500,000.00).
t w/ than P10,000 nor
License more than Provided,
P50,000, or both however, that the
such maximum penalty
19
Rosita Sy vs. People, 2010

Conviction for Illegal recruitment, Not a Bar to shall be incorporated in the contract for overseas
Conviction for Estafa employment and shall be a condition precedent for its
approval.
In People v. Cortez, the Court explained that: “In this
jurisdiction, it is settled that a person who commits illegal The performance bond to be filed by the
recruitment may be charged and convicted separately of recruitment/placement agency, as provided by law, shall
illegal recruitment under the Labor Code and estafa under be answerable for all money claims or damages that may
par. 2(a) of Art. 315 of the Revised Penal Code. The offense be awarded to the workers. If the recruitment/placement
of illegal recruitment is malum prohibitum where the agency is a juridical being, the corporate officers and
criminal intent of the accused is not necessary for directors and partners as the case may be, shall themselves
conviction, while estafa is malum in se where the criminal be jointly and solidarily liable with the corporation or
intent of the accused is crucial for conviction. Conviction partnership for the aforesaid claims and damages. Such
for offenses under the Labor Code does not bar conviction liabilities shall continue during the entire period or
for offenses punishable duration of the employment contract and shall not be
by other laws. Conversely, conviction for estafa under par. affected by any substitution, amendment or modification
2(a) of Art. 315 of the Revised Penal Code does not bar a made locally or in a foreign country of the said contract.”24
conviction for illegal recruitment under the Labor Code. It
follows that one's acquittal of the crime of estafa will not The applicant for license to operate a private employment
necessarily result in his acquittal of the crime of illegal agency shall assume joint and solidary liability with the
recruitment in large scale, and vice versa.”20 employer for all claims and liabilities which may arise in
connection with the implementation of the contract,
Acquittal in the Illegal Recruitment Case, Not a Bar to including but not limited to payment of wages, death and
Conviction for Estafa disability compensation and repatriations.25
Considering that illegal recruitment and estafa are distinct The applicant for license to operate a manning agency
crimes, a person acquitted of illegal recruitment may be shall assume joint and solidary liability with the employer
held liable for estafa. A person’s acquittal in the illegal for all claims and liabilities which may arise in connection
recruitment case does not prove that she is not guilty of with the implementation of the employment contract,
estafa.21 including but not limited to wages, death and disability
compensation and their repatriation.26
Conviction for both Illegal Recruitment and Estafa, Not
Double Jeopardy The liability extends to the expiration of the contract.27
Double jeopardy could not result from prosecuting and

convicting the accused-appellant for both crimes
considering that they were entirely distinct from each
There is a doctrine in agency which states that the
other not only from their being punished under different
principal is chargeable with and bound by the knowledge
statues but also from their elements being different.22
of or notice to his agent received while the agent was
acting as such. Simply put, notice to the agent is notice to
Same Evidence to prove Illegal Recruitment may be used
the principal.
to prove Estafa
Since the local employment agency is considered the agent
It is thus enough to show that the recruiter and his cohort of the foreign employer (the principal), knowledge of the
acted with unity of purpose in defrauding the victims by former of existing labor and social legislation in the
misrepresenting that they had the power, influence, Philippines is binding on the latter. Consequently, notice
agency and business to obtain overseas employment for to the former of any violation thereof is notice to the latter.
them upon payment of a placement fee, which they did pay
and deliver to the recruiter.23 However, notice to the principal is not notice to the agent.
The SC held in Sunace International Management Services,
Inc. vs. NLRC that “the theory of imputed knowledge
ascribes the knowledge of the agent to the principal, not
the other way around. The knowledge of the principal-
foreign employer cannot, therefore, be imputed to its
agent.”28
"The liability of the principal/employer and the

recruitment/placement agency for any and all claims
under this section shall be joint and several. This provision
20
People v. Ochoa, 2011; People v. Ocden 2011
21 25
Sy v. People, 2010 Sec. 1(f)(3), Rule II, Part II, 2002 POEA Rules
22 26
People v. Bayker, 2016 Sec. 1(e)(8), Rule II, Part II, 2003 POEA Rules
23 27
People v. Alzona, 2004] OSM Shipping Philippines, Inc. v. NLRC, 2003
24 28
[Section 10, RA No. 8042, as amended by Section 7, RA No. 10022] Sunace International Management Services, Inc. vs. NLRC

Direct Hiring, defined

It refers to the process of directly hiring workers by
Money Claims employers for overseas employment as authorized by the
In case of termination of overseas employment without DOLE Secretary and processed by the POEA, including:
just, valid or authorized cause as defined by law or 1. Those hired by international organizations;
contract, the workers shall be entitled: 2. Those hired by members of the diplomatic corps;
a. To the full reimbursement of his placement fee 3. Name hirees or workers who are able to secure
with interest of twelve percent (12%) per annum overseas employment opportunity with an
plus employer without the assistance or participation
b. His salaries for the unexpired portion of his of any agency.33
employment contract or for three (3) months for
every year of the unexpired term, whichever is Ban on Direct Hiring
less.29 General Rule:
No direct hiring except through the Boards and Entities
Serrano Doctrine: Illegally dismissed OFWs are now authorized by the Secretary of Labor. (Art. 18, LC)
entitled to all the salaries for the entire unexpired portion
of their employment contracts, irrespective of the Exception:
stipulated term or duration thereof. 1. Members of the diplomatic corps;
2. International organizations; and
Rule before Serrano (1995-2009): 3-month salary rule 3. Heads of state and government officials with the
applied rank of at least deputy minister
The employment contract involved in the instant case 4. Other employers as may be allowed by the
covers a two-year period but the overseas contract worker Secretary of Labor, such as:
actually worked for only 26 days prior to his illegal a. Those provided in (1), (2) and (3) who
dismissal. Thus, the three months’ salary rule applies bear a lesser rank, if endorsed by the
(Flourish Maritime Shipping v. Almanzor, 2008) POLO, or Head of Mission in the
absence of the POLO;
Rule after Serrano: invalidated the 3- month salary cap b. Professionals and skilled workers with
clause duly executed/authenticated
The SC there held that “said clause is unconstitutional for contracts containing terms and
being an invalid classification, in violation of the equal conditions over and above the
protection clause.”30 standards set by the POEA. The
number of professional and skilled
In the case of Yap31, the SC affirmed the Serrano ruling, but Overseas Filipino Workers hired for
did not apply the Operative Fact doctrine: “As an exception the first time by the employer shall not
to the general rule, the doctrine applies only as a matter of exceed five (5). For the purpose of
equity and fair play.” determining the number, workers
hired as a group shall be counted as
N B : In 2010, a year after Serrano, RA 10022, in amending one; or
RA 8042, reincorporated the nullified 3-month salary cap c. Workers hired by a relative/family
clause. However, the SC did not allow this and again struck member who is a permanent resident
the revived clause as unconstitutional in the 2014 case of of the host country.34 Their hiring,
nonetheless, has to be processed
Sameer Overseas Placement Agency vs. Cabiles.32 There, the
through the POEA.35
SC said that: “when a law or a provision of law is null
because it is inconsistent with the Constitution, the nullity
cannot be cured by reincorporation or reenactment of the Rationale for the Ban
same or a similar law or provision. A law or provision of law To ensure that such employment is fully regulated by the
that was already declared unconstitutional remains as government through its agencies, such as the POEA. In this
such unless circumstances have so changed as to warrant way, adverse exploitation of the migrant workers by
a reverse conclusion.” foreign employers is minimized, if not eradicated. [Chan,
2017]
Hence, the case of Serrano holds as binding precedent,
even after the passage of RA 10022.
29 34
Sec. 10 of RA 8042 Section 124, Rule II, Part III, Revised POEA Rules and Regulations Governing
30
Serrano v. Gallant Maritime Services, Inc., 2009 the Recruitment and Employment of Landbased Overseas Filipino Workers of
31
Yap vs. Thenamaris Ship’s Management and Intermare Maritime Agencies, 2016
35
Inc. (2011) Part III, Rule III, POEA Rules Governing the Overseas Employment as
32 amended (2002)
of Sameer Overseas Placement Agency vs. Cabiles (2014)
33
Section 1(i), Rule II, Omnibus Rules and Regulations Implementing the
Migrant Workers and Overseas Filipinos Act of 1995, as amended by R.A. No.
10022 (2010)

in the Philippines shall obtain an employment permit from

the Department of Labor.
The employment permit may be issued to a non-resident

ALIEN EMPLOYMENT REGULATION alien or to the applicant employer after a determination of
the non-availability of a person in the Philippines who is
The State shall promote the preferential use of Filipino competent, able and willing at the time of application to
labor, domestic materials and locally produced goods, and perform the services for which the alien is desired. For an
adopt measures that help make them competitive. (Art. XII, enterprise registered in preferred areas of investments,
Sec. 12, 1987 Constitution) said employment permit may be issued upon
recommendation of the government agency charged with
The ownership and management of mass media shall be the supervision of said registered enterprise.
limited to citizens of the Philippines, or to corporations,
cooperatives or associations, wholly-owned and managed Prohibition against transfer of employment. (Art. 41, LC)
by such citizens. a. After the issuance of an employment permit,
the alien shall not transfer to another job or
The Congress shall regulate or prohibit monopolies in change his employer without prior approval of
commercial mass media when the public interest so the Secretary of Labor.
requires. No combinations in restraint of trade or unfair b. Any non-resident alien who shall take up
competition therein shall be allowed. (Art. XVI, Sec. 11(1), employment in violation of the provision of this
Constitution) Title and its implementing rules and
regulations shall be punished in accordance
with the provisions of Articles 289 and 290 of
The advertising industry is impressed with public interest, the Labor Code.
and shall be regulated by law for the protection of In addition, the alien worker shall be subject to deportation
consumers and the promotion of the general welfare. after service of his sentence.
Only Filipino citizens or corporations or associations at Submission of list (Art. 42, LC)
least seventy per centum (70%) of the capital of which is Any employer employing non-resident foreign nationals
owned by such citizens shall be allowed to engage in the on the effective date of this Code shall submit a list of such
advertising industry. nationals to the Secretary of Labor within thirty (30) days
after such date indicating their names, citizenship, foreign
The participation of foreign investors in the governing and local addresses, nature of employment and status of
body of entities in such industry shall be limited to their stay in the country. The Secretary of Labor shall then
proportionate share in the capital; thereof, and all the determine if they are entitled to an employment permit.
executive and managing officers of such entities must be
citizens of the Philippines. (Art. XVI, Sec. 11(2), 1987 COVERAGE
Constitution)
General rule
No franchise, certificate, or any other form of All foreign nationals who intend to engage in gainful
authorization for the operation of a public utility shall be employment in the Philippines shall apply for Alien
granted except to citizens of the Philippines or to Employment Permit (AEP).36
corporations or associations organized under the laws of
the Philippines, at least sixty per centum (60%) of whose The following categories of foreign nationals are exempt
capital is owned by such citizens; nor shall such franchise, from securing an employment permit37
certificate, or authorization be exclusive in character or a. All members of the diplomatic service and
for a longer period than fifty years. Neither shall any such foreign government officials accredited by and
franchise or right be granted except under the condition with reciprocity arrangements with the
that it shall be subject to amendment, alteration, or repeal Philippine government;
by the Congress when the common good so requires. b. Officers and staff of international organizations
The State shall encourage equity participation in public of which the Philippine government is a member,
utilities by the general public. The participation of foreign and their legitimate spouses desiring to work in
investors in the governing body of any public utility the Philippines;
enterprise shall be limited to their proportionate share in c. Foreign nationals elected as members of the
its capital, and all the executive and managing officers of Governing Board who do not occupy any other
such corporation or association must be citizens of the position, but have only voting rights in the
Philippines. (Art. XII, Sec. 11, 1987 Constitution) corporation;
d. All foreign nationals granted exemption by law;
Employment permit of non-resident aliens (Art. 40, LC) e. Owners and representatives of foreign principals
Any alien seeking admission to the Philippines for whose companies are accredited by the POEA,
employment purposes and any domestic or foreign who come to the Philippines for a limited period
employer who desires to engage an alien for employment and solely for the purpose of interviewing
36 37
Section 1, D.O. 97-09, The Revised Rules for the Issuance of Employment Section 2, Id.
Permits to Foreign Nationals

Filipino applicants for employment abroad;

f. Foreign nationals who come to the Philippines to
teach, present and/or conduct research studies
in universities and colleges as visiting, exchange
or adjunct professors under formal agreements
between the universities or colleges in the
Philippines and foreign universities or colleges;
or between the Philippine government and
foreign government; provided that the
exemption is one a reciprocal basis; and
g. Permanent residing foreign nationals,
probationary or temporary resident visa holders.
CONDITIONS OF GRANT OF PERMIT
Employment permit of non-resident aliens. Any alien

seeking admission to the Philippines for employment
purposes and any domestic or foreign employer who
desires to engage an alien for employment in the
Philippines shall obtain an employment permit from the
Department of Labor.
The employment permit may be issued to a non-resident

alien or to the applicant employer after a determination of
the non-availability of a person in the Philippines who is
competent, able and willing at the time of application to
perform the services for which the alien is desired. For an
enterprise registered in preferred areas of investments,
said employment permit may be issued upon
recommendation of the government agency charged with
the supervision of said registered enterprise.
GROUNDS FOR DENIAL OF PERMIT
An application of AEP may be denied by the Regional

Director based on any of the following grounds:
1. misrepresentation of facts in the application;
2. submission of falsified documents;
3. the foreign national has a derogatory record; or
4. availability of a Filipino who is competent, able
and willing to the job intended for the foreign
national.38
38
Sec. 10, D.O. 97-09

Green Notes 2019 Labor Standards
General rule:
Applies to all employees in all establishments and
undertakings whether for profit or not.
Exceptions:
Does not apply to the following:
(a) Government employees;
(b) Managerial employees;
(c) Field personnel;
(d) Members of the family of the employer who are
dependent on him for support;
(e) Domestic helpers;
(f) Persons in the personal service of another; and
(g) Workers who are paid by results as determined
by the Secretary of Labor in appropriate
regulations. [Art. 82, LC]
Managerial Employees
Refer to those whose primary duty consists of the
management of the establishment in which they are
employed or of a department or subdivision thereof, and
to "other officers or members of the managerial staff". (LC)
Types of Managerial Employees39

1) Executives/Managers
2) Supervisors
3) Officers/members of managerial staff if the
following requisites are present:
a. Primary Duty: consists of the
performance of work directly related
to management policies of their ER
b. customarily and regularly exercises
discretion and independent judgment
c. Either:
(1) Regularly and directly assist a
proprietor or a managerial
employee (whose primary duty
consists of the management of
the establishment in which he is
employed or subdivision
thereof); or
(2) execute (under general
supervision) work along
specialized or technical lin es
requiring special training,
experience, or knowledge; OR
(3) execute (under general
supervision) special assignments
and tasks; and
d. Who do not devote more than 20% of
their hours worked in a work-week to
activities which are not directly and
closely related to the performance of
the work described in paragraphs (1),
(2) and (3) above.
39
Rule I & 2 (b), Book III, IRR
Lasallian Commission on Bar Operations 2018 15

Normal Hours of Work
General Rule:
The normal hours of work of any employee shall not
exceed 8 hours a day, for 6 days a week (8x6) [Art. 83, LC]
Hours worked [Art. 84, LC]
1. All time which an employee is required to be on Exceptions:
duty or to be at a prescribed workplace; and 1. Health Personnel
2. All time during which an employee is suffered or 2. Compressed Work Week
permitted to work. 3. Flexible Work Arrangements
Considered as hours worked under the Labor Code Health Personnel, coverage
1. Rest periods of short duration during working
hours (must not be more than 20 minutes);   Health personnel in cities and municipalities:
2. Waiting time, if integral part of the work;   (a) With a population of at least one million
3. If required to be on call and cannot use time (1,000,000); or
effectively for his own purpose; and (b) In hospitals and clinics with a bed capacity of at
4. Lectures, meetings and training programs unless least one hundred (100)
it is outside working hours, voluntary and not
productive.
General rule:
40 hours. Shall hold regular office hours for eight (8) hours
Summary of General Principles in determining if time is a day, for five (5) days a week, exclusive of time for meals.
considered as hours worked40
Exception:
(1) All hours are hours worked which the employee is 48 hours. Where exigencies of the service require that such
required to give his employer, regardless of personnel work for six (6) days or forty-eight (48) hours. In
whether or not such hours are spent in such case, health personnel shall be entitled to an
productive labor or involve physical or mental additional compensation of at least thirty percent (30%) of
exertion. their regular wage for work on the sixth day.
(2) An employee need not leave the premises of the Who are considered as health personnel
work place in order that his rest period shall not Health personnel includes the following:
be counted, it being enough that: (a) Resident physicians
(a) he stops working, (b) Nurses, nutritionists
(b) may rest completely and (c) Dietitians
(c) may leave his work place, to go elsewhere, (d) Pharmacists
whether within or outside the premises of (e) Social workers
his work place. (f) Laboratory technicians
(g) Paramedical technicians
(3) All time spent shall be Considered as hours (h) Psychologists
worked, if the work was with the knowledge of his (i) Midwives
employer or immediate supervisor. (j) Attendants
(a) If the work performed was necessary; (k) All other hospital or clinic personnel.
(b) It benefited the employer; or
(c) The employee could not abandon his work
at the end of his normal working hours Compressed Work Week
because he had no replacement.
The Compressed Work Week (CWW) is governed by
(4) The time during which an employee is inactive by Department Order No. 2, Series of 2004. It is done by the
reason of interruptions in his work beyond his employer in order to prevent serious losses due to causes
control shall be considered working time either beyond his control. For example: Substantial slump in
if: demand for his goods or services or lack of raw materials.
(a) The imminence of the resumption of work
requires the employee's presence at the place Conditions of a valid CWW schemes
of work; or DOLE shall recognize CWW schemes adopted in
(b) If the interval is too brief to be utilized accordance with the following:
effectively and gainfully in the employee's
own interest. (1) It is expressly and voluntarily supported by
majority of the employees affected;
(2) If work is hazardous, a certification is needed

from an accredited safety organization or the
40
Sec 4, Rule I, Book III, IRR

firm’s safety committee that work beyond 8 (1) Reduction of workdays - the normal workdays
hours is within the limits or level of exposure set per week are reduced but should not last for
by DOLE’s occupational safety and health more than six months.
standards; and
(2) Rotation of workers - employees are rotated or
(3) The Department of Labor and Employment is alternatively provided work within the
notified about the CWW. workweek.
Effects of CWW schemes (3) Forced leave - employees are required to go on

A CWW scheme which complies with the foregoing leave.
conditions shall have the following effects:
(4) Broken time schedule - the schedule of work is
(1) Unless there is a more favorable practice existing not continuous but the number of work hours
in the firm, work beyond eight hours will not be within the day or week is not reduced.
compensable by overtime premium provided the
total number of hours worked per day shall not (5) Flexi-holiday schedule - the employees agree to
exceed twelve (12) hours. In any case, any work avail themselves of the holidays at some other
performed beyond 12 hours a day or 48 hours a days.
week shall be subject to overtime premium.
(2) Consistent with Articles 85 of the Labor Code, Power Interruptions/brownouts

employees under a CWW scheme are entitled to
meal periods of not less than sixty (60) minutes. Inactive due to work interruptions
The right of employees to rest days as well as to The time during which an employee is inactive by reason of
holiday pay, rest day pay or leaves in accordance interruptions in his work beyond his control shall be
with law or applicable collective bargaining considered working time either if:
agreement or company policy shall not be (a) The imminence of the resumption of work
impaired. requires the employee's presence at the place of
work; or
(3) Adoption of the CWW scheme shall in no case (b) If the interval is too brief to be utilized effectively
result in diminution of existing benefits. Reversion and gainfully in the employee's own interest.42
to the normal eight-hour workday shall not
constitute a diminution of benefits. The reversion Work interruption due to brownout
shall be considered a legitimate exercise of Policy Instruction No. 36 of the DOLE provided the
management prerogative, provided that the following rules regarding power interruptions or
employer shall give the employees prior notice of brownouts:
such reversion within a reasonable period of
time. The employees must agree to the change of (a) Brownouts not more than 20 minutes
work schedule. The employees must not suffer Brownouts of short duration but not exceeding
any loss of overtime pay, fringe benefits, or their 20 minutes shall be treated as worked or
weekly or monthly take-home pay. compensable hours whether used productively by
the employees or not. First 20 minutes is
Department Order No. 21 compensable. But if the employees are required
D.O. No. 21 sanctions the waiver of overtime pay in to stay in their workplaces, such time is
consideration of the benefits that the employees will compensable even if it exceeds the first 20
derive from the adoption of a compressed workweek minutes.
scheme. The compressed workweek scheme was originally
conceived for establishments wishing to save on energy (b) Brownouts for more than 20 minutes
costs, promote greater work efficiency and lower the rate Brownouts running for more than 20 minutes
of employee absenteeism, among others. Under this may not be treated as hours worked provided any
scheme, the generally observed workweek of six (6) days is of the following conditions are present:
shortened to five (5) days but prolonging the working (i) The employees can leave their
hours from Monday to Friday without the employer being workplace or go elsewhere whether
obliged for pay overtime premium compensation for work within or without the work premises;
performed in excess of eight (8) hours on weekdays, in or
exchange for the benefits above cited that will accrue to (ii) The employees can use the time
the employees.41 effectively for their own interest.
Flexible Work Arrangements In each case, the employer may extend the
working hours of his employees outside the
It includes: regular schedules to compensate for the loss of
41 42
Bisig Manggagawa sa Tryco vs. NLRC, 2008 Sec 4 (d), Rule 1, Book III, IRR

productive man-hours without being liable for (b) Meal period of 1 hour is deemed compensable
overtime when employee is on continuous shift45
(c) Shortened meal period of less than 1 hour but
Industrial enterprise with one or two workshifts not less than 20 minutes subject to qualifications
may adopt any of the workshifts prescribed for under Sec 7, par 1, Rule I, Book III, IRR, to wit:
enterprises with 3 workshifts to prevent serious i. Where the work is non-manual work in
loss or damage to materials, machineries, or nature or does not involve strenuous
equipment that may result in case of power physical exertion;
interruptions. ii. Where the establishment regularly
operates not less than sixteen (16) hours
a day;
iii. In case of actual or impending
emergencies or there is urgent work to
Regular Meal Break be performed on machineries,
Not less than 60 minutes time-off for their regular meals, equipment or installations to avoid
subject to such regulations as the Secretary of Labor may serious loss which the employer would
prescribe. [Art. 85, LC] otherwise suffer; and
iv. Where the work is necessary to
NOTE: The eight-hour work period does not include the prevent serious loss of perishable goods.
meal break. Nowhere in the law may it be inferred that
employees must take their meals within the company NOTE: If meal time is less than 20 minutes, it is considered
premises. Employees are not prohibited from going out of rest period and shall be considered compensable time.
the premises as long as they return to their posts on time. Employees may request that their meal period be
43
shortened so that they can leave work earlier than the
established schedule. However, such shortened meal
During meal period where the laborers are required to period is not compensable.
stand by for emergency work or where said meal hour is
not one of complete rest, such period is considered Short Duration or “Coffee Break”
overtime. Rest periods or coffee breaks running from five (5) to
twenty (20) minutes shall be considered as compensable
Shorter Meal Period working time. [Sec 7, par. 2, Rule I, Book III, IRR}
Less than 1 hour but not less than 20 minutes. If more than 20 minutes, an employee need not leave the
premises of the work place in order that his rest period
Requisites for Shortened Meal Period shall not be counted, it being enough that:
(a) Employees voluntarily agree in writing and waive 1. he stops working,
the overtime pay; 2. may rest completely and
(b) No diminution in the salary and other fringe 3. may leave his work place, to go elsewhere,
benefits of the employees already existing; whether within or outside the premises of his
(c) Work is not physically strenuous and that they work place.46
are provided with adequate coffee breaks in the
morning and afternoon; Under the law, the idle time that an employee may spend
(d) Value of benefits is equal to the compensation for resting and during which he may leave the spot or place
due them; of work though not the premises of his employer, is not
(e) Overtime pay will become due and demandable counted as working time ONLY where the work is broken
if ever they are permitted or made to work or is not continuous.47
beyond 4:30pm; and
(f) The arrangement is only for a temporary
Waiting Time
duration.
“Waiting time” is compensable if during the period the

Compensability of Meal Period employee is subject to the absolute control of the
employer such that the employee is effectively deprived of
General rule: the time to attend to other personal pursuits.48
Meal periods are not compensable
Legal test
Whether waiting time constitute working time depends
Exceptions:
upon the circumstances of each particular case. The facts
It is compensable in the following cases:
may show that the employer was engaged or was waiting
(a) Where meal time is predominantly spent for the
employer’s benefit;44 to be engaged. The controlling factor is whether waiting
43 46
Philippine Airlines vs. NLRC, 1999 Sec 4(b), Rule I, Book III, IRR
44 47
Azucena citing 31 Am. Jur. 881; Duka, Labor Laws and Social Legislation National Dev’t Company vs. CIR, nd
45 48
National Development Co. vs. CIR, 1962 Africa vs. NLRC, 1989

time spend in idleness is so spent predominantly for the

employer’s benefit or for the employees.49 Overtime compensation, defined
Overtime compensation is additional pay for service or
Requisites for waiting time to be considered as hours work rendered or performed in excess of eight hours a day
worked by employees or laborers covered by the Eight-hour Labor
(1) It is an integral part of his work; Law.51
(2) The employee is required by the employer to
wait; or Nature of Overtime work
(3) Employee is required to remain on call in the To be considered as overtime work, the hours worked
premises of the employer or so close thereto that must be in excess of and in addition to the 8 hours worked
he can no longer use the time effectively for his during the prescribed daily work period.52
own purpose or benefit.
In case of health personnel, overtime work is hours worked
in excess of 8 hours during the prescribed daily work
period or in excess of 40 hours worked during the regular
work week of 5 days. [Art. 83, LC]
Rationale
It is a form of premium for working at a time when people Rationale for overtime compensation
are supposed to be asleep in accordance with the law of There can be no other reason than that he is made to work
nature. longer than what is commensurate with his agreed
compensation for the statutorily fixed or voluntary agreed
Waiver of payment of night shift differential hours of labor he is supposed to do.
General Rule:
Night Shift Differential (NSD) cannot be waived. Undertime is not offset by Overtime
Undertime work on any particular day shall not be offset
Exception: by overtime work on any other day. Permission given to
For higher and bigger benefits. the employee to go on leave on some other day of the week
shall not exempt the employer from paying the additional
Employees covered compensation required. [Art. 88, LC]
All employees, except the following:
1. Government employees Off-setting would prejudice the worker depriving him of
2. Those of retail and service establishments the additional pay for the rest day work he has rendered
regularly employing not more than five (5) and which is utilized to offset his equivalent time off on
workers; regular workdays. It would circumvent the law on payment
3. Domestic helpers and persons in the personal of premiums for rest day and holiday work.53
service of another;
4. Managerial employees Emergency or Compulsory Overtime Work
5. Field personnel and other employees whose time General rule:
and performance is unsupervised by the Employees cannot be compelled to render overtime work
employer including those who are engaged on against their will for this will result in involuntary
task or contract basis, purely commission basis, servitude.
or those who are paid a fixed amount for
performing work irrespective of the time Exceptions:
consumed in the performance thereof. 1. In times of war or any national or local
emergency declared by the Congress or the
Time covered Chief Executive;
10:00 pm to 6:00 am 2. When it is necessary to avail of favorable weather
or environmental conditions where performance
Rate or quality of work is dependent thereon;
NSD only: Not less than 10% of his regular wage for each 3. When work is necessary to preserve perishable
hour of work.50 goods;
4. When there is urgent work needed on machines
NSD during overtime: At least twenty-five per cent (25%) and equipment, in order to avoid serious loss or
and an additional amount of no less than ten per cent (10%) damage to the employer or some other cause of
of such overtime rate for each hour or work performed similar nature;
between 10 p.m. to 6 a.m. 5. To prevent loss or damage to life or property due
to emergencies or force majeure;
6. To prevent serious obstruction or prejudice to
the business or operations of the employer. [Art.
89, LC]
Overtime work must be voluntary and consensual.
49 52
Azcucena citing Armour vs. Wantock Caltex Regular Employees at Manila Office vs. Caltex Philippines Inc., 1995
50
Sec 3, Rule II, Book III, IRR
51
National Shipyard and Steel Corp. vs. CIR, 1961 53
Lagatic vs. NLRC, nd.

Amount of Overtime Pay Waiver of overtime pay

General rule:
For regular working days: Additional compensation Overtime compensation cannot be waived, whether
equivalent to his regular wage plus at least twenty-five expressly or impliedly; and stipulation to the contrary is
percent (25%) thereof. against the law. Quitclaim where workers agree to forego
payment of overtime compensation is null and void ab
For holiday or rest day: Additional compensation initio.58
equivalent to the rate of the first eight hours on a holiday
or rest day plus at least thirty percent (30%) thereof. Exception:
Non-payment by employer of overtime pay to employee in
excess of the regular hours worked is valid as overtime pay
was already provided in the written contract with a “built-
in” overtime pay and signed by the Director of the Bureau
of Employment Services and enforced by the employer.59
Base for overtime pay
The "regular wage" of an employee shall include the cash
Facilities, defined
wage only, without deduction on account of facilities
Board, lodging, and other facilities customarily provided by
provided by the employer. [Art. 90, LC]
an employer to his employees both in agricultural and non-
agricultural enterprises. Acceptance of facilities must be
Overtime pay shall be based only on the regular basic pay,
voluntary.
exclusive of fringe benefits.54
Fringe benefits not regularly received, and not by all Facilities and supplements distinguished
employees, are not included in the computation.55
Facilities Supplements
Overtime pay is for extra effort beyond that contemplated How treated
in the employment contract, hence when additional pay is Wage-deductible Not wage-deductible
given for any other purpose, it is illogical to include the (includes facilities)
same in the basis for the computation of overtime pay.56 Purpose
Articles or services for the Tools of the trade or
Rates benefit of the employee or articles or service
On Ordinary Days his family. primarily for the benefit of
Number of hours in excess of 8 hours (125% x hourly rate) the employer or necessary
to the conduct of the
On a Rest Day, Special Day, or Regular Holiday employer‘s business.
Number of hours in excess of 8 hours (130% x hourly rate)
Criterion
On a Night Shift Ordinary Day In determining whether a privilege is a facility, the
(110% x basic hourly rate) criterion is not so much its kind but its purpose.
Requirements for deducting value of facilities:
Rest Day, Special Day or Regular Holiday (1) Customarily furnished by the trade -
(110% x overtime hourly rate) "Customary" is founded on long-established and
constant practice connoting regularity. The
Burden of Proof receipt of an allowance on a monthly basis does
Entitlement to overtime pay must first be established by not ipso facto characterize it as regular and
proof that said overtime work was actually performed, forming part of salary because the nature of the
before an employee may avail of said benefit. grant is a factor worth considering;60
(2) Voluntarily accepted in writing by the employee;
Factors to consider where CBA does not contain any (3) Charged at fair and reasonable value.61
provision on computation of overtime pay:
(1) Whether or not the addition pay is for extra work
done or service rendered; and
(2) Whether the same is intended to be permanent
and regular, not contingent nor temporary and Coverage and Scheduling
given only to remedy a situation which can
change anytime.57 Right to a Weekly Rest Day
The employee is entitled to a rest not less than twenty-
four (24) consecutive hours after six consecutive normal
working days. [Art. 91, LC]
54 58
Bisig Manggagawa ng Philippine Refining Co., Inc vs. Phil. Refining Co., Inc., Pampanga Sugar Development Co., Inc. vs. CIR, 1982
59
1981 Engineering Equipment, Inc. vs. Minister of Labor, 1985
55 60
Shell Oil Workers Union vs. Shell and Affiliates Supervisor’s Union, 1976 Millares vs. NLRC, 1999
56 61
PNB vs. Phil National Bank Employees Association, 1982 Mabeza vs. NLRC, 1999
57
PNB vs. PEMA, 1982

Determination of weekly rest days On any regular holiday At least 30% of regular
The employer, in determining the weekly rest days must falling on scheduled rest wage
consider the following: day
1. The collective bargaining; and
2. Rules and regulations issued by the Secretary of *An employee shall be entitled to such additional
Labor. compensation for work performed on Sunday only when it
is his established rest day.
However, the employer shall respect the employee’s
preference based on religious grounds. The employee shall NOTE: Where the CBA or other applicable employment
make known his preference to the employer in writing at contract stipulates the payment of a higher premium pay
least seven (7) days before the desired effectivity of the than that prescribed under Article 93, the employer shall
initial rest day so preferred.62 pay such higher rate.
Where, however, the choice of the employee as to his rest

day based on religious grounds will inevitably result in Lectures, Meetings, and Trainings
serious prejudice or obstruction to the operations of the
undertaking and the employer cannot normally be Lectures, meetings and training
expected to resort to other remedial measures, the Attendance at lectures, meetings, training programs, and
employer may so schedule the weekly rest day of his other similar activities shall not be counted as working time
choice for at least two (2) days in a month. [Art. 92, LC] if all of the following conditions are met:
1. Attendance is outside of the employee's regular
Compulsory Work, when employer may require work on working hours;
rest day: 2. Attendance is in fact voluntary; and
3. The employee does not perform any productive
1. In cases of urgent work to be performed on the work during such attendance.63
machinery, equipment, or installation;
2. To prevent loss or damage to perishable goods; Travel Time
3. When the nature of work requires continuous
operations and the stoppage of work may result Travel time
in irreparable injury or loss to the employer; Official travel away from an employee’s workplace is hours
4. In cases of actual or impending emergencies of work if travel is:
caused by force majeure to prevent loss of life
and property, or imminent danger to public 1. Within the days and hours of the employee’s
safety. regularly scheduled administrative workweek,
5. In cases of abnormal pressure of work due to including regularly scheduled overtime hours, or
special circumstances, where the employer 2. Outside the hours of the employee’s regularly
cannot ordinarily be expected to resort to other scheduled administrative workweek, is ordered
measures; or approved, and meets one of the following four
6. Other circumstances analogous to the foregoing conditions:
as determined by the Secretary of Labor. [Art. 92, a. Involves the performance or work while
LC] traveling (such as driving a loaded truck)
b. Is incidental to travel that involves the
Compensation performance of work while traveling (such
Summary of premium pay for rest periods [Art. 93, LC] as driving an empty truck back to the point
of origin)
When work performed Premium pay c. Is carried out under arduous and unusual
On scheduled rest day* At least 30% of regular conditions (e.g. travel on rough terrain or
wage. under extremely severe weather
No regular work and no At least 30% of regular conditions); or
regular rest days can be wage for work performed d. Results from an event that could not be
scheduled due to the nature on Sundays and holidays scheduled or controlled administratively by
of work any individual (such as a job-related court
On any special At least 30% of regular appearance required by a court
holidays/special day wage subpoena).64
On any special At least 50% of regular
holidays/special day falling wage Commuting time
on scheduled rest day
General rule: Normal commuting time from home to work
and from work to home is not hours of work.
62 64
Sec.4, Rule III, Book III, IRR USC 5542(b)(2) and 5 CFR 550. 112(g), US Office of Personnel Management;
Abad (2011), Compendium on labor law
63
Sec 6, Rule 1, Book III, IRR

Exception: Commuting time may be hours of work when

the employee is required to perform substantial work
under the control and supervision of the employer.65
Purpose
Working while on call Holiday pay is a legislated benefit enacted as part of
constitutional imperative that the state shall afford
An employee who is required to remain on call in the
protection to labor. Its purpose is not merely “to prevent
employer's premises or so close thereto that he cannot use diminution of the monthly income of the workers on
the time effectively and gainfully for his own purpose shall account of work interruptions. xxx although the worker is
be considered as working while on call. forced to take a rest, he earns what he should earn, that is,
his holiday pay.” It is also intended to enable the worker to
An employee who is not required to leave work at his home
participate in the national celebrations held during the days
or with company officials where he may be reached is not
identified as with great historical and cultural
working while on call.66
significance.70
When employee is required to remain on call in the
Coverage
premises of the employer or so close thereto that he can
no longer use the time effectively for his own purpose or
benefit. General rule: Every worker should be paid his regular daily
wage during regular holidays.
No Work, No Pay Principle
Exceptions:
Holiday pay benefits shall not cover the following persons:
General rule: No work, no pay. The law contemplates a "no
work" situation where the employees voluntarily absent
themselves. (a) Those of the government and any of its political
subdivisions, including government-owned and
controlled-corporations;
When not applicable:
(b) Those of retail and service establishments
(a) Semestral break of private school teachers.
regularly employing less than 10 workers:
They certainly do not, ad voluntatem absent
a. Retail Establishment - one principally
themselves during semestral breaks. Rather, they
engaged in the sale of goods to end-
are constrained to take mandatory leave from users for personal or household use.
work.67 b. Service establishment - one
(b) The principle of "no work, no pay" does not apply principally engaged in the sale of
as the fact that the complainants had not worked service to individuals for their own or
at the jobsite was not of their own doing. If they household use and is generally
were not able to work at all, it was because they recognized as such;
refused to sign the third contract providing for (c) Domestic helpers and persons in the personal
another lowering of their salaries in violation of service of another;
their first agreement as approved by the POEA. (d) Managerial employees; and
They had a right to insist on the higher salaries (e) Field personnel and other employees whose time
agreed upon in the original contract and to reject and performance is unsupervised by the
the subsequent impositions of SAM, which employer including those who are engaged on
obviously thought the petitioners would have to task or contract basis, purely commission basis
accept because they had no choice.68 or those who are paid a fixed amount for the
(c) Work hours of seaman. Seamen are required to performing work irrespective of the time
stay on board of their vessels by the very nature consumed in the performance thereof.71
of their duties, and it is for this reason that, in
addition to their regular compensation, they are Mechanics of the Availment of the Holiday Pay Benefit
given free living quarters to be on board. It could
not have been the purpose of the law to require The employee is entitled to the payment of his regular daily
their employers to pay them overtime pay even basic wage (100%) during said holidays, even if the worker
when they are not actually working. The correct did not report for work on said days. PROVIDED, that he
criterion in determining whether or not sailors was present or was on leave of absence with pay on the work
are entitled to overtime pay is not, therefore, day immediately preceding the holiday.
whether they are on board and cannot leave ship
beyond the regular eight working number of In case the employee was suffered to work during the
hours, but whether they actually rendered holidays, he will be entitled to payment of holiday premium
service in excess of said number of hours.69 of 200% of his basic wage (100% of basic wage plus 100%).
65 68
CFC 551.422(b), US Office of Personnel Management; Abad (2011), Prieto vs. NLRC, 1993
69
Compendium on labor law Cagampan, et. al. vs. NLRC, 1991
66 70
Sec 5 (b), Rule 1, Book III, IRR Asian Transmission vs. CA, 2004
67 71
University of Pangasinan Faculty Union vs University of Pangasinan, 1993 Sec. 1, Rule IV, Book III, IR

Computation of Holiday Pay

Holidays Covered
Regular Holidays
Regular Holidays and Nationwide Special Days [RA 9492]
Unless otherwise modified by law, and or proclamation, Falling on a regular work day
the following regular holidays and special days shall be 100% of regular daily wage
UNWORKED
observed in the country:
First 8 hours 200%
Regular Holidays WORKED Excess of 8 +30% of hourly rate
1. New Year’s Day - Jan. 1 hours at 200%
2. Maundy Thursday - Movable Date Falling on a rest day
3. Good Friday - Movable Date First 8 hours +30% of 200%
4. Eidul Fitr WORKED Excess of 8 +30% of hourly rate
5. Araw ng Kagitingan - April 9
hours at 200%
6. Labor Day - May 1
7. Independence Day - June 12
8. Nat’l Heroes Day - Last Sunday of August
9. Bonifacio Day - November 30 Special days
10. Eid’l Fit’r - Movable Date
11. Eid’l Adha - Movable Date Falling on a regular work day
12. Christmas Day - December 25 UNWORKED No pay (XPT: CBA, company policy, etc)
13. Rizal Day - December 30 First 8 hours +30% of daily rate
WORKED Excess of 8 +30% of hourly rate
Special Holidays
hours
Falling on a rest day
National Special days Declared Special days
(1) Ninoy Aquino day (1) Special Non-Working First 8 hours +50% of daily rate
(2) All Saints day Holiday WORKED Excess of 8 +30% of hourly rate
(3) Last day of the (2) Special Public Holiday hours
year (3) Special National Special working holiday
Holiday No premium pay. Daily rate only if worked.
NOTE: Special holidays are not the same as special working

Double Holiday
holidays. Special working holiday is considered an ordinary
If 2 holidays fall on the same day.
working holiday; thus, there is no premium pay,
Unworked double holiday
Muslim Holidays
At least 200% of his basic wage, provided he was present or
While the regular holidays are observed in the whole
on leave with pay on the preceding work day.
country, the Muslim holidays, except Eid’l Fitr and Eid’l
Adha, are observed only in specified areas. Muslim
employees working outside of the specified areas shall be Worked double holiday
excused from reporting for work during the observance of Entitled to 300% of his basic wage, if present or on leave
the Muslim holidays recognized by law, without with pay on the preceding work day.
diminution of salary or wages during the period.
Illustration
In areas designated to observe Muslim holidays, both Day 2
Day 1 Entitled?
Muslims and Christians may not report to work on Muslim DOUBLE HOLIDAY
holidays (there are designated provinces and cities where Worked or LOA
Unworked. 200%
Muslim holidays are officially observed – Art. 170, CMPL). with pay.
In the same way that Muslims are also paid holiday pay for Worked or LOA
Worked. 300%
Christian holidays (declared as holiday/special days). with pay.
Wages and other emoluments granted by law to workers Unworked. No.
are determined on the basis of criteria laid down by laws
and not one’s faith or religion.72
Double Holiday Rule for Monthly-paid employees
For covered employees whose monthly salaries are
computed based on 365 days and for those other
employees who are paid using factor 314, or 262, or any
other factor which already considers the payment for the
11 regular holidays, NO additional payment is due them.73
72 73
San Miguel Corp. vs. CA, nd. BWC-WHSD Opinion No. 053, s. 1998

Successive Holiday Pay Entitlement to Holiday Pay

An employee may not be paid for both holidays if he
absents himself from work on the day immediately Absences
preceding the first holiday, unless he works on the first
holiday, in which case he is entitled to his holiday pay on Rules on absences prior to the holiday
the second holiday. If employee is on:
a. LOA with pay on the regular holiday – entitled;
Employee is entitled to holiday for both days if: b. LOA without pay on the day immediately
(a) Employee is present on day immediately preceding a regular holiday – NOT entitled if he
preceding first holiday; or has not worked on such regular holiday;
(b) Employee works on first holiday, which entitles
c. Where the day immediately preceding the
him to pay on second holiday
holiday is a non-working day in the
establishment or the scheduled rest day of the
To be entitled to pay for two (2) successive holidays,
employee must be: employee – entitled to holiday pay if he worked
(a) Present on the day immediately preceding the 1st on the day immediately preceding the
nonworking day or scheduled rest day
holiday; or
(b) On leave with pay on that day.
Temporary Cessation of Work
Illustration
In cases of temporary or periodic shutdown and temporary
cessation of work of an establishment, as when a yearly
DAY 2 DAY 3
inventory or when the repair or cleaning of machineries
REGULAR REGULAR
DAY 1 Entitled? and equipment is undertaken, the employee working on
HOLIDAY HOLIDAY regular holidays falling within the periods shall be entitled
1 2 to holiday pay.
Absent No.
Yes, for However, the regular holiday during the cessation of
the 2nd operation of an enterprise due to business reverses as
Absent Worked.
regular authorized by the Secretary of Labor may not be paid by
holiday the employer.
Yes to
Present/LOA both Holiday Pay of Hourly-Paid Faculty
with pay regular
holidays They are not entitled to payment of holiday pay because
they are paid only for work actually done. Since regular
Holidays on Sundays holidays are known to both the school and faculty
When a holiday falls on a Sunday, the following Monday members as ―no class days; certainly the latter do not
will not be considered a holiday unless a proclamation says expect payment for said unworked holidays.75
so.
They are entitled to their hourly rate on days declared as
Holidays falling on a Sunday
special holidays. Be it noted that when a special public
A legal holiday falling on a Sunday does not create a legal
holiday is declared, the faculty member paid by the hour is
obligation to pay extra, aside from the usual holiday pay, to
deprived of expected income, and it does not matter that
monthly-paid employees.74
the school calendar is extended in view of the days or
hours lost, for their income that could be earned from
In fixing the salary: other sources is lost during the extended days.
1. Deduct 51 Sundays from the 365;
2. The difference, 314, shall be used as divisor for
Similarly, when classes are called off or shortened on
determining the monthly salary;
account of typhoons, floods, rallies, and the like, these
3. The monthly salary thus fixed actually covers
faculty members must likewise be paid, whether or not
payment for 314 days of the year, including
extensions are ordered.
regular and special holidays.
Piece Workers
No provision of law requires any employer to make
adjustments in the monthly salary rate set by him to take
Philosophy underlying the exclusion of piece workers from
account of legal holidays falling on Sundays in a given year,
the 8-hour law is that said workers are paid depending
otherwise to reckon a year at more than 365 days.
upon the work they do irrespective of the amount of time
employed in doing said work.76
74 76
Wellington Investment and Manufacturing Corporation vs. Trajano, 1995) Red V Coconut Products Ltd., vs. CIR, 1966
75
Jose Rizal College vs. NLRC, 1987

