LAST MINUTE TIPS: LABOR U.P.

LAW BOC

LABOR LAW AND SOCIAL

LEGISLATION
“Among the most important duties of employers, the principal one is to give every worker
what is justly due him... (N)o laws, either
human or divine, permit them for their own profit
to oppress the needy and the wretched or to seek gain from another’s want.”
– Pope Leo XIII in Rerum Novarum, 1891
Q1: What are the characteristics of the assumption power of the SOLE?
A1: It is discretionary and plenary. The SOLE may assume jurisdiction over the dispute to either decide such dispute or
certify the dispute to the NLRC for compulsory arbitration when there exists a labor dispute causing or likely to cause a strike
or lockout in an industry indispensable to national interest. [Art. 278, LC]

The authority of the Secretary to assume jurisdiction over a labor dispute includes and extends to all questions and
controversies arising from such labor dispute. The power is plenary and discretionary in nature to enable him to
effectively and efficiently dispose of the dispute. [Philcom Employees Union v. Philippine Global Communications, 495 SCRA
214 (2006)]

The powers of the Secretary in "national interest" cases are not set by metes and bounds. Rather, the Secretary is
given wide latitude to adopt appropriate means to finally resolve the labor dispute. When the Secretary exercises
these powers, he is granted "great breadth of discretion" in order to find a solution to a labor
dispute.1âwphi1[SACORU v. Coca-Cola Bottlers Philippines, Inc., G.R. No. 200499 (2017)]

It is preemptive and extraordinary. The effects of the assumption of jurisdiction are the following:
1. the enjoining of an impending strike or lockout or its lifting, and
2. an order for the workers to return to work immediately and for the employer to readmit all workers under
the same terms and conditions prevailing before the strike or lockout, or the return-to-work order.

The powers given to the DOLE Secretary under Article 263 (g) is an exercise of police power with the aim of
promoting public good. In fact, the scope of the powers is limited to an industry indispensable to the national interest
as determined by the DOLE Secretary. Industries that are indispensable to the national interest are those essential
industries such as the generation or distribution of energy, or those undertaken by banks, hospitals, and export-
oriented industries. [SACORU v. Coca-Cola Bottlers Philippines, Inc., supra]

Q2: When is there a wage distortion?

A2: There is wage distortion where an increase in prescribed wage rates results in the elimination or severe
contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an
establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of
service, or other logical bases of differentiation. [Art. 124, LC]. A mere disparity in wages between employees holding
similar positions but in different regions does not constitute wage distortion as contemplated by law.

Wage distortion arises when these four elements concur:

1. An existing hierarchy of positions with corresponding salary rates;
2. A significant change in the salary rate of a lower pay class without a concomitant increase in the salary
rate of a higher one;
3. The elimination of the distinction between the two levels; and
4. The existence of the distortion in the same region of the country. [Prubankers Assn. v. Prudential Bank and
Co., G.R. No. 131247 (1999)] 


Q3: Can wage distortion be caused by management prerogative?

A3: No. A wage distortion can only exist where the wage adjustment is brought about by a wage order, not by
management prerogative. If the compulsory mandate under Article 124 to correct "wage distortion" is applied to
voluntary and unilateral increases by the employer in fixing hiring rates which is inherently a business judgment

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prerogative, then the hands of the employer would be completely tied even in cases where an increase in wages of a
particular group is justified due to a re-evaluation of the high productivity of a particular group, or as in the present
case, the need to increase the competitiveness of the company’s hiring rate. [Bankards Employees' Union v. NLRC,
G.R. No. 140689 (2004)]

Q4: How do you resolve wage distortion?

A4:
Organized Establishment
1. Employer and the union shall negotiate to correct the distortions

2. Disputes shall be resolved through the grievance procedure under the CBA

3. If it remains unresolved, through voluntary arbitration

Unorganized Establishment
1. Employer and employees shall endeavor to correct such distortions. 

2. Disputes shall be settled through the National Conciliation and Mediation Board 

3. If still unresolved after 10 calendar days of conciliation, it shall be referred to the appropriate branch of the
NLRC – compulsory arbitration 
Both the employer and employee cannot use 
economic weapons. 

4. Employer cannot declare a lock-out; Employee 
cannot declare a strike because the law has 
provided for
a procedure for settling 

5. The salary or wage differential does not need to be maintained. [National Federation of Labor v. 
NLRC, G.R.
No. 103586 (1994)] 


Q5: What are the two methods of wage-fixing?