Seafarers Any hours of work or duty including Entitled to

hours of watch-keeping performed by paid rest
Any hours of work or duty including hours of watch- the seafarer on designated rest days day or
keeping performed by the seafarer on designated rest days and holidays holiday pay
and holidays shall be paid rest day or holiday pay.77
Role of Divisor in Determining payment of Holiday Pay
Seasonal Workers for Monthly-Paid Employees
Seasonal workers who do not work during off-season are The divisor assumes an important role in determining
not entitled to pay for the regular holidays occurring whether or not holiday pay is already included in the
during their off-season. Workers assigned to “skeleton monthly paid employee’s salary.78
crews” that work during the off-season have the right to
be paid on regular holidays falling in that duration. Monthly paid employees are not entitled to the holiday pay
if their total annual income is divided by 365 days resulting
Summary of rules on entitlement to holiday pay in a wage which is beyond the minimum wage per day
In case of absences because they are considered paid every day of the year
Employee is on leave of absence with pay Entitled including holidays, rest days, and other non-working days.
on the day immediately preceding a The 365 days are as follows:
regular holiday
An employee is on leave of absence Not entitled
without pay on the day immediately 365 days
preceding a regular holiday 300 Ordinary days
Temporary cessation of work 51 Rest days
Regular holidays falling within the Entitled 11 Regular holidays
period in cases of temporary 3 Special holidays
shutdowns or cessation of work, when:
(a) an annual inventory; or For company with 6-day working schedule
(b) repair or cleaning of The divisor 314 means that the 10 legal holidays are already
machineries and equipment included in the monthly pay of the employee
is undertaken.
Regular holidays during the suspension Not entitled For the company with 5-day working schedule
of work if: The divisor 261 means that the holiday pay is already
(a) Cessation of operation is due included in the monthly salary of the employee
to business reverses; and
(b) Authorized by the Secretary of
Labor.
Private school teachers, including faculty members of Coverage [Art. 95, LC]
colleges and universities Every employee who has rendered at least one year of
Regular holidays during semestral Not entitled service shall be entitled to a yearly service incentive leave
vacations. of five days with pay.
Regular holidays during Christmas Entitled
vacation; Exceptions:
Piece workers
His holiday pay shall not be less than his Entitled  Those of the government and any of its political
average daily earnings for the last seven subdivisions, including GOCCs
(7) actual working days preceding the  Domestic helpers and persons in the personal service
regular holiday; of another
 Managerial employees as defined in Book 3 of this
Provided, however, that in no case shall Code
the holiday pay be less than the  Field personnel and other employees whose
applicable statutory minimum wage performance is unsupervised by the employer
rate. including those who are engaged on task or contract
Seasonal workers basis, purely commission basis, or those who are paid
During off-season when they are not at Not entitled a fixed amount for performing work irrespective of
work the time consumed in the performance thereof
Workers assigned to “skeleton crews” Entitled  Those who are already enjoying the benefit herein
that work during the off-season and provided
regular holidays fall in that duration.  Those enjoying vacation leave with pay of at least 5
Seafarers days
77 78
Section 11.C, Standard Terms and Conditions Governing the Employment of Producers Bank vs. NLRC, 2001
Filipino Seafarers on Board Ocean-Going Vessels

 Those employed in establishments regularly General Rule: All employers are required to pay all their
employing less than 10 employees.79 rank-and-file employees a 13th month pay not later than
Dec 24 of every year. PROVIDED that they have worked for
Teachers of private school on contract basis are entitled to at least one (1) month during a calendar year.
service incentive leave.80
Exceptions
Piece-rate workers are not entitled to service incentive 1. Government, its political subdivisions, including
leave.81 However, they shall be entitled to service incentive GOCCs except those operating essentially as
leave when, although they are piece-rate workers, they are private subsidiaries of the Government;
regular employees.82 2. Employers already paying their employees a 13th
month pay or more in a calendar year or its
Meaning of “1 year of service” equivalent at the time of this issuance.
The term "at least one-year service" shall mean service for “Equivalent” includes:
not less than 12 months, whether continuous or broken, a. Christmas bonus, mid-year bonus,
reckoned from the date the employee started working, cash bonuses; and
including authorized absences and paid regular holidays b. Other payments amounting to not less
unless the working days in the establishment as a matter than 1/12 of the basic salary;
of practice or policy, or that provided in the employment c. But shall not include cash and stock
contract is less than 12 months, in which case said period dividends, COLA and all other
shall be considered as one year.83 allowances regularly enjoyed by the
employee as well non-monetary
Entitlement benefit;
The grant of benefit in excess of that provided herein shall 3. Employers of household helpers and persons in
not be made a subject of arbitration or any court or the personal service of another relation to such
administrative action. [Art 95 (c), LC] workers;
4. Employers of those who are paid on purely
The service incentive leave shall be commutable to its commission, boundary or task basis and those
money equivalent if not used or exhausted at the end of who are paid a fixed amount for performing
the year.84 specific work
The cause of action of an entitled employee to claim his Amount

service incentive leave pay accrues from the moment the
employer refuses to remunerate its monetary equivalent if 1/12 of the total basic salary earned by an employee within
the employee did not make use of said leave credits but a calendar year.
instead chose to avail of its commutation (into money).
Accordingly, if the employee wishes to accumulate his Base amount: inclusions and exclusions in computation
leave credits and opts for its commutation upon his of 13th month pay.
resignation or separation from employment, his cause of
action to claim the whole amount of his accumulated
Included Excluded
service incentive leave shall arise when the employer fails
to pay such amount at the time of his resignation or Basic pay:
separation from employment.85  All remunerations or  COLA
earnings paid by an  Profit-sharing
employer to an payments
employee for  Allowances and
services rendered monetary benefits
 Cost of living not considered
Rationale allowances (COLA) integrated in basic
integrated into the pay **
1. To further protect the level of real wages from basic salary of a o Unused VL;
the ravage of world-wide inflation; covered employee o Sick leave
2. There has been no increase in the legal minimum pursuant to EO 178. credits;
wage rates since 1970;  Commission in case o OT premium;
3. The Christmas season is an opportune time for of salesmen o Night
society to show its concern for the plight of the (Philippine differential;
working masses so they may properly celebrate Duplicators case) o Holiday pay
Christmas and New Year.  Productivity bonuses
 Fringe benefits
Coverage
79 83
Sec. 1, Rule V, IRR Sec 3, Rule V, Book III, IRR
80 84
Cebu Institute of Technology vs. Ople, 1987 Sec 3, Rule V, Book III, IRR
81 85
Makati Haberdashery vs. NLRC, 1989 Auto Bus Transport vs. NLRC, 2005
82
Labor Congress vs. NLRC, 1998

** However, the above should be included in the calendar year up to the time of his resignation or
computation if by individual or collective agreement, termination from service.
company practice or policy.
Wage Difference
TIME OF PAYMENT The difference between the minimum wage and the actual
salary received by the employee cannot be deemed as his
General Rule: 13th month pay is paid not later than 13th month pay as such difference is not equivalent to or
December 24 of each year. of the same import as the said benefit contemplated by
law.
Exceptions:
Employer may give to his employees half of the required Terminated Employees
13th month pay before the opening of the regular school The payment of the 13th month pay may be demanded by
year and the other half on or before the 24th of December the employee upon the cessation of employer- employee
every year. relationship.87
The frequency of payment of this monetary benefit may be Other Rules on Thirteenth Month Pay
the subject of agreement between the employer and the
recognized CBA of the employees. Commissions
If the commissions may be properly considered part of the
RULES ON 13TH MONTH PAY IN SPECIAL CASES basic salary, then they should be included. If they are not
an integral part of the basic salary, then they should be
Employees paid by Results excluded.88
Employees who are paid on piece work basis are, by law,
entitled to the 13th month pay. Substitute payment not allowed
Benefits in the form of food or free electricity, assuming
Employees paid with fixed or guaranteed wage plus they were given, were not a proper substitute for the 13th
commission month pay required by law. Neither may year-end rewards
Employees who are paid a fixed or guaranteed wage plus for loyalty and service be considered in lieu of 13th month
commission are entitled to 13th month pay (not purely pay.89
commission); the basis for computation shall be both their
fixed or guaranteed wage and commission. 14th Month Pay is not mandated
Employers already paying their employees a 13th month
Employees with multiple employers pay or its equivalent are not covered by this Decree.90
Government employees working part time in a private
enterprise, including private educational institutions, as COMMISSIONS VIS-À-VIS 13TH MONTH PAY
well as employees working in two or more private firms,
whether on full or part time bases, are entitled to the Commissions are excluded from the term basic salary
required 13th month pay from all their private employers because commissions are paid as productivity bonuses.
regardless of their total earnings from each or all their These have no clear direct or necessary relation to the
employers. amount of work actually done by each individual employee.
A bonus is an amount granted and paid ex gratia to an
employee. If an employer cannot be compelled to pay a
Private School Teacher productivity bonus to its employees, it should follow that
Private school teachers, including faculty members of such productivity bonus, when given, should not be
universities and colleges, are entitled to the required 13th deemed to fall within the basic salary of employees when
month pay, regardless of the number of months they teach the time comes to compute their 13th month pay.91
or are paid within a year, if they have rendered service for
at least one (1) month within a year. It appears that petitioner pays its salesmen a small fixed or
guaranteed wage; the greater part of salesmen‘s wages or
Overload pay is not included in the computation for 13th salaries being composed of the sales or incentive
month pay; overload is not overtime as it is additional work commissions earned on actual sales closed by them. The
done within the normal shift.86 sales commissions were an integral part of the basic salary
structure. They are not overtime payments, or profit
Resigned or Separated Employee sharing payments or any other fringe benefit.92
An Employee who has resigned or whose services were
terminated at any time before the time for payment of the SERVICE CHARGE
13th month pay is entitled to this monetary benefit in
proportion to the length of time he worked during the year, In order to exempt the employer from paying 13th month
reckoned from the time he started working during the pay, a bonus stipulation in the CBA should be general in
86 90
Letran Calamba Faculty vs. NLRC, 2008] Kamaya Port Hotel vs. NLRC, 1989
87 91
Archilles Manufacturing Corp. vs. NLRC, 1995 Boie Takada vs. de la Serna, 1993
88 92
Phil. Duplicators Inc. vs. NLRC, 1995 Phil. Duplicators vs. NLRC, 1995
89
Framanlis Farms, Inc. vs. MOLE, 1989

scope, applicable to all employees, not only a few, for the WAGES VERSUS SALARIES
legal obligation benefits all employees regardless of their
designation or employment status so long as they have Wages and salary are in essence synonymous and are used
worked at least one month during the calendar year. [93 interchangeably. However, strictly speaking, there is a
legal distinction.96
Coverage
This rule shall apply only to establishments which collect Wage Salary
service charges such as: Paid for skilled or unskilled Paid to white collar workers
(1) Hotels, restaurants, lodging houses, night clubs, manual labor and denote a higher grade
cocktail lounge, massage clinics, bars, casinos of employment
and gambling houses and similar enterprises; Not subject to execution, Not exempt from
(2) Including those entities operating primarily as garnishment or attachment execution, garnishment or
private subsidiaries of the Government.94 except for debts related to attachment.97
necessities [Art. 1708, NCC]
Shall apply to ALL employees of covered employers
regardless of their positions, designations, or employment
status, irrespective of the method by which their wages are
paid.95
“No Work, No Pay” Principle
Exception:
Managerial employees are not covered.
General Rule: A fair day‘s wage for a fair day‘s labor.
Exception: When the laborer was able, willing and ready to
work but was illegally locked out, suspended or dismissed,
or otherwise illegally prevented from working. Exception: When the laborer was able, willing and ready to
work but was illegally locked out, suspended or dismissed,
or otherwise illegally prevented from working.98
Distribution of Service Charges
Service charges are distributed in accordance with the
following percentage of sharing:
(1) Eighty-five percent (85%) for the employees to “Equal Work for Equal Pay” Principle
be distributed equally among them; and the
shares shall be distributed to employees not less Persons who work with substantially equal qualifications,
than once every 2 weeks or twice a month at skill, effort, and responsibility under similar working
intervals not exceeding 16 days. conditions should be paid similar salaries.99
(2) Fifteen percent (15%) for the management to
answer for losses and breakages and, at the If an employer accords employees the same position and
discretion of the management, distribution to rank, the presumption is that these employees perform
managerial employees. equal work.100
Coverage:
The rules on wages do not apply to the following:

Definition 1. Household or domestic helpers, including family
drivers, and persons in the personal service of
It is the remuneration or earnings, however designated, another;
capable of being expressed in terms of money, whether fixed 2. Homeworkers engaged in needlework;
or ascertained on a time, task, piece, or commission basis, 3. Workers employed in any establishment registered
or other method of calculating the same, which is payable with the National Cottage Industries and
by an employer to an employee under a written or Development Authority (NACIDA) in accordance with
unwritten contract of employment for work done or to be RA 3470 provided that such workers work in their
done, or for services rendered or to be rendered and respective homes;
includes the fair and reasonable value, as determined by the 4. Workers in any duly registered cooperative with
Secretary of Labor and Employment, of board, lodging, or recommended by the Bureau of Cooperative
other facilities customarily furnished by the employer to Development and upon approval of the Secretary of
the employee. Labor and Employment (when the cooperative cannot
resort to other remedial measures without serious
Fair and reasonable value shall not include any profit to the loss or prejudice to its operation);
employer, or to any person affiliated with the employer. 5. Farm tenancy or leasehold;
[Art. 97 (f)] 6. Workers in registered barangay micro business
enterprise. [RA 9178]
93 97
Marcopper Mining Corp. vs. Ople Gaa vs. CA, 1985
94 98
Sec 1, Rule VI, Book 3, IRR Sugue vs. Triumph International, 2009
95 99
Sec 2, Rule VI, Book 3, IRR ISAE vs. Quisumbing, 2000
100
Philex Gold Philippines, Inc vs. Philex Bulawan Supervisors Union, 2005
96
Songco vs. NLRC, 1990

Forms of payment
Not allowed: PNs, vouchers, coupons, tokens, tickets, (1) Prohibition against interference in wage disposal
chits, any object other than legal tender, even when (2) Prohibition against wage deduction
requested by employee. [Art. 102, LC] (3) Prohibition against requirement to make
deposits for loss or damage
Allowed: Check or money order. Provided: ff. conditions (4) Prohibition against withholding of wages
are met: (5) Prohibition against deduction to ensure
1. There is a bank/facility for encashment within a employment
radius of 1 km from workplace; (6) Prohibition against retaliatory measures
2. Employer does not receive pecuniary benefit, directly (7) Prohibition against False Reporting
or indirectly from such arrangement; (8) Prohibition against keeping of employee’s
3. Given reasonable time during banking hours to records in a place than the workplace
withdraw – compensable if during working hours; (9) Prohibition against garnishment or execution
4. With written consent of employees or otherwise
indicated in CBA [Omnibus Rules] PROHIBITION AGAINST INTERFERENCE IN WAGE
DISPOSAL
Time of payment
 At least once every 2 weeks; Rules on wage disposal
 Twice a month, not exceeding 16 days; or (a) No employer shall limit or otherwise interfere
 After force majeure ceased. [Art. 103, LC] with the freedom of any employee to dispose of
his wages.
For performance of task which cannot be completed in 2 (b) He shall not in any manner force, compel, or
weeks, absence of CBA or arbitration award: oblige his employees to purchase merchandise,
 Payment at intervals not exceeding 16 days, in commodities or other property from any other
proportion to amount of work completed; or person, or otherwise make use of any store or
 Final settlement upon completion. services of such employer or any other person.
[Art. 112, LC]
Place of payment
General rule: PROHIBITION AGAINST WAGE DEDUCTION
At or near the place of undertaking. [Art. 104, LC]
General Rule:
Exceptions: No employer, in his own behalf or in behalf of any person,
(a) Cannot be effected at or near by reason of actual shall make any deduction from the wages of his employees.
or impending emergencies;
(b) Employer provides free transportation back and Exceptions:
forth; (a) Employee is insured with his consent by the
(c) Any analogous circumstances. Provided: time employer, and the deduction is to recompense
spent is compensable. [Omnibus Rules] the employer for the amount paid by him as
premium on the insurance;
Not allowed: Bar, night club, drinking establishments, (b) For union dues, in cases where the right of the
massage clinic, dance hall or other similar places where worker or his union to check-off has been
games are played with stakes of money, except to persons recognized by the employer or authorized in
employed in such places. writing by the individual worker concerned; and
(c) In cases where the employer is authorized by law
Direct payment of wages or regulations issued by the Secretary of Labor
and Employment, such as:
General rule: Payment must be paid directly to employee. i. Employee debt to employer is due and
demandable [Art. 1706, NCC];
Exceptions: ii. Attachment or execution in cases of
(a) Authorized by employee in writing to member of debts incurred for necessities: food,
his family; shelter, clothing, medical attendance
(b) Authorized by law (insurance premiums, [Art. 1708, NCC];
anything under CBA); iii. Withholding tax;
(c) In case of death pf employee – made to heirs iv. Deductions of a legally established
without need of intestate proceedings. [Art. 105, cooperative;
LC] v. Payment to 3rd parties upon written
authority by employee;
vi. Deductions for loss or damage;
vii. SSS, Medicare, Pag-IBIG premiums;
viii. Deduction for value meals and other
facilities.
It shall be unlawful to make any deduction from the wages

of any employee for the benefit of the employer:

1. as consideration of a promise of employment or When employee stops working for employer, the alleged
retention in employment [Art. 117, LC]; or purpose for the unauthorized deposits no longer exists.
2. to retaliate against the employee who filed a Any balance due must be returned to employee with legal
complaint. [Art. 118, LC] interest.102
Rationale PROHIBITION AGAINST WITHHOLDING OF WAGES

Prohibition seeks to protect the employee against
unwarranted practices that would diminish his
It shall be unlawful, directly or indirectly, to:
compensation without his knowledge and consent.101
(a) Withhold any amount from the wages of a
worker; or
Rules on employee’s consent for wage deduction
(b) Induce him to give up any part of his wages by
With Employee’s consent Without employee’s
force, stealth, intimidation, threat or by any
in writing consent other means whatsoever without the worker’s
(1) SSS Payments (1) Worker‘s insurance consent. [Art. 116, LC]
(2) PHILHEALTH acquired by the
payments employer
(3) Contributions to (2) Union dues, where PROHIBITION AGAINST DEDUCTION TO ENSURE
PAG-IBIG Fund the right to check-off EMPLOYMENT
(4) Value of meals and is recognized by the
other facilities employer (provided It shall be unlawful to make any deduction from the wages
(5) Payments to third in the CBA) of any employee for the benefit of the employer or his
persons with (3) Debts of the representative or intermediary as consideration of a
employee ‘s consent employee to the promise of employment or retention in employment. [Art.
(6) Deduction of employer that have 177, LC]
absences become due and
(7) Union dues, where demandable PROHIBITION AGAINST RETALIATORY MEASURES
check-off is not
provided in the CBA. Retaliatory measures
It shall be unlawful for an employer to refuse to pay or
PROHIBITION AGAINST REQUIREMENT TO MAKE reduce the wages and benefits, discharge or in any manner
DEPOSITS FOR LOSS OR DAMAGE discriminate against any employee who has filed any
complaint or instituted any proceeding under this Title or
General Rule: has testified or is about to testify in such proceedings. [Art.
No deposits are required from which deductions shall be 188, LC]
made for the reimbursement of loss of or damage to tools,
materials, or equipment supplied by the employer. This article is similar to Art. 259(f) which classifies as unfair
labor practice (ULP) an employer‘s prejudicial act against
Exceptions: an employee who gave or is about to give a testimony
(a) Recognized industry practice; or under the Code. However, they differ on the subject of the
(b) When such is necessary or desirable as testimony.
determined by the DOLE Secretary in
appropriate rules and regulations. [Art. 114, LC] Art. 118 Art. 259(f)
Subject of testimony is Subject is anything under
Conditions for the deductions wages the Code
(a) Employee is clearly shown to be responsible for The employer‘s retaliatory The employer‘s retaliatory
the loss or damage act is unlawful but not act is ULP.
(b) The employee is given ample opportunity to ULP (unless the act is
show cause why deduction should not be made; intended to impair the
(c) The amount of the deduction is fair and right to self-organization
reasonable and shall not exceed the actual loss of employees)
or damage; and
(d) The deduction from the employee‘s wage does PROHIBITION AGAINST FALSE REPORTING
not exceed 20% of the employee‘s wages in a
week. [Art. 115, LC] It shall be unlawful for any person to make any statement,
report, or record filed or kept pursuant to the provisions
Daily deposits to cover shortage in boundary is illegal of this Code knowing such statement, report or record to
The article providing the rule on deposits for loss or be false in any material respect. [Art. 119, LC]
damage to tools, materials, or equipment supplied by the
employer does not apply to or permit deposits to defray
any deficiency which the taxi driver may incur in the
remittance of his "boundary."
101 102
Radio Communication of the Phil., Inc. vs. Sec. of Labor, 1989 Five J Taxi vs. NLRC, 1994

PROHIBITION AGAINST KEEPING OF EMPLOYEE’S a declaration of bankruptcy or a judicial

RECORDS IN A PLACE THAN THE WORKPLACE liquidation must be present before the worker’s
preference may be enforced. Thus, Article 110 of
All employment records of the employees of an employer the Labor Code and its implementing rule cannot
shall be kept and maintained in or about the premises of the be invoked by the respondents in this case
workplace – main or branch office or establishment, if any, absent a formal declaration of bankruptcy or a
depending upon where the employees are regularly liquidation order.104
assigned. (f) Article 110 of the Labor Code does not establish a
lien, but a preference of credit in favor of
The keeping of the employee's records in another place is employees. Unlike a lien, a preference of credit
prohibited.103 does not create in favor of the preferred creditor
a charge or proprietary interest upon any
particular property of the debtor.105
PROHIBITION AGAINST GARNISHMENT OR
EXECUTION
Article 110 of the Labor Code did not sweep away the
overriding preference accorded under the scheme of the
General Rule:
Civil Code:
The laborer's wages shall not be subject to execution or
(a) Tax claims of the government or any subdivision
attachment.
thereof which constitute a lien upon properties
of the insolvent still preferred over wages;
Exception: (b) The use of the phrase "first preference" in Article
For debts incurred for food, shelter, clothing and medical
110 indicates that what Article 110 intended to
attendance. [Art. 1708, NCC]
modify is the order of preference found in Art.
2244, which pertains to unencumbered property.
Article 1708 of the New Civil Code to operate in favor of any
(c) Art. 2241 and 2242 pertain to encumbered
but those who are laboring men or women in the sense that
property and such property shall still remain
their work is manual. Persons belonging to this class
reserved to its respective lienholder;
usually look to the reward of a day's labor for immediate or
(d) Exception is if either 2241 (6) or 2242 (3)
present support, and such persons are more in need of the
applies.106
exemption than any others.
Primary effect
In cases of unlawful withholding of wages, the culpable
It moves wages from 2nd priority in 2244 to 1st priority; as
party may be assessed attorney's fees equivalent to 10% of
if 2244 (2) became 2244 (1).
the amount of wages recovered.
Art. 110 of the Labor Code cannot be viewed in isolation but
It shall be unlawful for any person to demand or accept, in
must be read in relation to the Civil Code scheme on
any judicial or administrative proceedings for the recovery
classification and preference of credits.107
of the wages, attorney‘s fees, which exceed 10% of the
amount of wages recovered.
Requirements of judicial liquidation or declaration of
bankruptcy still intact; workers must also file their claims.
WORKER PREFERENCE
Preference does NOT apply when the Employer
Worker preference in case of bankruptcy or liquidation corporation is under rehabilitation or receivership.108
In case of bankruptcy or liquidation, workers enjoy first
preference as regards their wages and other monetary WAGE ORDER
claims. They are paid in full before gov’t and other
creditors are paid. [Art. 110, LC]
Wage order, defined
Issued by Regional Board when conditions so warrant. Any
Rules on worker preference party aggrieved may appeal such order to the Commission
(a) It only creates a preference and not a license;
within 10 days from publication. Mandatory for
(b) Worker preference shall apply only to ordinary
Commission to decide within 60 days from filing. Filing of
preferred credits (meaning unencumbered appeal does not stay the order unless there is a surety for
property);
payment of employee’s compensation affected. [Art. 123,
(c) It must yield to special preferred credits where
LC]
liens are attached;
(d) Covers unpaid wages as well as other monetary
Factors in determining regional minimum wages:
claims; and
(a) Demand for living wages;
(e) Art. 110 of the Labor Code must be read with
(b) Wage adjustment vis-a-vis the consumer price
provisions of the New Civil Code concerning the
index (CPI);
classification, concurrence and preference of
(c) Cost of living and changes or increases therein;
credits. It is quite clear from the provisions that
(d) The needs of workers and their families;
103 106
Sec. 11, Rule X, Book II, IRR Republic vs. Peralta, 1987
104 107
DBP vs. LA Santos, nd. Development Bank of the Philippines vs. NLRC, 1995
105 108
DBP vs. Secretary of Labor Rubberworld (Phils.), Inc. vs. NLRC, 1999

(e) The need to induce industries to invest in the interested parties;

countryside; (3) Decide to issue or not to issue a wage order.
(f) Improvements in standards of living;
(g) Prevailing wage levels; Frequency
(h) Fair return of the capital invested and capacity to Wage orders issued may not be disturbed
pay of employers; for 12 months from effective date; this
(i) Effects in employment generation and family serves as a bar for petitions for wage hikes
income; and as well except when Congress passes a new
(j) Equitable distribution of income and wealth law affecting wages or other supervening
along the imperatives of economic and social circumstances
development.
Effectivity
Prohibition against injunction If it decides to issue a wage order, the wage
Prohibition against injunction cannot be issued against any order takes effect after 15 days from
proceeding before the Commission of Regional Boards. complete publication
[Art. 126, LC] in at least 1 newspaper of general circulation
in the region.
Non-diminution of benefits
No wage order shall be issued which provides for wages (4) Appeal wage order to Commission within 10
lower than minimum wage rates prescribed by Congress. calendar days; mandatory for the Commission to
[Art. 127, LC] decide within 60 calendar days from filing.
Procedure for Wage Fixing by Regional Board Filing of an appeal does not stay order unless
(1) Investigate and study pertinent facts, based on appellant files an undertaking with a surety, to
criteria set in Art. 124; guarantee payment of employees if the wage
(2) Conduct public hearings or consultations with order is affirmed (as amended by RA 6727)
notice to employer and employee groups,
provinces, city, municipal officials and other

AGENCIES ON WAGE STUDY AND DETERMINATION
National Wages and Productivity Commission Regional Tri-partite Wages and Productivity
(NWPC) Boards (RTWPB)
(1) Ex Officio Chairman: Secretary of Labor and (1) Chairman: Regional Director of DOLE
Employment (2) Vice Chairman: Regional Director of NEDA
(2) Ex-officio vice-chairman: Director-General of (3) Vice Chairman: Regional Director of DTI
NEDA (4) 2 Members from the employer sector
Composition (3) Two members each from the workers‘ and (5) 2 Members from the employee sector
employers‘ sectors who shall be appointed by (6) Secretariat
the President of the Philippines upon the
recommendation of the Sec. of Labor
(4) Executive Director of the Commission
(1) Headed by the Executive Director Tri-partite body – 3 sectors are represented:
(2) Two (2) Deputy Directors (1) Government
Secretariat
(2) Employers
(3) Employees.
(1) To act as the national consultative and advisory (1) To develop plans, programs and projects relative
body to the President of the Philippines and to wages, incomes and productivity
Congress on matters relating to wages, improvement for their respective regions;
incomes and productivity; (2) To determine and fix minimum wage rates
(2) To formulate policies and guidelines on wages, applicable in their regions, provinces or
incomes and productivity improvement at the industries therein and to issue the
enterprise, industry and national levels; corresponding wage orders, subject to
(3) To prescribe rules and guidelines for the guidelines issued by the Commission;
determination of appropriate minimum wage (3) To undertake studies, researches, and surveys
and productivity measures at the regional, necessary for the attainment of their functions,
provincial, or industry levels; objectives and programs, and to collect and
(4) To review regional wage levels set by the compile data on wages, incomes, productivity
Regional Tripartite Wages and Productivity and other related information and periodically
Boards to determine if these are in accordance disseminate the same;
with prescribed guidelines and national (4) To coordinate with the other Regional Boards as
development plans; may be necessary to attain the policy and
(5) To undertake studies, researches and surveys intention of this Code;
necessary for the attainment of its functions (5) To receive, process and act on applications for
and objectives, and to collect and compile data exemption from prescribed wage rates as may be
Powers and
and periodically disseminate information on provided by law or any Wage Order; and
Functions
wages and productivity and other related (6) To exercise such other powers and functions as
information, including, but not limited to, may be necessary to carry out their mandate
employment, cost-of-living, labor costs, under this Code. [Art. 122, LC]
investments and returns;
(6) To review plans and programs of the Regional
Tripartite Wages and Productivity Boards to
determine whether these are consistent with
national development plans;
(7) To exercise technical and administrative
supervision over the Regional Tripartite Wages
and Productivity Boards;
(8) To call, from time to time, a national tripartite
conference of representatives of government,
workers and employers for the consideration of
measures to promote wage rationalization and
productivity; and
(9) To exercise such powers and functions as may
be necessary to implement this Act. [Art. 121,
LC]

Definition The Non-Diminution Rule, mandates that Benefits given to

employees cannot be taken back or reduced unilaterally by
A situation where an increase in prescribed wage rates the employer because the benefit has become part of the
results in the eliminatin or severe contraction of employment contract, written or unwritten.112
intentional quantitative differences in wage or salary rates Any benefit and supplement being enjoyed by employees
between and among employee groups in an establishment cannot be reduced, diminished, discontinued, or
as to effectively obliterate the distinctions embodied in eliminated by the employer. The principle of
such wage structure based on skills, length of service, or non-diminution of benefits is founded on the
other logical bases of differentiation Constitutional mandate to “protect the rights of workers
and promote their welfare,” and “to afford labor full
Elements protection.”
1. Existing hierarchy of positions with corresponding Article 100 refers solely to the non-diminution of benefits
salary rates; enjoyed at the time of the promulgation of the Labor Code.
2. A significant change in the salary rate of a lower pay Employer-employee relationship is contractual and is
class without a concomitant increase in the salary based on the express terms of the employment contract as
rate of a higher one well as on its implied terms, among them, those not
3. The elimination of the distinction between the two expressly agreed upon but which the employer has freely,
levels; and voluntarily and consistently extended to its employees.
4. The existence of the distortion in the same region of Under the principle of mutuality of contracts embodied in
the country.109 Article 1308 of the Civil Code, the terms of a contract –
both express and implied – cannot be withdrawn except by
Distortion adjustment = [Minimum wage/Actual salary] x mutual consent or agreement of the contracting parties.113
Prescribed increase
Requisites
Wage distortion presupposes classification of employees If the following are met, the employer cannot remove or
based on skills, knowledge, complexity of job and other reduce benefits:
logical differentiation. In this case, the classification is not (1) Ripened company policy. Benefit is founded on a
among those considered as logical which is based on policy which has ripened into a practice over a
seniority between newly hired and old regular employees. long period;114
No hierarchy of positions involved.110 (2) Practice is consistent and deliberate; and
(3) Practice is not due to error in the construction or
How to Resolve Wage Distortion application of a doubtful or difficult question of
law.115
In organized establishment with bargaining (4) The diminution or discontinuance is done
representative unilaterally by the employer.
(1) Employer and the union shall negotiate to
correct the distortions.
(2) Disputes shall be resolved through the grievance General rule:
procedure. Prohibition against elimination or diminution of employee
(3) If still unresolved, voluntary arbitration. benefits and supplements.
In unorganized Establishment Exceptions:

(1) Employer and Employees shall endeavor to (a) Mistake in the application of the law;
correct such distortions. (b) Negotiated benefits - benefits initiated through
(2) Disputes shall be settled through the National negotiation between employee and employer,
Conciliation and Mediation Board. e.g. CBA, can only be eliminated or diminished
(3) If still unresolved after 10 calendar days of bilaterally;
conciliation, it shall be referred to the (c) Wage Order Compliance;116
appropriate branch of the NLRC – compulsory (d) Benefits on reimbursement basis;
arbitration.111 (e) Reclassification of Positions - e.g. loss of some
benefits by promotion;
(f) Contingent benefits or conditional bonus - the
rule does not apply to a benefit whose grant
depends on the existence of certain conditions,
109 113
Prubankers Assn. vs. Prudential Bank and Co., 1999 Arco Metal Products et al. vs Samahan ng mga Mangagawa sa Arco-Metal-
110
Bankard Employee Union vs. NLRC, nd. Nafula, 2008
111
National Federation of Labor vs. NLRC, 1994
112
Central Azucarera De Tarlac vs. Central Azucarera De Tarlac Labor Union- 114
Prubankers Assn. vs. Prudential Bank and Co., 1999
NLU, 2010 115
Globe Mackay Cable vs. NLRC, 1988
116
Pag-asa Steel Works vs. CA, et al., 2006

so that the benefit is not demandable if those Teachers of private school on contract basis are entitled to
preconditions are absent; and service incentive leave.119
(g) Productivity incentives.
Piece-rate workers are not entitled to service incentive
Gratuitous on the part of the employer leave.120 However, they shall be entitled to service
Moreover, to ripen into a company practice that is incentive leave when, although they are piece-rate
demandable as a matter of right, the giving of the increase workers, they are regular employees.121
should not be by reason of a strict legal or contractual
obligation, but by reason of an act of liberality on the part Meaning of “1 year of service”
of the employer. The term "at least one-year service" shall mean service for
not less than 12 months, whether continuous or broken,
On company practice reckoned from the date the employee started working,
If the benefits are enjoyed at the time or even before including authorized absences and paid regular holidays
promulgation of the Labor Code (May 1, 1974), Art. 100 unless the working days in the establishment as a matter
applies. of practice or policy, or that provided in the employment
contract is less than 12 months, in which case said period
If the benefits are enjoyed after promulgation of Labor shall be considered as one year.122
Code, it is a matter of company practice which cannot be
unilaterally revoked by the employer. Entitlement
The grant of benefit in excess of that provided herein shall
Requisites for Company Practice:117 not be made a subject of arbitration or any court or
Employee must prove by substantial evidence that: administrative action. [Art 95 (c), LC]
(1) the giving of the benefit is done over a long
period of time, and The service incentive leave shall be commutable to its
(2) that it has been made consistently and money equivalent if not used or exhausted at the end of
deliberately. the year.123
The cause of action of an entitled employee to claim his

service incentive leave pay accrues from the moment the
employer refuses to remunerate its monetary equivalent if
the employee did not make use of said leave credits but
instead chose to avail of its commutation (into money).
Accordingly, if the employee wishes to accumulate his
Coverage [Art. 95, LC] leave credits and opts for its commutation upon his
Every employee who has rendered at least one year of resignation or separation from employment, his cause of
service shall be entitled to a yearly service incentive leave action to claim the whole amount of his accumulated
of five days with pay. service incentive leave shall arise when the employer fails
to pay such amount at the time of his resignation or
Exceptions: separation from employment.124
 Those of the government and any of its political

subdivisions, including GOCCs
 Domestic helpers and persons in the personal service [Sec 14-A, RA 1161 (Social Security Law) as amended by RA
of another 7322, RA 8282 and RA 11210]
 Managerial employees as defined in Book 3 of this
Code Coverage
 Field personnel and other employees whose Every woman in the private sector, whether married or
performance is unsupervised by the employer unmarried, is entitled to the maternity leave benefits.
including those who are engaged on task or contract
basis, purely commission basis, or those who are paid Requisites
a fixed amount for performing work irrespective of (a) Employment - A female employee employed at
the time consumed in the performance thereof the time of delivery, miscarriage, or abortion
 Those who are already enjoying the benefit herein (b) Contribution - Who has paid at least 3 monthly
provided contributions in the 12-month period
 Those enjoying vacation leave with pay of at least 5 immediately preceding the semester of her
days childbirth, or miscarriage
 Those employed in establishments regularly (c) Notice - Employee notified employer of her
employing less than 10 employees.118 pregnancy and the probable date of her
childbirth, which notice shall be transmitted to
117 121
Supreme Steel Corporation v. Nagkakaisang Manggagawa ng Supreme Labor Congress vs. NLRC, 1998
122
Independent Union (NMS-IND-APL) (2011) Sec 3, Rule V, Book III, IRR
118 123
Sec. 1, Rule V, IRR Sec 3, Rule V, Book III, IRR
119 124
Cebu Institute of Technology vs. Ople, 1987 Auto Bus Transport vs. NLRC, 2005
120
Makati Haberdashery vs. NLRC, 1989

the SSS in accordance with the rules and full pay for the first four deliveries of the legitimate spouse
regulations it may provide. with whom he is cohabiting.
Benefits Requisites
[NOTE: This has been amended by Republic Act No. 11210, 1. Employment
which is outside the Bar Coverage. Rates in italic refer to the 2. Marriage to and cohabitation with his legitimate
new rates] spouse
A daily maternity benefit equivalent to 100% of her average 3. Delivery of the legitimate spouse
daily salary credit for:
1. 60 days for normal delivery Who is entitled to paternity leave
2. 78 days for caesarean delivery Married male employee both in the public and private
sectors 125
This benefit shall NOT be included in the computation of
13th month pay as it is granted to an employee in lieu of When may it be availed of
wages which is the basis for computing 13th month. It may be availed of for the first 4 deliveries of the legitimate
spouse with whom he is cohabiting126
[New benefit: 105 days or over 3 months of paid maternity
leave. It applies to every instance of pregnancy and Cohabiting means the obligation of the husband and wife
employers are required to grant it regardless of the mode of to live together.127 If the spouses are not physically living
delivery, civil status, legitimacy of the child, and together because of the workstation or occupation, the
employment status. male employee is still entitled to the paternity leave
benefit.
Extended: by 30 days without pay
What are the benefits under the law
Miscarriage or emergency termination of pregnancy: 60 A married male employee is allowed not to report for work
days of maternity leave with full pay shall be granted to for seven (7) days.
female workers.]
While on leave, the employee continues to earn the
Availment compensation, on the condition that his spouse has
Other conditions delivered a child or suffered a miscarriage for purposes of
1. SSS pays for the maternity leave. The enabling him to effectively lend support to his wife in her
employer shall advance the payment subject period of recovery and/or in the nursing of the newly-
to reimbursement by the SSS within 30 days born child.128
from filing of leave application.
2. Availment shall be a bar to the recovery of For purposes of this Act, delivery shall include childbirth
sickness benefits provided by this Act for the or any miscarriage.
same period for which daily maternity
benefits have been received. Non-conversion to cash
3. Employee may only avail of benefit for the first In the event that the paternity leave is not availed of, it
four (4) deliveries or miscarriages. shall not be convertible to cash and shall not be
4. Sanction: That if an employee should give cumulative.129
birth or suffer miscarriage
a. without the required contributions
having been remitted for her by her ER
to the SSS, or [RA 8972: Parental Leave for Solo Parents]
b. without the latter having been
previously notified by the ER of time of Defined
the pregnancy, then the employer shall Leave benefits granted to a solo parent to enable him/her
pay to the SSS damages equivalent to to perform parental duties and responsibilities where
the benefits which said employee physical presence is required.130
member would otherwise have been
entitled to. Coverage
Any solo parent or individual who is left alone with the
responsibility of parenthood due to:
1. Giving birth as a result of rape or, as used by the
[RA 8187: Paternity Leave Act of 1996] law, other crimes against chastity;
2. Death of spouse;
Coverage 3. Spouse is detained or is serving sentence for a
Every married male employee in the private and public criminal conviction for at least one (1) year;
sectors shall be entitled to a paternity leave of 7 days with
125 129
Sec 2, RA8187 Sec 7, IRR, RA 8187
126 130
Sec 2 RA8187 Sec 3 (d), RA 8972
127
Sec 1, IRR, RA 8187
128
Sec 3, RA8187

4. Physical and/or mental incapacity of spouse as 4. Educational benefits

certified by a public medical practitioner; 5. Housing benefits
5. Legal separation or de facto separation from 6. Medical assistance
spouse for at least one (1) year: Provided that
he/she is entrusted with the custody of the
children;
6. Declaration of nullity or annulment of marriage
as decreed by a court or by a church: Provided,
that he/she is entrusted with the custody of the
children; Leaves for victims of violence against women
7. Abandonment of spouse for at least one (1) year;
8. Unmarried father/mother who has preferred to [RA 9262 (Anti-Violence against Women and Their Children
keep and rear his/her child/children, instead of Act of 2004)]
having others care for them or give them up to a
welfare institution; Benefit
9. Any other person who solely provides parental A victim of VAWC who is employed shall be entitled to a
care and support to a child or children: Provided, paid leave of up to ten (10) days in addition to other paid
that he/she is duly licensed as a foster parent by leaves under the Labor Code and Civil Service Rules and
the Department of Social Welfare and Regulations and other existing laws and company policies:
Development (DSWD) or duly appointed legal
guardian by the court; and 1. At any time during the application of any
10. Any family member who assumes the protection order, investigation, prosecution
responsibility of head of family as a result of the and/or trial of the criminal case, extendible when
death, abandonment, disappearance, or the necessity arises as specified in the protection
prolonged absence of the parents or solo parent: order.
Provided, that such abandonment, 2. Upon the issuance of the Punong
disappearance, or prolonged absence lasts for at Barangay/kagawad or prosecutor or the Clerk of
least one (1) year.131
Court, as the case may be, of a certification (at no
cost) to the woman that such an action is pending,
Conditions to entitlement and this is all that is required for the employer to
A solo parent employee shall be entitled to the parental comply with the 10- day paid leave.
leave under the following conditions: 3. For government employees, in addition to the
1. He/she has rendered at least one (1) year of aforementioned certification, the employee
service, whether continuous or broken; concerned must file an application for leave
2. He/she has notified his/her employer that citing as basis R.A. 9262.135
he/she will avail himself/herself of it, within a
reasonable period of time; and Availment
3. He/she has presented to his/her employer a Solo In addition to other paid leaves under existing labor laws,
Parent Identification Card, which may be company policy, and/or collective bargaining agreement,
obtained from the DSWD office of the city or the qualified victim employee shall be entitled to a leave of
municipality where he/she resides.132 up to 10 days with full pay, consisting of basic salary and
mandatory allowances fixed by the Regional Wage Board,
Availment if any.136
The parental leave is in addition to leave privileges under
existing laws with full pay, consisting of basic salary and Condition for Entitlement
mandatory allowances. It shall not be more than seven (7) To be entitled to the leave benefit, the only requirement is
working days every year.133 for the victim-employee to present to her employer a
certification from the barangay chairman or barangay
Termination of the Benefit councilor or prosecutor or the Clerk of Court, as the case
A change in status or circumstances of parent claiming may be, that an action relative to the matter is pending.
benefits, such that he/she is no longer left alone with the
responsibility of parenthood, shall terminate his/her Unused leaves are not convertible to cash.
eligibility for these benefits.134
Special Leave Benefits for Women
Other Employment-related benefits available to all “solo
parents” (See VIII. Labor Standards - Related Special Laws) [RA 9710 (The Magna Carta of Women), DOLE DO No. 112,
1. Parental leave Series of 2011 as amended by DO No. 112-A Series of 2012]
2. Flexible work schedule
3. No discrimination policy
131 134
Sec 3(a), RA 8972 Sec 3(a), RA 8972
132 135
Sec 19, Art. V, IRR, RA 8972 Sec. 42, IRR, RA 8972
136
Sec. 45, RA 9262
133
Sec 8, RA 8972

Leaves under Magna Carta of Women Summary of leaves

No. of Requirement Commutabl
Benefit Days s e
A female employee’s leave entitlement of two (2) months 5 1 year of Yes
with full pay from her employer based on her gross SIL
service
monthly compensation following surgery caused by 60 3 mos. No
gynecological disorders, provided that she has rendered (normal) contributions
continuous aggregate employment service of at least six Maternit ; for the last 12
(6) months for the last 12 months. y Leave mos. before
78 (C- birth
Gynecological Disorders section)
Disorders that would require surgical procedures such as, 7 Married; No
but not limited to, dilatation and curettage and those Paternity cohabiting
involving female reproductive organs such as the vagina, Leave with legal
cervix, uterus, fallopian tubes, ovaries, breast, adnexa and spouse
pelvic floor, as certified by a competent physician. It shall 7 1 year of No, unless
also include hysterectomy, ovariectomy, and mastectomy. Parental
service; CBA says
Leave
present SP ID yes
Conditions for Entitlement VAWC 10 Certification No
Any female employee, regardless of age and civil status, 60 6 mos. No
shall be entitled to a special leave benefit, provided she has service for
complied with the following conditions: Magna
the last 12
1. She has rendered at least 6 months continuous Carta
mos. before
aggregate employment service for the last 12 surgery
months prior to surgery;
2. She has filed an application for special leave
3. She has undergone surgery due to gynecological
disorders as certified by a competent
physician.137
Application for Special Leave

Before surgery
The employee shall file her application for leave with her
employer within a reasonable period of time from the
expected date of surgery, or within such period as may be
provided by company rules and regulations or by CBA.
After surgery
Prior application for leave shall not be necessary in cases
requiring emergency surgical procedure, provided that the
employer shall be notified verbally or in written form
within a reasonable period of time and provided further
that after the surgery or appropriate recuperating period,
the female employee shall immediately file her application
using the prescribed form.138
137 138
Sec. 2, DO 112 Sec 3, DO 112

2. stipulate expressly or tacitly that upon getting

married a woman employee shall be deemed
resigned or separated or
3. actually dismiss, discharge, discriminate, or
Coverage otherwise prejudice a woman employee merely
Shall apply to all employers, whether operating for profit by reason of her marriage. [Art. 134, LC]
or not, including educational, religious and charitable
institutions Company policy of not accepting married women for
employment or disqualifying her because she got married
is considered as discrimination.141
Exceptions
The government and its subdivisions including GOCC’s
and to the employers of household helpers and persons in Bona fide occupational qualification exception
their personal service insofar as such workers are When the employer can prove that the reasonable
concerned.139 demands of the business require a distinction based on
marital status and there is no better available or acceptable
policy which would better accomplish the business
Prohibited acts
purpose, an employer may discriminate against an
1. Night work
employee based in the identity of the employee’s spouse.142
2. Discrimination
3. Stipulation against marriage
4. Discharge to prevent enjoyment of benefits and on The Court sustained the validity of employer policy
account of pregnancy prohibiting an employee from having a personal or marital
5. Discharge on account of Testimony relationship with an employee of a competitor. The
prohibition was reasonable under the circumstances
because relationships of such nature might compromise
the interests of the company.143
Prohibition [Art. 135, LC]

It shall be unlawful for any employer to discriminate
against any woman employee with respect to terms and
conditions of employment solely on account of her sex. Note: No more night work prohibition under R.A. 10151
(An Act Allowing the Employment of Night Workers,
The following are acts of discrimination: thereby Repealing Articles 130 and 131 of LC, as amended)
a. Payment of a lesser compensation, including
wage, salary, or other forms of remuneration and Prohibited Acts
fringe benefits, to female employees as against a It shall be unlawful for any employer:
male employee, for work of equal value; and 1. To deny any woman employee the benefits provided
for in this Chapter or to discharge any woman
b. Favoring a male employee over a female employed by him for the purpose of preventing her
employee with respect to promotion, training from enjoying any of the benefits provided under this
opportunities, study, and scholarship grants Code.
solely on account of their sexes. [Art 133, LC]
2. To discharge such woman on account of her
Criminal liability for the willful commission of any pregnancy, or while on leave or in confinement due
unlawful act as provided in this Article or any violation of to her pregnancy;
the rules and regulations issued pursuant to Section 2
hereof shall be penalized as provided in Articles 303 and 3. To discharge or refuse the admission of such woman
304 of this Code: Provided, That the institution of any upon returning to her work for fear that she may
criminal action under this provision shall not bar the again be pregnant. [Art 135, LC]
aggrieved employee from filing an entirely separate and
distinct action for money claims, which may include claims Discharge on Account of Testimony
for damages and other affirmative reliefs. The actions It shall be unlawful for any employer to discourage any
hereby authorized shall proceed independently of each woman or child or any other employee for having filed a
other.140 complaint or having testified or being about to testify
under the code.144
It shall be unlawful for an employer to:

1. require as a condition of employment or
continuation of employment that a woman
employee shall not get married, or
139 142
Sec 1, Rule XII, Book III, IRR Star Paper Corp. vs. Simbol, 2006
140 143
As amended by RA 6725, May 12, 1989 Duncan Association of Detailmen vs. Glaxo Wellcome, 2004
141 144
PT&T vs. NLRC, 1997 Sec 13(d), Rule XII, Book III

d. Any other person who, having authority,

influence or moral ascendancy over another in
[RA 7877: Anti-Sexual Harassment Act] a work or training or education environment
Work, education or training-related sexual harassment, 2. Any person who directs or induces another to
defined commit any act of sexual harassment
Work, education or training-related sexual harassment is
committed by an employee, manager, supervisor, agent of 3. Any person who cooperates in the commission
the employer, teacher, instructor, professor, coach, thereof by another without which it would not
trainer, or any other person who, having authority, have been committed
influence or moral ascendancy over another in a work or
training or education environment, demands, requests or Role of the employer or Head of Office
otherwise requires any sexual favor from the other, The Employer or Head of Office shall have the duty:
regardless of whether the demand, request or requirement (1) To prevent the commission of such acts and
for submission is accepted by the object of said Act.145 (2) To lay down the procedure for the resolution,
settlement or prosecution of committed
How work-related sexual harassment is committed acts.146
1. In a work-related or employment environment, sexual
harassment is committed when: Employer shall be solidarily liable for damages if:
a. The sexual favor is made as a condition (1) The employer or head of office, educational or
a. in the hiring or in the employment, re- training institution is informed of such acts by
employment or continued employment of the offended party and
said individual, or (2) No immediate action is taken thereon147
b. in granting said individual favorable
compensation, terms, conditions, Independent Action for Damages
promotions, or privileges; or The victim of work, education or training-related sexual
c. in refusal to grant the sexual favor results in harassment can institute a separate and independent
limiting, segregating or classifying the action for damages and other affirmative relief.148
employee which in a way would discriminate,
deprive or diminish employment Sanctions
opportunities or otherwise adversely affect 1. Criminal: imprisonment of 1 month to mos. or
said employee; fine of P10k to P20k or both
b. The above acts would either: 2. Termination
a. impair the employee’s rights or privileges under
existing labor laws; or Prescription of such action is in 3 years.
b. The above acts would result in an intimidating,
hostile, or offensive environment for the
employee.
2. In an education or training environment, sexual General Rule:

harassment is committed: Children below 15 shall NOT be employed [Art. 139(a) LC
a. Against one who is under the care, custody or and Sec 12 to 16 of RA 7610 as amended by RA 7658 and RA
supervision of the offender; 9231]
b. Against one whose education, training,
apprenticeship or tutorship is entrusted to the Exceptions:
offender; 1. Child works directly under the sole responsibility of his
c. When the sexual favor is made a condition to parents or legal guardian and where only members of
the giving of a passing grade, or the granting the ER‘s family are employed, provided:
of honors and scholarships, or the payment of a. his employment does NOT endanger his
a stipend, allowance or other benefits, life, safety, health and morals,
privileges, or considerations; or b. nor impairs his normal development,
d. When the sexual advances result in an and
intimidating, hostile or offensive environment c. the parent or legal guardian shall
for the student, trainee or apprentice. provide the said minor child with the
prescribed primary and/or secondary
Who are liable education149
1. The offender:
a. Employee 2. Child‘s employment or participation in public
b. Manager, Supervisor, agent of the employer entertainment or information through cinema,
c. Teacher, instructor, professor, coach, trainer theater, radio or television is essential, provided
that:150
145 148
Sec 3, RA 7877 Sec 6, RA 7877
146 149
Sec 4, RA 7877 Sec 12, RA 7610 as amended by RA 7658
147 150
Sec 5, RA 7877 Sec 12, RA 7610 as amended by RA 7658]

a. employment does NOT involve ads or

commercials promoting alcohol, tobacco and its
by-products or violence151.
[R.A. 10361, Batas Kasambahay or Domestic Worker’s Act]
b. the employment contract is concluded by the
child’s parents or guardian, and approved by
Note: RA 10361 has expressly repealed Chapter III,
DOLE
“Employment of Househelpers,” Title III of Book III of the
c. The ER shall ensure the protection, health, safety
Labor Code
and morals of the child
d. The ER shall institute measures to prevent the
child’s exploitation or discrimination taking into Domestic work
account the system and level of remuneration, This refers to work performed in or for a household or
and the duration and arrangement of working households.155
time
e. The ER shall formulate and implement, subject to Domestic worker or “Kasambahay”
the approval and supervision of competent Refers to any person engaged in domestic work within an
authorities, a continuing program for training employment relationship such as, but not limited to, the
and skills acquisition of the child.152 following: general househelp, nursemaid or “yaya”, cook,
gardener, or laundry person.156
In the above-exceptional cases where any such child may
be employed, the employer shall first secure, before The term domestic worker or “kasambahay” excludes any
engaging such child, a work permit from the DOLE which person who performs domestic work only occasionally or
shall ensure observance of the above requirements. sporadically and not on an occupational basis.157
The term "child" shall apply to all persons under eighteen RIGHTS AND PRIVILEGES
(18) years of age.153
(1) Minimum wage
Employment of Children from 15 to 18 - allowed but The minimum wage of domestic workers shall not be less
restricted to non-hazardous undertakings. than the following:
i. P2,500 a month for those employed in NCR
The following are hazardous workplaces:154 ii. P2,000 a month for those employed in chartered
1. Nature of the work exposes the workers to cities and first class municipalities
dangerous environmental elements, iii. P1,500 a month for those employed in other
contaminants or working conditions; municipalities
2. Construction work, logging, fire-fighting, Within one year from the effectivity of the Act, and
mining, quarrying, blasting, stevedoring, dock periodically thereafter, the Regional Tripartite and
work, deep sea fishing, and mechanized farming; Productivity Wage Boards shall review, and if proper,
3. Manufacture or handling of explosives and other determine and adjust the minimum wage rates of domestic
pyrotechnic products; workers.158
4. Exposure to or use of heavy power-driven
machinery or equipment; (2) Standard of Treatment
5. Exposure to or use of power-driven tools The employer or any member of the household shall not
subject a domestic worker or “kasambahay” to any kind of
abuse nor inflict any form of physical violence or
Working Hours of a Child
harassment or any act tending to degrade the dignity of a
Quantity
domestic worker.159
Age Bracket Daily Max Weekly Max
Below 15 y 4 hours 20 hours
(3) Board, Lodging and Medical Attendance
15 to below 18 8 hours 40 hours
The employer shall provide for the basic necessities of the
domestic worker to include at least three (3) adequate
Night work prohibition meals a day and humane sleeping arrangements that
Age Bracket Prohibited Hours ensure safety and shall provide appropriate rest and
Below 15 y 8 pm to 6 am (10 hrs) assistance to the domestic worker in case of illnesses and
15 to below 18 10 pm to 6 am (8 hrs) injuries sustained during service without loss of benefits.160
(4) Privacy
Respect for the privacy of the domestic worker shall be
guaranteed at all times and shall extend to all forms of
communication and personal effects161
151 157
Sec 14, RA 7610 as amended by RA 7658 Id.
152 158
Sec 12, RA 7610 as amended by RA 7658 Sec 24, RA 10361
153 159
Sec 2, RA 9231 Sec 5, RA 10361
154 160
Sec 3, Rule XIII, Book III, IRR Sec 6, RA 10361
155 161
Sec 4(C), RA 10361 Sec 7, RA 10361
156
Sec 4(D). RA 10361

It shall be unlawful for the employer to interfere with the

(5) Access to Outside Communication freedom of any domestic worker to dispose of the latter’s
The employer shall grant the domestic worker access to wage.
outside communication during free time: Provided, that in
case of emergency, access to communication shall be Prohibition Against Withholding of Wages
granted even during work time.162 It shall be unlawful for an employer, directly or indirectly,
to withhold the wages of the domestic worker. If the
(6) Education and Training domestic worker leaves without any justifiable reason, any
The employer shall afford the domestic worker the unpaid salary for a period not exceeding fifteen (15) days
opportunity to finish basic education and may allow access shall be forfeited.
to alternative learning systems and, as far as practicable,
higher education or technical and vocational training.163 Employment Certification
ER shall give the househelper a written statement of the
(7) Social and Other Benefits nature and duration of the service and his or her work
A domestic worker who has rendered at least one (1) month performance as househelper upon severance.169
of service shall be covered by the Social Security System
(SSS), the Philippine Health Insurance Corporation Termination
(PhilHealth), and the Home Development Mutual Fund or
Pag-IBIG, and shall be entitled to all the benefits in Initiated by the domestic worker
accordance with the pertinent provisions provided by law. The domestic worker may terminate the employment
relationship at any time before the expiration of the
(8) Leave Benefits employment contract for any of the following causes:
A domestic worker who has rendered at least one (1) year a. Verbal or emotional abuse of the domestic
of service shall be entitled to an annual service incentive worker by the employer or any member of the
leave of five (5) days with pay164 household;
b. Inhuman treatment including physical abuse of
Employment Age of Domestic Workers the domestic worker by the employer or any
Unlawful to employ any person below fifteen (15) years of member of the household;
age as a domestic worker165 c. Commission of a crime or offense against the
domestic worker by the employer or any
Persons between 15-18 years old should only be employed member of the household;
in non-hazardous work.166 d. Violation by the employer of the terms and
conditions of the employment contract and
Daily Rest Period: other standards set forth under this law;
Aggregate of eight (8) hours per day.167 e. Any disease prejudicial to the health of the
domestic worker, the employer, or member/s of
Obligations of the Employer the household; and
Employer’s Reportorial Duties. – The employers shall f. Other causes analogous to the foregoing.170
register all domestic workers under their employment in
the Registry of Domestic Workers in the barangay where
the employer’s residence is located. Initiated by the employer
Time and Manner of Payment An employer may terminate the services of the domestic
Payment of wages shall be made on time directly to the worker at any time before the expiration of the contract,
domestic worker in cash at least once a month and unless for any of the following causes:
allowed by the domestic worker through a written a. Misconduct or willful disobedience by the
consent, employer shall make no deductions from the domestic worker of the lawful order of the
wages other than that which is mandated by law.168 employer in connection with the former’s work;
b. Gross or habitual neglect or inefficiency by the
Pay Slip domestic worker in the performance of duties;
The employer shall at all times provide the domestic c. Fraud or willful breach of the trust reposed by
worker with a copy of the pay slip containing the amount the employer on the domestic worker;
paid in cash every pay day, and indicating all deductions d. Commission of a crime or offense by the
made, if any. domestic worker against the person of the
employer or any immediate member of the
Prohibition on Interference in the Disposal of Wages employer’s family;
162 167
Sec 8, RA 10361 Sec. 20, RA 10361
163
Sec 9, RA 10361
168
Sec 25, RA 10361
164
Sec 29, RA 10361 169
Sec 35, RA 10361
165
Sec 16, RA 10361
170
Sec 33, RA 10361
166
DO 4- 99 Sec. 4

e. Violation by the domestic worker of the terms Liability of Employer175

and conditions of the employment contract and 1. Employer may require homeworker to redo work
other standards set forth under this law; improperly executed without additional pay
f. Any disease prejudicial to the health of the 2. Employer need not pay homeworker for any work
domestic worker, the employer, or member/s of done on goods or articles not returned due to
the household; and homeworker‘s fault
g. Other causes analogous to the foregoing.171 3. If subcontractor/contractor fails to pay
homeworker, ER is jointly and severally liable with
the former to the homeworker for his/her wage
4. ER shall assist the homeworkers in the
maintenance of basic safe and healthful working
Note: DO 5, DOLE (February 4, 1992), is now Rule XIV, conditions at the homeworkers‘ place of work
Book III of the IRRI.
Regional Office shall provide technical assistance to
Homeworker registered homeworkers’ organizations176
Any person who performs industrial homework for an
employer, contractor, or sub-contractor.172 Prohibited Homework
1. explosives, fireworks and articles of like character;
Industrial homework 2. drugs and poisons; and
1. Is a system of production under which work for an 3. other articles, the processing of which requires
employer or contractor is carried out by a exposure to toxic substances.
homeworker at his/her home. Materials may or may
not be furnished by the employer or contractor. Conditions for deduction from homeworker’s earnings
2. Decentralized form of production, where there is No deduction from the homeworker‘s earnings for the
ordinarily very little supervision or regulation of value of materials lost, destroyed or damaged unless:
methods of work.173 1. Homeworker is clearly shown to be responsible
for loss or damage
Employer of homeworkers 2. Reasonable opportunity to be heard
Any person, natural or artificial who, for his account or 3. Amount of deduction is fair and reasonable, and
benefit, or on behalf of any person residing outside the does not exceed actual loss or damage
country, directly or indirectly, or through an employee, 4. Deduction does not exceed 20% of
agent contractor, sub-contractor or any other person: homeworker‘s weekly earnings177
1. Delivers, or causes to be delivered, any goods,

articles or materials to be processed or fabricated
in or about a home and thereafter to be returned
or to be disposed of or distributed in accordance NOTE: RA 10151 repealed Arts. 130 and 131 of the LC –
with his directions; or Women can now work at night
2. Sells any goods, articles or materials to be Coverage

processed or fabricated in or about a home and a. All employees working at night
then rebuys them after such processing or b. Work covers period between 10pm to 6am
fabrication, either by himself or through some c. Works for no less than 7 consecutive hours
other person.
Excluded: Those working in Agriculture, stock raising,
Rights and benefits of homeworkers174 fishing, maritime transport, inland navigation.
1. Right to form, join or assist organizations Night worker

2. Right to acquire legal personality and the rights Any employed person whose work requires performance
and privileges granted by law to legitimate labor of a substantial number of hours of night work which
organizations upon issuance of the certification of exceed a specified limit. This limit shall be fixed by the Sec
registration of Labor after consulting the workers’
3. Immediate payment upon ER‘s receipt of finished representatives/labor organizations and employers. [Art.
goods or articles 154, LC as amended by RA 10151]
4. SSS, MEDICARE and ECC premium contributions Any employed person whose work covers the period from
shall be deducted from their pay and shall be 10 o’clock in the evening to 6 o’clock the following
remitted by ER/contractor/subcontractor to the morning, provided that the worker performs no less than 7
SSS consecutive hours of work.178
171 175
Sec 34, RA 10361 Rule XIV, Book III, IRR
172
Sec. 1, Rule XIV, Book III, IRR
173
Sec 2(a), Rule XIV, Book III, IRR 176
Sec 14, Rule XIV, Book III, IRR
174
Rule XIV, Book III, IRR 177
Sec 8, Rule XIV, Book III, IRR
178
Book III, Rule XV, Sec. 2, IRR, thru DO 119-12

Rights of Night Workers workers who are prevented from working for
health reasons. [Art. 157, LC as amended by RA
Health Assessment 10151]
At the worker’s request, they shall have the right to
undergo a health assessment without charge and to Women Night Workers
receive advice on how to reduce or avoid health problems Employers shall ensure that measures shall be taken to
associated with their work: ensure that an alternative to night work for pregnant and
a. Before taking up an assignment as a night worker; nursing employees who would otherwise be called upon to
b. At regular intervals during such an assignment; perform such work. Such measures may include:
c. If they experience health problems during such an 1. Transfer to day work – As far as practicable,
assignment; pregnant or nursing employees shall be
With the exception of a finding of unfitness for night work, assigned to day work, before and after
the findings of such assessments shall be confidential and childbirth, for a period of at least sixteen (16)
shall NOT be used to their detriment, subject, however, to weeks, which shall be divided between the time
applicable company policies. [Art 155, LC as amended by RA before and after childbirth;
10151]
Medical certificate issued by competent physician
Mandatory Facilities (OB/Gyne/Pedia) is necessary for the grant of:
Mandatory facilities shall be made available for workers a. additional periods of assignment to day
performing night work, which include the following: work during pregnancy or after
a. Suitable first-aid and emergency facilities childbirth, provided that such shall not
b. Lactation station in required companies pursuant be more than 4 weeks or for a longer
to RA 10028 period as may be agreed upon by
c. Separate toilet facilities for men & women employer and worker;
d. Facility for eating w/ potable drinking water; AND b. extension of maternity leave; and
e. Facilities for transportation and/or properly c. clearance to render night work.
ventilated temporary sleeping or resting quarters,
separate for male and female workers, shall be 2. Provision of social security benefits - in
provided except where any of the ff. circumstances accordance with provisions of Act No 8282
is present: (Social Security Act of 1997) and other existing
i. There is an existing company company policy or collective bargaining
guideline, practice or policy, CBA, or agreement.
any similar agreement providing for an
equivalent or superior benefit; or 3. Extension of maternity leave – where transfer to
ii. Start or end of the night work does day work is not possible, but requires
NOT fall within 12 mn - 5 am; or recommendation by competent physician;
iii. Workplace is located in an area that is without pay or using earned leave credits, if any
accessible 24 hours to public [Art. 158, LC, as amended by RA 10151; Book III, Rule
transportation; or XV, Sec. 6, IRR, through DO 119-12]
iv. Number of employees does NOT
exceed a specified number as may be Protection against dismissal and loss of benefits attached
provided for by the SOLE in to employment status, seniority, and access to promotion
subsequent issuances [Art. 156, LC as Where no alternative work can be provided to a woman
amended by RA 10151] employee who is not in a position to render night work, she
shall be allowed to go on leave or on extended maternity
Transfer leave, using her earned leave credits.
If night worker is unfit for night work due to health reasons
as certified by competent physician, s/he shall be: A woman employee shall NOT be dismissed for reasons of
1. Transferred in good faith to a job for which they pregnancy, childbirth and childcare responsibilities as
are fit to work whenever practicable, which must defined under this Rule. She shall NOT lose the benefits
be similar and equivalent position; regarding her employment status, seniority, and access to
2. If transfer is not practicable, or workers are promotion which may attach to her regular night work
unable to render night work for a continuous position.179
period of not less than 6 months upon
certification of a competent public health
authority, they shall be granted the same
benefits as other workers who are unable to
work due to illness.
3. If workers are certified as temporarily unfit to
render night work for a period of less than 6
months, they shall be given the same protection
against dismissal or notice of dismissal as other
179
Book III, Rule XV, Sec. 8, IRR, thru DO 119-12

Conditions under which children below 15 may be

employed
Children below fifteen (15) years of age shall not be
Apprenticeship, Apprentice, Apprenticeship Agreement
employed except:
and Apprenticeable Occupation, defined 1. When a child works directly under the sole
responsibility of his parents or legal guardian and
Art 58, Labor Code “TESDA Law” where only members of the employer's family are
Apprenticeship employed: Provided, however, that his
Practical training on Training within employment neither endangers his life, safety,
the job supplemented employment with health and morals, nor impairs his normal
by related theoretical compulsory related development: Provided, further, That the parent
instruction theoretical instructions or legal guardian shall provide the said minor
involving a contract child with the prescribed primary and/or
between an apprentice secondary education; or
and an employer on an 2. Where a child's employment or participation in
approved apprenticeable public entertainment or information through
occupation cinema, theater, radio or television is essential:
Apprentice Provided, the employment contract is concluded
A worker who is A person undergoing by the child's parents or legal guardian, with the
covered by a written trainingfor an approved express agreement of the child concerned, if
apprenticeship apprenticeable possible, and approval of the Department of
agreement with an occupation during an Labor and Employment: and Provided, That the
individual employer or established period following requirements in all instances are
any of the entities assured by an strictly complied with:
recognized under this apprenticeship agreement a. The employer shall ensure the protection,
Chapter. health, safety, morals and normal
Apprenticeship Agreement development of the child;
An employment A contract wherein a b. The employer institute measures to
contract prospective employer prevent the child's exploitation or
wherein the employer binds himself to train the discrimination taking into account the
binds himself to train apprentice who in turn system and level of remuneration and the
the apprentice and the accepts the terms of duration and arrangement of working
apprentice in turn training for a recognized time; and
accepts the terms of apprenticeable c. The employer shall formulate and
training. occupation emphasizing implement, subject to the approval and
the rights, duties and supervision of competent authorities, a
responsibilities of each continuing program for training and skills
party acquisition of the child.
Apprenticeable Occupation
In the above exceptional cases where any such child may
Any trade, form of An occupation officially
be employed, the employer shall first secure, before
employment or endorsed by a tripartite
engaging such child, a work permit from the Department
occupation which body and approved for
of Labor and Employment which shall ensure observance
requires more than apprenticeship by the
of the child.
three (3) months of Authority
practical training on
The Department of Labor and Employment shall
the job supplemented
promulgate rules and regulations necessary for the
by related theoretical
instruction. effective implementation of this Section.181
Qualifications of apprentice under the Labor Code

a. Be at least 14 years of age;
When Apprentices may be Employed
b. Possess vocational aptitude and capacity for
appropriate tests; and
Prior approval by the DOLE of the proposed c. Possess the ability to comprehend and follow
apprenticeship program is a condition sine quo non oral and written instructions.
before an apprenticeship agreement can be validly
entered into. The act of filing the proposed Trade and industry associations may recommend to the
apprenticeship program with the DOLE is a preliminary Secretary of Labor appropriate educational requirements
step towards its final approval and does not for different occupations. [Art 59, LC]
instantaneously give rise to an employer-apprentice
relationship.180 Qualifications of apprentice under the IRR
To qualify as apprentice, an applicant shall:
180 181
Nitto Enterprises vs. NLRC, (1995) RA 7160, Sec. 12 as amended by RA 7658, Sec. 1

a. Be at least 15 years of age; provided those who c. The wages or salary rates of the learners which
are at least fifteen years of age but less than shall begin at not less than seventy-five percent
eighteen may be eligible for apprenticeship only (75%) of the applicable minimum wage; and
in non-hazardous occupations; d. A commitment to employ the learners if they so
b. Be physically fit for the occupation in which he desire, as regular employees upon completion of
desires to be trained; the learnership.
c. Possess vocational aptitude and capacity for the
particular occupation as established through All learners who have been allowed or suffered to work
appropriate tests; and during the first two (2) months shall be deemed regular
d. Possess the ability to comprehend and follow employees if training is terminated by the employer before
oral and written instructions. the end of the stipulated period through no fault of the
learners.
Employment of Apprentices
When applicable: The learnership agreement shall be subject to inspection
1. Only employers in highly technical industries by the Secretary of Labor and Employment or his duly
may employ apprentices; and authorized representative. [Art 75, LC]
2. Only in apprenticeable occupations approved by
the Secretary of Labor. [Art 60, LC] Learners employed in piece or incentive-rate jobs during
the training period shall be paid in full for the work done.
Apprenticeable Occupation [Art 76, LC]
An occupation officially endorsed by a tripartite body and
approved to be apprenticeable by the authority. [Sec 4, RA Learnership and Apprenticeship, distinguished
7796]
Learnership Apprenticeship
Under TESDA guidelines, the period of apprenticeship Nature
should not be less than 4 months and not more than 6 Semi-Skilled Highly Technical
months. Period
3 Months Not less than 3 months
An apprentice is entitled to the full minimum wage (not but not more than 6
75%) when: months
1. The employer stipulates in the contract and
2. The employer avails of the tax benefit where he 3 months < P<6 months
is able to deduct from his remittance to the Commitment to employment
government in exchange of the training
At the option of the At the option of the
program given to apprentice.
Learner employer
Learners, defined Necessity of DOLE approval of program
Persons hired as trainees in semi-skilled and other Not necessary. Only Prior approval by DOLE
industrial occupations which are non-apprenticeable and DOLE inspection is necessary
which may be learned through practical training on the job required
in a relatively short period of time which shall not exceed Deductibility of expenses
three (3) months. [Art 73, LC] No provision for Expenses of training
deductibility deductible from income
When Learners may be Employed tax
When employed
Learners may be employed when no experienced workers (1) When no (1) The person is at least
are available, the employment of learners is necessary to experienced workers fifteen (15) years of age,
prevent curtailment of employment opportunities, and the are available provided those who are
employment does not create unfair competition in terms (2) The employment at least fifteen (15) years
of labor costs or impair or lower working standards. [Art of learners is of age but less than
74, LC] necessary to prevent eighteen (18) may be
curtailment of eligible for
Learnership programs must be approved by the Authority.
[RA 7796] employment apprenticeship only in
opportunities; and non-hazardous
Conditions of Employment [Art 75, LC] (3) The employment occupation;
Any employer desiring to employ learners shall enter into does not create (2) The person is
a learnership agreement with them, which agreement shall unfair competition in physically fit for the
include: terms of labor costs occupation in which he
a. The names and addresses of the learners;
or impair or lower desires to be trained;
b. The duration of the learnership period, which
shall not exceed three (3) months; working standards. (3) The person possesses
vocational aptitude and

Learnership Apprenticeship Any violation of this Chapter or its implementing rules

capacity for the and regulations shall be subject to the general penalty
particular occupation as clause provided for in this Code. [Art 77, LC]
established through
appropriate tests; and
(4) The person is able to
comprehend and follow [RA 7277 - Magna Carta for Disabled Persons, as amended
oral and written by RA 9442]
instructions
Wage rate Disabled Persons
General Rule General Rule Those suffering from restriction or different abilities, as
Not less than 75% of Not less than 75% of the a result of a mental, physical or sensory impairment, to
the minimum wage minimum wage perform an activity in the manner or within the range
considered normal for a human being182
Exception Exception
Learners in No compensation if Impairment
piecework shall be SOLE authorizes, as OJT Any loss, diminution or aberration of psychological,
paid in full for the is required by the school physiological, or anatomical structure or function183
work done.
Deductibility of training cost Disability shall mean:
Not allowed Allowed 1. physical or mental impairment that
substantially limits one or more psychological,
Conditions
physiological or anatomical function of an
(1) Program is
individual or activities of such individual; OR
duly recognized 2. a record of such an impairment; OR
by DOLE 3. being regarded as having such an
(2) Deduction impairment184
shall not exceed
10% of direct Handicap
labor wage A disadvantage for a given individual, resulting from an
impairment or a disability that limits or prevents the
(3) Payment of
function, or activity that is considered normal given the
minimum wage
age and sex of the individual.185
to apprentices
Regularization Equal Opportunity
A commitment to No disabled person shall be denied access to
employ the learners opportunities for suitable employment. A qualified
if they so desire, as disabled EE shall be subject to the same terms and
regular employees conditions of employment and the same compensation,
upon completion of privileges, benefits, fringe benefits, incentives or
the learnership. allowances as a qualified able-bodied person.186
All learners who have

been allowed or
suffered to work Forms of discrimination against the handicapped in
during the first two employment187
(2) months shall be 1. Limiting, segregating or classifying a disabled
deemed regular job applicant in such a manner that adversely
employees if training affects his work opportunities;
is terminated by the
employer before the 2. Using qualification standards, employment
end of the stipulated tests or other selection criteria that screen out
period through no or tend to screen out a disabled person unless
fault of the learners. such standards, tests or other selection
criteria are shown to be job related for the
position on question and are consistent with
business necessity;
Enforcement
182 185
Sec. 4 (a), RA 7277 Sec 4(d), RA 7277
183 186
Sec. 4(b), RA 7277 Sec 5(1), RA 7277
187
Sec 32, RA 7277
184
Sec 4(c), RA 7277

3. Utilizing standards, criteria, or methods of c. Provided such entities present proof as

administration that: certified by the DOLE and the DOH189
a. have the effect of discrimination on
the basis of disability; or 2. For construction of disabled- friendly facilities -
b. perpetuate the discrimination of additional deduction from their net taxable
others who are subject to common income, equivalent to 50% of the direct costs of
administrative control; the improvements or modifications
a. Private entities
4. Providing less compensation, such as salary, b. That improve or modify their physical
wage or other forms of remuneration and facilities in order to provide
fringe benefits, to a qualified disabled reasonable accommodation for
employee, by reason of his disability, than the disabled persons
amount to which a non-disabled person c. Does NOT apply to improvements or
performing the same work is entitled; modifications or facilities required
under BP 344.190
5. Favoring a non-disabled employee over a
qualified disabled employee with respect to 3. For discounts – may claim such discounts as tax
promotion, training opportunities, study and deductions based on the net cost of the goods
scholarship grants, solely on account of the sold or services rendered
latter’s disability; a. The cost of the discount shall be allowed
as deduction from gross income for the
6. Re-assigning or transferring a disabled same taxable year that the discount is
employee to a job or position he cannot granted.
perform by reason of his disability; b. The total amount of the claimed tax
deduction net of VAT if applicable, shall
7. Dismissing or terminating the services of a be included in their gross sales receipts
disabled employee by reason of his disability for tax purposes and shall be subject to
unless the employer can prove that he impairs proper documentation and to the
the satisfactory performance of the work provisions of the National Internal
involve to the prejudice of the business Revenue Code, as amended.191
entities; Provided, however, That the employer
first sought provide reasonable
accommodations for disabled persons;
8. Failing to select or administer in the effective

manner employment tests which accurately
reflect the skills, aptitude or other factor of the
disabled applicant or employee that such test
purports to measure, rather than the impaired
sensory, manual or speaking skills of such
applicant or employee, if any; and
9. Excluding disabled persons from membership

in labor unions or similar organization.
If the violator is a corporation or an organization, who

is/are liable under the Act
If the violator is a corporation, organization or any
similar entity, the officials thereof directly involved shall
be liable188
Tax Incentives for Employers/ Establishments

1. For employment of disabled persons - additional
deduction, from their gross income, equivalent
to 25% of the total amount paid as salaries and
wages to disabled persons
a. Private entities
b. Employ disabled persons either as
regular EEs, apprentice or learner
188 190
Sec 46 (c), RA 7277 Sec 8 (c), RA 7277
191
Sec 32, RA 7277, as amended by RA 9442
189
Sec 8(b), RA 7277

Green Notes 2019 Social Welfare Legislation
COVERED EMPLOYEES
a. An employer or any person who uses the services of

another person in business, trade, industry or any
undertaking.
b. A social, civic, professional, charitable and other non-
profit organizations which hire the services of employees
are considered “employers.”
c. A foreign government, international organization or its
wholly-owned instrumentality such as an embassy in the
Philippines, may enter into an administrative agreement
with the SSS for the coverage of its Filipino employees.
COMPULSORILY COVERED EMPLOYEES
a. A private employee, whether permanent, temporary or

provisional, who is not over 60 years old.
b. A domestic worker or kasambahay who has rendered at
least one (1) month of service.
c. A Filipino seafarer upon the signing of the standard
contract of employment between the seafarer and the
manning agency which, together with the foreign ship
owner, act as employers.
d. An employee of a foreign government, international
organization or their wholly-owned instrumentality based
in the Philippines, which entered into an administrative
agreement with the SSS for the coverage of its Filipino
workers.
e. The parent, spouse or child below 21 years old of the
owner of a single proprietorship business.
SELF EMPLOYED PERSONS
A self-employed person, regardless of trade, business or

occupation, with an income of at least P1,000 a month and
not over 60 years old, should register with the SSS.
Included, but not limited to, are the following self-
employed persons:
a. Self-employed professionals;
b. Business partners, single proprietors and board
directors;
c. Actors, actresses, directors, scriptwriters and news
reporters who are not under an employer-employee
relationship;
d. Professional athletes, coaches, trainers and jockeys;
e. Farmers and fisherfolks; and

f. Workers in the informal sector such as cigarette vendors, EXCLUSIONS (EMPLOYERS)

watch-your-car boys, hospitality girls, among others.192
The government and any of its political subdivisions,
Unless otherwise specified, all provisions of the law, R.A. branches or instrumentalities, including corporations
No. 8282, applicable to covered employees shall also be owned or controlled by the Government with original
applicable to the covered self-employed persons. charters.
A self-employed person shall be both employee and EXCLUSIONS (EMPLOYEES)

employer at the same time.
Workers whose employment or service falls under any of
VOLUNTARY COVERAGE the following circumstances are not covered:
1. Separated Members (1) Employment purely casual and not for the purpose of
A member who is separated from employment or ceased occupation or business of the employer;
to be self-employed/OFW/non-working spouse and (2) Service performed on or in connection with an alien
would like to continue contributing. vessel by an employee if he is employed when such vessel
is outside the Philippines;
2. Overseas Filipino Workers (OFWs) (3) Service performed in the employ of the Philippine
A Filipino recruited in the Philippines by a foreign-based Government or instrumentality or agency thereof;
employer for employment abroad or one who legitimately (4) Service performed in the employ of a foreign
entered a foreign country (i.e., tourist, student) and is government or international organization, or their wholly
eventually employed. owned instrumentality: Provided, however, that this
exemption notwithstanding, any foreign government,
3. Non-working spouses of SSS members international organization or their wholly-owned
A person legally married to a currently employed and instrumentality employing workers in the Philippines or
actively paying SSS member who devotes full time in the employing Filipinos outside of the Philippines, may enter
management of household and family affairs may be into an agreement with the Philippine Government for the
covered on a voluntary basis, provided there is the inclusion of such employees in the SSS except those
approval of the working spouse. The person should never already covered by their respective civil service retirement
have been a member of the SSS. The contributions will be systems: Provided, further, That the terms of such
based on 50 percent (50%) of the working spouse’s last agreement shall conform with the provisions of R.A. No.
posted monthly salary credit but in no case shall it be lower 8282 on coverage and amount of payment of contributions
than P1,000.193 and benefits: Provided, finally, That the provisions of this
Act shall be supplementary to any such agreement; and
DATES OF COVERAGE (5) Such other services performed by temporary and other
employees which may be excluded by regulation of the
For compulsory coverage: Social Security Commission. Employees of bona-fide
1. For employer - Compulsory coverage of the employer independent contractors shall not be deemed employees
shall take effect on the first day of his operation or on the of the employer engaging the service of said contractors.
first day he hires employee/s. The employer is given only
30 days from the date of employment of employee to
report the person for coverage to the SSS.
2. For employee - Compulsory coverage of the employee The following are primary beneficiaries:
shall take effect on the first day of his employment. 1. The dependent spouse until he or she remarries;
2. The dependent legitimate, legitimated or legally
3. For self-employed - The compulsory coverage of the self adopted, and illegitimate children who are not yet 21 years
employed person shall take effect upon his registration of age. The dependent illegitimate children shall be
with the SSS or upon payment of the first valid entitled to 50% of the share of the legitimate, legitimated
contribution, in case of initial coverage. or legally adopted children. However, in the absence of the
dependent legitimate, legitimated children of the member,
For voluntary coverage: his/her dependent illegitimate children shall be entitled to
1. For an OFW – upon first payment of contribution, in case 100% of the benefits
of initial coverage.
2. For a non-working spouse – upon first payment of The following are secondary beneficiaries:
contribution. 1. The dependent parents, in the absence of the primary
3. For a separated member – on the month he/she beneficiaries.
resumed payment of contribution. 2. Any other person designated by the member as his/her
secondary beneficiary, in the absence of all the foregoing
primary beneficiaries and dependent parents.194
192 194
Sec. 9-A, R.A. 1161 (As amended by R.A. 8282) Sec. 8 (k), R.A. 1161 (As amended by R.A. 8282)
193
Sec. 9, R.A. 1161 (As amended by R.A. 8282)

The SSS benefits may be classified into two (2) as follows: Dependents shall be the following:
(a) Social security benefits: (a) the legitimate spouse dependent for support upon the
1) Sickness member or pensioner;
2) Maternity (b) the legitimate, legitimated, legally adopted child,
3) Retirement including the illegitimate child, who is unmarried, not
4) Disability gainfully employed, not over the age of majority, or is over
5) Death and funeral. the age of majority but incapacitated and incapable of self-
(b) Employees’ compensation benefits. support due to a mental or physical defect acquired prior
to age of majority; and
(c) the parents’ dependent upon the member for support.
Gainful Occupation — Any productive activity that

provided the member with income at least equal to the
COMPULSORY MEMBERS OF THE GSIS minimum compensation of government employees.
1. All government personnel, whether elective or There are two (2) kinds of beneficiaries under the GSIS Law
appointive, irrespective of status of appointment, provided as follows:
they are receiving fixed monthly compensation and have 1. Primary beneficiaries — The legal dependent spouse until
not reached the mandatory retirement age of 65 years, are he/she remarries and the dependent children.
compulsorily covered as members of the GSIS and shall be 2. Secondary beneficiaries — The dependent parents and,
required to pay contributions.195 subject to the restrictions on dependent children, the
legitimate descendants.
2. However, employees who have reached the retirement
age of 65 or more shall also be covered, subject to the
following rules:
An employee who is already beyond the mandatory
The following are the benefits under the GSIS Law:
retirement age of 65 shall be compulsorily covered and be
(a) Compulsory Life Insurance Benefits under the
required to pay both the life and retirement premiums
Life Endowment Policy (LEP)
under the following situations:
(b) Compulsory Life Insurance Benefits under the
Enhanced Life Policy (ELP)
a. An elective official who at the time of election to public
(c) Retirement Benefits
office is below 65 years of age and will be 65 years or more
(d) Separation Benefit
at the end of his term of office, including the period/s of
(e) Unemployment Benefit
his re-election to public office thereafter without
(f) Disability Benefits
interruption.
(g) Survivorship Benefits
b. Appointive officials who, before reaching the mandatory
(h) Funeral Benefits
age of 65, are appointed to government position by the
President of the Republic of the Philippines and shall
remain in government service at age beyond 65.
c. Contractual employees including casuals and other
employees with an employee-government agency
relationship are also compulsorily covered, provided they
are receiving fixed monthly compensation and rendering
the required number of working hours for the month.
EXCLUSIONS
There are three (3) agencies involved in the
The following employees are excluded from compulsory
implementation of the Employees’ Compensation Program
coverage:
(ECP). These are: (1) The Employees’ Compensation
(a) Uniformed personnel of the Armed Forces of the
Commission (ECC) which is mandated to initiate,
Philippines (AFP), Philippine National Police
rationalize and coordinate policies of the ECP and to
(PNP), Bureau of Fire Protection (BFP) and Bureau of Jail
review appealed cases from (2) the Government Service
Management and Penology (BJMP);
Insurance System (GSIS) and (3) the Social Security System
(b) Barangay and Sanggunian Officials who are not
(SSS), the administering agencies of the ECP.
receiving fixed monthly compensation;
(c) Contractual Employees who are not receiving fixed
COVERAGE The following shall be covered by the
monthly compensation; and
Employees’ Compensation Program (ECP):
(d) Employees who do not have monthly regular hours of
work and are not receiving fixed monthly compensation.
1. All employers;
2. Every employee not over sixty (60) years of age;
195
Sec. 3, R.A. 1146 (As amended by R.A. 8291)

3. An employee over 60 years of age who had been paying 5. he complied with the four conditions enumerated under
contributions to the System (GSIS/SSS) prior to age sixty Section 32-A for an occupational disease or a disputably-
(60) and has not been compulsorily retired; and presumed work-related disease to be compensable.
4. Any employee who is coverable by both the GSIS and SSS
and should be compulsorily covered by both Systems. OCCUPATIONAL DISEASES
Sectors of employees covered by the ECP. - The following For an occupational disease and the resulting disability or
sectors are covered under the ECP: death to be compensable, all of the following conditions
must be satisfied:
1. All public-sector employees including those of 1. The seafarer’s work must involve the risks described
government-owned and/or controlled corporations and herein;
local government units covered by the GSIS; 2. The disease was contracted as a result of the seafarer’s
2. All private sector employees covered by the SSS; and exposure to the described risks;
3. Overseas Filipino workers (OFWs), namely: 3. The disease was contracted within a period of exposure
a. Filipino seafarers compulsorily covered under the SSS. and under such other factors necessary to contract it; and
b. Land-based contract workers provided that their 4. There was no notorious negligence on the part of the
employer, natural or juridical, is engaged in any trade, seafarer.203
industry or business undertaking in the Philippines;
otherwise, they shall not be covered by the ECP. A work-related illness or injury is defined as any sickness
resulting to disability or death as a result of one of the
twenty-four (24) occupational diseases listed under
Section 32-A of the said contract with the conditions set
DATES OF COVERAGE therein satisfied.204
The coverage under the ECP of employees in the private Among these illnesses are:
and public sectors starts on the first day of their 1. Cancer of the epithelial lining of the bladder. (Papilloma
employment. of the bladder)
2. Cancer, epithellomatous or ulceration of the skin or of
BENEFITS the corneal surface of the eye due to tar, pitch, bitumen,
mineral oil or paraffin, or compound product or residue
The following are the benefits provided under the Labor of these substances.
Code: 3. Deafness
a. Medical Benefits196 4. Decompression sickness (a) Caissons disease (b)
b. Disability Benefits197 Aeroembolism
1. Temporary total disability198 5. Dermatitis due to irritants and sensitizers
2. Permanent total disability199 6. Infection
3. Permanent partial disability200 7. Ionizing radiation disease, inflammation, ulceration or
c. Death Benefit201 malignant disease of skin or subcutaneous tissues of the
d. Funeral Benefit202 bones or leukemia.
8. Poisoning and its sequelae caused by certain chemicals
9. Vascular disturbance in the upper extremities
10. Vascular disturbance in the lower extremities –
varicocoele causing pain, varicose veins resulting in
discoloration and ulceration.
11.Cardiovascular events to include heart attack, chest
pain (angina), heart failure or sudden death.
Under the Philippine Overseas Employment
Administration Standard Employment Contract (POEA- 12. Cerebro-Vascular events
SEC), to avail of death or disability benefits, the seafarer is 13. End organ damage resulting from uncontrolled
required to prove that: hypertension
14. Cataract and pterygium
1. he suffered an illness; 15. Poisoning by cadmium.205
2. he suffered this illness during the term of his
The POEA-SEC cannot be presumed to contain all the
employment contract;
possible injuries that render a seafarer unfit for further sea
3. he complied with the procedures prescribed under
duties in view of Section 20 (B) (4) of the POEA-SEC which
Section 20-B;
4. his illness is one of the enumerated occupational disease states that “(t)hose illnesses not listed in Section 32 of this
or that his illness or injury is otherwise work-related; and Contract are disputably presumed as work-related.”
196 201
Article 185 to 190, Chapter IV, Title II, Book IV, Labor Code Article 194, Chapter VII, Title II, Book IV, Ibid
197 202
Article 191 to 193, Chapter IV, Title II, Book IV, Ibid Sec. 1, Rule XIV, Amended Ruled on Employees’ Compensation
198 203
Article 191, Ibid Sec. 32-A (4), POEA-SEC (2010)
199 204
200 205

Green Notes 2019 Labor Relations
Definition
It is the right of workers and EEs to form, join, or assist

unions, organizations, or associations for purposes of CB
and negotiation and for mutual aid and protection. It also
refers to the right to engage in peaceful concerted
activities or to participate in policy and decision-making
processes affecting EEs rights and benefits.
Extent of the right to self-organization
(1) To form, join, and assist labor organizations for the

purpose of CB through representatives of  their own
choosing or for their mutual aid and protection; and (Art.
253)  
(2) To engage in lawful and concerted activities for
the purpose of CB or for their mutual aid and protection.
(Art. 278)  
NOTE: The right to self-organization includes the right

NOT to join any labor organization.
All persons employed in commercial, industrial and

agricultural enterprises and in religious, charitable,
medical or educational institutions whether operating for
profit or not, shall have the right to self-organization and
to form, join, or assist labor organizations of their own
choosing for purposes of collective bargaining. Ambulant,
intermittent and itinerant workers, self-employed people,
rural workers and those without any definite employers
may form labor organizations for their mutual aid and
protection. (Art. 243)
WHO MAY EXERCISE THE RIGHT
(1) All employees

(2) Government employees
(3) Supervisory Employees
(4) Aliens with valid working permits
(5) Security personnel
All Employees
Any person in the employ of an employer. The term shall

not be limited to the employees of a particular employer,
unless the Code so explicitly states. It shall include any
individual whose work has ceased as a result of or in
connection with any current labor dispute or because of
any unfair labor practice if he has not obtained any other
substantially equivalent and regular employment. (Art. 219
(f))
Any employee, whether employed for a definite period or

not, shall, beginning on his first day of service, be
considered as an employee for purposes of membership in
any labor union. (Art. 292 (c))

Government Employees
Effect of Inclusion of Employees outside of the Bargaining
A. Employees of government corporations established Unit
under the Corporation law:
 Right to organize THE HERITAGE HOTEL MANILA v. SECRETARY OF
 Right to bargain collectively LABOR AND EMPLOYMENT
B. All other employees in the civil service: Confidential Employees

 Right to form associations for purposes not
contrary to law Bar 1994, 2002, 2009
Who are confidential employees?
Those who, by reason of their positions or nature of
WHO MAY NOT EXERCISE THE RIGHT work, are required to assist or act in a fiduciary
manner to managerial employees; and hence, are
(1) Managerial employees likewise privy to sensitive and highly confidential
(2) Confidential employees records. xxx By the very nature of their functions, they
(3) Member-employee of a cooperative assist and act in a confidential capacity to, or have
(4) Employees of international organizations access to confidential matters of, persons who
(5) Non-employees exercise managerial functions in the field of labor
(6) Members of the AFP, police officers, policemen, relations. 208
firemen and jail guards
(7) High-level / Managerial Government Employees
Rationale for exclusion
By the very nature of their functions, they assist and act

in a confidential capacity to, or have access to
confidential matters of, persons who exercise managerial
functions in the field of labor relations. As such, the
A "Managerial employee" is one who is vested with the rationale behind the ineligibility of managerial employees
powers or prerogatives to lay down and execute to form, assist or join a labor union equally applies to
management policies and/or to hire, transfer, suspend, them.209
lay-off, recall, discharge, assign, or discipline employees.
Worker-members of a Cooperative
Rationale for prohibition
Bar 2002
If these managerial employees would belong to or be Rationale: A cooperative is, by its nature, different
affiliated with a Union, the latter might not be assured of from an ordinary business being run either by persons,
their loyalty to the Union in view of evident conflict of partnerships, or corporations. Its owners and/or
interests. The Union can also become company- members are the ones who run and operate while the
dominated with the presence of managerial employees in others are its employees.210
Union membership.206
Therefore, an employee of such a cooperative, who is a
Managerial functions refer to powers, such as to: member and co-owner thereof, cannot invoke the
(1) Effectively recommend managerial actions; right to collectively bargain because an owner cannot
(2) Formulate or execute management policies or bargain with himself or his co-owners.211
decisions; or
(3) Hire, transfer suspend, lay-off, recall, dismiss, assign, May form associations
or discipline employees.207 While the members of a cooperative who are also its
Right of Supervisory Employees employees cannot unionize for purposes of collective
Supervisory Employees are allowed to exercise the right of bargaining, the law does not prohibit them from
self-organization PROVIDED that they do not possess, by forming an association for their mutual aid and
the nature of their work, confidential information relating protection.
to labor relations.
As stated in SMC Employees Union v. Laguesma: Employees of International Organizations
Supervisors 3 and above may not be considered
confidential employees merely because they handle A certification election cannot be conducted in an
confidential data pertaining to labor relations. The international organization which the Philippine
information they handle are properly classifiable as government has granted immunity from local jurisdiction.
technical business operations data which has no
relevance to negotiations and settlement of grievances. International organization, defined.
206 209
Bulletin Publishing Corp. v Sanchez (1986) Philips Industrial Dev’t., Inc. v NLRC (1992)
207 210
San Miguel Supervisors and Exempt Union v Laguesma, 1997 Batangas Electric Cooperative v Young (1988).
208 211
Metrolab Industries v Confessor (1996) Supra note 10.

The term is generally used to describe an organization set be eligible to join the organization of rank- and-file
up by agreement between two or more states. Such government employees. [Sec. 3, E.O. 180]
organizations are endowed with some degree of
international legal personality such that they are capable Right of Supervisory Employees
of exercising specific rights, duties, and powers.
Supervisory employees may join, assist, or form separate
Reason for grant of immunity labor organizations of their own.
The assurance of unimpeded performance of their
functions by the agencies concerned. Supervisory employees are not eligible to join rank-and-
file labor organizations, because conflict of interest may
No deprivation of labor’s basic rights arise with rank-and-file employees in so far as
The immunity of international organizations from local supervisory employees are considered as extensions of
jurisdiction does not deprive labor of its basic rights which the management.
are guaranteed by Article II, Section 18, Article III, Section
8 and Article XIII, Section 3 of the 1987 Constitution; and Test of Supervisory Status
implemented by Articles 243 and 246 of the Labor Code.
Recourse for any violation of labor’s basic rights by an The test of "supervisory" or "managerial status" depends
international organization may be had through on whether a person possesses authority to act in the
international Conventions or through the organization’s interest of his employer in the matter specified in Article
internal grievance machineries.212 212 (k) of the Labor Code and Section 1 (m) of its
Implementing Rules [now Section 1(t)] and whether such
Certification election barred by immunity authority is not merely routinary or clerical in nature, but
A certification cannot be viewed as an independent or requires the use of independent judgment. Thus, where
isolated process. It could trigger off a series of events in such recommendatory powers, as in the case at bar, are
the collective bargaining process together with related subject to evaluation, review, and final action by the
incidents and/or concerted activities, which could department heads and other higher executives of the
inevitably involve the international organization in the company, the same, although present, are not effective
“legal process”, which includes “any penal, civil, and and not an exercise of independent judgment as required
administrative proceedings.” The eventuality of court by law.216
litigation is neither remote and from which international
organizations are precisely shielded to safeguard them Aliens
from the disruption of their functions.213
General Rule: All aliens, natural or juridical, as well as
Waiver of immunity foreign organizations are strictly prohibited from engaging
Waiver of immunity is discretionary. Without such express directly or indirectly in all forms of trade union activities
waiver, the NLRC or its labor arbiters have no jurisdiction without prejudice to normal contacts between Philippine
even in cases of alleged illegal dismissal of any of its labor unions and recognized international labor centers.
employees.214
Exception: Aliens working in the country can exercise the
Non-Employees right to self-organization if: (VR)
Persons who are not employees of a company are not (a) With valid permits issued by the Department of Labor
entitled to the constitutional right to join or form a labor and Employment, and
organization for purposes of collective bargaining. The (b) Reciprocity - said aliens are nationals of a country
question of whether employer-employee relationship which grants the same or similar rights to Filipino
exists is a primordial consideration before extending labor workers.217
benefits under the workmen's compensation, social
security, Medicare, termination pay, and labor relations Security personnel
law.215
The security guards and other personnel employed by a
Members of the AFP, Policemen, Police Officers, security service contractor shall have the right:
Firemen, and Jailguards (1) To form, join, or assist in the formation of a labor
Members of the AFP, Policemen, Police Officers, Firemen, organization of their own choosing for purposes of
and Jailguards are expressly excluded by EO 180 from the collective bargaining and
coverage of the law which provides guidelines for the (2) To engage in concerted activities which are not
exercise of the right to organize of government employees. contrary to law including the right to strike. [D.O. No.
14 Series of 2001 Guidelines Governing the
High-level/Managerial Employees Employment and Working Conditions of Security
High-level employees of the government whose functions Guards and Similar Personnel in the Private Security
are normally considered as policy-making or managerial or Industry)
whose duties are of a highly confidential nature shall not
212 216
International Catholic Migration Commission v. Calleja (1990). Franklin Baker Company v Trajano, G.R. No. 75039 (1988).
213
Id. (More recent citation: Cathay Pacific Steel Corporation vs. CA, G.R. No.
214
Callado v. International Rice Research Institute (1995) 164561, Aug. 30, 2006)
215 217
Singer Sewing Machine v. Drilon (1991) Art 284

similarity of work and duties, or similarity of

compensation and working conditions
(3) Similarity of Employment status - The
determination of the appropriate bargaining unit is
based on the employment status of the employees.
The inclusion as union members of employees outside the (4) Collective Bargaining history – This factor puts
bargaining unit shall not be a ground for the cancellation premium to the prior collective bargaining history or
of the registration of the union. Said employees are affinity of the employees in determining the
automatically deemed removed from the list of appropriate bargaining unit. However, the existence
membership of said union. (Art. 245-A of a prior collective bargaining is neither decisive nor
conclusive in the determination of what constitute an
appropriate bargaining unit.
It shall be unlawful for any person to restrain, coerce,
discriminate against or unduly interfere with employees Bar 2007
and workers in their exercise of the right to self- Community of interest
organization. Such right shall include the right to form, Not exactness of interests. Interrelatedness or
join, or assist labor organizations for the purpose of interdependence is sufficient.
collective bargaining through representatives of their own
choosing and to engage in lawful concerted activities for The basic test of an asserted bargaining unit’s acceptability
the same purpose for their mutual aid and protection, is whether or not it is fundamentally the combination
subject to the provisions of Article 264 of this Code. (As which will best assure to all employees the exercise of their
amended by Batas Pambansa Bilang 70, May 1, 1980). (Art. CB rights. 220
246)
The bargaining history factor is the weakest factor in
determining the bargaining unit. xxx The [Supreme Court]
has categorically ruled that the existence of a prior
collective bargaining history is neither decisive nor
Definition conclusive in the determination of what constitutes an
A bargaining unit is a group of employees of a given
appropriate bargaining unit.221
employer, comprised of all or less than all of the entire
body of employees, consistent with equity to the What will best assure the employees’ rights to CB is
employer, indicate to be the best suited to serve the principal consideration. It is not the convenience of the
reciprocal rights and duties of the parties under the employer that constitutes the determinative factor in
collective bargaining provisions of the law. (ISAE v. forming an appropriate bargaining unit.222
Quisumbing, 2000)
Unit severance and Globe Doctrine
Principles in Determining a Bargaining Unit Bar 2007
Globe doctrine. Bargaining units may be formed
Our labor laws do not however provide the criteria for through separation of new units from existing from
determining the appropriate bargaining unit. existing ones whenever plebiscites had shown the
Jurisprudence/case laws provide for different factors.218 worker’s desire to have their own representatives.223
Who determines?
Initially, the members themselves. But if dispute arises as Duty of court to conduct plebiscite224
regards appropriateness of ABU, it may be referred to the No one would deny court’s right to full investigation in
BLR. Appropriateness may also be resolved in a petition for arriving at a correct and conclusive finding of fact in order
certification election. to deny or grant the petitions for CE. One way of
determining the will of employees. Plebiscite not to be
Tests to determine the appropriate bargaining unit conducted by the DOLE but by the court. Order to hold
The basic test in determining the appropriate bargaining plebiscite in interlocutory.
unit is that a unit, to be appropriate, must affect a grouping
of employees who have substantial, mutual interests in Size of unit and effect of self-organization
wages, hours, working conditions and other subjects of When confidential employees are few in number and by
collective bargaining.219 practice and tradition identified with the supervisors, such
identity of interest should allow their inclusion in the
Factors bargaining unit of supervisors-managers for purposes of
(1) Globe doctrine - Express will or desire of the CB. The breaking up of bargaining agents into tiny units
employees will greatly impair their organizational value – the
(2) Substantial Mutual Interests Rule - Affinity and
Unity of the employees’ interest, such as substantial
218 222
UP v Calleja, 211 SCRA 451 (1992). Supra note 70.
219 223
Supra note 26. Mechanical Departments Labor Union v. CIR, 24 SCRA 925 (1968).
220 224
Democratic Labor Assoc. v. Cebu Stevedoring, 103 Phil 1103 (1958). Kapisanan ng mga Manggagawasa Manila Railroad Co. v Yard Crew Union
221
San Miguel v. Laguesma, G.R. No. 100485 (1994). (1960).

ineffectiveness of a small union with scanty members as Any labor organization whose formation, function, or
bargaining unit. 225 administration has been assisted by any act defined as
unfair labor practice by this Code. (Art. 219 (i))
Effect of prior agreement
Prior agreement not binding to employees of separate BU. Rationale for labor unions
A prior agreement (collective bargaining agreement) does A labor union is the instrumentality through which an
not bind employees of a separate bargaining unit or if they individual labourer, who is helpless as against a powerful
are indeed part of the bargaining unit. The agreement will employer, may through concerted effort and activity,
not bind subsequent federation or union if it curtails the achieve the goal of economic well-being.233
right to self-organization as guaranteed by the
Constitution and labor laws.226 Union registration
Determining Agency Registration is basically compliance with documentary

BLR no longer handles all labor-management disputes. Its requirements.
functions and jurisdiction are largely confined to union
matters, collective bargaining registry, and labor Bar 2010
education. Requirements for Independent Labor Unions (Art 240
LC and IR Book V, Rule III, Sec. 2): Application form
The industrial court enjoys a wide discretion in (1) Registration fee: fifty pesos (P50.00)
determining the procedure necessary to insure the fair (2) Officers' names and addresses, principal address
and free choice of bargaining representations by of the labor organization, minutes of the
employees.227 organizational meetings and the list of workers
who participated in such meetings
Labor organization (3) Names of all its members comprising at least
Any union or association of employees which exists in twenty percent (20%) of all employees in the
whole or in part for the purpose of collective bargaining or bargaining unit where it seeks to operate (As
of dealing with employers concerning terms and amended by EO No. 111, December 24, 1986)
conditions of employment. (Art. 219 (g)) (4) Copies of its annual financial report, if applicant
union has been in existence for one or more years;
Any union or association of employees in the private sector unless it has not collected any amount from the
which exists in whole or in part for the purpose of members (in which case a statement to this effect
collective bargaining, mutual aid, interest, cooperation, should be made)
protection or other lawful purposes.228 (5) Four (4) copies of the constitution and by-laws of
the applicant union, minutes of its adoption or
Union ratification, and the list of the members who
Any labor organization in the private sector organized for participated in it
collective bargaining and for other legitimate purposes229 (6) Statement that it is not reported as a local chapter
or union
Workers' association
An association of all workers organized for the mutual aid Federations or National Unions additional requirements
and protection of its members or for a legitimate purpose (IR Book V, Rule III, Sec. 2)
other than collective bargaining230 (1) Proof of affiliation of at least ten (10) chartered locals
or chapters (each of which must be a duly recognized
Legitimate labor organization collective bargaining agent in the establishment or
Any labor organization duly registered with the industry in which it operates) supporting the
Department of Labor and Employment and includes any registration of such applicant federation or national
branch or local thereof (Art. 219(h)). union
(2) Names and addresses of the companies where the
Any labor organization in the private sector registered or locals or chapters operate and the list of all the
reported with the Department in accordance with Rules members in each company involved.
III and IV of these Rules.231
Registration requirements for reporting a Local
Legitimate workers' association Chapter (IR Book V, Rule III, Sec. 2 (e))
An association of workers organized for mutual aid and (1) Charter certificate issued by the federation or national
protection of its members or of any legitimate purposes union and
other than collective bargaining registered with the (2) Names of its officers, their addresses, and the chapter’s
Department232 principal office
(3) Chapter’s constitution and by-laws
Company union
225 230
Filoil refinery v. Filoil Supervisory & Confidential Employees Assoc. (1972) IR, Book V, Rule I, Sec. 1(ccc)
226 231
General Rubber v. BLR (1997). IR, Book V, Rule I, Sec. 1(ee)
227 232
Supra note 72. IR, Book V, Rule I, Sec. 1(ff)
228 233
IR, Book V, Rule I, Sec. 1(cc) Guijarno v. CIR (1973).
229
IR, Book V, Rule I, Sec. 1(zz)

(4) Certification of the genuineness and due execution of (1) Notify the applicant within one (1) day from receipt
requirements 2 & 3, made under an oath by secretary of application/notice
or treasurer and attested to by the president of the (2) Give applicant thirty (30) days from receipt of
chapter notice to complete the necessary requirements;
NOTE: upon prescription of this period, such application
 Upon being issued the 1st requirement, the will be denied, or the notice will be returned,
Chapter gains legal personality to file a petition without prejudice to the filing of a new application
for certification election or notice
 Requirements 2 – 4 are in order for the chapter
to be entitled to all other rights and privileges of Sec. 6:
a legitimate labor organization Form of denial:
Minimal requirement for local or chapter In writing, stating in clear terms the reasons for denial
The law gives this incentive as it favors the creation of or return
chapters/locals than independent labor organizations.
Period for appeal:
Where to file application for registration Within ten (10) days from receipt of notice:
1. For ILO, Chartered Locals, Workers Association: DOLE (1) to the Bureau if denied by the Regional Office
Regional Office where the labor organization operates (2) to the Secretary if denied by the Bureau
2. For federations or national unions: Directly with the Grounds for appeal:
BLR or through DOLE Regional Office which will forward Grave abuse of discretion
the application to the BLR
Procedure on appeal:
Action on application (1) File a memorandum of appeal with the Regional
Art 242 Office or the Bureau that issued the denial/return
The Bureau shall act on all applications for registration of notice
within thirty (30) days from filing. (2) The memorandum (together with the complete
All requisite documents and papers shall be certified records of the application/notice) shall be
under oath by the secretary or the treasurer of the transmitted by the Regional Office to the Bureau,
organization, as the case may be, and attested to by its or by the Bureau to the Office of the Secretary,
president. within twenty-four (24) hours from receipt of the
IR, Book V, Rule IV, Sec. 4 memorandum of appeal
The Regional Office or the Bureau, as the case may be, (3) The Bureau or the Office of the Secretary shall
shall act on applications for registration or notice of decide the appeal within twenty (20) days from
change of name, affiliation, merger and consolidation receipt of the records of the case
within one (1) day from receipt thereof, either by:
approving the application and issuing the certificate of Effects of registration

registration/acknowledging the notice/report; or (1) It grants the union the status of legitimacy of a labor
organization;
denying the application/notice for failure of the (2) Results in the acquisition of legal personality; and
applicant to comply with the requirements for (3) It becomes entitled to all rights and privileges granted
registration/notice. by law to legitimate labor organizations.
(As amended by Dept. Order No. 40-D-05, series of IR, Book V, Rule III, Sec. 2 (E)
2005 For Local Chapters: gains legal personality only for
purposes of filing a petition for certification election
Denial of registration, appeal. from the date it was issued a charter certificate.
Art 243
The decision of the Labor Relations Division in the But, if the other requirements are submitted, it is
regional office denying registration may be appealed by entitled to all rights and privileges granted by law to
the applicant union to the Bureau within ten (10) days legitimate labor organizations.
from receipt of notice thereof.
Union personality not subject to collateral attack
IR, Book V, Rule IV, Sec. 5-7
Sec. 5: Once a union acquires a legitimate status as a labor
Grounds for denial: organization, it continues as such until its certificate of
(1) supporting documents are incomplete registration is cancelled or revoked in an independent
(2) supporting documents do not contain the required action for cancellation (petition for cancellation of
certification and attestation registration).234
Periods:
234
Legend International v. Kilusang Manggagawa ng Legenda (2011).

Effects
(1) The certified labor union enjoys all rights and
privileges of an exclusive bargaining agent
Pre-condition: employer-employee relationship (2) Has the right to compel management to bargain with
Under the law, the duty to bargain collectively arises only it
between an employer and its employees. Where neither (3) One-year period bar from the filing of a petition for
party is an employer nor an employee of the other, no such CE starting from the issuance of the certificate
duty would exist. Where there is no duty to bargain
collectively, the refusal to bargain violates no right.235 Public sector
DETERMINATION OF REPRESENTATION STATUS Section 11, EO No. 180: Sole and Exclusive Employees’
Representative
1. SEBA Certification (replaced Voluntary A duly registered employees’ organization shall be
Recognition) accorded voluntary recognition upon a showing that no
2. Certification Election other employees’ organization is registered or is
3. Consent Election seeking registration, based on records of the Bureau of
4. Run-off Election Labor Relations, and that the said organization has the
majority support of the rank-and-file employees in the
An employer does not have the power to declare a union organizational unit.
as the exclusive representative of its workers for the
purpose of collective bargaining. Voluntary recognition Where there is only one registered organization in the
[now SEBA Certification] is not a mere formality. Employer unit, they may be accorded voluntary recognition.
had no authority to give this certification, because it is the
employees’ prerogative (no the employers) to determine Conditions:
whether they want a union to represent them and which Proven that there is no other employees’ organization
union it should be.236 registered or seeking registration in the unit (based on the
records of BLR)
SEBA CERTIFICATION [REPLACED VOLUNTARY
RECOGNITION] This organization must have the majority support of the
rank-and-file employees in the unit.
Definition
Also known as the Request for Sole and Exclusive CERTIFICATION ELECTION
Bargaining Agent (SEBA) Certification. Under SO 40-I-15,
this repealed and replaced Voluntary Certification. Bar 2001, 2003, 2004, 2005, 2013
IR, Book V, Rule I, Sec 1 (h) Certificate election or
The process by which a legitimate labor union is
consent election
recognized by the employer as the exclusive bargaining
refers to the process of determining through secret
representative or agent in a bargaining unit, reported with
ballot the sole and exclusive representative of the
the Regional Office.
employees in an appropriate bargaining unit for
purposes of collective bargaining or negotiation.
The determination of an exclusive bargaining agent shall
be through SEBA certification in cases where there is only
A certification election is ordered by the department,
one legitimate labor organization operating within the
while a consent election is voluntarily agreed upon by
bargaining unit in an unorganized establishment.
the parties, with or without the intervention by the
department.
Requirements
SEBA Certification can be conducted:
Nature of proceeding
(1) In an unorganized establishment (wherein there
Certification election is not a litigation, but a mere
is no certified exclusive bargaining
investigation of a non-adversary character where the rules
representative),
of procedure are not strictly applied. Technical rules and
(2) Where there is only 1 union operating in the
objections should not hamper the correct ascertainment
bargaining unit, and
of the labor union that has the support of confidence of the
(3) The union is comprised of at least majority (51%)
majority of the workers and is thus entitled to represent
of the number of employees covered by the
them in their dealings with management.237
bargaining unit
 If unorganized but BU has more than 1 union 
Bar 2012
request will be referred to the election officer for the
conduct of a CE Who may file
A petition for CE may be filed by a legitimate labor
 If establishment is organized  request will be
union in an unorganized establishment.
referred to the Mediator-Arbitrator for
determination of propriety of conducting a CE
235
Allied Free Workers Union v. Cia Maritima (1967)
236 237
Samahang Manggagawa sa PERMEX v SOLE, G.R. No. 10772 (1998). Port Workers Union v DOLE, 207 SCRA 329 (1992).

Med-arbiter must automatically order the conduct of or run-off and no appeal is pending, if another union
CE in an unorganized establishment upon filing of a had been previously recognized voluntarily or
petition for CE by a legitimate labor union.238 certified in a valid certification.
Employer may also be an initiating party (Bystander (4) Signatures as proof of support of at least 25% of all
rule) employees of the APU
Bar 1996
Art 270.When an employer may file petition. Rules of procedure not binding on labor cases. Verification
When requested to bargain collectively, an employer of pleadings is not a formal jurisdictional requirement.
may petition the Bureau for an election. If there is no When all requirements have been complied with, it is
existing certified collective bargaining agreement in the incumbent upon the med-arbiter to order a CE to be
unit, the Bureau shall, after hearing, order a conducted.241
certification election.
Bar 2009
All certification cases shall be decided within twenty Substantial Support
(20) working days. 25% consent signatures requirement may be belatedly
submitted. The administrative rule requiring the
The Bureau shall conduct a certification election within simultaneous submission of the 25% consent signatures
twenty (20) days in accordance with the rules and upon the filing of petition for certification election
regulations prescribed by the Secretary of Labor. should not be strictly applied to frustrate the
determination of the legitimate representative of the
workers. Significantly, the requirement in the rule is not
Employer has no standing to question a petition for CE. found in Article 268, the law it seeks to implement. This
Employer is not a party to certification election which is is all the more reason why the regulation should at best
the sole or exclusive concern of the workers except when be given only a directory effect. Accordingly, the mere
workers request to bargain collectively. Employer may not filing of a petition for certification election within the
question the validity of a CE. 239 freedom period is sufficient basis for the issuance of an
order for the holding of a certification election, subject to
Except where the employer has to file a petition for the submission of the consent signatures within a
certification election pursuant to Article 258 of the Labor reasonable period from such filing.242
Code because of a request to bargain collectively, it has
nothing to do with a certification election which is the sole Whether retractions were before or after the filing of the
concern of the workers. Its role in a certification election petition for CE has not much relevance. The rule being
has aptly been described in Trade Unions of the Philippines followed in case of alleged retractions and withdrawals is
and Allied Services (TUPAS) v. Trajano, as that of a mere by- that the best forum for determining whether there was
stander. It has no legal standing in a certification election indeed retractions is the certification election itself wherein
as it cannot oppose the petition or appeal the Med- the workers can freely express their choice in a secret
Arbiter's orders related thereto. An employer that involves ballot.243
itself in a certification election lends suspicion to the fact
that it wants to create a company union.240 In an unorganized establishment
Art 269. Petitions in unorganized establishments.
Voting is done by a secret ballot ordered by the DOLE. In any establishment where there is no certified
bargaining agent, a certification election shall
Purpose automatically be conducted by the Med-Arbiter upon
 Find out if employees want to be represented; the filing of a petition by a legitimate labor
 Find out which union should be certified as the sole organization. (As amended by Section 24, Republic Act
and exclusive bargaining representative No. 6715, March 21, 1989)
Form of Petition Article 263 of the Labor Code mandates that a certification
(1) In writing election shall automatically be conducted by the Med-
(2) Verified under oath Arbiter upon the filing of a petition by a legitimate labor
(3) Members and officers list organization. Nothing is said therein that prohibits such
(4) Description of the bargaining unit automatic conduct of the certification election if the
management appeals on the issue of the validity of the
Statement indicating that: union's registration.244
(1) bargaining unit is unorganized or there is no
registered collective bargaining agreement; Since no certified bargaining agent represented the
(2) petition is filed within 60-day freedom period, if there supervisory employees, the establishment (petitioner) may
is an existing CBA; be deemed an unorganized establishment within the
(3) petition is filed outside the 1-year period from date of purview of Art. 257 of the Labor Code. xxx The fact that
recording of voluntary recognition or conduct of CE petitioner's rank-and-file employees were already
238 242
Sugbuanon Rural Bank v Laguesma, G.R. No. 116194 (2000). Port Workers Union v DOLE, 207 SCRA 329 (1992).
239 243
Hercules Industries, Inc. v SOLE, 214 SCRA 129 (1992). Oriental Tin Can Labor Union v SOLE, 294 SCRA 640 (1998).
240 244
Philippine Scouts, et al., v Torres, 224 SCRA 682 (1993). Sugbuanon Rural Bank v Laguesma, G.R. No. 116194 (2000).
241
National Mines and Allied Workers Union v SOLE, 227 SCRA 821 (1993).

represented by a certified bargaining agent does not make CERTIFICATION YEAR BAR RULE / ONE YEAR BAR
the establishment an organized establishment vis-a-vis RULE
the supervisory employees. After all, supervisory Provides that no petition for a CE may be filed within one
employees are "not . . . eligible for membership in a labor year from the date of a valid certification, consent, or run-
organization of the rank-and-file employees."245 off election. Thus if an election had been held but not one
of the unions won, a PCE may be filed again but only after
In an organized establishment 12 mos. The same ban shall apply even if “NO UNION” won
Refers to an enterprise where there exists a recognized or in the previous election. The purpose of this bar is to give
certified sole and exclusive bargaining agent.246 a chance to the union to conclude a CBA with the employer
within 1 year.
Cannot conduct CE if any of the following BARS exist:
Bar 2011 NEGOTIATION BAR RULE
(a) Contract Bar Rule (except during 60-day freedom CE barred if union has commenced and sustained
period)247 negotiations in good faith within 1 year.
(b) Certification Year Bar Rule248 DEADLOCK BAR RULE
(c) Negotiation Bar Rule Provides that a petition for CE can only be entertained if
(d) Deadlock Bar Rule249 there is no pending bargaining deadlock submitted to
conciliation or arbitration or which has become the
CONTRACT BAR RULE subject of a valid notice of strike or lockout. The principal
purpose is to ensure stability in the relationship of the
Bar 1999, 2000
workers and the management.
Contract bar rule. Existing CBA bars any other labor
organization from filing a petition for CE except within
Exception: there was no reasonable effort in good faith
60-day freedom period.250
bargaining
Petition during freedom period
Forced intervention/Motion for intervention
Art 264. Duty to bargain collectively when there exists Incumbent union, forced intervenor. By force of law, an
a collective bargaining agreement. incumbent union is automatically impleaded in a petition
When there is a collective bargaining agreement, the for CE as well as other contending choices.
duty to bargain collectively shall also mean that neither
party shall terminate nor modify such agreement Written consent of at least 20% of the BU applies to
during its lifetime. However, either party can serve a petition for CE only. It is crystal clear from the said
written notice to terminate or modify the agreement at provisions that the requisite written consent of at least
least sixty (60) days prior to its expiration date. It shall 20% of the workers in the bargaining unit applies to
be the duty of both parties to keep the status quo and petitioners for certification election only, and not to
to continue in full force and effect the terms and motions for intervention. Nowhere in the aforesaid legal
conditions of the existing agreement during the 60-day provisions does it appear that a motion for intervention in
period and/or until a new agreement is reached by the a certification election must be accompanied by a similar
parties. written consent.253
Petition beyond freedom period Responsible Agencies

Purpose of prohibition of filing petition for CE beyond  BLR and med-arbiters (original jurisdiction)
freedom period. Otherwise put, the rule prohibits the filing  DOLE (regional offices)
of a petition for certification election during the existence
of a collective bargaining agreement except within the
Requisite for validity of election/failure of election
freedom period when the said agreement is about to
Majority of all eligible voters must cast their votes.
expire. The purpose is to ensure stability in the
relationships of the workers and the management by
Less than majority = failure of election.
preventing frequent modifications of any collective
bargaining agreement earlier entered into by them in good
Re-election may be had upon appeal of any of the unions
faith and for the stipulated original period.251
to be held within 6 months after the first election.
CBA is automatically renewed until new agreement is
Election was held by SC as null and void because members
reached. It shall be the duty of both parties to keep the
of cooperative (ineligible to vote) were allowed to vote in
status quo and to continue in full force and effect the
the election.254
terms and conditions of the existing agreement during the
60-day period or until a new agreement is reached by the
Effect of private agreement
parties.252
245 250
Philippine Telegraphic v Laguesma, 223 SCRA 452 (1993). Atlantic Gulf and Pacific Co. Manila Inc. v. Laguesma (1992).
246 251
IR, Book V, Rule 1, Sec. 1 (ll) National Congress of Union in Sugar Industry v Ferrer – Calleja (1992).
247 252
LC, Art. 265 and IR, Book V, Rule XVII, Sec. 7 Supra note 55.
248 253
IR, Book V, Rule VIII, Sec. 14 (d) and (e) Philippine Association of Free Labor Union v Calleja, 169 SCRA 491 (1989).
249 254
IR, Book V, Rule VIII, Sec. 14 (d) Benguet Electric Coop v Calleja, 180 SCRA 740 (1989).

Private agreement is not binding to foreclose the petition shall act on their behalf. Having been denied this
for CE.255 opportunity by the betrayal committed by petitioning
 Posting notice union in the present case, the employees were prevented
 Notice of pre-election conference from making an intelligent and independent choice.258
 Voters’ list
 Optional: sample ballot Appeal
Art 272. Appeal from certification election orders.
Posting of notice may not be waived. Any party to an election may appeal the order or results
of the election as determined by the Med-Arbiter
Voter's list directly to the Secretary of Labor and Employment on
IR, Book V, Rule IX, Sec 6 (as amended by DO 40 – I - 15 the ground that the rules and regulations or parts
All employees who are members of the appropriate thereof established by the Secretary of Labor and
bargaining unit 3 months prior to the filing of the Employment for the conduct of the election have been
petition/request shall be eligible to vote. violated. Such appeal shall be decided within fifteen (15)
calendar days. (As amended by Section 25, Republic Act
An employee who has been dismissed from work but No. 6715, March 21, 1989)
has contested the legality of the dismissal in a forum of
appropriate jurisdiction at the time of the issuance of “Close of election proceedings”
the order for the conduct of a certification election Period from the closing of the polls to the counting and
shall be considered a qualified voter, unless his/her tabulation of the votes, as it could not have been the
dismissal was declared valid in a final judgment at the intention of IR to include here the period for the final
time of the conduct of the certification election. determination of the challenged votes and canvas.259
In case of disagreement over the voters’ list or over the Nullification of election results
eligibility of voters, all contested voters shall be allowed A general allegation of duress is not sufficient to invalidate
to vote. But their votes shall be segregated and sealed a CE. It must be shown by competent and credible proof.
in individual envelopes in accordance with Sections 11 xxx
and 12 of this Rule.
One’s religious convictions may be the basis for an
Employees with questioned dismissal are still qualified to employee joining or refusing to join a labor union; exercise
vote. Their case need not be resolved before CE be of constitutional freedom cannot be a ground to invalidate
conducted.256 Without a final judgment declaring the CE.260
legality of dismissal, dismissed employees are eligible or
qualified voters Suspension of certification election: Prejudicial Question
Anterior to the granting of an order allowing a CE, it
Election proceedings becomes necessary to inquire into the composition of
It refers to the period during a certification election, labor organization whenever status of the labor
consent or run-off election and election of union officers, organization is challenged on the basis of Art 255
starting from the opening to the closing of the polls, (Ineligibility of Managerial EEs to Join any LO; Right of
including the counting, tabulation and consolidation of Supervisory EEs).261
votes but excluding the period for final determination of
the challenged votes and the canvas thereof. Opposition
Non-submission of books of account is a ground to oppose
Waiver of protest a petition for CE by the local or chapter concerned.262
Grounds of protests not raised before the close of the
proceedings and duly formalized within 5 days after the Effect of Petition for Cancellation of Registration
close of the election proceedings are deemed waived.257 An order to hold a certification election is proper despite the
pendency of the petition for cancellation of the registration
However, in one case, the SC ruled that rule on when one certificate of the respondent union. The rationale for this is
Is allowed to file a protest should not be a ground to that at the time the respondent union filed its petition, it
dismiss a protest by former members of the petitioning still had the legal personality to perform such act absent
union, if the reason for the former members’ late protest an order directing a cancellation xxx Also, the pendency of
was because they had to form another union to file the said a petition for cancellation of union registration does not
protest, as a result of the fraud committed against them by preclude CB. 263
the petitioning union. Mere technicalities should not be
allowed to prevail over the welfare of the workers. What is
essential is that they be accorded an opportunity to
determine freely and intelligently which labor organization
255 260
PLUM Federation v Noriel, 119 SCRA 299 (1982). United Employees Union of Gelmart v Noriel, 67 SCRA 267 (1975).
256 261
Transport Corp v Laguesma, 227 SCRA 827 (1993). Dunlop Slazenger v SOLE, G.R. No. 131248 (1998).
257 262
SamahanngManggagawa v Laguesma, 267 SCRA 303 (1997). Protection Technology v SOLE, 242 SCRA 99 (1995).
258 263
DHL Phils. United Rank and File Assoc. v. Buklod ng Manggagawa ng DHL Legend International v Kilusang Manggagawang Legenda, G.R. No. 169754
Phils. (2004). (2011).
259
Phil Fruits and Vegetable Industries v Torres, 211 SCRA 95 (1992).

Public Sector Where no petition for certification election was filed

Recognition after Certification Election but the parties themselves agree to hold a consent
Section 12, EO No. 180: Sole and Exclusive Employees’ election with the intercession of the Regional Office,
Representative the result thereof shall constitute a bar to another
Where there are two or more duly registered petition for certification election
employees’ organizations in the appropriate
organizational unit, the Bureau of Labor Relations shall, RUN-OFF ELECTION
upon petition, order the conduct of a certification
election and shall certify the winner as the exclusive Definition
representative of the rank-and-file employees in said Bar 2000, 2006
organizational unit. Art 268 par 1 penultimate sentence
IR, Book V, Rule I, Sec 1 (ss)
Where there are two or more unions in the bargaining unit, An election between the labor unions receiving the two
a Certification Election must take place. highest number of votes in a certification or consent
election with 3 or more choices, where such a certified
Certification Election or consent results in none of the 3 or more choices
“Accreditation” receiving the majority of the valid vote cast; provided
 Whoever gets accredited will be the exclusive that the total number of votes for all contending unions
representative of the unit is at least 50% of the number of votes cast.
 May be conducted by the BLR
Conditions for run-off
Whether the employees of National Housing Corporation  There is a valid election (majority of employees in BU
are covered by the Labor Code or by the civil service laws, voted)
a certification election may be conducted.264  No choice in the election received majority of the
votes cast;
CONSENT ELECTION  Total number of votes for all contending unions = at
least 50% of the number of votes cast;
 Not ordered by the DOLE  No unresolved challenge or election protest
 Agreed upon by the parties, with or without the
intervention of the DOLE  If all conditions are present, then a run-off election
can be conducted between the labor unions receiving
Agreement the 2 highest number of votes.
In case the contending unions agree to a consent election,
the Med-Arbiter shall forward the records of the petition
to the Regional Director for the determination of the
Election Officer by the contending unions through raffle.
The first pre-election conference shall be scheduled (1) Right to act as the representative of its members in
within 10 days from the date of entry of agreement to collective bargaining
conduct consent election. (2) Right to be certified as the exclusive representative of
all the employees in an appropriate bargaining unit
Number of hearings (3) Right to be furnished by the employer, upon written
If the contending unions fail to agree to a consent election, request, with its annual audited financial statements
the Med-Arbiter may conduct as many hearings but in no within thirty (30) calendar days from the date of
case shall the conduct thereof exceed 15 days from the receipt of the request, or within sixty (60) days before
date of the scheduled preliminary conference/hearing, the expiration of the existing collective bargaining
after which time the petition shall be considered agreement, or during the collective bargaining
submitted for decision. negotiation
(4) Right to own property, real or personal
Effects of consent election (5) Right to sue and be sued in its registered name
IR, Book V, Rule VIII, Sec 23. Effects of consent election (6) Right to undertake all other activities not contrary to
law for the benefit of the organization and its
Where a petition for certification election had been
members
filed, and upon the intercession of the Med-Arbiter, the
parties agree to hold a consent election, the results
thereof shall constitute a bar to the holding of a Rule on intervention
certification election for one year from the holding of
such consent election. Where an appeal has been filed A labor union is one such party authorized to represent
from the results of the consent election, the running of its members. This authority includes the power to
the one-year period shall be suspended until the represent its members for the purpose of enforcing the
decision on appeal has become final and executory. provisions of the CBA. A party acting in a representative
capacity, such as a union, may be permitted to intervene
in a case.
264
Trade Unions of the Philippines and Allied Services vs. National Housing
Corporation, GR No. 49677 (1989)

equivalent of snuffing out the life of a labor organization,

A person whose interests are already represented will for without such registration, it loses its rights under the
not be permitted to do the same except when there is a labor code.272
suggestion of fraud or collusion or that the representative
will not act in good faith for the protection of all interests Union-member relations are governed by
represented by him.265 (1) Union’s constitution and by-laws
(2) Art 241: Rights and conditions of membership
Effects of non-registration (3) Art 260: ULP of labor organizations
(1) No acquisition of legal personality
(2) Union does not become entitled to all rights and
privileges granted by law to legitimate labor
organization.
Union dues and Special Assessments
A local union owes its creation and continued existence
Right of members as regards Union Funds (Art 250)
to the will of its members and not to the federation. 266
 To full and detailed financial reports (250-b)
Being an affiliate union does not mean the affiliate cannot  To audited, verified financial statements (250-l)
stand on its own without the federation.267  To inspect books of accounts (250-m)
 To have fiscal officers duly authorized by
Cancellation of Union Certificate of Registration constitution and by-laws (250-g)
 To have the union’s finances reported to the
The legal process leading to the revocation of the DOLE (250-g)
legitimate status of a union or workers’ association.268  To have fiscal officers who are were not
convicted for any crime involving moral
Grounds for cancellation (Art. 247) turpitude (250-f)
 To have members’ payment receipted (250-h)
(1) Misrepresentation, false statement or fraud in  To have income and expenses properly
connection with the adoption or ratification of the documented (250-h)
constitution and by-laws or amendments thereto, the  To be secure in that the funds of the organization
minutes of ratification, and list of members who took are not misappropriated and are being used for
part in the ratification. authorized purposes only (250-j)
(2) Misrepresentation, false statements or fraud in  To be given a true and correct financial account
connection with the election of officers, minutes of of monies received and paid by the union (250-i)
election of officers, list of voters.  To not be charged or levied special assessment
(3) Voluntary dissolution by the members. of other extra-ordinary fees, unless authorized
through a written resolution by majority of the
Comingling not a ground. The rule in Art. 256 on members (250 – n)
prohibiting the commingling of supervisors with rank-
and-file employees in a union is not a ground for Bar 2009, 2011
cancellation of union registration.269 Art. 289. Visitorial power.
The Secretary of Labor and Employment or his duly
For fraud and misrepresentation to be grounds for authorized representative is hereby empowered to
cancellation of union registration under the Labor Code, inquire into the financial activities of legitimate labor
the nature of the fraud and misrepresentation must be organizations upon the filing of a complaint under oath
grave and compelling enough to vitiate the consent of a and duly supported by the written consent of at least
majority of union members.270 twenty percent (20%) of the total membership of the
labor organization concerned and to examine their
Existence of a ground does not automatically lead to books of accounts and other records to determine
cancellation. An overly stringent interpretation of the compliance or non-compliance with the law and to
statute governing cancellation of union registration prosecute any violations of the law and the union
without regard to the surrounding circumstances cannot constitution and by-laws: Provided, That such inquiry
be allowed. Otherwise, it would lead to an unconstitutional or examination shall not be conducted during the sixty
application of the statute and emasculation of public policy (60)-day freedom period nor within the thirty (30) days
objectives. Worse, it can render nugatory the protection to immediately preceding the date of election of union
labor and social justice clauses that pervades the officials. (As amended by Section 31, Republic Act No.
Constitution and the Labor Code.271 6715, March 21, 1989)
Cancellation of union registration kills the union. Union dues

Cancellation of a certificate of registration is the
265 269
Acedera v. ICTSI, G.R. No. 146073 (2003). Air Phil v. BLR (2006).
266 270
Tropical Hut Employees Assoc. V. Tropical Hut Food Market, G.R. No. L- Mariwasa v. Secretary of DOLE (2009).
271
43495-99 (1990). Heritage Hotel Manila v. National Union of Workers (2011).
267 272
MSMG-UWP v. Ramos (2000) Supra note 22.
268
IR, Book V, Rule I, Sec. 1 (g)

Are payments to meet the union’s general and current Express consent of the employee to any deduction in his
obligations. Payment must be regular, periodic, and compensation is required to be obtained in accordance
uniform. with the steps outlined by the law, which must be followed
to the letter.275
Bar 1997, 2001, 2002
Art 250 (n), (o) Attorney’s fees cannot be deducted without employee’s
(n) No special assessment or other extraordinary fees written consent. Attorney’s fees may not be deducted or
may be levied upon the members of a labor organization checked off from any amount due to an employee without
unless authorized by a written resolution of a majority his written consent. No deduction can be made from the
of all the members in a general membership meeting salaries of the concerned employees other than those
duly called for the purpose. The secretary of the mandated by law.276
organization shall record the minutes of the meeting
including the list of all members present, the votes cast,
the purpose of the special assessment or fees and the
recipient of such assessment or fees. The record shall Policy declaration
be attested to by the president. It is the policy of the State to promote and emphasize the
primacy of free collective bargaining and negotiations,
(o) Other than for mandatory activities under the Code, including voluntary arbitration, mediation and
no special assessments, attorney’s fees, negotiation conciliation, as modes of settling labor or industrial
fees or any other extraordinary fees may be checked off disputes. (Art. 218-A (a))
from any amount due to an employee without an
individual written authorization duly signed by the To encourage a truly democratic method of regulating the
employee. The authorization should specifically state relations between the employers and employees by means
the amount, purpose and beneficiary of the deduction; of agreements freely entered into through collective
bargaining, no court or administrative agency or official
Payment of attorney’s fees shall have the power to set or fix wages, rates of pay, hours
Art 228 (b) Appearances and Fees of work or other terms and conditions of employment,
No attorney’s fees, negotiation fees or similar charges except as otherwise provided under the Labor Code. (Art.
of any kind arising from any collective bargaining 218-B)
agreement shall be imposed on any individual member
of the contracting union: Provided, However, that Definition
attorney’s fees may be charged against union funds in Collective bargaining is a process where the parties agree
an amount to be agreed upon by the parties. Any to fix and administer terms and conditions of employment
contract, agreement or arrangement of any sort to the which must not be below the minimum standards fixed by
contrary shall be null and void. (As amended by law and set a mechanism for resolving their grievances.
Presidential Decree No. 1691, May 1, 1980)
DUTY TO BARGAIN COLLECTIVELY
Payment of attorney’s fees is an obligation of the union, not
the employees. Attorney’s fees must be charged with the The duty to bargain collectively means the performance of
union funds, not on individual members. Art 228 intended a mutual obligation to meet and convene promptly and
to protect employee against unwarranted practices that expeditiously in good faith for the purpose of negotiating
would diminish his compensation without his consent.273 an agreement with respect to wages, hours of work, and all
other terms and conditions of employment including
Requirements for Special Assessments proposals for adjusting any grievances or questions arising
 Authorization by written resolution of general under such agreement and executing a contract
membership at a general membership meeting incorporating such agreements if requested by either
 Secretary's record of the minutes party but such duty does not compel any party to agree to
 Individual written authorization for check-off a proposal or to make any concession. (Art. 263)
signed by employee
Collective bargaining as a democratic means
Check-off It is a mutual obligation of employer and union. Collective
The method of deducting from an employer's pay, the bargaining, which is defined as negotiation towards
amounts due to the union for fees, fines or assessments. collective agreement, is one of the most democratic
frameworks under the New Labor Code, designed to
Substantial compliance not sufficient. Failure of the union stabilize the relation between labor and management and
to comply strictly with the requirements set out by the law to create a sound and stable industrial peace. It is a mutual
invalidates the questioned special assessment. Substantial responsibility of the employer and the Union and is
compliance is not enough in view of the fact that special characterized as a legal obligation.277
assessment will diminish the compensation of union
members.274 Legal duty to initiate contract negotiation
273 276
Pacific Banking Corporation v Clave, 128 SCRA 112 (1984). Gabriel v Sec of Labor, G.R. No. 115949 (2000)
274 277
Palacol v Ferrer-Calleja, 182 SCRA 710 (1990). Kiok Loy v NLRC, 141 SCRA 179 (1986).
275
Peninsula Employees Union v. Esquivel (2016)

While it is a mutual obligation of the parties to bargain, the its lifetime. Duty to keep the status quo and to continue in
employer, however, is not under any legal duty to initiate full force and effect the terms and conditions of the CBA
contract negotiation. The mechanics of collective during the 60-day period and/or until a new agreement is
bargaining is set in motion only when the following reached (Art. 264).
jurisdictional preconditions are present, namely:
1. Possession of the status of majority Bargaining requires good faith. The duty to bargain
representation of the employees’ representative requires that the parties deal with each other with open
in accordance with any of the means of selection and fair minds. A sincere endeavor to overcome obstacles
or designation provided for by the Labor Code; and difficulties that may arise, so that employer-employee
2. Proof of majority representation; and relations may be stabilized and industrial strife eliminated,
3. A demand to bargain.278 must be apparent. Respondents cannot invoke the
beneficial provisions of the 1987 CBA but disregard the
CB does not end with negotiation concessions it voluntary extended to petitioner. The goal
Collective bargaining does not end with the execution of of collective bargaining is the making of agreements that
the agreement. It is a continuous process. will stabilize business conditions and fix fair standards of
working conditions.280
Ensures workers’ participation in decision-making. CB is a
way to ensure workers’ participation in decision-making. CBA is the law between the parties. There can be no
It provides for an orderly procedure by which each side unilateral modifications in the CBA. 281
can seek to present to the other best possible case for
satisfaction of particular demands and elicits the consent Collective bargaining agreement (CBA)
of those who will have to live under the terms of any
agreement derived from the bargaining process. Definition
It is a contract executed upon request of either the
Duty to bargain when there is no CBA employer or the exclusive bargaining representative of the
It is the mutual obligation of the employer and SEBA to employees incorporating the agreement reached after
meet and convene. negotiations with respect to wages, hours of work and all
other terms and conditions of employment, including
The purposes of the meeting and convening are: proposals for adjusting any grievances or questions under
(1) To negotiate an agreement on wages, hours of work, such agreement.
and all other terms and conditions of employment,
including mandatory provisions for grievances and MANDATORY PROVISIONS OF CBA
arbitration machineries Bar 1996, 1997
(2) To execute a contract incorporating such agreement Mandatory subjects of bargaining
 Statutory or mandatory proposals
Kind of compliance  Employer’s refusal to negotiate mandatory
“prompt, expeditious, in good faith” subjects of bargaining is ULP.
Limitations Examples of mandatory subjects

“no compulsion on either party to agree to a proposal or to  Terms and conditions of employment
make a concession.”  Wages and other types of compensation
 Hours of work
How to bargain in good faith  Vacation and holiday; bonus
To deal with each other, openly, with a sincere desire to  Bonuses
negotiate  Pensions and retirement plan
 Seniority
“Good faith can be inferred from the totality of the  Transfer
circumstances involved in the negotiation”
 Lay-offs
 Employee workload
Effect of bad faith bargaining
 Work load rules and regulations
Refusal to make counter proposal indication of bad faith.
 Rent of company houses
Refusal to make a counter proposal to the union’s proposal
 Union security arrangement
for CBA negotiation is an indication of its bad faith. Where
the employer did not even bother to submit an answer to  Code of conduct
the bargaining proposals of the union, there is a clear
evasion of the duty to bargain collectively.279 Mandatory Provisions of CBA
(a) Grievance procedure
(b) Voluntary Arbitration
Duty to bargain when there is a CBA (c) No strike, no lock-out clause
Includes all of the duties where there is no CBA yet, plus
the obligation not to terminate or modify the CBA during
278 280
Id. P.I. Manufacturing Inc. v P.I. Manufacturing Supervisors and Foremen
279
General Milling ILU v General Milling Corp., G.R. Nos. 183122/183889 (2011). Association, 543 SCRA 613 (2008).
281
Faculty Association of Mapua v CA, 254 SCRA 709 (2007).

GRIEVANCE PROCEDURE Under voluntary arbitration, xxx, referral of a dispute by

the parties is made, pursuant to a voluntary arbitration
How enforcement/implementation effected clause in their collective agreement, to an impartial third
Ordinarily: Through grievance machinery; Voluntary person for a final and binding resolution.285
arbitration
Extraordinarily: Strike; ULP complaint with the NLRC The essence of voluntary arbitration, after all, is that it is
by agreement of the parties, rather than compulsion of
Grievance law, that a matter is submitted for arbitration. It does not
Any dispute between employee and union as regards: matter that the person chosen as arbitrator is a labor
1. Interpretation of the CBA arbiter who, under Art. 224 of the Labor Code, is charged
2. Interpretation of company personnel policies with the compulsory arbitration of certain labor cases.
There is nothing in the law that prohibits these labor
Implication: VA still has jurisdiction even if there is no arbiters from also acting as voluntary arbitrators as long as
SEBA or CBA. the parties agree to have him hear and decide their
dispute.286
Any claim by either party that the other party is violating
any provision of the CBA or company personnel policies. The decision of a VA chosen by the parties is final and
executory and not appealable. This principle strengthens
Grievance machinery the purpose of arbitration in preserving industrial peace
“grievance procedure” and in avoiding unnecessary litigation between the
Series of formal steps agreed upon by parties to a CBA for parties.287
the resolution of grievances
NO STRIKE-NO LOCKOUT CLAUSE
VOLUNTARY ARBITRATION A no strike clause is applicable only to economic strikes.
Reference of a dispute to an impartial third party “no strike, no lock-out” provision in the CBA is a valid
designated by the parties. stipulation but may be invoked only by employer when the
strike is economic in nature or one which is conducted to
List of VAs are found in the NCMB force wage or other concessions from the employer that
are not mandated to be granted by law itself. It would
Disputes that may be brought to VA: inapplicable to prevent a strike which is grounded on
1. Unresolved grievances as agreed to by the unfair labor practice.288
parties
2. ULPs and bargaining deadlocks Permissible Issues
When a subject under discussion is NOT MANDATORY, it
Compulsory Arbitration may be discussed if both parties agree, BUT a strike or
The process of settlement of labor disputes by a lockout may not be used to compel negotiation or
government agency which has authority to investigate and agreement.
make an award which is binding on the parties.
Wages, hours of work and all other terms and conditions
Consent of the parties is not required. of employment.
A collective bargaining agreement refers to the negotiated
It is government agency who will hear and rule on the contract between a legitimate labor organization and the
case. employer concerning wages, hours of work and all other
terms and conditions of employment in a bargaining unit,
Voluntary Arbitrator including mandatory provisions for grievances and
Refers to any person accredited by the NCMB as such, or arbitration machineries. As in all other contracts, the
any person named or designated in the CBA by the parties parties in a CBA may establish such stipulations, clauses,
to act as their voluntary arbitrator, or one chosen by the terms and conditions as they may deem convenient
parties pursuant to a selection procedure agreed upon in provided they are not contrary to law, morals, good
the CBA.282 customs, public order or public policy. xxx provision in the
CBA condoning the implementation of the Wage Order is
May recourse to grievance procedure be dispensed with? void as only the Tripartite Wage Productivity Board of the
Yes. If union is not interested in a particular grievance, DOLE could approve exemption of an establishment from
union should not participate anymore, the employee is the coverage of a Wage Order.289
then allowed to skip the grievance procedure. 283
Retirement plan valid CBA issue.
Notice of strike illegal  dispute may be resolved via The fact that the retirement plan is non-contributory, i.e.
grievance procedure or VA.284 employees contribute nothing to the operation of the plan,
does not make it a non-issue in the CBA negotiations. xxx
282 286
IR, Book V, Rule I, Sec. 1(aaa) Manila Central Line v Manila Central Line FWU-NFL, 290 SCRA 690 (1998).
283 287
Atlas Farms v NLRC, G.R. No. 142244 (2002). Eternet Employees v De Veyra, 189 SCRA 752 (1990).
284 288
USAEU-FFW v CA, G.R. No. 169632 (2006). Panay Electric v NLRC, 248 SCRA 688 (1995).
285 289
Luzon Dev’t Bank v Assoc of Luzon Dev’t Bank Employees, 249 SCRA 162 Manila Fashions, Inc. v NLRC, 264 SCRA 104 (1996).
(1995).

Since the retirement plan has been an integral part of the immediately call the parties to conciliation meetings. The
CBA since 1972, the union’s demand to increase the Board shall have the power to issue subpoenas requiring
benefits due the employees under said plan, is a valid CBA the attendance of the parties to such meetings. It shall be
issue.290 the duty of the parties to participate fully and promptly in
the conciliation meetings the Board may call;
Bar 2004
CBA interpretation During the conciliation proceedings in the Board, the
How interpreted. The CBA is the law between the parties are prohibited from doing any act which may
contracting parties — the collective bargaining disrupt or impede the early settlement of the disputes; and
representative and the employer-company.
Compliance with a CBA is mandated by the expressed The Board shall exert all efforts to settle disputes amicably
policy to give protection to labor. In the same vein, CBA and encourage the parties to submit their case to a
provisions should be "construed liberally rather than voluntary arbitrator. (As amended by Section 20, Republic
narrowly and technically, and the courts must place a Act No. 6715, March 21, 1989)
practical and realistic construction upon it, giving due
consideration to the context in which it is negotiated Art. 262. Duty to bargain collectively in the absence of
and purpose which it is intended to serve." This is collective bargaining agreements.
founded on the dictum that a CBA is not an ordinary In the absence of an agreement or other voluntary
contract but one impressed with public interest. 291 arrangement providing for a more expeditious manner of
collective bargaining, it shall be the duty of employer and
A promise not incorporated in CBA cannot be validly the representatives of the employees to bargain
demanded under the law. It goes without saying, however, collectively in accordance with the provisions of this Code.
that only provisions embodied in the CBA should be so
interpreted and complied with. Where a proposal raised by
a contracting party does not find print in the CBA, it is not When to file written notice of intent
a part thereof and the proponent has no claim whatsoever 1. During the certification period (year)
to its implementation.292
Notice of intent must be submitted with the Union
Bar 1999, 2001, 2008 proposal.
The CBA must be implemented in good faith during its
lifetime, even if the parties are negotiating a new CBA. If there is a CBA in place, written notice must be served
The implementation may exceed the CBA’s lifetime if no 60 days prior to expiry.
CBA was agreed upon in which case the CBA is
automatically renewed. Reply
Employer to reply not later than 10 days after notice of
Provisions of the imposed CBA continues to have full force intent to negotiate was served.
and effect until a new CBA has been entered into by the
parties. Article 259 mandates the parties to keep the status Conferences
quo and to continue in full force and effect the terms and How many times? As many as needed
conditions of the existing agreement during the 60-day
period prior to the expiration of the old CBA and/or until How long should a negotiation be?
a new agreement is reached by the parties.293 LC 265. x xx Any agreement on such other provisions of the
CBA entered into within 6 months from the date of expiry
BARGAINING PROCEDURE of the term of such other provisions as fixed in the CBA,
shall retroact to the day immediately following such date.
Art. 261. Procedure in collective bargaining. If any such agreement is entered into beyond six months,
The following procedures shall be observed in collective the parties shall agree on the duration of retroactivity
bargaining: thereof x xxx
When a party desires to negotiate an agreement, it shall
serve a written notice upon the other party with a Agreeing first on the effectivity date of the CBA lifts or
statement of its proposals. The other party shall make a releases the burden of deadline to reach agreement.
reply thereto not later than ten (10) calendar days from
receipt of such notice; Example: Expiry of the CBA – December 31, 2011 . If the new
CBA is agreed upon within six months from December 31,
Should differences arise on the basis of such notice and 2011(expiry), the effectivity of the new CBA shall be from
reply, either party may request for a conference which January 1, 2012. End of 6-month period of negotiation – June
shall begin not later than ten (10) calendar days from the 30, 2012. If the new CBA is agreed upon beyond June 30, 2012,
date of request. the effectivity of the new CBA shall be agreed upon by the
parties.
If the dispute is not settled, the Board shall intervene upon
request of either or both parties or at its own initiative and
290 292
Union of Filipro Employees-Drug v Nestle, G.R. No. 158930-31 (2006). Id.
291 293
Samahanng Manggagawasa Top Form v NLRC, 295 SCRA 171 (1998). Supra note 87.

Conferences may either result in an agreement or a No interpretation of CBA provisions if their meaning is
deadlock. clear.
If there is a deadlock, a notice of strike or lock-out (NSL)
may be filed as the case may be; In case of ambiguity of the terms of a CBA, and there is doubt
as to the intention of the parties, resort to evidence extrinsic
If no NSL has been filed: of the CBA to determine the full agreement intended by the
2. NCMB Conciliation. At the request of any of the parties. Evidence aliunde may consist of the minutes of
parties, the NCMB may interfere for preventive negotiation, contemporaneous and subsequent practices,
mediation. etc.297
3. The NCMB shall exert all efforts to settle the dispute.
Extrinsic evidence: Minutes of CBA negotiations
The conciliator is not a judge; he shall not rule on the Contemporaneous and subsequent practices or acts in the
dispute. implementation of the CBA
Information obtained in the conciliation proceedings are In case of doubt or ambiguity, apply:
privileged communication. It cannot be used in any NLRC Art. 1702 of the Civil Code, which provides that all labor
litigation. legislation and labor contracts shall be construed in favor
of safety and decent living for the laborer, and;
During conciliation, parties are prevented from doing any
acts that could prevent settlement of the dispute or could Art. 4 of the Labor Code that says all doubts shall be
be disruptive. This is to give the conciliator a chance to resolved in favor of labor.
really settle the dispute.
Unless expressly assumed, labor contracts such as CBAs are
If not resolved in conciliation, the deadlock may result not enforceable against a transferee of an enterprise, labor
to: contracts being in personam, thus binding only between the
(1) Voluntary arbitration parties.298
(2) Assumption of jurisdiction (AJ) of the SOLE
(3) Strike or lock out It is the bargaining unit, which is the true party in interest
to a CBA. Thus, a shift in the union's allegiance after the
Courts are not to interfere until there is a showing that the execution of the CBA does not affect the binding effect of
SOLE abused his discretion. Bargaining is not equivalent to a contract up to its expiration date.
an adversarial litigation when the rights and obligations
are delineated and remedies applied – it is simply a process There must be express assumption of liability for terms
of finding a reasonable solution to a conflict and and conditions of CBA for transferee of enterprise to be
harmonizing opposing positions into a fair and reasonable liable.
compromise.294
CBA Enforcement
CBA resulting from an AJ or VA, need not be ratified. But
CBA still needs to be posted and registered with the DOLE. Art. 267. Exclusive bargaining representation and
workers’ participation in policy and decision-making.
RULES IN THE ADMINISTRATION AND The labor organization designated or selected by the
IMPLEMENTATION OF THE CBA majority of the employees in an appropriate collective
bargaining unit shall be the exclusive representative of
During the lifetime of the CBA, it is the law between the the employees in such unit for the purpose of collective
parties. Those who are entitled to its benefits can invoke bargaining. However, an individual employee or group
its provisions. of employees shall have the right at any time to present
grievances to their employer.
But CBA provisions are not beyond judicial determination
if impugned. Any provision of law to the contrary notwithstanding,
workers shall have the right, subject to such rules and
The CBA may not provide for substandard benefits.295 regulations as the Secretary of Labor and Employment
may promulgate, to participate in policy and decision-
Only provisions embodied in the CBA should be so making processes of the establishment where they are
interpreted and complied with. Where a proposal raised by employed insofar as said processes will directly affect
a contracting party does not find print in the CBA, it is not their rights, benefits and welfare. For this purpose,
a part thereof and the proponent has no claim whatsoever to workers and employers may form labor-management
its implementation.296 councils: Provided, That the representatives of the
workers in such labor-management councils shall be
The provisions of the CBA should be interpreted in elected by at least the majority of all employees in said
accordance with their literal meaning. establishment. (As amended by Section 22, Republic Act
No. 6715, March 21, 1989)
294 297
Caltex Refinery Employees Association v Brillantes.279 SCRA 218 (1997). United Kimberly Clark EU v. UKC Inc. (2006)
295 298
Manila Fashions v. NLRC (1996) ALU-VIMCONTU v. NLRC (1991)
296
Samahang Manggagawa sa Top Form v. NLRC (1998)

Union security clauses

Duration Bar 1995, 2004, 2011, 2012
Bar 2012 Termination of employment pursuant to Union
Duration of CBA Provisions Security Clause; requisites:
the union security clause must be applicable
5 years
term of the bargaining agent (SEBA) the union is requesting for the enforcement of the
representation aspect/union recognition union security provision in the CBA
3 years there is sufficient evidence to support union’s decision

All other provisions to expel the employee from the union301
Bar 2000, 2009 Courts must look into substantial evidence to warrant the
Substitutionary doctrine dismissal of an employee pursuant to Union Security
New SEBA to implement existing CBA until Clause.302
negotiations may be validly had.
Company may not be compelled to early negotiation.
Who benefits from extended CBA?

All members of the bargaining unit.
When a CBA is entered into by union representing the Definition and General Concept
employees and employer, even non-union member Bar 1996, 2005
employees are entitled to the benefits.299 All members of Art. 219 (k)
the BU are included in the CBA. It is discrimination to "Unfair labor practice" means any unfair labor practice
exclude them from the application of the CBA.300 as expressly defined by the Code.
Art. 258. Concept of unfair labor practice and
Arbitral awards procedure for prosecution thereof.
Imposed by the NLRC, SOLE, SC Unfair labor practices violate the constitutional right of
workers and employees to self-organization, are
Bar 1994, 2001 inimical to the legitimate interests of both labor and
Effectivity of arbitral awards management, including their right to bargain
Retroacts to such time agreed upon by the employer collectively and otherwise deal with each other in an
and union. atmosphere of freedom and mutual respect, disrupt
industrial peace and hinder the promotion of healthy
If there is no agreement and it was awarded beyond and stable labor-management relations.
the 6-month period =First day after the 6-month
period from expiration Consequently, unfair labor practices are not only
violations of the civil rights of both labor and
If there is no agreement and it was awarded within the management but are also criminal offenses against the
6-month period =first day after expiry of the CBA State which shall be subject to prosecution and
punishment as herein provided.
Extension of 5-year term of CBA as regards
representation Subject to the exercise by the President or by the
Can parties agree to extend the term for more than 5 Secretary of Labor and Employment of the powers
years? General Rule: No. Express provision, Art 259-A. vested in them by Articles 278 and 279 of this Code, the
Exception: In Rivera v Espiritu (2002) ---where PALEA and civil aspects of all cases involving unfair labor practices,
PAL agreed to suspend the existing CBA between them which may include claims for actual, moral, exemplary
with the condition, among others, that PALEA is to be and other forms of damages, attorney’s fees and other
recognized as SEBA during the period of the suspension of affirmative relief, shall be under the jurisdiction of the
the CBA --- up to 10 years was allowed, by agreement of Labor Arbiters. The Labor Arbiters shall give utmost
the parties. priority to the hearing and resolution of all cases
involving unfair labor practices. They shall resolve such
Implications: cases within thirty (30) calendar days from the time
PALEA was recognized as SEBA for 10 years. they are submitted for decision.
Parties by agreement may install the SEBA indefinitely.
Parties by agreement may suspend CBA even for 10 years. Recovery of civil liability in the administrative
The right to CB includes the right to suspend it. proceedings shall bar recovery under the Civil Code.
No criminal prosecution under this Title may be

instituted without a final judgment finding that an
299 301
New Pacific Timber v NLRC, G.R. No. 124224 (2000). Alabang Country Club v NLRC, 545 SCRA 351 (2008).
300 302
Mactan Workers v Aboitiz, 45 SCRA 577 (1972). Del Monte v Zaldivar, G.R. No. 158620 (2006).

unfair labor practice was committed, having been first of their right to self- of their right to self-
obtained in the preceding paragraph. During the organization; organization;
pendency of such administrative proceeding, the
running of the period of prescription of the criminal Effect of dismissal of union leaders = made union
offense herein penalized shall be considered leaderless
interrupted: Provided, however, that the final judgment Dismissal amounted to restrain and the dismissal was
in the administrative proceedings shall not be binding tainted with discrimination. This would constitute ULP on
in the criminal case nor be considered as evidence of the basis of Art 259(a) or under general prohibition.305
guilt but merely as proof of compliance of the
requirements therein set forth. (As amended by BP Blg. Petitioner is guilty of ULP from its refusal to bargain, to
70, May 1, 1980 and later further amended by Section 19, their acts of economic inducements resulting in the
RA No. 6715, March 21, 1989) promotion of those who withdrew from the union, use of
armed guards to prevent the organizers to come in, and the
dismissal of the union officials and members. Once cannot
ULP may only be committed in the context of an but conclude that respondents did not want a union in
employer-employee relationship. their hacienda, a clear interference in the right of the
workers to self-organization.306
ULP violates the rights to:
1. Self-organization Where the ill-timed resignation from the union members
2. Collective bargaining indicate that the employer had interfered with the right of
3. Concerted activities its employees to self-organization, the company may be
found guilty of ULP. 307
ULPs are not only civil rights violations but are also
criminal offenses against the State.
ULPs are those expressly defined by the labor code (LC

Only the officers and agents of corporations, associations
219-K):
or partnerships who have actually participated in or
1. Those in LC Art. 259 - ULP of employers
authorized or ratified ULPs are criminally liable.
2. Those in LC Art. 260 - ULP of LOs
3. Those in LC Art. 274 - Violations of CBA economic
provision was gross in character
Art. 259: ULP by Employers:
1. Interference, restraint, coercion  
Any violations that relate to the exercise of the right to
2. Yellow dog condition  
self-organization and collective bargaining
3. Contracting out of services  
4. Company unionism or captive unionism  
ULP vis-à-vis Management Prerogative
5. Discrimination for or against union
 membership
Law on ULP not intended to hamper management
6. Discrimination because of testimony  
prerogatives. Law on unfair labor practices is not intended
7. Violation of duty to bargain  
to deprive employers their fundamental right to prescribe
8. Payment by the Er of negotiation fees
and enforce rules as they honestly believe to be necessary
9. Gross violation of CBA  
to the proper, productive and profitable operation of their
business. 303
Interference, restraint and coercion
An act which restrains, coerces, or interferes with
Requisite of ULP
employees in the exercise of their right to self-
organization is an Unfair Labor Practice.
Employer – Employee relationship
When there is no employer-employee relationship
Test of interference
between the company and the union, it should necessarily
Whether the EE has engaged in a conduct which, it may
follow that the company cannot be guilty of unfair labor
reasonably be said, tends to interfere with the free
practice. Unfair labor practice may be committed only
exercise of the EES right to self-organization.
within the context of an employer-employee
relationship.304
It is not necessary that there be a direct evidence that an
EE was in fact intimidated or coerced by statement of
General Prohibition
threats of the ER if there is a reasonable inference that
Art 259. ULP of Art 260. ULP of LOs anti-union conduct of the ER does have an adverse effect
Employers on self-organization and CB.308
a. To interfere with, a. To restrain or coerce Totality of Conduct Doctrine
restrain or coerce employees in the exercise
employees in the exercise
303 306
Philcom EU v Philcom, G.R. No. 144315 (2006). Hacienda Fatima v National Federation of Sugarcane Workers, G.R. No.
304
American President Lines v. Clave (1982) 149440 (2003).
305 307
Republic Savings Bank v CIR, 21 SCRA 226 (1967). General Milling v CA, G.R. No. 146728 (2004).
308
The Insular Life Assurance-NATU v. The Insular Life Assurance (1971)

The culpability of ER’s remarks is to be evaluated not only The free speech protection is inapplicable where the
on the basis of their implications, but against the expression of opinion by the employer of his agent
background of and in conjunction with collateral contains a promise of benefit, threats, or reprisal. Letters
circumstances. should be interpreted according to the totality of conduct
doctrine.
Under this doctrine, expressions of opinion by an ER,
though innocent in themselves, frequently were held to be Yellow-Dog Contract
culpable because of: Non-union membership or withdrawal from membership
1. The circumstances under which they were as a condition of employment
uttered;
2. The history of the particular ER’s labor relations Yellow dog contract/stipulation
or anti-union bias, and; “only a yellow dog (coward) would sign such.”
3. Their connection with an established collateral
plan of coercion or interference.  A promise exacted from workers as a condition of
employment that they are not to belong to, or attempt to
Interrogation foster a union during their period of employment.
Scotty’s Department Store v. Micaller (1956)309
Employer’s interrogation of union members, while it is a Visayan Stevedore v CIR (1967)313
privilege, should not hamper the members’ right to self- Where the workers not admitted to work were union
organization. members and the company branch manager had told them
directly that severance of their connection with the union
Philippine Steam Navigation v. Philippine Marine Officers was the remedy if they wanted to continue working with
Guild (1965) the company, there was unfair labor practice.
The rule in this jurisdiction is that subjection by the
company of its employees to a series of questioning Contracting out to discourage unionism
regarding their membership in the union or their union Contracting out per se is not ULP. It becomes ULP when
activities, in such a way as to hamper the exercise of free such interfere with, restrain or coerce employees in the
choice of their part, constitutes ULP. 310 exercise of their right to self-organization.
Speech, espionage, economic coercion Contracting out if motivated to prevent employees from
Insular Life Assurance Co EU v Insular Life Assurance Co., exercising their right to SO. An employer’s contracting out
Ltd (1971). 311 of work is itself an ULP where motivated by the desire to
It is not necessary that the employees are coerced or prevent his employees from organizing and selecting a
restrained, the reasonable tendency test will determine collective bargaining representative, rid himself of union
whether the employer has engaged in the conduct that men, or escape his statutory duty to bargain collectively
tends to interfere with employees’ free exercise of right to with his employees’ bargaining representative.
self-organization.
Company domination of union
Individual bargaining is not allowed. Progressive Development v CIR (1977). Where the dismissal
When employer negotiates or attempts to negotiate with of the employees because of union activities and not
his employees individually in connection with changes in because of company’s alleged losses was adequately
the agreement is ULP. proven, the employer is guilty of ULP.
Act of company president in writing letters to strikers When financial assistance does NOT constitute union
urging them to return to work is an interference with the domination or union interference or ULP:
right to CB. Individual solicitation is also interference.  Company provided the union a union office
 Company granting union leaves or privileges
Concerted activities  Company granting assistance for conduct of union
Philippine Blooming Mills EO v PBM (1973).312 education seminars
Concerted activity need not be rooted in CBA matters, but
may be by reason of mutual aid and protection. Employer For as long as financial assistance is publicly disclosed and
who refuses its employees to join a demonstration against ratified by the members, it is valid.
police abuses is guilty of ULP. Employees who
demonstrated did not violate CBA, as it was in the exercise Discrimination to Encourage/Discourage Unionism
of their freedom of expression, guaranteed by the Bill of What the law prohibits is discrimination to encourage or
Rights. discourage union membership.
Letter containing promises of benefits to the employees in Discouraging membership in a labor organization includes
order to entice them to return to work is not protected by not only discouraging adhesion to union membership but
the free speech provisions of the Constitution. also discouraging participation in union activities such as
a legitimate strike.
309 312
99 Phil 762 (1946). 51 SCRA 189 (1973).
310 313
15 SCRA 174 (1965). 19 SCRA 426 (1967).
311
37 SCRA 243 (1971).

Negotiation or attorney’s fees

ULPs in the form of discriminatory dismissal were found Sweetheart contracts are favorable both to the union and
where only unionists were permanently dismissed while the employer at the expense of the employees. The
non-unionists were not. settlement of bargaining issues must be made by fair
bargaining in good faith, and not through the payment of
Unequal treatment based on union or non-union negotiation or attorney's fees which will ultimately lead to
membership sweetheart contracts.
Gross violation of CBA
Purpose is to ensure that employees are given equal Only gross violations of economic provisions of the CBA
treatment whether they are union members or not. are to be deemed ULPs; violations which are not gross are
mere grievances. (Art. 267)
Test of discrimination
It is necessary that the underlying reason for the discharge To be considered as gross violation, it must be a flagrant
is established. The discharge must be made with proper and/or malicious refusal to comply with the economic
motive. provision of the CBA.
Where circumstances establish a discriminatory motive on

the part of the employer, the assignment of a just cause
Only the officers, members of governing boards,
will be unavailing. If it can be established that the true and
representatives or agents or member of labor associations
basic inspiration for the employer’s act is derived from the
or organizations who have actually participated in or
employees’ union activities, the assignment by the
authorized or ratified the ULPs are criminally liable.
employer of another reason, whatever its semblance of
validity, is unavailing.
Art. 260: It shall be ULP for labor organizations, its
officers, agents or representatives:
An inference that the discharge of an employee was
motivated by his union activity must be based upon
1. To restrain or coerce EEs in the exercise of their
evidence, direct or circumstantial, not upon mere
rights to self-organization; however, a labor
suspicion.
organization shall have the right to prescribe its
own rules with respect to the acquisition or
Retaliation testimony against employer/indirect
retention of membership
discrimination
2. To cause or attempt to cause an ER to
discriminate against an EE, including
Should the testimony relate to the right of SO and CB? discrimination against an EE with respect to
2 views: whom membership in such organization has
(1) Yes. All matters relating to labor been denied or to terminate an EE on any ground
(2) No. Strict view: only those relating to exercise of right other than the usual terms and conditions under
to SO and CB which membership or continuation of
membership is made available to other members
What is prohibited to be done directly shall not be 3. To violate the duty, or refuse to bargain
allowed to be done indirectly. Thus, the following have collectively with the ER, provided it is the
been held as ULP: representative of the EEs
(1) Dismissal of a laborer on account of union activities 4. To cause or attempt to cause an ER to pay or
of his brother; deliver or agree to pay or deliver any money or
(2) Discharge of an employee due to union activities of other things of value, in the nature of an
the wife; exaction, for services which are not performed
(3) Discharge of a wife to due union activities of the or not to be performed, including the demand for
husband fee for union negotiations (Featherbedding)
5. To ask for or accept negotiations or attorney's
Violation of duty to bargain fees from ERs as part of the settlement of any
Duty to bargain does not end in the execution of the CBA. issue in Collective Bargaining or any other
Gross failure to comply with the an economic provision of dispute
the CBA constitutes ULP.314 6. To violate the CBA.
If an employer found the union’s demands excessive, its Restraint or Coercion

remedy under the law is to refer the matter for voluntary “Interfere” is not included since any act of a labor
arbitration or compulsory dispute resolution, not the organization is an interference to the right of self-
closure of the establishment.315 organization.
The duty to bargain does not include the obligation to
Exception: LO has a right to prescribe its own rules with
reach an agreement.316
respect to the acquisition or retention of membership (ex.
Union Security Clause)
314 316
LC Art. 274 Union of Filipro Employees v Nestle, G.R. No. 158930 (2008).
315
St. John Colleges v St. John Faculty and EU, G.R. No. 167892 (2006).

present substantial evidence to support its allegations of

Union Security Clause ULP by management. xxx It is not enough that union
"Union security" is a generic term which is applied to and believed that the employer committed acts of ULP when
comprehends "closed shop," "union shop," "maintenance of the circumstances clearly negate even a prima facie
membership" or any other form of agreement which showing to warrant such belief. 318
imposes upon employees the obligation to acquire or
retain union membership as a condition affecting For a charge of ULP to prosper, it must be shown that the
employment. (NUWHRAIN v. NLRC, G.R. No. 179402, 2008) employer was motivated by ill will, bad faith, or fraud, or
was oppressive to labor, or done in a manner contrary to
Discrimination to Encourage/Discourage Unionism morals, good customs, or public policy, and of course, that
[ART. 260 (B)] social humiliation, wounded feelings or grave anxiety
General Rule: It is considered as ULP for a labor resulted. 319
organization to cause an employer to discriminate against
an employee. Interpretation
Exception: Provisions of a valid union security clause and Liberal construction in favor of labor. Statutory
other company policies. (NUWHRAIN v. NLRC, G.R. No. prohibitions construed liberally in favor of employees and
179402, 2008) strictly against the employer. 320
Featherbedding Inter-relations of ULP Acts

Featherbedding or “make-work” by the union is the Republic Savings Bank v CIR, 21 SCRA 226 (1967).
practice of the union asking for money or other things of FACTS: Respondent wrote and published letter to the bank
value from the employer in return for services which are president, demanding his resignation on the grounds of
not performed or are not to be performed. (Art. 260) immorality, nepotism, favoritism and discrimination in the
Asking or Accepting Negotiation and Other Attorney’s appointment and promotion of bank employees.
Fees HELD: Assuming that they acted in their individual
Sweetheart Contracts or the act of labor organizations to capacities when they wrote the letter, they were
ask for or accept negotiation or attorney’s fees from the nonetheless protected for they were engaged in concerted
employer in settling a bargaining issue or a dispute. activity, in their right of self-organization that includes
concerted activity for mutual aid and protection,
interference with which constitutes ULP. The joining in
Violation of a Collective Bargaining Agreement
protests or demands by even a small group of employees,
Bar 2011
if in furtherance of their interests as such, is a concerted
Violation of CBA must be gross and as regards activity protected by the IPA. It is not necessary that union
economic provisions. To constitute ULP, violations of activity be involved or that CB be contemplated.
the CBA must be gross, which means, under LC 274,
flagrant and/or malicious refusal to comply with the
Management prerogative and ULPs
economic provisions thereof.317
The Court recognizes the proprietary right of SanMig to
exercise an inherent management prerogative and its best
Violations of collective bargaining agreements, except business judgment to determine whether it should
flagrant and/or malicious refusal to comply with its contract out the performance of some of its work to
economic provisions, shall not be considered unfair labor independent contractors. However, the rights of all
practice and shall not be strikeable. (IRR) workers to self-organization, collective bargaining and
Economic provisions negotiations, and peaceful concerted activities, including
With reasonable monetary cost the right to strike in accordance with law, equally call for
recognition and protection.321
Non-economic provisions
Without or wherein monetary cost cannot be computed, MOTIVE, CONDUCT, AND PROOF
i.e. job security, management prerogatives, grievance
machinery
Employer motive and proof
Motive is decisive factor in holding an employer guilty of
If ER refuses to abide by the CBA’s check-off provision or
ULP.322
grievance procedure, is there ULP per LC 274?
No. They are non-economic provisions.
PARTIES LIABLE FOR ACTS
Remedy: treat it as violation of the CBA or duty to bargain
ULP by employer
collectively independently of LC 264.
Officers of company who participated in the commission
of the UL
Burden of proof
Union with burden of proof to support ULP allegations. It
is the union, therefore, who had the burden of proof to
317 320
Arellano University EU v CA, G.R. No. 139940 (2006). Caltex Filipino Managers and Supervisors Assoc., v CIR, 44 SCRA 350 (1972).
318 321
Schering Employees Labor Union v Schering Plough Corp, G.R. No. 142506 SMC-EU v Bersamira, 186 SCRA 496 (1990).
322
(2005). Phil. Metal Foundries v CIR, 90 SCRA 135 (1979).
319
Central Azucarera de Bais EU v Central Azucarera, G.R. No. 186605 (2010).

ULP by LO Limitations
Officers of union who participated in the commission of Bar 2000
the ULP Any violation of legal requirements will render strike
illegal. The strike is indeed a powerful weapon of the
Compromise working class. But precisely because of this, it must be
ULP cases cannot be compromised for PUBLIC INTEREST handled carefully, like a sensitive explosive, lest it blow
up in the workers’ own hands. Thus, it must be
Bar 2011 declared only after the most thoughtful consultation
Remedies and Sanctions among them, conducted in the only way allowed, that
Quadra v CA (2006). In ULP cases, particularly in cases is, peacefully, and in every case conformably to
of dismissal, moral and exemplary damages may be reasonable regulation. Any violation of the legal
awarded. requirements and strictures, such as a defiance of a
return-to-work order in industries affected with
public interest, will render the strike illegal, to the
detriment of the very workers it is supposed to
protect.325
The State shall guarantee the rights of all workers to self-
The right to strike is not an absolute right.
Role of Peace Officers During Strikes And Picketing
in accordance with law.323
Escorting - No public official or employee, including
Concerted activities
officers and personnel of the New Armed Forces of the
1. Participated in by 2 or more EEs;
Philippines or the Integrated National Police, or armed
2. May be done by one employee
person, shall bring in, introduce or escort in any manner,
any individual who seeks to replace strikers in entering or
Deemed as concerted activity if aim is to move others for
leaving the premises of a strike area, or work in place of
purposes of CB or mutual aid or protection.
the strikers.
For CB or mutual aid or protection;
The police force shall keep out of the picket lines unless
actual violence or other criminal acts occur therein:
Through action generally directed at ER or by others
having duties under the law to induce the desired
Provided, that nothing herein shall be interpreted to
behavior.
prevent any public officer from taking any measure
necessary to maintain peace and order, protect life and
The more common of these concerted activities as far as
property, and/or enforce the law and legal order. (As
employees are concerned are:
amended by Executive Order No. 111, December 24,
1. STRIKES — the temporary stoppage of work as a
1986)326
result of an industrial or labor dispute;
2. PICKETING — the marching to and fro at the
2. Arrest and detention of law violators- Except on
employer's premises, usually accompanied by
grounds of national security and public peace or in
the display of placards and other signs making
case of commission of a crime, no union members
known the facts involved in a labor dispute; and
or union organizers may be arrested or detained
3. BOYCOTTS — the concerted refusal to patronize
an employer's goods or services and to persuade for union activities without previous consultations
others to a like refusal. with the Secretary of Labor.327
4. LOCKOUT — the counterpart activity that
management may licitly undertake. The
temporary refusal to furnish work on account of Definition
a labor dispute Strike means any temporary stoppage of work by the
concerted action of employees as a result of an industrial
The right of legitimate labor organizations to strike and or labor dispute.328
picket and of employer to lockout, consistent with the
national interest, shall continue to be recognized and A coercive measure resorted to by laborers to enforce
respected. The legality of these activities is usually their demands. The idea behind a strike is that a company
dependent on the legality of the purposes sought to be engaged in a profitable business cannot afford to have its
attained and the means employed therefor.324 production or activities interrupted, much less,
paralyzed.329
323 327
Sec 3, Art XIII, The 1987 Constitution. Art. 281. Requirement for arrest and detention.
324 328
Ilaw at Buklod ng Manggagawa v NLRC, 198 SCRA 586 (1991). Art 219(o)
325 329
BLT Bus Co. v NLRC, 212 SCRA 792 (1992). Phil Can Co. v CIR (1950).
326
Art. 279. Prohibited activities.

The most powerful of the economic weapons of workers Effect on work relationship
which they unsheathe to force management to agree to an Continuing work relationship
equitable sharing of the joint product of labor and Work relationship SUSPENDED during the strike, NOT
capital.330 SEVERED!
Requisites Consequences of continuing work relationship between

1. Temporary work stoppage ER and strikers
2. By workers’ concerted action ER’s duty to bargain collectively with EEs remains
3. Because of a labor dispute ER’s must reinstate them after the strike
4. Between ER and EES
Since strikes cause disparity effects not only on the
A valid strike therefore presupposes the existence of a relationship between labor and management but also on
labor dispute. The strike undertaken by respondents took the general peace and progress of society, the law has
the form of a sit-down strike, or more aptly termed as a provided limitations on the right to strike.335
sympathetic strike, where the striking employees have no
demands or grievances of their own, but they strike for the Responsibility for illegal acts must be on an individual and
purpose of directly or indirectly aiding others, without not collective basis. A union officer may be declared to have
direct relation to the advancement of the interest of the lost his employment status if he knowingly participated in
strikers. It is indubitable that an illegal strike in the form of an illegal strike whereas a union member may be similarly
a sit-down strike occurred in petitioner’s premises, as a faulted if he knowingly participates in the commission of
show of sympathy to the two employees who were illegal acts during the strike.336
dismissed by petitioner.331
Mere participation in an illegal strike is not a sufficient
Strike must be pursued on legal bounds. A strike is the ground for termination of the services of the union
most powerful of the economic weapons of workers which members. The law, however, treats differently mere union
they unsheathe to force management to agree to an members. Mere participation in an illegal strike is not a
equitable sharing of the joint product of labor and capital. sufficient ground for termination of the services of the
It is a weapon that can either breathe life to or destroy the union members. The Labor Code protects an ordinary,
Union and its members in their struggle with management rank-and-file union member who participated in such a
for a more equitable due to their labors. The decision to strike from losing his job, provided that he did not commit
declare a strike must therefore rest on a rational basis, free an illegal act during the strike. It can be gleaned from the
from emotionalism, envisaged by the tempers and aforecited provision of law in point, however, that an
tantrums of a few hot heads, and finally focused on the ordinary striking employee cannot be terminated for mere
legitimate interests of the Union which should not, participation in an illegal strike. There must be proof that
however, be antithetical to the public welfare, and, to be he committed illegal acts during the strike and the striker
valid, a strike must be pursued within legal bounds. The who participated in the commission of illegal act must be
right to strike as a means of attainment of social justice is identified.337
never meant to oppress or destroy the employer.332
TYPES AND CONVERSION
Nature and Purpose
A worker who joins a strike does so precisely to assert or Types
improve the terms and conditions of his employment. If his (a) ULP
purpose is to abandon his work, he would not go into the (b) Economic or bargaining deadlock
trouble of joining a strike.333
A no-strike clause in a CBA is applicable only to economic
Rationale for regulation by law strikes. Corollarily, if the strike is founded on an unfair
A strike is “any temporary stoppage of work by the labor practice of the employer, a strike declared by the
concerted action of employees as a result of an industrial union cannot be considered a violation of the no-strike
or labor dispute.” It is the most preeminent of the clause. An economic strike is defined as one which is to
economic weapons of workers which they unsheathed to force wage or other concessions from the employer which
force management to agree to an equitable sharing of the he is not required by law to grant.338
joint product of labor and capital. Undeniably, strikes exert
some disquieting effects not only on the relationship between ULP
labor and management but also on the general peace and Bar 2009, 2010, 2011, 2012, 2013
progress society. Our laws thus regulate their exercise Art 278 (c)
within reasons by balancing the interests of labor and (c) In case of bargaining deadlocks, the duly certified or
management together with the overarching public recognized bargaining agent may file a notice of strike
interest.334 or the employer may file a notice of lockout with the
330 334
Sta. Rosa Coca Cola Plant Employees Union v. Coca Cola Bottlers Phils., Lapanday Workers Union v NLRC, 248 SCRA 95 (1995).
335
Inc., G.R. No. 164302 (2007). Sta Rosa Coca-Cola Plant EU v CCBP, G.R. No. 164302-03 (2007).
331 336
G&S Transport v Infante, 533 SCRA 326 (2007). Chuayuco Steel v Buklod ng Manggagawa, G.R. No. 167347 (2007).
332 337
Sta. Rosa Coca Cola Plant Employees Union v. Coca Cola Bottlers Phils., G&S Transport v Infante, 533 SCRA 288 (2007).
338
Inc., G.R. No. 164302 (2007). Mastor Iron Labor v NLRC, 219 SCRA 47 (1993).
333
BLTB Bus Co. v NLRC, 212 SCRA 792 (1992).

Ministry at least 30-day before the intended date having filed a notice of strike or lock-out or without the
thereof. In cases of unfair labor practice, the period of necessary strike or lock-out vote having been obtained
notice shall be 15 days and in the absence of a duly and reported to the Board. Neither will a strike be
certified or recognized bargaining agent, the notice of declared after assumption of jurisdiction by the
strike may be filed by any legitimate labor organization Secretary or after certification or submission of the
in behalf of its members. However, in case of dismissal dispute to compulsory or voluntary arbitration or
from employment of union officers duly elected in during the pendency of cases involving the same
accordance with the union constitution and by-laws, grounds for the strike or lock-out.
which may constitute union busting, where the
existence of the union is threatened, the 15-day Grounds as strikeable issues:
cooling-off period shall not apply and the union may  ULP (including union busting)
take action immediately. (As amended by Executive  Bargaining deadlock
Order No. 111, December 24, 1986)
ULP ECONOMIC
ULP strike Barred by no-
Strike committed upon a ULP complaint. May be strike clause? NO340 YES
conducted after filing a notice of strike to the DOLE at Strikers’ Court has discretion to
least 15 days before entitlement to grant.
backwages YES, in cases of
BARGAINING DEADLOCK – ECONOMIC/ULP discriminatory
dismissal or NO
Economic strike suspension, unlawful
A concerted activity to force wage or other concessions lock-out and other
from the employer which he is not required by law to ULPs
grant. Cooling off
period 15 days or 0 days (if 30 days
Conversion required union busting)
An economic strike changes in character to one for ULP Good faith as
from the time the company refuses to reinstate some of its defense YES NO
striking employees because of their union activities after it
had offered to readmit all strikers and in fact readmit
Striking Party
others.
IR, Book V, Rule XXII, Sec. 6. Who may declare strike or
lockout.
Backpay not due to strikers in economic strikes since the
Any certified or duly recognized bargaining
employer should get the equivalent day’s work for what he
representative may declare a strike in cases of
pays his employees. In ULP strikes, grant of back wages is
bargaining deadlocks and unfair labor practices. The
discretionary.339
employer may declare a lockout in the same cases. In
the absence of a certified or duly recognized bargaining
Non-conversion – Strike to lock-out
representative, any legitimate labor organization in the
Sukhothai Cuisine and Restaurant v. CA (2006).
establishment may declare a strike but only on the
Strikes held in violation of agreements providing for
grounds of ULP.
arbitration are illegal since these agreements must be
strictly adhered to and respected if their ends are to be
achieved. Xxx For failing to exhaust all steps in the
Who may strike?
arbitration proceedings, the strike staged by the private
respondents is illegal. xxx Even if the strike were to be Strike upon: SEBA LLO
declared valid because its objective or purpose is lawful, Bargaining
the strike may still be declared invalid where the means deadlock YES NO
employed are illegal. (278-c)
ULP YES NO, but YES if there is
Grounds for strike (278-c) NO SEBA
Bar 2007, 2012
IR, Book V, Rule XXII, Sec. 5. Grounds for strike or Can minority union strike because of a ULP?
lock-out. NO. They cannot strike. Only recourse is to file ULP
complaint with the NLRC.
A strike or lock-out may be declared in cases of
bargaining deadlocks and unfair labor practices.
Violations of collective bargaining agreements, except LEGAL VS. ILLEGAL STRIKE
flagrant and/or malicious refusal to comply with its
economic provisions, shall not be considered unfair LEGAL STRIKE
labor practice and shall not be strikeable. No strike or Art. 278 (c)
lock-out may be declared on the grounds involving
inter-union and intra-union disputes or without first
339 340
Consolidated Labor Assn v Marsman and Co, 11 SCRA 589 (1964). Mastor Iron Labor v NLRC, 219 SCRA 47 (1993).

(c) In case of bargaining deadlocks, the duly certified or 13. In violation of a no strike – no lockout provision in
recognized bargaining agent may file a notice of strike CBA342
or the employer may file a notice of lockout with the 14. Wage distortion (RA 6727)
Ministry at least 30 days before the intended date 15. Employees who have no labor dispute with their
thereof. In cases of unfair labor practice, the period of employer but who, on the day they are scheduled to
notice shall be 15 days and in the absence of a duly work, refuse to work and instead join a “welgang
certified or recognized bargaining agent, the notice of bayan”, where there is no showing that the employees
strike may be filed by any legitimate labor organization notified their employer of their intention, or that they
in behalf of its members. However, in case of dismissal were allowed by the latter, to join the welgang bayan,
from employment of union officers duly elected in commit an illegal work stoppage.343
accordance with the union constitution and by-laws,
which may constitute union busting, where the Statutory/Procedural Requirements
existence of the union is threatened, the 15-day The procedural requirements for a valid strike are
cooling-off period shall not apply and the union may mandatory in nature and failure to comply therewith
take action immediately. (As amended by Executive renders the strike illegal. 344
Order No. 111, December 24, 1986)
In case of alleged union-busting, the 3 remaining
ILLEGAL STRIKE requirements – notice, strike vote, and 7-day report period
1. Without union first having bargained collectively – cannot be dispensed with (only cooling – off period is
(279-a) dispensed with). The union may strike “immediately”
2. For failure to comply with statutory/procedural provided that the strike vote is conducted, the result
requirements (279-a) thereof submitted “in every case” at least 7 days before the
(1) Notice of strike was filed with DOLE intended strike or lockout.345
(2) Observe cooling – off period (between filing
of notice and actual strike) Unlawful Means
30 days = Bargaining Deadlock strike Strike must be through legal means. It is doctrinal that the
15 days = ULP strike exercise of the right of private sector employees to strike
0 day = Union Busting is not absolute. Even if the purpose of the strike is valid,
(3) 24 – hour prior notice to NCMB on strike the strike may still be held illegal where the means
vote341 employed are illegal.346
(4) Valid strike vote was taken by majority of
total union membership Employment of Strike Breakers
(5) Report on strike vote to NCMB (7 days Art 279. Prohibited activities.
before strike, subject to cooling-off period) (c) No employer shall use or employ any strike-breaker,
3. CBA violation not gross in character (Art. 274) nor shall any person be employed as a strike-breaker.
4. Reason for strike is inter-union or intra-union dispute
(278-b) Strike breakers
5. Done thru unlawful means (279 – b) Any person who obstructs, impedes, or interferes with by
 obstruct, impede, or interfere with by force, force, violence, coercion, threats, or intimidation any
violence, coercion, threats or intimidation any peaceful picketing affecting wages, hours or conditions of
peaceful picketing by EEs during any labor work or in the exercise of the right of self-organization or
controversy or in the exercise of the right to SO collective bargaining.347
or CB, or shall aid or abet such obstruction or
interference. Improved offer balloting and strikes
6. Conducted after AJO or certification order (279-a, Art 280. Improved offer balloting.
par. 2) In an effort to settle a strike, the Department of Labor
7. Conducted after certification or submission of and Employment shall conduct a referendum by secret
dispute to compulsory/voluntary arbitration (279-a, ballot on the improved offer of the employer on or
par. 2) before the 30th day of the strike. When at least a
8. Conducted during pendency of cases involving the majority of the union members vote to accept the
same grounds for the strike (279-a, par. 2) improved offer the striking workers shall immediately
9. ER hires/employs a strikebreaker (279-c) return to work and the employer shall thereupon
10. Strikebreaking by non-strikers (279-c) readmit them upon the signing of the agreement.
11. Escorting replacement by AFP/PNP, government
officers or employees, security guards (279–d) In case of a lockout, the Department of Labor and
12. After improved offer balloting (assumed that strike Employment shall also conduct a referendum by secret
declared, on 30th day NCMB will tell union the offer balloting on the reduced offer of the union on or before
of management, labor dispute shall end if union the 30th day of the lockout. When at least a majority of
accepts) (280) the board of directors or trustees or the partners
holding the controlling interest in the case of a
341 344
IR, Rule XXII, Sec. 10 and Capitol Medical Center v. NLRC (2005) Pilipino Telephone Corp. v PILIEA, 525 SCRA 361 (2007)
342 345
Soriano Aviation v Employees Association of A. Soriano Aviation (2009) Sukhothai Cuisine Restaurant v CA, G.R. No. 150437 (2006).
343 346
BiflexPhils. Inc. Labor Union v Filflex Industrial and Manufacturing Philippine Diamond Hotel v Manila Diamond EU, G.R. No. 158075 (2006).
347
Corporation and Biflex, G.R. No. 155679 (2006) Art 219(r)

partnership vote to accept the reduced offer, the The right to strike while constitutionally recognized, is not
workers shall immediately return to work and the without legal restrictions. There are procedural steps to be
employer shall thereupon readmit them upon the followed before a strike may be staged. These
signing of the agreement. (Incorporated by Section 28, requirements are mandatory, meaning noncompliance
Republic Act No. 6715, March 21, 1989) therewith makes the strike illegal.350
IR, Book V, Rule XXII, Sec 12 Effect of illegality

In case of a strike, the regional branch of the Board For Union Officers: Dismissal, No back wages
shall, at its own initiative or upon request of any For Members: None, except if it is proved that they
affected party, conduct a referendum by secret committed illegal acts during strike
balloting on the improved offer of the employer on or
before the 30th day of the strike. When at least majority An ordinary striking worker cannot be terminated for mere
of the union members vote to accept the improved participation in an illegal strike. The effects of such illegal
offer, the striking workers shall immediately return to strikes, outlined in Article 279(a), make a distinction
work and the employer shall thereupon re-admit them between workers and union officers who participate
upon the signing of the agreement. therein: an ordinary striking worker cannot be terminated
xxx for mere participation in an illegal strike. There must be
proof that he or she committed illegal acts during a strike.
TEST OF LEGALITY A union officer, on the other hand, may be terminated from
work when he knowingly participates in an illegal strike,
Purpose and Means Test and like other workers, when he commits an illegal act
Assumption and certification orders are executory in during a strike. In all cases, the striker must be identified.
character and are to be strictly complied with by the But proof beyond reasonable doubt is not required.
parties even during the pendency of any petition Substantial evidence available under the attendant
questioning their validity. xxx Regardless therefore of their circumstances, which may justify the imposition of the
motives, or the validity of their claims, the striking workers penalty of dismissal, may suffice. Liability for prohibited
must cease and/or desist from any and all acts that tend acts is to be determined on an individual basis.351
to, or undermined this authority of the secretary once an
assumption and/or certification was issued.348
The strike in question was illegal. The strike itself was

prompted by no actual, existing unfair labor practice Bar 2000, 2004
committed by the petitioner. In effecting a change in the
IR, Book V, Rule XXII, Sec 13. Peaceful picketing.
seating arrangement in the office of the underwriting
Workers shall have the right to peaceful picketing. No
department, the petitioner merely exercised a reasonable
person engaged in picketing shall commit any act of
prerogative employees could not validly question, much
violence, coercion, or intimidation or obstruct the
less assail as an act of ULP. The court is indeed at a loss how
free ingress to or egress from the employer’s premises
rearranging furniture, as it were, can justify a 4 month long
for lawful purposes, or obstruct public thoroughfares.
strike.349
No person shall obstruct, impede or interfere with, by
Guidelines and balancing of interest force, violence, coercion, threats or intimidation, any
Shell Oil Workers Union v Shell Co. of the Phils., 39 SCRA 276 peaceful picketing by workers during any labor
(1971). When to strike – The assumption is that labor can be controversy or in the exercise of the right to self-
trusted to determine for itself when the right to strike may organization or collective bargaining shall aid or abet
be availed of in order to attain a successful fruition in their such obstruction or interference. No employer shall
disputes with management. use or employ any person to commit such acts nor
shall any person by employed for such purpose.
How strike is to be conducted – A strike otherwise valid, if
violent in character, may be placed beyond the pale. Care
Nature and Purpose
is to be taken, however, especially where an unfair labor
The purpose of pickets is said to be a means of peaceable
practice is involved, to avoid stamping it with illegality just
persuasion. Picketing involves merely the marching to and
because it is tainted by such acts. To avoid rendering
fro at the premises of the employer, usually accompanied
illusory the recognition of the right to strike, responsibility
by the display of placards and other signs making known
in such a case should be individual and not collective. A
the facts involved in a labor dispute. xxx As applied to a
different conclusion would be called for, of course, if the
labor dispute, to picket means the stationing of one or
existence of force while the strike lasts is pervasive and
more persons to observe and attempt to observe.352
widespread, consistently and deliberately resorted to as a
matter of policy. It could be reasonably concluded then
Picketing and Libel Laws
that even if justified as to ends it becomes illegal because
Peaceful picketing is part of the freedom of speech. That
of the means employed.
the language employed by the picketers is far from being
348 351
Union of Filipino Employees v Nestle Phils.Inc., 192 SCRA 396 (1990). Sukhothai Cuisine Restaurant v CA, G.R. No. 150437 (2006).
349 352
Reliance Surety and Insurance v NLRC, 193 SCRA 365 (1991). Sta Rosa Coca-Cola Plant EU v CCBP, G.R. No. 164302-03 (2007).
350
Stamford Marketing Corp v Julian, G.R. No. 145496 (2004).

courteous and polite does not give rise to a cause for label employer may declare a lockout on grounds involving
and damages.353 inter-union and intra-union disputes.359
Curtailment Effect On Work Relationship

Peaceful picketing, freedom of speech. The wholesale Lockout may affect all or less than all of the employee-
condemnation of peaceful picketing is likewise clearly union members. Lockout, in the sense in which it is
bereft of support in law. Peaceful picketing is part of universally used, is an act directed at the union itself rather
freedom of speech guarantee of the constitution.354 than at the individual employee-union members of the
union.360
Regulation / restrictions, innocent third party rule and
liabilities Grounds
A picketing labor union has no right to prevent employees In case of bargaining deadlocks, the ER may file a notice of
of another company from getting in and out of its rented strike or the employer may file a notice of lockout with the
premises; otherwise, it will be held liable for damages for Ministry at least 30-days before the intended date thereof.
its acts against an innocent bystander. 355
In cases of unfair labor practice, the period of notice shall
Prohibited activities be 15 days and in the absence of a duly certified or
 Acts of violence, coercion or intimidation recognized bargaining agent, the notice of strike may be
 Obstruct the free ingress to or egress from the filed by any legitimate labor organization in behalf of its
employer’s premises for lawful purposes members.
 Obstruct public through fares
 Obstruct, impede, or interfere with by force, Lockout may be caused either by:
violence, coercion, threats or intimidation, any 1. A collective bargaining deadlock or
peaceful picketing 2. An unfair labor practice act.
 Use or employment of any person to commit
such acts or employment of person for such Lockout is recognized as a valid weapon in collective
purpose. bargaining. It may bring pressure upon the other party
(employee), where an impasse has arisen during bargaining
negotiations or where one party commits ULP, subject to
SLOWDOWN
statutory requirements.
Slowdown as “strike on installment”, inherently illicit a
willful reduction in the rate of work by concerted action of
workers for the purpose of restricting the output of the General Rule: Lockout, as a rule, is not subject to labor
employer, in relation to a labor dispute; as an activity by injunction or restraining orders.
which workers, without a complete stoppage of work,
retard production, or their performance of duties and Exception: In cases of national interest or if acts
functions to compel management to grant their demands. prohibited under Art. 279 are being committed.
The Court also agrees that such a slowdown is generally PROHIBITED LOCKOUT
condemned as inherently illicit and unjustifiable, because No labor union may strike and no employer may declare a
while the employees "continue to work and remain at their lockout on grounds involving inter-union and intra-union
positions and accept the wages paid to them," they at the disputes.361
same time "select what part of their allotted tasks they care
to perform of their own volition or refuse openly or In line with the national concern for and the highest
secretly, to the employer's damage, to do other work;" in respect accorded to the right of patients to life and health,
other words, they "work on their own terms.356 strikes and lockouts in hospitals, clinics and similar
medical institutions shall, to every extent possible, be
avoided, and all serious efforts, not only by labor and
management but government as well, be exhausted to
substantially minimize, if not prevent, their adverse effects
Definition on such life and health, through the exercise, however
It is any temporary refusal of an employer to furnish work legitimate, by labor of its right to strike and by
as a result of an industrial or labor dispute.357 It is an management to lockout.362
employer’s act excluding employees who are union
members from the plant.358 No or employer shall declare a lockout without first having
bargained collectively in accordance with Title VII of this
The right of legitimate labor organizations to strike and Book or without first having filed the notice required in the
picket and of employers to lockout, consistent with the preceding Article or without the necessary lockout vote
national interest, shall continue to be recognized and first having been obtained and reported to the Ministry.
respected. However, no labor union may strike and no
353 357
Philcom v Philnabank EA, 105 SCRA 314 (1981). Art. 218 (p), Labor Code of the Philippines
354 358
Nagkahiusang Manggagawa sa Cuison Hotel-National Federation of Labor Sta.Mesa v. CIR, 48 OG 3353
359
v Libron, 124 SCRA 448 (1983). Art. 278 (b), LC
355 360
Liwayway publishing Co. Inc. v Permanent concrete workers union, 108 Azucena, Vol. II
361
SCRA 161 (1981) Art. 278 (b) (3rd sentence) , LC
356 362
Ilaw at Buklod ng Manggagawa v NLRC, 198 SCRA 598 (1991). Art. 278 (g), LC

No lockout shall be declared after assumption of If NCMB is satisfied that the conduct of strike vote was
jurisdiction by the President or the Minister or after properly done, after the lapse of 7 days, the employees may
certification or submission of the dispute to compulsory or now conduct their strike, or the employer may now
voluntary arbitration or during the pendency of cases proceed with its lockout.
involving the same grounds for the strike or lockout.363
If the dispute remains unsettled after the lapse of the
VALID LOCKOUTS: cooling off period and the 7day reporting period, the labor
 In anticipation of a threatened strike, where union may strike or the employer may lockout its workers.
motivated by economic considerations.364
 In response to unprotected strike or walkout.365 NCMB shall continue mediating and conciliating.
 In response to a whipsaw strike.366
Effect of Illegal Lockout
Unlawful lockouts: Any worker whose employment has been terminated as a
 To discourage and dissipate membership in a labor consequence of any unlawful lockout shall be entitled to
organization, or otherwise kill the union reinstatement with full backwages.369
 To aid a particular union by preventing further
organizational work of its rival, or to coerce the
employees to join the favoured union.
 To avoid bargaining.
Art. 278(g) of the Labor Code provides that when in the
Lockout must be for a lawful purpose and carried out
opinion of the DOLE Secretary, the labor dispute causes or
through lawful means. A lockout is unlawful where it is
will likely cause a strike or lockout in an industry
declared in order to defeat organizational and bargaining
indispensable to the national interest, he is empowered to
rights of employees.367
either:
1. Assume jurisdiction over the labor dispute and
Procedural Requirements
decide it himself; or  
1. BARGAIN FIRST (Art. 264(a))
2. Certify it to the NLRC for compulsory
2. NOTICE OF INTENTION TO LOCKOUT.
arbitration, in which case, it will be the NLRC
which shall hear and decide it.  
File notice of lockout to the regional office of the
NCMB368 A copy of the notice should also be served to the
This power may be exercised by the DOLE Secretary even
other party.
before the actual staging of a strike or lockout since Art.
278(g) does not require the existence of a strike or lockout
Cooling-Off Period but only of a labor dispute involving national interest.
Observe cooling off period
1. 30 days for Bargaining Deadlock;
Nature
2. 15 days for Unfair Labor Practice;
The assumption of jurisdiction by the Secretary of Labor
over labor disputes causing or likely to cause a strike or
In case of union busting, where the existence of the union
lockout in an industry indispensable to the national
is threatened, the cooling off period shall not apply and the
interest is in the nature of a police power measure.
union may take action immediately.
The compelling consideration of the Secretary’s
Strike Vote assumption of jurisdiction is the fact that a prolonged
If not resolved, conduct a strike vote and inform the NCMB strike or lockout is inimical to the national economy; and
24-hours prior the intended day of conducting the strike thus, the need to implement some measures to suppress
vote. any act which will hinder the company’s essential
productions is indispensable for the promotion of the
Conduct of Strike Vote. Get approval of a majority of the
common good.370
board of directors of the corporation or association or of
the partners in the partnership
Assumption order
1. Obtained by secret ballot
The power granted to the Secretary of DOLE by Art 278(g)
2. In a meeting called for that purpose
authorizes her to assume jurisdiction over a labor dispute
causing or likely to cause a strike or lockout in an industry
Strike Vote Report indispensable to the national interest, and correlatively, to
Submit the result of the strike vote at least 7 days before
decide the same. 371
the intended strike or lockout. (7 day strike ban)
The Secretary’s assumption of jurisdiction power
Declaration of Lockout necessarily includes matters incidental to the labor
dispute; that is, issues that are necessarily involved in the
363 368
Art. 279 (a) National Conciliation and Mediation Board (Regional branch)
364 369
Tidewater Express Lines case, 142 NLRB 1111 Art. 279(a), par. 3, 1st sentence, LC
365 370
News Union of BAtimore v. NLRB, 393 F2d 673 Union of Filipro Employees v. NLRC (1990).
366 371
NLRB v. Brown, 13 L ed 2d 839 Union of Filipro Employers v Nestle, G.R. No. 158930-31 (2006).
367
Dinglasan v. NLU, 98 Phil. 649

dispute itself, not just to those ascribed in the Notice of Awards and orders
Strike, or, otherwise submitted to him for resolution372 A union’s demand for a signing bonus bereft of any factual
or legal basis where the CBA was not concluded in the
The authority to assume jurisdiction over a labor dispute bargaining table. There is no basis for the award or
must include and extend to all questions and controversies conversion of the Unions demand for a signing bonus into
arising therefrom.373 gratuity pay inasmuch as the latter benefit was, in the first
place, never an issue between the parties nor part of the
Compulsory arbitration, conducted by: Unions demand. So, the SOLE abused her discretion when
1. Labor arbiter she extended to the union an award not asked for, let alone
2. SOLE under 278 (g) negotiated.380
In compulsory arbitration, parties are compelled to forego Arbitral award; retroactive effect. CBA arbitral awards
their right to strike by the government. granted after six months from the expiration of the last
CBA shall retroact to such time agreed upon by both
Initiating Party employer and the employees or their union. Absent such
an agreement as to retroactivity, the award shall retroact
1. SECRETARY OF LABOR AND EMPLOYMENT to the first day after the six-month period following the
“When, in his opinion, there exists a labor dispute causing expiration of the last day of the CBA should there be one.
or likely to cause a strike or lockout in an industry In the absence of a CBA, the Secretary's determination of
indispensable to the national interest, the Secretary of the date of retroactivity.381
Labor and Employment may assume jurisdiction over the
dispute and decide it or certify the same to the The Labor Secretary’s authority to assume jurisdiction
Commission for compulsory arbitration. Such assumption over a labor dispute must include and extend to all
or certification shall have the effect of automatically questions and controversies arising therefrom, including
enjoining the intended or impending strike or lockout as cases over which the labor arbiter has jurisdiction.382
specified in the assumption or certification order. If one
has already taken place at the time of assumption or Effects of Assumption of Jurisdiction
certification, all striking or locked out employees shall
immediately return-to-work and the employer shall 1st effect - Automatic injunction
immediately resume operations and readmit all workers The intended strike is automatically enjoined.
under the same terms and conditions prevailing before the
strike or lockout. The Secretary of Labor and Employment 2nd effect – Automatic return to work orders
or the Commission may seek the assistance of law If a strike has taken place, all employees should
enforcement agencies to ensure compliance with this immediately return to work. Employers should
provision as well as with such orders as he may issue to immediately resume operation and readmit all employees
enforce the same. xxx”374 under same terms before the strike.
Great breadth of discretion given to Secretary of Labor Note: There must be actual reinstatement.
under Article “(263)” 278 (g).375
AJ or Certification immediately executory, even if motion
The discretion to assume jurisdiction may be exercised by for reconsideration is still pending.
the SOLE without necessity of prior notice or hearing
given to any of the parties.376 Effect of Defiance of Assumption or Certification Orders
A strike undertaken despite Secretary’s issuance of an
The Secretary of Labor has the discretion to determine assumption or certification order becomes a prohibited
what industries are indispensable to national interest.377 activity and thus, illegal.383
2. PRESIDENT – 269(G) Once the SOLE assumes jurisdiction over a labor dispute,
To certify a labor dispute to the Industrial Court is the such jurisdiction should not be interfered with by the
prerogative of the President. The Supreme Court will not application of the coercive processes of a strike or lockout.
interfere with such prerogative, much less curtail its Defiance of the assumption order or a return-to work
exercise.378 order by a striking employee, whether a union officer or a
member, is an illegal act and, therefore, a valid ground for
Assumption and certification orders are executory in loss of employment status.384
character and are to be strictly complied with by the
parties even during the pendency of any petition
questioning their validity. 379
372 379
Union of Filipro Employers v Nestle, G.R. No. 158930-31 (2006). Union of Filipro Employees v Nestle, 192 SCRA 396 (1990).
373 380
Supra. Nissan Motors v SOLE, 491 SCRA 602 (2006).
374 381
Art 278(g) Manila Electric Co. v SOLE, G.R. No. 127598 (2000).
375 382
PLDT v Manggagawang Komunikasyon s aPilipinas, 463 SCRA 418 (2005). Interphil Lab EU v Interphil, 372 SCRA 658 (2001).
376 383
Capitol Medical v Trajano, 462 SCRA 457 (2005). Philcom EU v Philcom 495 SCRA 214 (2006).
377 384
Philtread WU v Confesor, 269 SCRA 393 (1997). Manila Hotel Employees v Manila Hotel, 517 SCRA 349 (2007).
378
Feati University v Bautista, 18 SCRA 1191 (1966).

OPTION – Submit case Voluntary arbitration after

certification That complainant has no adequate remedy at law; and
Art 278 (h)
(h) Before or at any stage of the compulsory arbitration That the public officers charged with the duty to
process, the parties may opt to submit their dispute to protect complainant’s property are unable or
voluntary arbitration. unwilling to furnish adequate protection.
Compulsory arbitration and labor rights Such hearing shall be held after due and personal
The assumption of jurisdiction is in the nature of police notice thereof has been served, in such manner as the
power measure. This is done for the promotion of the Commission shall direct, to all known persons against
common good considering that a prolonged strike or whom relief is sought, and also to the Chief Executive
lockout can be inimical to the national economy. The and other public officials of the province or city within
Secretary of Labor acts to maintain industrial peace. Thus, which the unlawful acts have been threatened or
his certification for compulsory arbitration is not intended committed, charged with the duty to protect
to impede the workers' right to strike but to obtain a speedy complainant’s property: Provided, however, that if a
settlement of the dispute.385 complainant shall also allege that, unless a temporary
restraining order shall be issued without notice, a
substantial and irreparable injury to complainant’s
property will be unavoidable, such a temporary
There can be no injunction issued against any strike except restraining order may be issued upon testimony
in only one instance, that is, when a labor dispute arises in under oath, sufficient, if sustained, to justify the
an industry indispensable to the national interest and such Commission in issuing a temporary injunction upon
dispute is certified by the President to the CIR in hearing after notice. Such a temporary restraining
compliance with sec 10, RA 875.386 order shall be effective for no longer than twenty (20)
days and shall become void at the expiration of said
Exceptions twenty (20) days. No such temporary restraining order
Art. 225. Powers of the Commission. or temporary injunction shall be issued except on
The Commission shall have the power and authority: condition that complainant shall first file an
undertaking with adequate security in an amount to
e. To enjoin or restrain any actual or threatened be fixed by the Commission sufficient to recompense
commission of any or all prohibited or unlawful acts those enjoined for any loss, expense or damage
or to require the performance of a particular act in any caused by the improvident or erroneous issuance of
labor dispute which, if not restrained or performed such order or injunction, including all reasonable
forthwith, may cause grave or irreparable damage to costs, together with a reasonable attorney’s fee, and
any party or render ineffectual any decision in favor of expense of defense against the order or against the
such party: Provided, That no temporary or granting of any injunctive relief sought in the same
permanent injunction in any case involving or growing proceeding and subsequently denied by the
out of a labor dispute as defined in this Code shall be Commission.
issued except after hearing the testimony of
witnesses, with opportunity for cross-examination, in The undertaking herein mentioned shall be
support of the allegations of a complaint made under understood to constitute an agreement entered into
oath, and testimony in opposition thereto, if offered, by the complainant and the surety upon which an
and only after a finding of fact by the Commission, to order may be rendered in the same suit or proceeding
the effect: against said complainant and surety, upon a hearing
to assess damages, of which hearing, complainant and
That prohibited or unlawful acts have been surety shall have reasonable notice, the said
threatened and will be committed and will be complainant and surety submitting themselves to the
continued unless restrained, but no injunction or jurisdiction of the Commission for that purpose. But
temporary restraining order shall be issued on nothing herein contained shall deprive any party
account of any threat, prohibited or unlawful act, having a claim or cause of action under or upon such
except against the person or persons, association or undertaking from electing to pursue his ordinary
organization making the threat or committing the remedy by suit at law or in equity: Provided, further,
prohibited or unlawful act or actually authorizing or That the reception of evidence for the application of a
ratifying the same after actual knowledge thereof; writ of injunction may be delegated by the
Commission to any of its Labor Arbiters who shall
That substantial and irreparable injury to conduct such hearings in such places as he may
complainant’s property will follow; determine to be accessible to the parties and their
witnesses and shall submit thereafter his
That as to each item of relief to be granted, greater recommendation to the Commission. (As amended by
injury will be inflicted upon complainant by the denial Section 10, Republic Act No. 6715, March 21, 1989)
of relief than will be inflicted upon defendants by the
granting of relief;
385 386
Philtread Workers Union v Confesor, 296 SCRA 393 (1997). Caltex Filipino Managers and Supervisors Assn v CIR, G.R. No. 130632-33
(1972).

Green Notes 2019 Post-Employment
Employer, defined
One who employs the services of others; One for whom
employees work and who pays their wage or salaries.
NOTE: A juridical entity is considered as an employer,

whether registered or unregistered. As provided under Art.
219 (e) of the Labor Code, as amended, an employer is any
person acting in the interest of an employer, directly or
indirectly. The law does not require an employer (in this
case, an association) to be registered before he may come
within the purview of the Labor Code.387
Employee, defined
One who is engaged in the service of another; who
performs services for another; who works for salary or
wages.
His work is subject to control of the employer not only as

to the result but the matter and means of doing it.
An employee-employer relationship is not a condition sine

qua non before the Labor Code applies. It depends on what
kind of issues is involved. When one speaks of
employments benefits or of unionization, EE-ER
relationship is a requisite. When the issue is an indirect
employer’s liability, or illegal recruitment, or misuse of
POEA license, there is no EE-ER relationship between the
complainant and the respondent, and yet the pertinent
Labor Code provisions may be invoked. (Azucena, p. 6)
Four-fold test
The existence of an employer-employee relationship is

ultimately a question of fact. Four elements must be
considered to determine the existence of employer-
employee relationship:
1. Selection and engagement of the employees
2. Payment of wages
3. Power of dismissal
4. Power to control the employees conduct in
relation to his work,
The control test is the most crucial indication of the

existence of an employer-employee relationship.388
Power of control refers to the existence of the power and

not the actual exercise thereof.
The most important is the employer’s control of the

employee’s conduct, not only as to the results of the work to
be done, but also as to the means and methods to
accomplish.
387 388
Orlando Farm Works vs. NLRC, 1998 The Manila Hotel Corp vs. NLRC, 2000
84
NOTE: RULES AS GUIDELINES vs. RULES AS CONTROL: 6. The permanency and duration of the relationship
The first, which aim only to promote the result, create no between the worker and the employer; and
employer-employee relationship unlike the second, which 7. The degree of dependency of the worker upon the
address both the result and the means used to achieve it.389 employer for his continued employment in that line
of business.
Decided Cases where there is EE-ER Relationship:
1. Between jeepney owners/operators and jeepney The proper standard of economic dependence is whether
drivers [National Labor Union vs. Dinglasan, 1956]; the worker is dependent on the alleged employer for his
2. Between bus owner/operator and bus conductor continued employment in that line of business.
[Doce vs. Workmen’s Compensation Commission, 1958]
3. Between auto-calesa owner/operator and driver Payment of PAG-IBIG Fund contributions;
[Citizens’ League of Freeworkers vs. Abbas, 1966] payment/remittance of contributions to the State
4. Between taxi owners/operators and taxi drivers. Insurance Fund; Deduction of withholding tax; and
[Martinez vs. NLRC, 1977]; Deduction/remittance of SSS contributions are proof of
5. Between barbershop owner and barbers and employment.
manicurists [Corporal Sr. v. NLRC, 2000];
6. Between fishing enterprise and fishermen-crew Mode of compensation is not a test for the existence of
members whose fishing activity is scheduled by the employer-employee relationship.
former [Ruga v. NLRC, 1990]390;
7. Between an insurance corporation and an insurance
agent [Tongko vs Manulife Phils Inc.]391;
Two-tiered test
Regular employee, defined
First Tier: Control Test - the putative employer’s power to One who is engaged to perform tasks usually necessary or
control the employee with respect to the means and desirable to the usual trade or business of the employer.
methods by which the work is to be accomplished; and
Test
Second Tier: Economic Reality Test - the underlying Primary standard to determine a regular employment is
economic realities of the activity or relationship. Existing the reasonable connection between the particular activity
economic conditions between the parties are used to performed by the employee in relation to the usual
determine whether employer-employee relationship business or trade of the employer. The test is whether the
exists. This is resorted to when there is serious doubt as to former is usually necessary or desirable in the usual business
the relationship of the employee with the employer. or trade of the employer.392
Purpose The connection can be determined by considering the

This two-tiered test would provide us with a framework of nature of work performed and its relation to the scheme
analysis, which would take into consideration the totality of the particular business or trade in its entirety. The
of circumstances surrounding the true nature of the repeated and continuing need for the performance of the
relationship between the parties. This is especially job has been deemed sufficient evidence of the necessity,
appropriate in this case where there is no written if not indispensability of the activity to the business.
agreement or terms of reference to base the relationship
on; and due to the complexity of the relationship based on If the work is an integral part of the business and the
the various positions and responsibilities given to the worker does not furnish an independent business or
worker over the period of the latter’s employment. professional service, the work is presumed to be a regular
employment.
The determination of the relationship between the
employer and employee depends upon the circumstances NOTE: Employees may become regular by the nature of
of the whole economic activity, such as: their work; by the period of their service (in the case of
1. The extent to which the services performed are an casual employees); and by probationary employment.
integral part of the employer’s business; (Azucena)
2. The extent of the worker’s investment in equipment
and facilities; Employees are deemed regular if they have been engaged
3. The nature and degree of control exercised by the to perform activities which are usually necessary or
employer; desirable in the usual business or trade of the employer
4. The worker’s opportunity for profit and loss; (Art. 295, LC)
5. The amount of initiative, skill, judgment or foresight
required for the success of the claimed independent Casual employees are those who, after one year of service,
enterprise; become regular. The employee is only regular for that
389
Insurance Life Assurance Co., Ltd. vs NLRC Relations Commission (1990) and Insular Life Assurance Co., Ltd. v. National
390
As distinguished from a “joint fishing venture” in Pajarillo vs. SSS, 1966 Labor Relations Commission (1998).
391 392
As distinguished from a subsequent management contract which De Leon vs. NLRC
superseded a contract of agency between the insurance corporation and
insurance agent in Great Pacific Life Assurance Corporation v. National Labor
85
work activity for which he is hired. His employment may regular employee.395
be on-and-off, but every time the particular work activity
occurs, he is the one to be rehired. (Art. 295, LC; Azucena) Probationary employees may be dismissed before end of
the probationary period (Azucena). Termination, to be
valid, must be done before the lapse of the probationary
period.396
Casual employee, defined
Where an employee is engaged to perform a job, work, or In the case of teachers, the legal requisites for acquisition
service which is merely incidental to the business of the of permanent employment, are as follows:
employer; and such job, work or service is for a definite 1. The teacher is a full-time teacher;
period made known to the employee at the time of 2. The teacher must have rendered three
engagement. consecutive years of service; and
3. Such service must have been satisfactory.397
If employee has rendered at least 1 year of service, whether Full time teachers who have rendered three consecutive
such service is continuous or broken, he is considered a years of satisfactory services shall be considered
regular employee with respect to the activity which he is permanent.398
employed.
Under the Manual of Regulations
A full time teacher is one whose total working time is
devoted to the school, has no other regular remunerative
employment, and is paid on a regular monthly basis
Probationary employee, defined
regardless of the number of teaching hours. In college, the
One who is under observation by an employer to
normal teaching load of a full-time instructor shall be
determine whether he is qualified for permanent
eighteen (18) hours a month.399
employment. (Azucena)
One who is on trial by an employer during which the

employer determines whether or not he is qualified for
permanent employment.393
Project employee, defined
General rule: One whose employment has been fixed for a specific
Probationary employment shall not exceed six (6) months project or undertaking, the completion or termination of
(Art. 296, LC) which has been determined at the time of the engagement
of the employee… (Art. 280, LC; Azucena)
If an employee is allowed to work after a probationary
period, he shall be considered a regular employee. (Art. Project employment is subject to two types of activities:
296, LC) those particular job or undertaking that is within the
regular or usual business of the employer company, and
Exception: those without. Whichever type they are, employees must
1. Covered by an apprenticeship agreement be designated as “project employees”; are assigned to a
stipulating a longer period (Art. 296 [281], LC) specific project; and such project must be effected and
2. Voluntary agreement of parties implemented in good faith. (Azucena)
3. The employer gives the employee a second
chance to pass the standards set394 Test:
4. When a longer period is required and established Whether or not the “project employees” were assigned to
by company policy carry out a specific project or undertaking, the duration
(and scope) of which were specified at the time the
Termination of probationary employment employees were engaged for that project.400
1. Just / authorized cause (Art. 296, LC)
2. When employee fails to qualify as a regular NOTE: Day Certain Rule is when the project employment
employee in accordance with reasonable does not end at an exact date but upon the completion of
standards made known by the employer to the the project.
employee at the time of his engagement
If there is a continuous rehiring for the same tasks or
NOTE: In all cases of probationary employment, the nature of tasks under different projects, which tasks are
employer shall make known to the employee the standards vital, necessary, and indispensable to the usual business or
under which he will qualify as a regular employee at the trade of the employer, an employee who was initially hired
time of his engagement. Where no standards are made as a project employee may eventually acquire regular
known to the employee at that time, he shall be deemed a status.401
393 398
International Catholic Migration Comm. vs. NLRC Mercado, et al. vs. NLRC
394 399
Mariwasa Manufacturing vs. Leogardo UST vs. NLRC
395 400
Aberdeen Court, Inc. vs. Agustin ALU-TCP, et. al. vs. NLRC
396 401
Pasamba vs. NLRC Maraguinot vs. NLRC
397
Lacuseta v. Ateneo de Manila
86
Employee-employer relationship
The Security Service Contractor or Private Security
Agency is the employer of its security guards and other
Seasonal employee, defined private security personnel on duty detail to a principal or
One whose work or services performed is seasonal in client under a Service Agreement
nature and the employment is for the duration of the
season (Art. 295, LC) Duty Detail Order
A written order/schedule/assignment issued to a security
Passage of time does not make a seasonal employee guard and other private security personnel by a superior
regular or permanent. officer, usually the private security agency or branch
manager or operation’s officer, for the performance of
Regular seasonal employees are those called to work from security and/or detective service duties.
time to time. The nature of their relationship with the
employer is such that during off season they are Must contain:
temporarily laid off. They are not separated from service  Name, address, and telephone number of the
but are merely considered on leave of absence without pay agency
until they are reemployed. As such, they are considered as  Issue serial number and date of Duty Detail
regular employees. (Manila Hotel Co. v. CIR et. al.) Workers Order
who have performed the same tasks every season for  Complete name and designation of the grantee
several years are considered regular employees for their  Purpose
respective tasks. (Hacienda Fatima v. National Federation  Inclusive dates of detail
of Sugarcane Workers-Food and General Trade)  Firearms description and license number
 Authorized uniform to be used
 Other specific instructions or remarks; and
 Signature and designation of issuing officer
Fixed-term employee, defined

Fixed-term employment is not defined under the Labor Floating status
Code as it was repealed. The Civil Code however The employer is allowed to temporarily suspend work due
recognizes its validity. Under the Civil Code, fixed-term to bona fide suspension of business operations or
employment contracts are not limited, as they are under undertaking for a period not exceeding six (6) months. This
present Labor Code, to those by nature seasonal or for is provided for the Labor Code, as follows: ART. 300.
specific projects with predetermined dates of completion.
It also includes those to which the parties by free choice
have assigned a specific date of termination.402
When employment not deemed terminated
The bona fide suspension of the operation of a business or
A fixed-term employment is valid provided it is entered
undertaking for a period not exceeding six (6) months, or
into by the parties without any force, duress, or improper
the fulfillment by the employee of a military or civic duty
pressure being brought to bear upon either party,
shall not terminate employment. In all such cases, the
particularly the employee, and absent any other
employer shall reinstate the employee to his former
circumstance vitiating consent. It must also appear that
position without loss of seniority of rights if he indicates
the employer and the employee dealt with each other on
his desire to resume his work not later than one (1) month
more or less equal terms with no moral dominance
from the resumption of operations of his employer or from
exercised by the former or the latter. (Id)
his relief from the military or civic duty.
Fixed-term employees are deemed regular because: (a) the
Concept of work suspension
nature of their work is necessary or desirable in the There is no termination of employment during the bona
principal business of the employer; and (2) they enjoy fide suspension of business operations. The establishment
security of tenure. They are however not permanent for
simply temporarily suspends its operations for legitimate
their work will exist only for a certain period of time.
and valid reasons, including but not limited to, serious
(Azucena)
financial losses or business reverses, force majeure (fire,
flood, typhoon, etc.), failure to obtain a permit or license
to operate, or due to a lawful order by a competent
[Pursuant to Department Order No. 150-16] authority – i.e. Temporary Restraining Order/Injunction
by a competent court, work stoppage order by the DOLE,
Security Guards or cease operations from the LTFRB for public
This refers to any person who offers or renders personal transportation, etc.
service to watch or secure a residence, business
establishment, building, compound, any other area or Dire exigency required
property; or inspects, monitors, or performs body checks As held by Supreme Court(de Guzman v Philippine Rabbit
or searches of individuals or baggage and other forms of Bus Line Company), the “paramount consideration” to take
security inspection. note for a bona fide suspension of business operation is the
402
Brent School, Inc. vs. Zamora
87
“dire exigency” of the employer’s business compelling it “to

put some of its employees temporarily out of work.” Labor-only contracting
There are no hard and fast rules on what may constitute as Where the person supplying workers to an employer does
a dire exigency. Thus, the validity of a bona fide suspension not have substantial capital or investment in the form of
of business operation will be on a case to case basis and tools, equipment, machineries, work premises, among
taking into consideration the surrounding circumstances. others, and the workers recruited and placed by such
person are performing activities which are directly related
Burden of proof is on employer to the principal business of such employer. In such cases,
the person or intermediary shall be considered merely as
Due to the “grim economic consequences” to the an agent of the employer who shall be responsible to the
employee, the employer has the burden of proving that workers in the same manner and extent as if the latter
suspension of operation is valid. The same rule applies for were directly employed by him. (Art. 106, LC)
employees who are placed on “floating status.” Failure to
do so, the employer may be held liable for illegal dismissal. It “is an arrangement where the contractor or
subcontractor merely recruits, supplies, or places workers
6 Months Period to perform a job, work, or service for a principal.404 The
During the six (6) months period, the employee’s elements enumerated under Sec. 5 of D.O. No. 174-17 must
employment status is merely suspended and not be present.
terminated. If it continues beyond that period, the
employment is permanently terminated resulting in illegal Indirect Employer
dismissal. Any person, partnership, association or corporation which,
not being an employer, contracts with an independent
Temporary retrenchment or lay-off Temporary lay-off is contractor for the performance of any work, task, job or
neither illegal nor is it a form of unfair labor practice. project. (Art. 107, LC)
However, there is no exact legal provision that applies to
temporary retrenchment or lay-off. Instead, Article 300 Independent Contractor
has been applied by analogy “to set a specific period that They are those who undertake ‘job contracting’. They
employees may remain temporarily laid-off or in floating exercise independent employment, contracting to do a
status.” As 6 months is the limitation for suspension of piece of work according to their own methods and without
business operations, the temporary retrenchment or lay- being subject to control of their employer except as to the
off should also not be longer than 6 months. result of their work.405
After the lapse of 6 months, the employer has two options: LEGITIMATE CONTRACTING OR SUBCONTRACTING
(a) recall the employees back to work, or (b) permanently MUST HAVE: 406
retrench them. If the employer does not exercise any of 1. Registered in accordance with the rules and carries a
these options, this would be “tantamount to dismissing the distinct and independent business;
employee” with the employer being liable for the dismissal. 2. Undertakes to perform a job, work or service on its
If recalled back to work, the employer is required to own responsibility, according to its own manner and
reinstate the employees to their former positions without method, and free from control and direction of the
loss of seniority rights provided they exercise such right principal in all matters connected with the
within one (1) month from resumption of operations. performance of the work except as to the results
therof;
If the bona fide suspension of operations exceeds six (6) 3. The contractor has substantial capital and/or
months, the employment is considered terminated and investment
made permanent resulting in constructive dismissal.
The Service Agreement ensures compliance with all the
rights and benefits under Labor Laws. Assure that the
contractual employees are entitled to all labor and
occupational safety and health standards, free to exercise
right to self-organization, security of tenure and social and
welfare benefits.
Contracting or Sub-contracting
SEVERAL FACTORS THAT MAY BE CONSIDERED IN
Defined as an arrangement whereby a principal agrees to
DETERMINING THE EXISTENCE OF INDEPENDENT
put out or farm out with a contractor or subcontractor the
CONTRACTOR RELATIONSHIP:407
performance or completion of a specific job, work, or
1. whether the contractor is carrying on an
service within a definite or predetermined period,
independent business;
regardless of whether such job, work, or service is to be
2. the nature and extent of work;
performed or completed within or outside the premises of
3. the skill required;
the principal.403
4. the term and duration of the relationship;
403 406
Section 3[c], D.O. No. 174-17, 2017 Sec. 4, Department Order No. 18-A, Series of 2011
404
Polyfoam-RGC International Corp. v. Concepcion
405
Wack Wack Gold v NLRC (2005) 407
Vinoya v NLRC (2000)
88
5.
the right to assign the performance of specified performed by union members and such will
pieces of work; interfere with, restrain or coerce employees in
6. the control and supervision of the workers; the exercise of their rights to self-organization
7. The power of the employer with respect to the as provided in Art. 259 of the Labor Code, as
hiring, firing and payment of workers of the amended;
contractor; f. Requiring the contractor’s/subcontractor’s
8. The control of the premises; employees to perform functions which are
9. The duty to supply premises, tools, appliances, currently being performed by the regular
materials and labor; employees of the principal;
The mode and manner and terms of payment. g. Requiring the contractor’s/subcontractor’s
employees to sign, as a precondition to
Job Contracting Labor-Only employment or continued employment, an
Contracting antedated resignation letter; a blank payroll; a
The principal is The principal is waiver of labor standards including minimum
considered by the law considered the direct wages and social or welfare benefits; or a
as an indirect employer employer of the quitclaim releasing the principal or contractor
of the contractor’s contractor’s from liability as to payment of future claims; or
employees; employees; require the employee to become a member of a
The relationship between the principal and the cooperative;
contractor is governed by the Civil Code and h. Repeated hiring by the
pertinent commercial laws; contractor/subcontractor of the employees
And if it is labor-only contracting, there arises a under an employment contract of short
principal-agent relationship between them; thus, duration;
the principal is responsible to the employees of i. Requiring employees under a
the contractor as if such employees had been contracting/subcontracting arrangement to
directly employed by the principal employer408 sign a contract fixing the period of employment
Permissible Prohibited by law to a term shorter than the term of the Service
There is substantial There is no substantial Agreement, unless the contract is divisible into
capital or investment capital or investment phases for which substantially different skills are
required and this is made known to the employee
at the time of engagement;
EE-ER relationship EE-ER relationship
j. Such other practices, schemes or employment
exists between for a exists for a
arrangement designed to circumvent the right of
limited purpose, that is, comprehensive
workers to security of tenure.
to ensure that the purpose, i.e. to prevent
employees are paid a circumvention of
their wages labor laws.
A presumption arises A presumption arises

that it is job that it is a labor-only Under Sec. 8 of D.O. No. 174-17 (2017), contracting or
contracting if it is contractor if it is not subcontracting shall only be allowed if the contractor or
registered with DOLE registered with the subcontractor:
pursuant to D.O. 18-A, DOLE pursuant to D.O. a.) Is engaged in a distinct and independent
2011. But such 18-a, 2011. Such business and undertakes to perform the job or
presumption may be presumption may be work on its own responsibility, according to its
refuted. refuted. own manner and method;
b.) Has substantial capital to carry out the job
PROHIBITIONS farmed out by the principal on his account,
manner and method, investment in the form of
(1) Labor-only contracting409 tools, equipment, machinery and supervision;
(2) Arrangements that violate public policy410 – they are not c.) Is free from control and/or direction of the
labor-only contracting but are nonetheless are prohibited principal in all matters connected with the
because they contravene public policy. performance of the work except as to the result
a. When the principal farms out work to a “Cabo”; thereto; and
b. Contracting out of job or work through an in- d.) The Service Agreement ensures compliance with
house agency; all the rights and benefits for all employees of the
c. Contracting out of job or work through an in- contractor or subcontractor under the labor
house cooperative which merely supplies laws.
workers to the principal;
d. Contracting out of a job or work by reason of a Under D.O. No. 174-17 (2017), Labor-only contracting,
strike or lockout whether actual or imminent; which is totally prohibited, refers to an arrangement
e. Contracting out of a job or work being where:
a.) i. The contractor or subcontractor does not have
408 410
Aliviado vs. P&G, 2010 Sec. 6, D.O. No. 174-17
409
Sec. 5, D.O. No. 174-17
89
substantial capital, OR contractor for purposes of enforcing the provision of the

ii. The contractor or subcontractor does not Labor Code and other social legislation, to the extent of the
have investments in the form of tools, work performed under the employment contract.412
equipment, machineries, supervision, work
premises, among others, and Consequences of labor-only contracting
iii. The contractor’s or subcontractor’s 1. A principal-agent relationship is established between
employees recruited and placed are performing the principal and the contractor413;
activities which are directly related to the main 2. The workers supplied by the contractor becomes the
business operation of the principal; direct employee of the principal414;
3. Thus, an EE-ER relationship arises between the
OR principal and the employees of the contractor (Labor
Code governs);
b.) The contractor or subcontractor does not 4. Consequently, it becomes entitled to the benefits
exercise the right to control over the under the CBA of the principal415;
performance of the work of the employee 5. The principal becomes solidarily liable to the
employees of his contractor on their wages and
Substantial Capital, defined money claims.
A contractor’s paid-up capital stocks/shares must at least
P5,000,000 in the case of corporations, partnerships and
cooperatives; in the case of single proprietor ship, a net
worth of at least P5,000,000.411
BASIC PRINCIPLES IN TERMINATION CASES
Balancing of interest in disciplinary cases

A trilateral relationship exists when there are:
1. Principal – decides to farm out a job or service to a 1. Labor’s interests
contractor or subcontractor; Worker’s right to labor is recognized by the
2. Contractor/Subcontractor – has the capacity to Constitution as property right. An employee cannot
independently undertake the performance of the job, be deprived of his work without just cause or due
work, or service; and process.
3. Workers – those engaged by the
contractor/subcontractor to accomplish the job,
2. Management’s interests
work, or service
Discipline of employees is a management
prerogative.416 The employer cannot be compelled to
NOTE: The relationship between the principal and the continue to employ such persons whose continuance
contractor is governed by the Civil Code and pertinent in the service will patently be inimical to his
commercial laws. interest.417
Those of the contractor and his employees are governed
by the Labor Code and special labor laws.
Security of Tenure
No employer-employee relationship exists between the
principal and the contractor’s employees, because the
Security of Tenure, defined
contractor is deemed the employer. (Azucena)
Security of Tenure means the right not to be removed from
one’s job except for a valid reason and through proper
procedure.
In case of regular employment, the employer shall not

terminate the services of an employee.
Every employer or indirect employer shall be held
responsible with his contractor or subcontractor for any
Exceptions:418
violation of any provision of this Code. For purposes of
determining the extent of their civil liability under this 1. When it is for a just cause (Art 297, LC) or
Chapter, they shall be considered as direct employers. [Art. 2. When authorized by law (Art 298-299, LC)
109, LC]
The right of employees to security of tenure does not give
In the event that any violation of any provision of the Labor them vested rights to their positions to the extent of
Code, including the failure to pay wages, there exists a depriving management of its prerogative to change their
solidary liability on the part of the principal and the assignments or to transfer them.419
411 417
Sec. 3, D.O. No. 174-17, 2017 Virginia Sugue v Triumph International Phils, Inc., 2009
412 418
Sec.9, D.O. 174-17, 2017 Subject to the requirements of due process (IRR, Book V, Rule 23, Sec1.
Security of Tenure)
419
413
Aliviado vs. P&G, 2010 Antonio H. Abad Jr., Compendium on Labor Law (2004), p. 55, as cited in
414
Phil. Bank Communication vs. NLRC, 1986 Mendoza v Rural Bank of Lucban (2004)
415
Tabas, et al vs. California Manufacturing Company, Inc. et al., 1989
416
Sagales vs. Rustan’s Commercial Corp, 2008
90
The employer’s privilege to transfer its employees to

different workstations cannot be used as a subterfuge to
rid itself of an undesirable worker.420
Just causes refer to those instances enumerated under
Nature of right Article 297 of the Labor Code, as amended. These are
Security of tenure is a right of paramount value guaranteed causes directly attributable to the fault or negligence of
by the Constitution. 421 It stands to reason that a right so the employee. 429
highly ranked as security of tenure should not lightly be
denied on mere speculation.422 An employee terminated by reason of just causes is not
entitled to separation pay except as expressly provided for
Dismissal based on loss of trust and confidence arising from in the company policy or CBA.430
alleged misconduct of employee is not to be used as a
shield to dismiss an employee arbitrarily. Bar 1996, 2001
Art. 297. Termination by employer.
Termination without just cause entitles a worker to
An employer may terminate an employment for any of the
reinstatement regardless of whether he was accorded due
following causes:
process.
a. Serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or
Termination for a just cause even without procedural due
representative in connection with his work;
process, does not warrant reinstatement. The employer
incurs only liability for damages.423 b. Gross and habitual neglect by the employee of
his duties;
Coverage c. Fraud or willful breach by the employee of the
All workers are entitled to security of tenure. (Art XIII, Sec trust reposed in him by his employer or duly
3, 1987 Constitution) authorized representative;
d. Commission of a crime or offense by the employee
Confidential and Managerial employees are also entitled to against the person of his employer or any
security of tenure. They cannot be arbitrarily dismissed at immediate member of his family or his duly
any time, and without cause as reasonably established in authorized representatives; and
an appropriate investigation.424 e. Other causes analogous to the foregoing.
Requisites of a Valid Termination425 Serious Misconduct or Willful Disobedience

1. Substantive due process
Legality of the act of dismissal as provided under Bar 1995, 1996
Articles 297 to 299 of the Labor Code. SERIOUS MISCONDUCT
2. Procedural due process Misconduct

Legality in the manner of dismissal with due Improper or wrong conduct. It is the transgression of some
observance of the procedural requirements. established and definite rule of action, a forbidden act, a
dereliction of duty willful in character, and implies
Measure of Penalty wrongful intent and not mere error in judgment.431
Employee’s length of service is taken into consideration in
imposing the penalty to be meted an erring employee.426 Requisites for serious misconduct432
But if it is to be regarded as a justifying circumstance in 1. Conduct must be serious
moderating the penalty of dismissal, it will actually become 2. Must relate to the performance of the employee’s
a prize for disloyalty, perverting the meaning of social duties
justice and undermining the efforts of labor to cleanse its
3. Must show that the employee has become unfit
ranks of all undesirables.427
to continue working for the employer
The penalty must be commensurate with the act, conduct or
omission imputed to the employee and must be imposed in Examples of Serious Misconduct justifying termination
connection with the disciplinary authority of the 1. Falsification of time records433
employer.428 2. Immorality. Teachers must adhere to the
exacting standards of morality and decency. A
While the employer has the inherent right to discipline,
including that of dismissing its employees, this prerogative
is subject to the regulation by the State in the exercise of
its police power
420 427
Veterans Security Agency Inc. vs. Gonzalvo, Jr. Bago vs. NLRC, 2007
421 428
Art 11, Sec 9, 1987 Constitution Sagales vs. Rustan’s Commercial Corporation, 2008
422 429
Llosa Tan vs. Silahis International Hotel, 1990 Dep. Order No. 147-15 (2015)
423 430
Alhambra Industries vs. NLRC Id.
424 431
Inter Oriental Maritime Enterprises, Inc. vs. NLRC, 1994 Pastor Austria vs. NLRC, 1999
425 432
Shoemart vs. NLRC, 1989 Pastor Austria vs. NLRC, 1999
426 433
Inter Oriental Maritime Enterprises, Inc. vs. NLRC, 1994 Felix vs. Enertech Systems Industries, Inc., 2001
91
teacher, both in his official and personal conduct, though not habitual, results to loss of trust and confidence,
must display exemplary behavior.434 such as when the resultant damage claims the life of a
3. Moonlighting. It is a valid ground for dismissal for child, dismissal is valid and legal.440
unauthorized use of company time.435
4. Theft of company property436 A single or isolated act of negligence do not constitute a
5. Drug abuse. Supreme Court has taken judicial just cause for the dismissal of the employee.441
notice of scientific findings that drug abuse can
damage the mental faculties of the user. 437 An unsatisfactory rating can be a just cause for dismissal
only if it amounts to gross and habitual neglect of
duties. The fact that an employee’s performance is found
Bar 1995, 1999, 2003 to be poor or unsatisfactory does not necessarily mean
WILLFUL DISOBEDIENCE that the employee is grossly and habitually negligent of his
duties.442
Requisites of Willful Disobedience
1. Employee’s assailed conduct must have been willful Examples of Gross of Habitual neglect of duties justifying
or intentional, termination
2. The willfulness being characterized by a “wrongful 1. Abandonment of work
and perverse attitude”; The deliberate and unjustified refusal of an employee
3. The order violated must have been reasonable, to resume his employment. It is a form of neglect of
lawful, made known to the employee and duty, and hence, a just cause for termination by
4. Order must pertain to the duties which he had been employer.443
engaged to discharge.
Requisites of Abandonment444
Gross and Habitual Neglect of Duties a. Failure to report for work or absence
without valid or justifiable reason
Gross negligence, defined b. Clear intention to sever the employer-
Want or absence of or failure to exercise slight care of employee relationship.
diligence, or the entire absence of care. It evinces a
thoughtless disregard of consequences without exerting The burden of proof to show that there was
any effort to avoid them. unjustified refusal to go back to work rests on the
employer.445
Requisites of neglect of duty
The filing by an employee of a complaint for illegal
1. Gross neglect of duty
dismissal is proof of her desire to return to work, thus
2. Neglect must be habitual negating the employer’s charge of abandonment.446
Gross Negligence, Habitual Neglect and Fraud438 Employer must serve a memo or show-cause letter to
the employee at her last known address requiring her
Fraud and to report for work or to explain her absence, with a
Gross
Habitual neglect willful neglect warning that her failure to report would be construed
negligence
of duties as abandonment of work.447
Imply bad faith
on the part of Employer should serve the employee a notice of
Repeated failure the employee termination as required by law.448
to perform one’s in failing to
Want of care
duties over a perform his job 2. Habitual absenteeism
in the
period of time, to the Repeated and habitual infractions, committed despite
performance
depending upon detriment of several warnings, constitute gross misconduct.
of one’s duties
the the employer Habitual absenteeism without leave constitute gross
circumstances and the negligence and is sufficient to justify termination of an
employer’s employee.449
business
Employee’s infractions are worse than inefficiency.
Bar 1999 They border on dishonesty constituting serious
To be a valid ground for dismissal, neglect must be both misconduct.450
gross and habitual.439 However, if gross negligence,
434 443
Santos, Jr vs. NLRC, 1998 Abad
435 444
Capitol Wireless vs. Balagot, 2007 Padilla Machine Shop vs. Javilgas, 2008
436 445
Caltex Phils, Inc vs. Agad, 2010 Tacloban Far East Marketing Corporation vs. CA, 2009
437 446
Bughaw Jr vs. Treasure Island, 2008 Henlin Panay Company vs. NLRC, 2009
438 447
JGB and Associates, Inc. vs. NLRC, 1996 Henlin Panay Company vs. NLRC, 2009
439 448
National Sugar vs. NLRC, 1998 Henlin Panay Company vs. NLRC, 2009
440 449
School of the Holy Spirit of Quezon City vs. Taguiam, 2008 Challenge Socks Corporation vs. CA, 2005
441 450
National Bookstore, Inc. vs. CA, 2000 Arseno Quiambao vs. Manila Electric Company, 2009
442
Eastern Overseas Employment Center, Inc. v Bea, 2005
92
A series of irregularities when put together may Rules of dismissal for managerial employees are
constitute serious misconduct. We also held that different from those governing ordinary employees.461
gross neglect of duty becomes serious in character
due to frequency of instances. There can be no good Managerial and
faith in intentionally and habitually incurring Rank and file
confidential
inexcusable absences.451 employees
employees
Loss of Trust and Confidence /Fraud or Willful Breach Employers are Termination
of Trust generally allowed based on the
a wider latitude of ground of loss
Fraud, defined discretion in of trust and
Deemed to comprise anything calculated to deceive, terminating confidence
including all acts, omissions, and concealment involving a managerial requires proof
breach of legal or equitable duty, trust or confidences personnel, or of involvement
justly reposed, resulting in damage to another, or by which those similar in the events in
an undue and unconscientious advantage is taken of rank, performing question462
another. Deceit is specie of fraud.452 functions which,
by their nature,
Requisites of willful breach of trust leading to loss require the
of trust and confidence453 employer’s full
1. Breach must be willful and not ordinary trust and
breach454 confidence
2. Employee hold a position of trust and confidence
3. Must be in relation to the work performed Strained Relation Rule
4. There must exist substantial evidence, and It would be unjust and inequitable to compel an employer
should not be based on mere surmises, to continue with the employment of a person who
speculations and conjectures occupies a managerial and sensitive position despite loss
of trust and confidence
Breach must be willful and not ordinary breach455
The breach is willful if it is done intentionally, knowingly, The relationship must be considered seriously strained,
and purposely without justifiable excuse. foreclosing the remedy of reinstatement.463
There must be a cause for the loss of confidence. It must Trust in an employee, once lost is difficult, if not
rest on some basis which must be convincingly impossible to regain.464
established. An employee must not be dismissed on mere
presumptions or suppositions.456 Strained Relation rule does not apply to ULP cases where
the employee was dismissed for union activities.465
Employee holds a position of trust and confidence
A position of trust and confidence has been defined as one Penalty of dismissal for breach of trust cannot be mitigated
where a person is entrusted with confidence on delicate by length of service.466 The longer an employee stays in the
matters, or with the custody, handling, or care and service of the company, the greater is his responsibility for
protection of the employer’s property and/or fund.457 knowledge and compliance with the norms and conduct
and the code of discipline of the company.467
General rule: dismissal on the ground of loss of trust and
confidence is restricted to Managerial employees.458 Requirement of Substantial evidence
Exception: it also applies to rank-and-file employees when Proof beyond reasonable doubt of employee’s misconduct
position is reposed with trust and confidence. 459 (Cashiers, is not required. It is sufficient that employer has reasonable
auditors, property custodians) grounds to believe that the employee is responsible for the
misconduct which renders him unworthy of the trust and
Positions of trust and confidence who may be terminated confidence demanded of his position.468
on the ground of Fraud or Willful Breach of Trust and Loss
of Confidence 460 If there is sufficient evidence to show that the employee
1. Managerial and Employees occupying a position of trust and confidence is guilty of a
2. Supervisory Employees breach of trust, or that his employer has ample reason to
3. Fiduciary Rank and File Employees distrust him, the labor tribunal cannot justly deny the
employer the authority to dismiss such employee.469
451 461
Quiambao vs. Manila Electric Co., 2009 Mania Midtown Commercial Corporation vs. NUHRAIN, 1988
452 462
Yolanda Garcia vs. People, 1999 Mania Midtown Commercial Corporation vs. NUHRAIN, 1988
453 463
Roberto Gonzales vs. NLRC Aurelio vs. NLRC, 1993
454 464
Salas vs. Aboitiz One, Inc., 2008 Bago vs. NLRC, Standard Insurance Co. Inc., 2007
455 465
Salas vs. Aboitiz One, Inc., 2008 Gubac vs. NLRC, 1990
456 466
Nozario Austria vs. NLRC, 1991 PLDT vs. NLRC, 1988
457 467
Eats-cetera Food Services Outlet vs. Letran, 2009 Citybank N.A. vs. Gatchalian, 1995
458 468
Fujitsu Computer Products Corp vs. CA; 2005 Ocean Terminal Services, Inc. vs. NLRC, 1991
459 469
Coca Cola vs. NLRC, 1989 Eats-cetera Food Services Outlet vs. Letran, 2009
460
Chan, 2017.
93
An employee who cannot get along with his co-

Department Order 147-15 (2015) makes a distinction employees is detrimental to the company for he can
between Fraud or Willful Breach of Trust and Loss of upset and strain the working environment. Thus
Confidence as a just cause for the termination by an management has the prerogative to take the
employer. necessary action to correct the situation and protect
its organization.
The requisites of Loss of Confidence:
1. There must be an act, omission, or concealment; It is analogous to loss of trust and confidence that must
2. The act, omission or concealment justifies the be duly proved by the employer.
loss of trust and confidence of the employer to
the employee; 2. Stealing the wallet of a co-employee cannot be a
3. The employee concerned must be holding a ground for dismissal under serious misconduct
position of trust and confidence; because it is not work-related. But the employee can
4. The loss of trust and confidence should not be be validly dismissed for cause analogous to serious
simulated; misconduct.476
5. It should not be used as a subterfuge for causes
which are improper, illegal, or unjustified; and A cause analogous to serious misconduct is a
6. It must be genuine and not mere afterthought to voluntary and/or willful act or omission attesting to
justify an earlier action taken in bad faith. an employee's moral depravity.
Commission of a Crime Theft committed by an employee against a person

other than his employer, if proven by substantial
Requisites evidence, is a cause analogous to serious misconduct.
1. Employee committed an act or omission
punishable/prohibited by law.470 3. Obesity of a flight attendant, when the airline
2. Commission of a crime should be made against: company constituted a continuing qualification of an
a. The employer himself, employee to keep the job, is a ground for dismissal
b. His duly authorized representative,471 or under Art 282(e). His obesity may not be unintended,
c. Any immediate member of his family (Art but is nonetheless voluntary.477
11 (2), RPC)
i. Spouse Others
ii. Ascendants
iii. Descendants Courtesy resignations were utilized in government
iv. Legitimate, natural or adopted reorganization.478
siblings of the employer or of his
relative by affinity or consanguinity Change of ownership is a management prerogative. Where
within the 4th civil degree such transfer of ownership is in good faith, the transferee
is under no legal duty to absorb the transferor employees.
Termination by employer on the basis of commission The most that the transferee may do is to give preference
of a crime is an act of self-defense impelled by the to the qualified separated employees in the filling of
natural instinct of self-preservation. vacancies in the facilities of the purchaser.479
The acquittal in a criminal prosecution involving Fixed-term employment. If the contract is for a fixed term
misconduct is not binding and conclusive upon a and the employee is dismissed without just cause, he is
labor tribunal.472 Conviction of an employee in a entitled to the payment of his salaries corresponding to
criminal case is not indispensable to warrant his the unexpired portion of the employment contract.480
dismissal by his employer.473
Previous offenses may be used as valid justification for
Analogous Cases dismissal from work only if they are related to the
subsequent infraction-basis of the termination of
The act or omission must be voluntary and/or willful on employment. Previous infractions, in other words, may be
the part of the employees.474 used if they have a bearing on the proximate offense
warranting dismissal.481
Examples of Analogous causes justifying termination
1. Attitude problem is a valid ground for termination.475
470 476
Dep. Order No. 147-15 (2015). John Hancock Life Insurance Corporation vs. Davis, 2008
471 477
Chan, 2017 Yrasuegui vs. PAL, 2008
472 478
Starlight Plastic Industrial Corporation vs. NLRC, 1989 Batongbacal vs. Associated Bank, 1988
473 479
Mercury Drug Corp. vs. NLRC, 1989 Manlimos vs. NLRC , 1995
474 480
John Hancock Life Insurance Company vs. Davis, 2008 Medenilla vs. PVB, 2000
475 481
Heavylift Manila, Inc vs. CA, 2005 Mc Donald’s vs. Alba, 2008; La Carlota Planters Association v NLRC, 1998
94
Transfer
The appointment was for a definite and renewable period
The transfer of employees is a management prerogative which, when it was not renewed, did not involve a
subject only to limitations found in law, collective dismissal but an expiration of the petitioner's term.489
bargaining agreement, and general principles of fair play
and justice.482 Other Causes of Termination under D.O. 147-15
An employee’s right to security of tenure does not give him 1. Reasonable and lawful grounds specified under
such a vested right in his position as would deprive the its company policies
company of its prerogative to change his assignment or 2. Sexual Harassment (which is considered as a
transfer him where he will be most useful.483 serious misconduct)
3. Causes of termination as provided under the CBA
The objection to the transfer being grounded solely upon
the personal inconvenience or hardship that will be caused
to the employee by reason of the transfer is not a valid
reason to disobey an order of transfer. Employee may be Authorized causes refer to those instances enumerated
dismissed for willful disobedience.484 under Articles 298 [Closure of Establishment and
Reduction of Personnel] and 299 [Disease as a Ground for
Transfer as valid management prerogative and Termination] of the Labor Code, as amended. These are
transfer as constructive dismissal485 causes brought by the necessity and exigencies of
Valid management business, changing economic conditions and illness of the
Constructive dismissal
prerogative employees.490
No demotion in rank or When continued
diminution of salary, employment is rendered Bar 2001, 2002
benefits, and other impossible, unreasonable or Authorized causes of termination (Art 298, 299 LC)491
privileges, and the action unlikely; 1. Labor-saving devices
is not motivated by When there is a demotion in 2. Redundancy
discrimination, made in rank and/or a diminution in 3. Retrenchment
bad faith, or effected as a pay; or 4. Closing or cessation of operation
form of punishment or When a clear discrimination, 5. Disease or illness
demotion without insensibility or disdain by an 6. Totality of infractions
sufficient cause. employer becomes
unbearable to the employee. Art. 298. Closure of establishment and reduction of
personnel.
Promotion The employer may also terminate the employment of any
employee due to the installation of labor-saving devices,
Promotion, defined redundancy, retrenchment to prevent losses or the
The advancement from one position to another with an closing or cessation of operation of the establishment or
increase in duties and responsibilities as authorized by undertaking unless the closing is for the purpose of
law, and usually accompanied by an increase in salary.486 circumventing the provisions of this Title, by serving a
written notice on the workers and the Ministry of Labor
For there to be a promotion is that there must be and Employment at least one (1) month before the
“advancement from one position to another” or an upward intended date thereof. In case of termination due to the
vertical movement of the employee’s rank or position. Any installation of labor-saving devices or redundancy, the
increase in salary should only be considered incidental but worker affected thereby shall be entitled to a separation
never determinative of whether or not a promotion is pay equivalent to at least his one (1) month pay or to at
bestowed upon an employee.487 least one (1) month pay for every year of service,
whichever is higher.
There is no law that compels an employee to accept a
promotion for the reason that a promotion is in the nature In case of retrenchment to prevent losses and in cases of
of a gift or reward, which a person has a right to refuse.488 closures or cessation of operations of establishment or
undertaking not due to serious business losses or
Residency Training financial reverses, the separation pay shall be equivalent
to one (1) month pay or at least one-half (1/2) month pay
Residency or resident physician position in a medical for every year of service, whichever is higher. A fraction
specialty is never a permanent one. Residency connotes of at least six (6) months shall be considered one (1) whole
training and temporary status. It is a step taken by a year.
physician right after post-graduate internship prior to his
recognition as a specialist or sub specialist in a given field.
482 487
Aguanza vs. Asian Termminal Inc, 2009 Phil Telegraph vs. CA, 2003
483 488
PLDT vs. Paguio, 2005 Phil Telegraph vs. CA, 2003
484 489
Herida vs. F&C Pawnshop and Jewelry Store , 2009 Felix vs. Buenaseda, 1995
485 490
Aguanza vs. Asian Termminal Inc, 2009 Dep. Order No. 147-15 (2015).
486 491
Phil Telegraph vs. CA, 2003 Abad
95
Procedural steps required Redundancy exists where the services of an employee are
1. Written notice to DOLE 30 days prior to the in excess of what would reasonably be demanded by the
intended date of termination actual requirements of the enterprise.
2. Written notice to employee(s) concerned 30
days prior to the intended date of termination An employer has no legal obligation to keep on the payroll
3. Payment of separation pay: employees more than the number needed for the
operation of the business.498
For Redundancy and installation of labor saving
devices Cause of Redundancy
1 month pay, or 1 month pay for every year of Redundancy could be a result of a number of factors, such
service (a fraction of 6 months or more to be as the over-hiring of workers, a decrease in the volume of
considered 1 year), whichever is higher business or the dropping of a particular line or service
previously manufactured or undertaken by the
For retrenchment, closure not due to serious enterprise.499
business losses, and diseases
1 month pay, or 1 half month pay for every year of Requisites for valid redundancy program500
service (a fraction of 6 months or more to be 1. Written notice served on both the employee and the
considered as 1 year) whichever is higher. DOLE at least one month prior to the intended date
of termination;
For closure or cessation of business operation 2. Payment of separation pay equivalent to at least one
due to serious business losses or financial month pay or at least one month pay for every year of
reverses, no separation pay is required.492 service, whichever is higher;
3. good faith in abolishing the redundant position; and
Basis of employer’s right 4. Use of fair and reasonable criteria in ascertaining what
The law acknowledges the right of every business entity to positions are to be declared redundant.
reduce its work force if such measure is made necessary
or compelled by economic factors that would otherwise Criteria in implementing a redundancy program501
endanger its stability or existence.493 1. Preferred status
2. Efficiency
General rule: 3. Seniority.
The wisdom or soundness of the decision is not subject to
discretionary review on the part of the Labor Arbiter, the Retrenchment
NLRC and the CA.
Exception: Bar 1998, 2001, 2003
Such decision may, however, be rejected if the same is Retrenchment, defined
found to be in violation of the law or is arbitrary or An economic ground to reduce the number of employees
malicious.494 due to business losses or reverses which are serious, actual
and real.
Labor-Saving Devices
Cause of Retrenchment
Definition Normally resorted to by management during periods of
Contemplates the installation of machinery to effect business reverses and economic difficulties occasioned by
economy and efficiency in its method of production.495 It such events as recession, industrial depression, or
refers to the reduction of the number of workers in any seasonal fluctuations.
workplace made necessary by the introduction of labor-
saving machinery or devices.496 Retrenchment as a means of last resort
Retrenchment is only a measure of last resort, when other
Where the introduction of labor-saving devices is resorted less drastic means have been tried and found to be
to not merely to effect greater efficiency in the operations inadequate.502
of the business but principally because of serious business
reverses and to avert further losses, the device could then Requirements for valid retrenchment503
verily be considered one of retrenchment.497 The requirements must be proved by clear and convincing
evidence
Redundancy 1. That retrenchment is reasonably necessary and likely
When position considered redundant to prevent business losses which, if already incurred,
are not merely de minimis, but substantial, serious504,
actual and real, or if only expected, are reasonably
492 499
Dep. Order No. 147-15 (2015). Edge Apparel Inc. vs. NLRC, 1998; Lowe Inc v CA, 2000
493 500
Edge Apparel Inc. vs. NLRC, 1998 Lowe Inc vs. CA, 2000
494 501
Elleccion vs. NLRC, 2009 Lowe Inc vs. CA, 2000
495 502
Edge Apparel Inc. vs. NLRC, 1998 Flight Attendants & Stewards Association of the Philippines vs. PAL, 2008
496 503
Dep. Order No. 147-15 (2015). Flight Attendants & Stewards Association of the Philippines vs. PAL, 2008
497 504
Edge Apparel Inc. vs. NLRC, 1998 Metro Construction Inc. vs. Aman, 2009
498
Edge Apparel Inc. vs. NLRC, 1998
96
imminent as perceived objectively and in good faith Legal Legal Illegal dismissal
by the employer; No Employee is Employee is
2. Written notice served on both the employee and the separation entitled to entitled to
DOLE at least one month prior to the intended date benefits separation reinstatement
of termination; pay. and payment
3. Payment of separation pay equivalent to at least one of full wages.
month pay or at least one month pay for every year of
service, whichever is higher; If
4. good faith in exercising management’s prerogative to reinstatement
retrench employees for the advancement of its not possible,
interest and not to defeat or circumvent the employee is
employees' right to security of tenure; and, entitled to full
5. Use of fair and reasonable criteria in ascertaining who backwages and
would be dismissed and who would be retained separation pay
among the employees, such as status, efficiency,
seniority505, physical fitness, age, and financial
hardship for certain workers.
Claiming of Separation Pay vis-à-vis Closure of Business
The fact alone that a mere portion of the business shut General Rule: A claim of additional separation pay shall not
down and not the whole of it does not necessarily remove be permitted.510
the measure within the meaning of Retrenchment.506 Exception: A CBA was agreed upon by the company and
the respective labor union during the time the losses
Retrenchment cannot be resorted to once business losses were already being incurred. 511
had already decreased and the business had picked up.507
Temporary Closure
Closing or Cessation of Operation Bar 2001

Article 301. When employment not deemed
508
Closure of company may pertain to: terminated.
1. Complete cessation of business operation The bona-fide suspension of the operation of a business
2. Partial cessation of business operation or undertaking for a period not exceeding six (6)
3. Shut-down of establishment months, or the fulfillment by the employee of a military
or civic duty shall not terminate employment. In all such
Closure may be due to: cases, the employer shall reinstate the employee to his
1. Serious business loss former position without loss of seniority rights if he
2. Not due to business loss indicates his desire to resume his work not later than
one (1) month from the resumption of operations of his
Requisites of a valid Closure of business employer or from his relief from the military or civic
1. Bona fide closure/cessation of business, i.e., its duty.
purpose is to advance the interest of the employer
and not to defeat or circumvent the rights of Bona fide suspension of the operation
employees under the law or a valid agreement;  less than 6 months: Closure shall not terminate
2. Written notice served on both the employee and the employment
DOLE at least one month prior to the intended date
of termination;  More than 6 months: Employment shall be
deemed terminated
Bar 2006
3. Separation pay, in case of closure/cessation of Article 286 applies only when there is a bona fide
business not due to financial losses, must be suspension of the employer’s operation of a business or
equivalent to ½ month pay for every year of service undertaking for a period not exceeding six (6) months. In
or one month pay, whichever is higher. such a case, there is no termination of employment but
only a temporary displacement of employees, albeit the
Effects of closure of business509 displacement should not exceed six (6) months.512
Due to NOT due to
serious serious The paramount consideration should be the dire exigency
Closure of business of the business of the employer that compels it to put some
business business
done in bad faith of its employees temporarily out of work.513
losses losses
Good faith
505 510
Emcor, Inc vs. Sienes, 2009 North Davao Mining v. NLRC
506 511
Edge Apparel Inc. vs. NLRC, 1998 Benson Industries Employees Union v. Benson Industries, 2004
507 512
PSBA vs. NLRC, 1993 Eagle Gold Club Inc. vs. Mirando, 2009
508 513
Cheniver Deco Print Technics Corp. vs. NLRC, 2000 Eagle Gold Club Inc. vs. Mirando, 2009
509
Eastridge Golf Club Inc. vs. Eastridge Golf Club Inc. Labor Union, 2008
97
If the employee was forced to remain without work or

assignment for a period exceeding six months, then he is
in effect constructively dismissed.514
Bar 2004
The so-called "floating status" of an employee should last
only for a legally prescribed period of time. When that
"floating status" of an employee lasts for more than six
months, he may be considered to have been illegally
dismissed from the service.515
In case of installation of labor-saving devices, redundancy,

and retrenchment, the Last-in, First-Out Rule shall apply
except when an employee volunteers to be separated from
employment. It means that when there are two employees
occupying the same position in the company affected by,
for example, retrenchment program, the last one
employed will necessarily be the first to go.516
514 516
Valdez vs. NLRC, 1998 Dep. Order No. 147-15 (2015) citing Maya Farms Employees Organization vs.
515
Valdez vs. NLRC, 1998 NLRC, 1994
98
Redundancy, Retrenchment, and Closure, distinction
REDUNDANCY RETRENCHMENT CLOSURE OF BUSINESS
Management prerogative Management prerogative Management prerogative

Service capability of the Effected by management during Carried out to either stave off the
workforce is in excess of periods of business recession, financial ruin or promote the
what is reasonably needed industrial depression, seasonal business interest of the employer.
to meet the demands of fluctuations, lack of work or Art 283 authorizes termination of
Cause the business enterprise considerable reduction in the employment due to business closure,
volume of the employer’s business. regardless of the underlying reasons
Resorted to by an employer to avoid and motivations therefore, be it
or minimize business losses. financial losses or not.
1. Written notice served 1. That retrenchment is 1. Bona fide closure/ cessation of

on both the employee reasonably necessary and likely business, i.e., its purpose is to
and the DOLE at least to prevent business losses advance the interest of the
one month prior to the which, if already incurred, are employer and not to defeat or
intended date of not merely de minimis, but circumvent the rights of
termination; substantial, serious518, actual employees under the law or a
2. Payment of and real, or if only expected, are valid agreement;
separation pay reasonably imminent as 2.Written notice served on both the
equivalent to at least perceived objectively and in employee and the DOLE at least
one month pay or at good faith by the employer; one month prior to the intended
least one month pay for 2. Written notice served on both date of termination;
every year of service, the employee and the DOLE at 3. Separation pay, in case of
whichever is higher; least one month prior to the closure/cessation of
3. Good faith in intended date of termination; business not due to financial
abolishing the 3. Payment of separation pay losses. It must be equivalent to
redundant position; equivalent to at least one month ½ month pay for every year of
and pay or at least one month pay service or one month pay,
Requisite to
4. Use of fair and for every year of service, whichever is higher.
be valid
reasonable criteria in whichever is higher;
ascertaining what 4. Good faith in exercising
positions are to be management’s prerogative to
declared redundant, retrench employees for the
such as: (1) preferred advancement of its interest and
status; (2) efficiency; not to defeat or circumvent the
and (3) seniority.517 employees’ right to security of
tenure; and,
5. Use of fair and reasonable
criteria in ascertaining who
would be dismissed and who
would be retained among the
employees, such as status,
efficiency, seniority519, physical
fitness, age, and financial
hardship for certain workers.
Employer must prove that Employer must prove serious Must prove that the closure is bona
it has become business losses. fide. Unlike retrenchment, closure or
overmanned. Necessary conditions for the cessation of business, as an
company losses to justify authorized cause of termination of
retrenchment: employment, need not depend for
Justification 1. Losses must be substantial and validity on evidence of actual or
not de minimis; imminent reversal of the employer's
2. Losses must be actual or fortune.
reasonably imminent;
3. the retrenchment is
reasonably necessary and is
517 519
Lowe Inc v CA, 2000 Emcor, Inc v Sienes, 2009
518
Metro Construction Inc. v Aman, 2009
99
likely to be effective in
preventing the expected
losses; and
4. the alleged losses, if already
incurred, or the expected
imminent losses sought to be
forestalled, are proven by
sufficient and convincing
evidence.
New staffing pattern, Books of accounts, profit and loss
feasibility studies/ statements, and even its accountant
proposal on the viability of to competently amplify its financial
Evidence that
the newly created position.521
may be
positions, job description
proffered and the approval by the
management of the
restructuring.520
520
AMA vs. Garcia, 2008
521
Metro Construction Inc. vs. Aman, 2009
100
Disease warrants their dismissal as it is akin to “habitual

delinquency”.528
Article 299. Disease as ground for termination. General rule: It is the totality, not the
An employer may terminate the services of an employee compartmentalization of company infractions that the
who has been found to be suffering from any disease and employee had consistently committed, which justifies the
whose continued employment is prohibited by law or is penalty of dismissal. 529
prejudicial to his health as well as to the health of his co- Exceptions: Previous past infractions may be used as a
employees: Provided, That he is paid separation pay justification for an employee’s dismissal from work only if
equivalent to at least one (1) month salary or to one-half in connection with a subsequent similar offense.530
(1/2) month salary for every year of service, whichever is
greater, a fraction of at least six (6) months being Past infractions for which an employee had already been
considered as one (1) whole year. penalized cannot be collectively taken as a justification for
his dismissal from the service.531
Bar 2004
Requisites for Disease or illness to be a ground for
termination522
1. The continued employment of the employee is General concepts
prohibited by law or prejudicial to his health or the Dismissals based on just causes contemplate acts or
health of his co-employees omissions attributable to the employee while dismissals
2. There is a certification by a competent public health based on authorized causes involve grounds under the
authority that the disease is of such a nature or at Labor Code which allow the employer to terminate
such a stage that it cannot be cured within a period of employees. 532
6 months, even with proper medical treatment
3. Notice to the employee and DOLE at least 1 month prior Procedural Requirement
to the intended date of termination Basis for termination Requirements
4. Separation pay of one month or one-half month for Art 297: Just Cause
every year of service, whichever is higher, a fraction 1. Serious
of 6 months or more being considered as 1 year. misconduct or Twin-notices and hearing
willful rule
Requirements are mandatory for valid termination.523 disobedience 1. Notice specifying the
2. Gross and grounds for which
The requirement for a medical certificate under Art 284 habitual neglect dismissal is sought
of the Labor Code cannot be dispensed with. of duties 2. Hearing or opportunity
3. Fraud or willful to be heard
The burden of proving the validity of the dismissal of the breach 3. Notice of the decision to
employee rests on the employer.524 4. Commission of a dismiss
crime or offense
The employer, before it can legally dismiss its employee on 5. Analogous causes
the ground of disease, must adduce a certification from a
Art 298 and 299:
competent public authority that the disease of which its
Authorized cause
employee is suffering is of such nature or at such a stage 1. Notice to:
that it cannot be cured within a period of six months even 1. Labor-saving
devices a. Employee
with proper treatment.525 b. DOLE
2. Redundancy
The requirement of a medical certificate under Article 299 3. Retrenchment At least 30 days prior to the
cannot be dispensed with; otherwise, it would sanction the 4. Closing or effectivity of the separation
unilateral and arbitrary determination by the employer of cessation of
the gravity or extent of the employee's illness and thus operation
defeat the public policy in the protection of labor.526 5. Disease or illness
An employee shall not be terminated on basis of actual,

perceived, or suspected HIV status or Hepatitis B status.527
Totality of Infraction Doctrine

Where the employee has been found to have repeatedly
incurred several suspensions or warnings on account of
violations of company rules and regulations, the law
522 528
Savallana vs. IT International Corp., 2001 Villeno vs. NLRC, 1995
523 529
Viola Cruz vs. NLRC, 2000 Manila Electric Company vs. NLRC, 1996
524 530
Savallana vs. IT International Corp., 2001 Stellar Industrial Services, Inc. vs. NLRC, 1996
525 531
Duterte vs. Kingswood Trading Co., 2007 Tower Industrial Sales vs. CA, 2006, citing Lopez vs. NLRC, 1998
526 532
Crayon Processing vs. Pula, 2007 Agabon vs. NLRC, 2004
527
Dep. Order No. 147-15 (2015).
101
“Ample opportunity”, connotes every kind of assistance

a. First written notice to be served on the that management must accord the employee to enable him
employees. It must contain: to prepare adequately for his defense, including legal
ii. Specific causes or grounds for termination representation537
iii. Directive that the employees are given the
opportunity to submit their written Dismissal without due process
explanation within a reasonable period.
iv. Detailed narration of the facts and Bar 2002
circumstances that will serve as basis for the Consequence of non-compliance with procedural
charge. requirements
v. Company rules, if any, are violated and/or Just or Effects
among which the grounds under Art. 297 is Due
authorized Employer’s
being charged against the employees. process Dismissal
cause liability
No liability
b. Written notice of termination, after being given
an ample opportunity to be heard, indicating
that: Separation pay
if dismissal is
i. All circumstances involving the charge Legal
due to
against the employees have been
authorized
considered; and
cause
ii. Grounds have been established to justify the
severance of their employment.
Reinstatement
The foregoing notices shall be served personally to the Full backwages
employee or to the employee’s last known address.533
Separation pay
x Illegal
“Reasonable opportunity” should be construed as a period if
reinstatement
of at least 5 calendar days from receipt of notice.534
not possible
Reinstatement
A hearing or conference wherein the employees will be
Full backwages
given the opportunity to:
a. Explain and clarify their defenses to the charge
Separation pay
against them; x x Illegal
if
b. present evidence in support of their defenses;
reinstatement
and
not possible
c. rebut the evidence presented against them by
the management.
Damages due to
non-
Hearing or conference in termination cases is not
compliance
necessary.535 with procedural
Employer however must provide the employee an ample requirements
opportunity to be heard and to defend himself with the x Legal
assistance of his representatives if he so desires. Separation pay
if dismissal is
Ample opportunity to be heard means any meaningful due to
opportunity (verbal or written) given to the employee to authorized
answer the charges against him and submit evidence in cause
support of his defense, whether in a hearing, conference
or some other fair, just, and reasonable way, not
necessarily in a hearing for that purpose.
Exception:536
A formal hearing or conference becomes mandatory only
when:
1. Requested by the employee in writing
2. Substantial evidentiary disputes exist
3. company rule or practice requires it
4. When similar circumstances justify it
533 536
Dep. Order No. 147-15 (2015). Id.
534 537
King of Kings Transport, Inc. vs. Mamac, 2007 Abiera vs. NLRC, 1992
535
Perez vs. Philippine Telegraph and Telephone Company, GR 152048, 2009
102
History of the effects of non-compliance with It is true that administrative and quasi-judicial bodies are
procedural requirements not bound by the technical rules of procedure in the
Ruling adjudication cases. However, the right to counsel, a very
basic requirement of substantive due process, has to be
Year Employer’s liability for non- observed. Indeed, rights to counsel and to due process of
Dismissal compliance with law are two of fundamental rights guaranteed by the 1987
procedural requirements Constitution to person under investigation, be the
Prior to proceeding administrate civil, or criminal.541
Illegal
1989
1989 Burden of proof
Wenphil
Legal Damages
Corp v
Burden of Proof542
NLRC
Employee Employer
Full backwages
Must first establish by Burdened to prove that
2000 Computed from the time of
substantial evidence the they did not commit illegal
Serrano v Legal dismissal until the court
fact of his or her dismissal. dismissal.
NLRC finds the dismissal to be for
just cause
Nominal damages Degree of proof
2004 Indemnity is stiffer than All administrative determinations require only substantial
Agabon v Legal Wenphil Corp. v NLRC to proof and not clear and convincing evidence.543
NLRC discourage the practice of
“dismiss now, pay later” Substantial evidence is that relevant evidence that a
reasonable mind might accept as adequate to support a
conclusion, even if other equally reasonable mind might
Wenphil or Belated Due process rule
conceive otherwise.544
Where the employer had a valid reason to dismiss an
employee but did not follow the due process requirement,
the dismissal may be upheld but the employer will be As a general rule, employers are allowed a wider latitude of
penalized to pay an indemnity to the employee.538 discretion in terminating the services of managerial
employees who perform functions which, by their nature,
require the employers' full trust and confidence; thus,
Wenphil-Serrano Doctrine
existence of basis for believing that the employee has
Serrano modifies Wenphil. The Wenphil doctrine was
breached the trust of the employer is sufficient and does
meant to discourage dismissal without due process. But
not require proof beyond reasonable doubt. In fact, it has
the purpose is not achieved as many employers “dismiss
been held that when the employer has ample reason to
now and pay later”. Employer is liable for the full backwages
distrust an employee, a labor tribunal cannot deny the
although the dismissal is not outright illegal since it is based
employer the authority to dismiss him.545
on a valid reason.
Prescription
The employee remains dismissed. The dismissal is merely
defective or “ineffectual”. The doctrine applies to Bar 1994, 1997
dismissals under Art 297, 298 and 299. An action for reinstatement by reason of illegal dismissal is
one based on an injury which may be brought within 4
Agabon abandoned Serrano ruling years from the time of dismissal. (Art 1146, Civil Code)
The doctrine in Serrano had already been abandoned
in Agabon v. NLRC by ruling that if the dismissal is done
without due process, the employer should indemnify the
employee with nominal damages.539
RESIGNATION
Indemnity for Nominal Damages for Dismissal without
Due Process540 Resignation, defined
Dismissal for authorized Voluntary resignation is the act of an employee, who finds
Dismissal for just cause
cause himself in a situation in which he believes that personal
Php30,000 only Php50,000 because it was reasons cannot be sacrificed in favor of the exigency of the
because it was initiated by employer’s service; thus, he has no other choice but to disassociate
initiated by an exercise of management himself from his employment.546
act attributable prerogative
to employee
Right to counsel
538 542
Agabon vs. NLRC, 2004 Romeo Basay, et al. vs. Havienda Consolacion, et al., 2010
539 543
King of Kings Transport, Inc. vs. Mamac, 2007 Manalo v Roldan-Confesor, 1992
540 544
PNCC Skyway Corp. vs. SOLE, 2017 citing JAKA Food Processing Mitsubishi Motors Phils. Corporation v Simon, 2008
545
Corporation vs. Paco, 2005 Rentokil Philippines, Inc. v Sanchez, 2008
541 546
Salaw vs. NLRC, 1991 Alfaro v CA, 2001
103
If resignation is not voluntary, it can be deemed to be Employee is generally not Employee is entitled to
constructive dismissal.547 entitled to separation pay separation pay
Voluntary resignation and illegal dismissal are adversely If resignation is not voluntary, it can be deemed to be
opposed modes of terminating employment relations, in constructive dismissal.552
that the presence of one precludes that of the other548
Voluntary resignation and illegal dismissal are adversely
Not entitled to separation pay549 opposed modes of terminating employment relations, in
An employee who voluntarily resigns is not entitled to that the presence of one precludes that of the other553
separation pay.
Constructive Dismissal
Exceptions:
1. When otherwise stipulated in the Constructive dismissal, defined
employment contract Constructive dismissal is a dismissal in disguise. There is
2. Stipulated in the CBA cessation of work in constructive dismissal because
3. Sanction by established employer practice '"continued employment is rendered impossible,
and policy. unreasonable or unlikely, as an offer involving a demotion
in rank or a diminution in pay' and other benefits." To be
Art. 301. When employment not deemed terminated. considered as such, an act must be a display of utter
The bona-fide suspension of the operation of a business discrimination or insensibility on the part of the employer
or undertaking for a period not exceeding six (6) months, so intense that it becomes unbearable for the employee to
or the fulfillment by the employee of a military or civic continue with his employment. The law recognizes and
duty shall not terminate employment. In all such cases, resolves this situation in favor of employees in order to
the employer shall reinstate the employee to his former protect their rights and interests from the coercive acts of
position without loss of seniority rights if he indicates his the employer.554
desire to resume his work not later than one (1) month
from the resumption of operations of his employer or Test of constructive dismissal
from his relief from the military or civic duty. Whether a reasonable person in the employee's position
would have felt compelled to give up his position under the
RETIREMENT circumstances.555
[RA 7641: Retirement Pay Law]
Resignation contemplates a voluntary act; thus, an
employee who is forced to relinquish his position due to
the employer's unfair or unreasonable treatment is
deemed to have been illegally terminated or discharged.
Resignation Constructive Dismissal Employer’s sudden, arbitrary and unfounded adoption of

Employee, who finds Employee involuntarily the two-day work scheme which greatly reduced
himself in a situation in resigns due to the harsh, petitioners’ salaries renders it liable for constructive
which he believes that hostile, and unfavorable dismissal.556
personal reasons cannot conditions set by the
be sacrificed in favor of employer. It arises when Demotion is allowed as a penalty. The appropriateness
the exigency of the there is clear depends on factors such as employer’s tolerance of or
service; thus he has no discrimination, laxity in past similar offences, employee’s years of service
other choice but to insensibility, or disdain by and record, and even the amount of money or value
disassociate himself from an employer and this involved.
his employment.550 becomes unbearable to
the employee.551 Quitting because continued employment is rendered
No ill will on the part of There is ill will on the part impossible, unreasonable or unlikely, as an offer involving
management of management which demotion in rank and a diminution in pay.557
prompted discrimination
against employee. May also involve act of clear discrimination, insensibility,
Voluntary Involuntary or disdain by an employer that it becomes so unbearable
No illegal dismissal unless Amounts to illegal on the part of the employee that it could foreclose any
involuntary dismissal choice by him except forego his continued employment.558
547 553
Abad, Jr, Antonio H. (2008). The Law on Labor Standards. Rex Printing Alfaro vs. CA, 2001
554
Company, Inc. Divine Word College of Laoag v. Mina (2016)
548 555
Alfaro vs. CA, 2001 Gilles vs. CA, GR 149273, 2009;
549 556
CJC Trading, Inc. vs. NLRC, 1995 La Rosa vs. Ambassador Hotel, 2009
550 557
Alfaro vs. CA, 2001 Jo Cinema Corporation vs. Abellana, 2001
551 558
Gilles vs. CA, 2009 Hyatt Taxi Services, Inc vS. Catinoy, 2002; Gilles v CA, 2009
552
Abad, Jr, Antonio H. (2008). The Law on Labor Standards. Rex Printing
Company, Inc.
104
Doctrine of strained relations rule565

1. Where reinstatement is not feasible, expedient or
Nature
practical
A disciplinary measure for a protection of the company’s
2. Where reinstatement would only exacerbate the
property pending investigation of any alleged malfeasance
tension and strained relations between parties
committed by the employee.
3. Where relationship between the employer and
employee has been unduly strained by reason of their
Preventive suspension is not a penalty.
irreconcilable differences, particularly where the
illegality dismissed employee held a managerial or key
Period
position in the company
It cannot exceed 30 days.
4. It would be more prudent to order payment of
separation pay instead of reinstatement
After the period, employee must be reinstated to his
former position In order to apply the Doctrine, it must be proven that the
concerned employee occupies a position where he enjoys
If suspension is extended, the employee shall be entitled to the trust and confidence of his employer; and that it is
his salaries and other benefits that may accrue to him likely that if reinstated, an atmosphere of antipathy and
during the period of such suspension.559 antagonism may be generated as to adversely affect the
efficiency and productivity of the employee concerned.566
When preventive suspension exceeds maximum period
allowed without reinstatement or when preventive When reinstatement no longer available, payment of
suspension is for indefinite period, only then will separation pay is awarded
constructive dismissal set in.560 Clearly, the law intended reinstatement to be the general
rule. It is only when reinstatement is no longer feasible
Requirements for preventive suspension561 that payment of separation pay is awarded to an illegally
1. An employee may be placed in a preventive dismissed employee.567
suspension if his continued employment poses a
serious and imminent threat to the life or property of
Payment of separation pay as a substitute for
the employer or his co-workers.
reinstatement is allowed only under exceptional
However, when it is determined that there is no sufficient circumstances, viz:568
1. When reasons exist which are not attributable to the
basis to justify an employee’s preventive suspension, the
employee is entitled to the payment of salaries during the fault or beyond the control of the employer, such as,
time of preventive suspension. when the employer, who is in severe financial strait
and has suffered serious business losses, has ceased
operations, implemented retrenchment, or abolished
the position due to the installation of labor-saving
devices;
Bar 1999 2. when the illegally dismissed employee has contracted
The employee who has been illegally terminated is entitled a disease and his reinstatement will endanger the
to the twin reliefs of reinstatement and backwages.562 safety of his co-employees; or,
3. where strained relationship exists between the
1. Reinstatement without loss of seniority rights employer and the dismissed employee.
and other privileges
2. Full backwages inclusive of allowances, and to When can the employee be reinstated
other benefits or their monetary equivalent 1. Immediately, even pending appeal, upon the decision
computed from the time his compensation was of the Labor Arbiter reinstating dismissed or separated
withheld up to the time of actual reinstatement employee. The employee shall either be
a. admitted back to work or,
The fact that his employer later made an offer to re- b. at the option of the employer, be merely
employ him did not cure the vice of his earlier arbitrary reinstated in the payroll (Art. 229 LC)
dismissal.563 2. Upon finality of the decision ordering reinstatement
(Art 294 LC)
REINSTATEMENT
Reinstatement, defined
The restoration to a state or condition from which one had
been removed or separated.564
559 564
Philippine Airline vs. NLRC, 1998 Pheschem Industrial Corporation v Moldez, 2005
560 565
Mandapat vs. ADD Force Personnel Services, Inc. 2010 Quijano vs. Mercury Drug Corp, 1998
561 566
Gatbanton vs. NLRC, 2006 Cabigting vs. San Miguel Foods Inc., 2009
562 567
Condo Suite Club Travel, Inc. v NLRC, 2000; Golden Donuts, Inc. v NLRC, Pheschem Industrial Corporation vs. Moldez, 2005
568
2000 Pheschem Industrial Corporation vs. Moldez, 2005
563
Ranara v NLRC, 1992
105
BACKWAGES
When termination is based on grounds under Art
Backwages, defined 298 and 299:
Earnings lost by a work due to employee’s illegal dismissal. a. Installation of labor saving devices
It is a form of relief that restores the income lost by reason b. Redundancy
of such unlawful dismissal. c. Retrenchment
d. Cessation of the employer’s business
It is not a private compensation or damages, nor is it a e. Disease
redress of a private right, but rather, in the nature of a
command to the employer to make public reparation for 2. Separation pay as financial assistance
illegally dismissing an employee569 Separation pay shall be allowed as a measure of social
justice
Effect of failure to order Backwages
The fact that the NLRC did not award backwages to the Separation Pay as Financial Assistance
respondents or that the respondents themselves did not When allowed When not allowed
appeal the NLRC decision does not bar the Court of Though validly dismissed, Where employee was
Appeals from awarding backwages.570 employee may be awarded dismissed for just cause
as some equitable relief in under Art 297 of the
Substantive rights like the award of backwages resulting consideration of the past Labor code578 or for an
from illegal dismissal must not be prejudiced by a rigid and services rendered where offense involving moral
technical application of the rules. The order of the Court dismissal was due to turpitude, like theft or
of Appeals to award backwages being a mere legal causes other than just illicit sexual relations
consequence of the finding that respondents were illegally causes under Art 297 or with a fellow worker579
dismissed by petitioners, there was no error in awarding those reflecting on his
the same.571 moral character.577
Computation of Backwages 3. Separation pay in lieu of reinstatement where

1. Without deduction for their earnings elsewhere reinstatement is not feasible
during their layoff572
2. Awards including salary differentials are not allowed573 The grant of separation pay was a proper substitute
3. The salary base properly used should be the basic only for reinstatement; it could not be an adequate
salary rate at the time of dismissal plus the regular substitute both for reinstatement and
allowance. for backwages.580
Allowance includes: 4. Separation pay as a benefit in the CBA or company

 Emergency cost of living allowances (ECOLA), policy
transportation allowances, 13th month pay574
 Vacation leaves, service incentive leaves and sick Separation pay and Backwages, distinguished
leaves Separation pay in lieu of
Backwages
reinstatement
The effects of extraordinary inflation are not to be applied Granted to an illegally Granted to an illegally
without an official declaration thereof by competent dismissed employee dismissed employee
authority575
Granted where Granted with
Salary increase based on performance is not included in reinstatement is no longer reinstatement
the computation of backwages; otherwise, it would be feasible.
merely based on speculation. A salary increase is
conditioned on the outstanding performance of the Employer must still pay for
employee; an illegally terminated employee could not be backwages.
guaranteed to have an outstanding performance simply
because in the past he did excel.576 Oriented towards the Payment of backwages is a
immediate future, the form of relief that restores
SEPARATION PAY transitional period the the income that was lost
dismissed employee must by reason of unlawful
Kinds dismissal582
1. Separation pay as statutory requirement for
authorized causes
569 576
St. Theresea’s school of Novaliches Foundation vs. NLRC, 1998 PLDT vs. Paguio, 2005
570 577
Asian Terminals, Inc. vs. NLRC, 2007 Bristol Myers Squibb vs. Baban, 2008; Toyota Motor Phils. Corp Workers
571
Asian Terminals, Inc. vs. NLRC, 2007 Association v NLRC, 2007
572 578
Bustamante vs. NLRC, 1996 BPI and BPI Family Bank vs. NLRC and Arambulo, 2010
573 579
Insular Life Assurance Co. vs. NLRC, 1987 PLDT vs. NLRC, 1988
574 580
Paramount Vinyl Product Corpo vs. NLRC, 1990 Nissan North EDSA Balintawak vs. Serrano, 2009
575 582
Lantion vs. NLRC, 1990 Id.
106
undergo before locating a

replacement job.581 Exception:
Where termination of employment is done with malice or
Computation bad faith.591
1. Employer may not, in the guise of exercising
management prerogatives, pay separation Corporate veil is pierced:
benefits unequally.583 1. When it is deliberately and maliciously designed to
2. Allowances and commissions are included in the evade financial obligations to employees or when
computation of separation pay. Since used as means to perpetuate fraud or an illegal act592
commissions were earned by actual market 2. Directors or trustees who willfully and knowingly
transactions attributable to employees, such assent to patently unlawful acts or who are guilty of
commissions should be included in the gross negligence or bad faith in the managing
separation pay. Thus, the separation pay should corporate affairs.593
take into account the average commissions
earned during the last year of employment. 584 Otherwise, the manager, officer or the stockholder s are
not liable personally since the corporation is vested by law
Employees who receive their separation pay are not barred with a separate and distinct personality.594
from contesting the legality of their dismissal from the
service and their acceptance of those benefits would not
amount to estoppel. Otherwise, employees who have been
forced to resign and accept their separation pay can no
longer resort to legal remedies.585
DAMAGES, ATTORNEY’S FEES, AND OTHER All money claims arising from employer-employee
INDEMNITY relations accruing during the effectivity of this Code shall
be filed within three (3) years from the time the cause of
Bar 2001 action accrued; otherwise they shall be forever barred.
Moral damages
Recoverable when the dismissal of an employee is Article 291 covers claims for overtime pay, holiday pay,
attended by: 586 service incentive leave pay, bonuses, salary differentials,
1. Bad faith, and illegal deductions by an employer. Italso covers money
2. fraud claims arising from seafarer contracts. The provision,
3. constitutes an act oppressive to labor however, does not cover "money claims" consequent to an
4. done in a manner contrary to good customs and illegal dismissal such as backwages.It also does not cover
public policy claims for damages due to illegal dismissal. These claims
are governed by Article 1146 of the Civil Code of the
Such an award cannot be justified solely upon the Philippines. (Arriola v. Pilipino Star Ngayon)
premise that the employer fired his employee without
just cause or due process. Additional facts must be
pleaded and proven to warrant the grant of moral
damages under the Civil Code.587 Art 302. Retirement
Exemplary damages Any employee may be retired upon reaching the
Awarded if the dismissal is effected in a wanton, retirement age established in the collective bargaining
oppressive or malevolent manner.588 agreement or other applicable employment contract.
Attorney’s fees
Not recoverable when there is no sufficient showing of In case of retirement, the employee shall be entitled to
bad faith. receive such retirement benefits as he may have earned
under existing laws and any collective bargaining
Justified when claimant is compelled to litigate with 3rd agreement and other agreements: Provided, however, that
parsons or to incur expenses to protect his interest by an employee’s retirement benefits under any collective
reason of an unjustified act of the party against whom it bargaining and other agreements shall not be less than
is sought.589 those provided therein.
Liability of Corporate officers In the absence of a retirement plan or agreement providing

General Rule: for retirement benefits of employees in the establishment,
In cases of illegal dismissal, corporate directors and an employee upon reaching the age of sixty (60) years or
officers are not solidarily liable with the corporation.590 more, but not beyond sixty-five (65) years which is hereby
581 589
Id. Lopez vs. NLRC, 1998
583 590
Businessday Information Systems and Services, Inc. vs. NLRC, 1993 Harpoon Marine Services Inc. vs. Francisco, 2011
584 591
Songco vs. NLRC, 1990 Bogo Medelin Sugarcane Planters Association vs. NLRC, 1998
585 592
Amkor Technlogy Philippines, Inc. vs. Juangco, 2006 Pabalan vs. NLRC, 1990
586 593
PAL vs. NLRC, 1999 Sec 31 Corporation Code
587 594
M+W Zander Philippines, Inc. vs. Enriquez, 2009 Sunio vs. NLRC, 1984
588
Kay Products vs. CA, 2005
107
declared the compulsory retirement age, who has served Termination and Retirement, distinguished598
at least five (5) years in the said establishment, may retire
and shall be entitled to retirement pay equivalent to at least Termination
Retirement
one-half (1/2) month salary for every year of service, a Mode of ending Mode of ending
fraction of at least six (6) months being considered as one employment employment
whole year. Statutory, governed by Contractual, based on a
the Labor code and other bilateral agreement of the
Unless the parties provide for broader inclusions, the term related law as to its employer and employee
‘one-half (1/2) month salary’ shall mean fifteen (15) days grounds, benefits and
plus one-twelfth (1/12) of the 13th month pay and the cash procedure
equivalent of not more than five (5) days of service Benefits resulting from Article 302 of the Labor
incentive leaves. termination vary, Code gives leeway to the
depending on the cause parties to stipulate above
Retail, service and agricultural establishments or a floor of benefits
operations employing not more than ten (10) employees or
workers are exempted from the coverage of this provision. (see previous discussion on Retirement a mode of
termination by employee)
Violation of this provision is hereby declared unlawful and
subject to the penal provisions under Article 288 of this
Code.
A retirement plan in a company partakes the nature of a

contract, with the employer and the employee as the
contracting parties. It creates a contractual obligation in
which the promise to pay retirement benefits is made in
consideration of the continued faithful service of the
employee for the requisite period.
RA 7641
Age requirement
1. Compulsory
Upon reaching 65 years of age; with at least 5 years of
service
2. Optional
Upon reaching 60 years of age before 65 years; with
at least 5 years of service; at the option of the
employee
Computation of retirement pay

1. 15 days based on the employee’s latest salary
2. 1/12 of the 13th month pay; and
3. cash equivalent of the 5 days of service incentive
leave
Computation: 22.5 days x number of years of service

22.5 days is computed at 15 days plus 2.5 days representing
1/12 of the 13th month pay plus 5 days of service incentive
leave595
R.A. No. 7641 does not apply to a retirement plan which

gives to the retiring employee more than what the law
requires.596
While termination of employment and retirement from
service are common modes of ending employment, they
are mutually exclusive, with varying juridical bases and
resulting benefits. 597
595 597
Capitol Wireless v Confessor, 1996 Quevedo v Benguet Electric Cooperative Inc., 2009
596 598
Oxales v Unilab, 2008 Quevedo v Benguet Electric Cooperative Inc., 2009
108
Green Notes 2019 Management Prerogative
Management prerogative, defined

Act by which one directing a business is able to control the
variables thereof so as to enhance the chances of making a
profit.
This is also one which, the employer is free to regulate,

according to his own discretion and judgment all aspects
of employment; this includes hiring, working assignments,
methods, time, place and manner, tools to be used, process
to be followed, supervision of workers, working
regulations, transfer of employees, lay-off of workers,
discipline, dismissal and recall of work.
Management has the prerogative to discipline its

employees and to impose appropriate penalties on erring
workers pursuant to company rules and regulations.599
The only criterion to guide the exercise of management

prerogative is that the policies, rules and regulations on
work-related activities of the employees must always be
fair and reasonable and the corresponding penalties, when
prescribed, commensurate to the offense involved and to
the degree of the infraction. 600
In revising the employees Code of Conduct which would

have repercussions to their security of tenure and deprive
them of their livelihood, the company must have
participation in the decision and policy making process of
affecting their rights, duties, and welfare.601
Although the right of employers to shape their own work

force is recognized, this management prerogative must
not curtail the basic right of employees to security of
tenure.602
Business enterprises have the right to transfer employees

from one work station to another where it deems the
employee will be most useful and productive. The limits as
to transferring employees are as long as there is no
unreasonable cause, inconvenience, and prejudice in their
transfer.603
Employer has the right to transfer or assign employees

from one area of operation to another, or one office to
another in pursuit of its legitimate business interest,
provided that there is no demotion in rank or diminution
of salary, benefits, and other privileges, and not motivated
by discrimination or made in bad faith, or effected as a
form of punishment.604
Failure to observe prescribed standards of work or to fulfil

reasonable work assignments due to inefficiency may
constitute just cause for dismissal. Such inefficiency is
understood to mean failure to attain work goals or work
599 602
Articificio vs. NLRC Alert Security & Investigation Agency, Inc. vs. Salidali Pasawilan
600 603
St. Michael’s Institute vs. Santos Chu vs. NLRC
601 604
Philippine Airlines vs. NLRC Westin Phil. Plaza Hotel vs. NLRC
109
quotas, either by failing to complete the same within the an employee or worker due to old age, or impose early
allotted reasonable period, or by producing unsatisfactory retirement to employees upon reaching a certain age.
results. This management prerogative of requiring
standards may be availed of so long as they are exercised Where age is a bona fide occupational qualification
in good faith for the advancement of the employer's reasonably necessary in the normal operation of a
interest.605 business, where there is differentiation based on
reasonable factors other than age, when this is in
observance of a bona fide seniority system, employee
retirement, or voluntary early retirement plan in the
company, or where allowed by the Secretary of Labor,
A bonus is a gratuity or act of liberality of the giver which
limitations or preferences in age may be applied.
the recipient has no right to demand as a matter of right.
The grant of a bonus is basically a management prerogative
MARRIAGE BETWEEN EMPLOYEES OF COMPETITOR
which cannot be forced upon the employer who may not
be obliged to assume the onerous burden of granting EMPLOYERS
bonuses or other benefits aside from the employee’s basic
salaries or wages.606 It shall be unlawful for an employer to require as a
condition of employment or continuation of employment
A bonus, however, becomes a demandable or enforceable that a woman employee shall not get married, or to
obligation when it is made part of the wage or salary or stipulate expressly or tacitly that upon getting married, a
compensation of the employee which was promised to the woman employee shall be deemed resigned or separated,
employee. or to actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee merely by reason
of her marriage.610
An employer has a right to guard its trade secrets,

The management is also empowered to change their manufacturing formulas, marketing strategies, and other
employees work schedule whenever exigencies so require confidential programs and information from competitors.
provided that it is done in good faith.607 The prohibition against personal or marital relationships
with employees of competitor companies upon the
respondent's employees is reasonable under the
circumstances because relationships of that nature might
compromise the interests of the company. The employer,
in this case, did not impose an absolute ban, but merely
Exception: sought to balance any conflict of interest. The Constitution
(1) That the employment qualification is reasonably recognizes the right of businesses to enforce such policy
related to the essential operation of the job involved; to protect its right to reasonable returns.611
and,
(2) That there is a factual basis for believing that all or Courts have established that no-spouse employment policy
substantially all persons meeting the qualification violate the marital status provision because it arbitrarily
would be unable to properly perform the duties of the discriminates against all spouses of present employees
job.608 without regard to the actual effect on the individual’s
qualifications or work performance. The absence of a bona
WEIGHT fide occupational qualification invalidates a rule denying
employment to one spouse due to the current employment
A bona fide occupational qualification on weight is deemed of the other spouse in the same office, otherwise known as
valid in an instance where the primary objective of the the bona fide occupational qualification exception.
employer in the imposition of the weight standards is
safety. For example, on an airplane, the body weight and
size of a cabin attendant are important factors to consider
especially during emergency situations considering that
aircraft space is very limited.609 Post-Employment Ban – a stipulation in an employee’s
employment contract forbidding or restricting the
AGE employee from accepting a competitive employment or
from doing certain action after he resigns or retires from
Generally, under Republic Act No. 10911 or the “Anti-Age his employ.
Discrimination in Employment Act”, it is illegal for an
employer to require an applicant to disclose his or her age Examples/Kinds
during the application process, refuse an applicant solely (a) non-competition/non-compete clause – when the
because of how old the person is, give preferential salaries employee is prevented from directly competing or
or treatment to younger employees, deny training, lay-off working for a competitor of his former employer, or
605 609
Buiser vs. Leogardo, Jr. Yrasegui v. PAL (2008)
606
Trader’s Royal Bank vs. National Labor Relations Commission 610
Sec. 136, Title III, Chapter I, Stipulation Against Marriage
607
Union Carbide Labor Union vs. Union Carbide Phils., Inc 611
Duncan Association of Detailman v. Glaxo Wellcome, Phils., Inc. (2005)
608
Star Paper, Corp. v. Simbol (2006)
110
when the employee is prevented from setting up a

competing business;
(b) non-solicitation clause – when a duty is imposed
on the employee not to approach his former
employer’s customers or prospective customers, or
when the employee is prevented from taking
customers/clients of his former employer; and
(c) non-poaching clause – when the employee is
prevented from enticing his former employer’s staff
away from the business, the aim is to prevent the
employee from taking key employees with him to
his new employment or business.
Whether such an agreement would be held valid and

binding will depend on its reasonableness in relation to
the parties concerned, as well as to its public policy.
Factors to consider for the ban/clause’s validity:612

(a) whether the covenant protects a legitimate business
interest of the employer;
(b) whether the covenant creates an undue burden on
the employee;
(c) whether the covenant is injurious to the public
welfare;
(d) whether the time and territorial limitations contained
in the covenant are reasonable; and
(e) whether the restraint is reasonable from the
standpoint of public policy
Restrictive covenants are not necessarily void for being in

restraint of trade. In deciding to include a restrictive
covenant in the employment contract, employers must see
to it that there are reasonable limitations as to:
1. time,
2. trade and
3. place613
The limitations of the exercise of management prerogative

is that there must be an exercise of good faith for the
advancement of the employees interest and not for the
purpose of defeating or circumventing the rights of the
employees under the law are valid exercise of management
prerogative.614
In particular, the employer must be able to show that the

transfer is not unreasonable, inconvenient or prejudicial to
the employee; nor does it involve a demotion in rank or a
diminution of his salaries, privileges and other benefits.
The employer bears the burden of proving that the transfer
of the employee has complied with the foregoing test.615
Limitations in their exercise of management prerogatives

are the following:
1. Constitution
2. Law
3. Contracts (CBA)
4. General principles of fair play and justice
612 614
Rivera v. Solidbank Corporation (2006) Chu vs. NLRC
615
PLDT vs. Paguio
613
Tiu v. Platinum Plans Phils., Inc. (2007)
111
Green Notes 2019 Jurisdiction and Reliefs
Jurisdiction
1. Unfair labor practice cases (Art. 224)
2. Termination disputes; (Art. 224)
3. If accompanied by a claim for reinstatement, those
cases that workers may file involving wages, rates of
pay, hours of work, and other terms and conditions of
employment; (Art. 224)
4. Claims for actual, moral, exemplary and other forms
of damages arising from the employer-employee
relations (Art. 224)
5. Cases arising from any violation of Article 279
(Prohibited Activities) of this Code, including
questions involving the legality of strikes and lockouts
(Art. 224)
6. Except claims for Employees Compensation, Social
Security, Medicare and maternity benefits, all other
claims arising from employer-employee relations,
including those of persons in domestic or household
service, involving an amount exceeding five thousand
pesos (P5,000.00) regardless of whether
accompanied with a claim for reinstatement. (Art.
224)
7. Wage distortion disputes in unorganized
establishments not voluntarily settled by the parties
(R.A. 6727 and Art. 124);
8. Enforcement of compromise agreements when there
is non-compliance by any of the parties (Art. 233)
9. Money claims arising out of employer-employee
relationship or by virtue of any law or contract,
involving Filipino workers for overseas deployment,
including claims for actual, moral, exemplary and
other forms of damages (R.A. 8042, as amended by R.A.
10022)
10. Other cases as may be provided by law.
Labor Arbiter vs. Regional Director

REGIONAL DIRECTOR
LABOR ARBITER (Art. 224)
(Art. 129)
1. Money claim
accompanied with a claim 1. Money claim is not
of accompanied
Reinstatement, regardless by reinstatement, AND
of amount, OR
2. Money claim exceeds
P5,000, whether 2. Money claim does not
or not there is a claim for exceed P5,000
reinstatement.
Requirements to perfect appeal to NLRC

Decisions, awards, or orders of the Labor Arbiter shall be
final and executory unless appealed to the Commission by
any or both parties within ten (10) calendar days from
receipt thereof; and in case of decisions or resolutions of
the Regional Director of the Department of Labor and
Employment pursuant to Article 129 of the Labor Code,
within five (5) calendar days from receipt thereof. If the
10th or 5th day, as the case may be, falls on a Saturday,
Sunday or holiday, the last day to perfect the appeal shall
be the first working day following such Saturday, Sunday
or holiday (Rule VI, Section 1, 2011 NLRC Rules of
Procedure).
112
REQUISITES FOR PERFECTION OF APPEAL. (Rule VI,

Section 4, 2011 NLRC Rules of Procedure).
(a) The appeal shall be:

1. Filed within the reglementary period provided in Jurisdiction
Section 1 of this Rule; 1) Exclusive original jurisdiction
2. verified by the appellant himself/herself in a. Petition for injunction in ordinary
accordance with Section 4, Rule 7 of the Rules of labor disputes to enjoin or restrain any
Court, as amended; actual or threatened commission of
3. in the form of a memorandum of appeal which shall any or all prohibited or unlawful acts or
state the grounds relied upon and the arguments in to require the performance of a
support thereof, the relief prayed for, and with a particular act in any labor dispute
statement of the date the appellant received the which, if not restrained or performed
appealed decision, award or order; forthwith, may cause grave or
4. in three (3) legibly typewritten or printed copies; and irreparable damage to any party;
5. accompanied by: b. Petition for injunction in strikes or
a. proof of payment of the required appeal fee and lockouts under Article 279 of the Labor
legal research fee, Code;
b. posting of a cash or surety bond as provided in c. Certified Cases which refer to labor
Section 6 of this Rule, and disputes causing or likely to cause a
c. proof of service upon the other parties. strike or lockout in an industry
indispensable to the national interest,
A mere notice of appeal without complying with the other certified to it by the Secretary of Labor
requisites aforestated shall not stop the running of the and Employment for compulsory
period for perfecting an appeal. arbitration by virtue of Article 278 (g) of
the Labor Code;
The appellee may file with the Regional Arbitration Branch d. Petition to annul or modify the order
or Regional Office where the appeal was filed his/her or resolution (including those issued
answer or reply to appellant's memorandum of appeal, not during execution proceedings) of the
later than ten (10) calendar days from receipt thereof. Labor Arbiter.
Failure on the part of the appellee who was properly 2) Exclusive appellate jurisdiction
furnished with a copy of the appeal to file his/her answer a. All cases decided by the Labor Arbiters;
or reply within the said period may be construed as a b. Cases directed by the DOLE Regional
waiver on his/her part to file the same. Directors or hearing officers involving
small money claims under Article 129 of
Subject to the provisions of Article 225 of the Labor Code, the Labor Code;
as amended, once the appeal is perfected in accordance c. Contempt cases decided by the Labor
with these Rules, the Commission shall limit itself to Arbiters.
reviewing and deciding only the specific issues that were
elevated on appeal. (4a) GROUNDS OF APPEAL FROM LA TO NRLC (Rule VI,
Section 2, 2011 NLRC Rules of Procedure)
Reinstatement pending appeal a. If there is prima facie evidence of abuse of discretion
Under Article 229 of the Labor Code, the decision of the on the part of the Labor Arbiter or Regional Director;
[LA] reinstating a dismissed or separated employee, b. If the decision, award or order was secured through
insofar as the reinstatement aspect is concerned, shall fraud or coercion, including graft and corruption;
immediately be executory, even pending appeal. The c. If made purely on questions of law; and/or
employee shall either be admitted back to work under the d. If serious errors in the findings of facts are raised
same terms and conditions prevailing prior to his dismissal which, if not corrected, would cause grave or
or separation or, at the option of the employer, merely irreparable damage or injury to the appellant.
reinstated in the payroll. The posting of a bond by the
employer shall not stay the execution for reinstatement. REVERSAL OF LA DECISION BY NLRC
Verily, the employer is duty-bound to reinstate the However, in the event that the LA's decision is reversed by
employee, failing which, the employer is liable instead to a higher tribunal, the employer's duty to reinstate the
pay the dismissed employee's salary.616 dismissed employee is effectively terminated. This means
that an employer is no longer obliged to keep the employee
in the actual service or in the payroll. The employee, in
turn, is not required to return the wages that he had
received prior to the reversal of the LA's decision.
Notwithstanding the reversal of the finding of illegal
dismissal, an employer, who, despite the LA's order of
reinstatement, did not reinstate the employee during the
pendency of the appeal up to the reversal by a higher
616
Manila Doctors College and Turla vs. Olones, G.R. No. 225044, (2016)
113
tribunal may still be held liable for the accrued wages of

the employee, i.e., the unpaid salary accruing up to the The BLR no longer handles all labor management disputes;
time of the reversal. By way of exception, an employee may rather its functions and jurisdiction are largely confined to:
be barred from collecting the accrued wages if shown that 1. Union matters;
the delay in enforcing the reinstatement pending appeal 2. Collective bargaining registry; and
was without fault on the part of the employer.617 3. Labor education.
Jurisdiction over labor management problems or disputes

is also exercised by other offices:
1. DOLE Regional Offices
2. Office of the Secretary of Labor
COURT OF APPEALS 3. NLRC
4. POEA
Appeal via rule 65, Rules of Court 5. OWWA
Section 2, Rule 43 of the 1997 Rules of Civil Procedure is 6. SSS-ECC
explicit that Rule 43 shall not apply to judgments or final 7. RTWPB
orders issued under the Labor Code of the Philippines. 8. NWPC
9. Regular courts over intra-corporate disputes
The correct remedy that should have been availed of is the
special civil action of certiorari under Rule 65. The party Mediator-arbiter
may seasonably avail of the special civil action for An officer in the Regional Office or Bureau authorized to
certiorari, where the tribunal, board or officer exercising hear, conciliate and decide representation cases or assist
judicial functions has acted without or in excess of its in the disposition of intra or inter-union disputes.
jurisdiction, or with grave abuse of discretion, and praying
that judgment be rendered annulling or modifying the The BLR has original and exclusive jurisdiction over:
proceedings, as the law requires, of such tribunal, board or 1. Inter-union disputes
officer. In any case, St. Martins Funeral Homes v. NLRC 2. Intra-union disputes
(295 SCRA 494, 1998) settled any doubt as to the manner 3. Other related labor relations disputes
of elevating decisions of the NLRC to the CA by holding
that the legislative intendment was that the special civil
action of certiorari was and still is the proper vehicle for
judicial review of decisions of the NLRC.618
SUPREME COURT The National Conciliation and Mediation Board, is hereby

created and which shall absorb the conciliation, mediation
RULE 45, RULES OF COURT and voluntary arbitration functions of the Bureau of Labor
Appeal by Certiorari to the Supreme Court Relations.620
A party desiring to appeal by certiorari from a judgment or
final order or resolution of the Court of Appeals, the CONCILIATION vs. MEDIATION
Sandiganbayan, the Regional Trial Court or other courts Conciliation – is conceived of as a mild form of
whenever authorized by law, may file with the Supreme intervention by a neutral third party, the Conciliator-
Court a verified petition for review on certiorari. The Mediator, relying on his persuasive expertise, who takes an
petition shall raise only questions of law which must be active role in assisting parties by trying to keep disputants
distinctly set forth.619 talking, facilitating other procedural niceties, carrying
messages back and forth between the parties, and
generally being a good fellow who tries to keep things calm
and forward-looking in a tense situation.621
JURISDICTION
Mediation – is a mild intervention by a neutral third party,
The Bureau of Labor Relations and the Labor Relations
the Conciliator-Mediator, whereby he starts advising the
Division in the regional offices of the Department of Labor
parties or offering solutions or alternatives to the
shall have original and exclusive authority to act, at their
problems with the end in view of assisting them towards
own initiative or upon request of either or both parties, on
voluntarily reaching their own mutually acceptable
all
settlement of the dispute622
inter-union and intra-union conflicts, and all disputes,
grievances or problems arising from or affecting labor-
PREVENTIVE MEDIATION
management relations in all work places whether
A formal or informal request for conciliation and mediation
agricultural or non-agricultural, except those arising from
assistance sought by either or both parties to avoid the
the implementation or interpretation of collective
occurrence of actual labor dispute.
bargaining agreements which shall be subject of grievance
procedure and/or voluntary arbitration. (Art. 232)
617 620
Manila Doctors College v. Olones (2016) Sec. 22, E.O. 86
618
PNB v. Velasco (2008)
619 622
Sec. 1, Rule 45, Rules of Court NCMB
114
placement (Art. 37).  

2. Have access to Er’s records and premises to
determine violations of any provisions of the LC
The DOLE Regional Directors have original and exclusive
on recruitment and placement (Art. 128).  
jurisdiction over the following cases:
3. Conduct industrial safety inspections of
1. Labor standards enforcement cases under
establishments (Art. 165).  
Article 128;  
4. Inquire into the financial activities of LLO and
2. Small money claims cases arising from labor
examine their books of accounts upon the filing
standards violations in the amount not
of the complaint under oath and duly supported
exceeding P5,000.00 and not accompanied with
by the written consent of at least 20% of the total
a claim or reinstatement under Article 129;  
membership of the LO concerned.
3. Occupational safety and health violation;  
4. Registration of unions and cancellation thereof,
cases filed against unions and other labor Modes of Labor Standards Inspections (RULE III., SEC.1,
 relations related cases;   DO 131-B)
5. Complaints against private recruitment and 1. Joint Assessment (JA);
 placement agencies for local employment; and 2. Compliance Visit (CV);
  3. Occupational Safety and Health Standards
6. Cases submitted to them for voluntary Investigation (OSHI); or
arbitration in their capacity as Ex-Officio 4. Special Assessment or Visit Establishment (SAVE).
Voluntary Arbitrators under Department
 Order No. 83 - 07, Series of 2007.   Enforcement Power
RECOVERY/ADJUDICATORY POWERs It is the power of the SOLE to:

Requisites for Regional Director’s Adjudicatory Power: 1. Issue compliance orders 
1. Claim is presented by an employee or a person 2. Issue writs of execution for the enforcement of
employed in domestic or household service, or house their orders, except in cases where the ER
helper. contests the findings of the labor officer and
2. Claim arises form employer-employee relations raise issues supported by documentary proof
3. Claimant does not seek reinstatement which were not considered in the course of
4. Aggregate money claim of each employee or house inspection 
helper does not exceed 5,000 pesos. (Azucena, 3. Order stoppage of work or suspension of
Everyone’s Labor Code, p. 121) operation when non-compliance with the law or
implementing rules and regulations poses grave
The RD or any of his duly authorized hearing officers is and imminent danger to health and safety of
empowered through summary proceeding and after due workers in the workplace 
notice, to hear and decide cases involving recovery of 4. Require ERs to keep and maintain such
wages and other monetary claims and benefits, including employment records as may be necessary in aid
legal interests. to the visitorial and enforcement powers
5. Conduct hearings within 24 hours to determine
whether:
a. An order for stoppage of work or
suspension of operations shall be lifted
VISITORIAL AND ENFORCEMENT POWERS or not; and
Visitorial Power b. ER shall pay the concerned EEs their
It constitutes:  salaries in case the violation is
1. Access to ER’s records and premises at any time attributable to his fault
 of the day or night, whenever work is being
undertaken POWER TO SUSPEND EFFECTS OF TERMINATION
2. To copy from said records   The Secretary of the Department of Labor and
3. Question any EE and investigate any fact, Employment may suspend the effects of the termination
condition or matter which may be necessary to pending resolution of the dispute in the event of a prima
determine violations or which may aid in the facie finding by the appropriate official of the Department
enforcement of the LC and of any wage order, or of Labor and Employment before whom such dispute is
rules and regulation issued pursuant thereto. pending that the termination may cause a serious labor
dispute or is in implementation of a mass lay-off. (Art. 292
Instances where the visitorial power of the SOLE may (b))
be exercised under the Labor Code
REMEDIES
Power to: The proper remedy to question the decisions or orders of
1. Inspect books of accounts and records of any the Secretary of Labor is via Petition for Certiorari under
 person or entity engaged in recruitment and Rule 65, not via an appeal to the OP. For appeals to the OP
placement, require it to submit reports regularly in labor cases have indeed been eliminated, except those
on prescribed forms and act in violations of any
provisions of the LC on recruitment and
115
involving national interest over which the President may Arbitrator or panel of Voluntary Arbitrators and shall
assume jurisdiction.623 immediately dispose and refer the same to the Grievance
Machinery or Voluntary Arbitration provided in the
Collective Bargaining Agreement.
ART. 275. Jurisdiction over other Labor Disputes. - The

Voluntary Arbitrator or panel of Voluntary Arbitrators,
Article 260 of the Labor Code requires parties to establish upon agreement of the parties, shall also hear and decide
a grievance machinery for the adjustment and resolution all other labor disputes including unfair labor practices and
of grievances arising from the interpretation or bargaining deadlocks.
implementation of a collective bargaining agreement or
the interpretation or enforcement of company personnel ART. 224. Jurisdiction of the Labor Arbiters and the
policies. Commission.
(c) Cases arising from the interpretation or
implementation of collective bargaining agreements
and those arising from the interpretation or
enforcement of company personnel policies shall be
JURISDICTION OF THE VOLUNTARY ARBITRATOR disposed of by the Labor Arbiter by referring the same
to the grievance machinery and voluntary arbitration
The original and exclusive jurisdiction of the labor arbiter as may be provided in said agreements.
over unfair labor practices, termination disputes, and claims
for damages cannot be arrogated into the powers of Remedy
voluntary arbitrators in the absence of an express GR: Decisions of VA are final and executory after 10
agreement between the union and the company.624 calendar days from receipt of the copy of the award or
decision by the parties (Art. 262-A).
The Voluntary Arbitrator or Panel of Voluntary Arbitrators
will have original and exclusive jurisdiction over money NOTE: Art. 262-A deleted the word “unappealable” from
claims 'arising from the interpretation or implementation of Art. 263. It makes the voluntary arbitration award final and
the Collective Bargaining Agreement and, those arising executory after 10 calendar days from receipt of the copy
from the interpretation or enforcement of company of the award or decision by the parties. But, the decision
personnel policies', under Article 267."625 may still be reconsidered by the VA on the basis of a motion
for reconsideration duly filed during that period.627
Unresolved grievances. The law grants to voluntary
arbitrators original and exclusive jurisdiction to hear and XPN: Appeal to the CA via Rule 43 of the Rules of Court
decide all unresolved grievances arising from the within 15 days from the date of receipt of VA’s decision.
interpretation or implementation of the Collective
Bargaining Agreement and those arising from the NOTE: A VA by the nature of his functions acts in quasi-
interpretation or enforcement of company personnel judicial capacity. There is no reason why the VA’s decisions
policies (Art. 274, Labor Code).626 involving interpretation of law should be beyond the SC’s
review. Administrative officials are presumed to act in
ART. 274. Jurisdiction of Voluntary Arbitrators and Panel accordance with law, yet the SC will not hesitate to pass
of Voluntary Arbitrators. - The Voluntary Arbitrator or upon their work where a question of law is involved or
panel of Voluntary Arbitrators shall have original and where a showing of abuse of authority or discretion in
exclusive jurisdiction to hear and decide all unresolved their official acts is properly raised in petitions for
grievances arising from the interpretation or certiorari.628
implementation of the Collective Bargaining Agreement
and those arising from the interpretation or enforcement
of company personnel policies referred to in the
immediately preceding article. Accordingly, violations of a
Collective Bargaining Agreement, except those which are
gross in character, shall no longer be treated as unfair
labor practice and shall be resolved as grievances under
the Collective Bargaining Agreement. For purposes of this
article, gross violations of Collective Bargaining
Agreement shall mean flagrant and/or malicious refusal to
comply with the economic provisions of such agreement.
The Commission, its Regional Offices and the Regional

Directors of the Department of Labor and Employment
shall not entertain disputes, grievances or matters under
the exclusive and original jurisdiction of the Voluntary
623 626
Pena v. Office of the President, G.R. No. 189314 (2011) Sanyo Philippines Workers Union v Canizares, 211 SCRA 361 (1992).
624 627
Lantex Industries v CA, 529 v 631 (2007). Albert Teng Fish Trading v. Pahagac (2010)
625 628
Del Monte v Saldivar, 504 SCRA 192 (2006). Continental Marble Corp. v. NLRC (1988)
116
PRESCRIPTION OF ACTIONS
MONEY ART. 306, Labor Code
CLAIMS All money claims arising from
employer-employee relations
shall be filed within 3 years from
the time the cause of action
accrued; otherwise they shall be
forever barred.
ILLEGAL Art. 1146, Civil Code
DISMISSAL Although illegal dismissal is a
violation of the Labor Code, it
does not fall within the ambit of
the term “offense” in Art. 305
because in illegal dismissal, no
penalty, fine, or imprisonment is
imposed. Thus, the 4-year
prescription in the civil code
must apply.629
UNFAIR LABOR Art. 305, Labor Code
PRACTICE All unfair labor practices shall be
filed with the appropriate
agency within 1 year from
accrual of such unfair labor
practice; otherwise, forever
barred.
OFFENSES Art. 305, Labor Code
UNDER THE Offenses penalized under the
LABOR CODE Code and the rules and
regulations shall prescribe in 3
years
ILLEGAL Sec. 12, RA 8042
RECRUITMENT Illegal recruitment cases shall
prescribe in 5 years: Provided; if
economic sabotage is involved, it
shall prescribe in 20 years.
629
Callanta v. Carnation Phil. Inc., 1886
117

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DE LA SALLE UNIVERSITY COLLEGE OF LAW

Lasallian Commission on Bar Operations

LABOR LAW AND SOCIAL LEGISLATION

BARGAINING REPRESENTATIVE ....................................................... 59

LABOR RELATIONS ................................................................................... 53

(Section 3, Art. XIII, Constitution)

Section 3, Labor Code

The law, in protecting the rights of the employees,

Lasallian Commission on Bar Operations 1

Lasallian Commission on Bar Operations 2

right cannot be invoked against the private

• When can an employee invoke constitutional due process

It is the Civil Code (1700-1712), not the Labor Code that

Under the Civil Code, contracts of labor are explicitly

In the interpretation of contracts, obscure words and

Lasallian Commission on Bar Operations 3

RECRUITMENT AND PLACEMENT, defined

Any act of canvassing, enlisting, contracting, transporting,

The proviso in Article 13 (b) raises a presumption that the

The number of persons dealt with is not an essential

ALLOWED ENTITIES TO ENGAGE IN RECRUITMENT

1. Private employment agencies [Sec. 25, LC];

Private Employment Agency

Private fee-charging employment agency, defined.

Private Recruitment Entity

Private recruitment entity, defined.

Lasallian Commission on Bar Operations 4

Among the principal functions of the POEA are the

Lasallian Commission on Bar Operations 5

Lasallian Commission on Bar Operations 6

4. Persons, partnerships or corporations which  There be at least 3 recruiters in case of

Lasallian Commission on Bar Operations 7

Lasallian Commission on Bar Operations 8

any person, whether a b. Illegal Recruitment as Economic Sabotage

Elements of Illegal Recruitment committed by a non-

Lasallian Commission on Bar Operations 9

2. It is committed by any person, whether a imprisonment shall be imposed if

Lasallian Commission on Bar Operations 10

Double jeopardy could not result from prosecuting and

"The liability of the principal/employer and the

Lasallian Commission on Bar Operations 11

Direct Hiring, defined

Lasallian Commission on Bar Operations 12

in the Philippines shall obtain an employment permit from

The employment permit may be issued to a non-resident

Lasallian Commission on Bar Operations 13

Filipino applicants for employment abroad;

CONDITIONS OF GRANT OF PERMIT

Employment permit of non-resident aliens. Any alien

The employment permit may be issued to a non-resident

GROUNDS FOR DENIAL OF PERMIT

An application of AEP may be denied by the Regional

Lasallian Commission on Bar Operations 14

Types of Managerial Employees39

Lasallian Commission on Bar Operations 2018 15

Normal Hours of Work

(2) If work is hazardous, a certification is needed

Lasallian Commission on Bar Operations 2018 16

Effects of CWW schemes (3) Forced leave - employees are required to go on

(2) Consistent with Articles 85 of the Labor Code, Power Interruptions/brownouts

Lasallian Commission on Bar Operations 2018 17

“Waiting time” is compensable if during the period the

Lasallian Commission on Bar Operations 2018 18