A5:
1. Floor Wage Method- fixing a determinate amount to be added to the prevailing statutory minimum wage
rates (e.g. setting P25 increase for min. wage rates)
2. Salary-Ceiling Method- Wage adjustment to be applied to EEs receiving a certain denominated salary or
workers being paid more than existing min. wage (e.g. WO granting P25 increase to those earning up to
P250)

Q6: Who are exempted from Wage Orders issued by the Regional Tripartite Wages and Productivity
Boards?
A6: Per the Rules on Exemption, the following categories of establishments may be exempted upon application with
and as determined by the Board:
1. Distressed establishment
2. New business enterprises
3. Retail/service establishments employing not more than 10 workers
4. Establishments adversely affected by natural calamities

The Boards may also exempt establishments other than those enumerated above only if they are in accord with the
rationale for exemption stated in the Rules on Exemption and upon strong justifiable reasons.

Q7: Differentiate the jurisdiction of labor arbiters under Art. 224, visitorial and enforcement powers of the
SOLE under Art. 128, and the adjudicatory power of DOLE Regional Directors under Art. 129
A7:
Art. 224 Art. 128 Art. 129
Officers Labor Arbiter SOLE or his/her authorized RD or any authorized hearing
Designated representative officer of DOLE
Nature of Power Adjudicatory power Visitorial and enforcement Adjudicatory power on matter
power exercised through involving recovery of wages
routine inspections of
establishment
Subject Unfair labor practices, Labor Legislation in general Labor standards (money
termination disputes
 claims)

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Monetary claims below

5k arising from terms
and conditions of
employment, if it is with
a claim for
reinstatement
Issues regarding strikes
and lockouts as per art.
279
Claims exceeding 5k,
whether or not it is with
a claim for
reinstatement, except
those involving SSS,
Medicare and maternity
benefits
Existence of Past or present EER Requires existence of EER* EER not necessary since it
EER. should not include a claim for
reinstatement
How Initiated Sworn complaint filed Enforcement power is an Sworn complaint filed by any
by any interested party offshoot of visitorial power interested party
Limits to Claim Generally no limit. But The power of the SOLE to Monetary claims below
if the claim is below order and enforce compliance P5,000.00 without a claim for
P5,000.00, it must be with labor standard laws can be reinstatement
accompanied by a claim exercised even where the
for reinstatement. individual claim exceeds
P5,000.00 [Cireneo Bowling
Plaza, Inc. v. Sensing]

Appeal Appeal to the NLRC Appeal to Secretary of Labor Appeal to NLRC within 5
within 10 calendar days calendar days

Q8: May the DOLE make a prima facie determination of the existence of an employer-employee
relationship in the exercise of its visitorial and enforcement powers?
A8: Yes. If a complaint is brought before the DOLE to give effect to the labor standards provisions of the Labor
Code or other labor legislation, and there is a finding by the DOLE that there is an existing employer-employee
relationship, the DOLE exercises jurisdiction to the exclusion of the NLRC. The findings of the DOLE, however
may still be questioned through a petition for certiorari under Rule 65 of the Rules of Court [...] The DOLE's labor
inspection program can now proceed without being sidetracked by unscrupulous employers who could render
nugatory the "expanded visitorial and enforcement power of the DOLE granted by RA 7730 . . . by the simple
expedient of disputing the employer-employee relationship [and] force the referral of the matter to the NLRC.
[People's Broadcasting Service v. Secretary of the Department of Labor and Employment, G.R. No. 179652 (2012 Resolution)]

Q9: Who are exempted from securing an alien employment permit?

A9:
1. All members of the diplomatic service and foreign government officials accredited by and with reciprocity
arrangement with the Philippine government; 

2. Officers and staff of international organizations of which the Philippine government is a member, and their
legitimate spouses desiring to work in the Philippines; 

3. Owners and representatives of foreign principals whose companies are accredited by 
the Philippine
Overseas Employment Administration (POEA), who come to the Philippines for a limited period and solely
for the purpose of interviewing Filipino applicants for employment abroad;

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4. Foreign national who come to the Philippines to teach, present and/or conduct research studies in
universities and colleges as visiting, exchange or adjunct professors under formal agreements between the
universities or colleges in the Philippines and foreign universities or colleges; or between the Philippine
government and foreign government: provided that the exemption is on a reciprocal basis; 

5. Permanent resident foreign nationals, probationary or temporary resident visa holders under Sec. 13 (a-f)
of the Philippine Immigration Act of 1940 and Section 3 of the Alien Social Integration Act of 1995 (RA
7917); 

6. Refugees and stateless persons recognized by DOJ pursuant to Article 17 of the UN Convention and
Protocol Relating to status of Refugees and Stateless Persons; and 

7. All foreign nationals granted exemption by law. [Sec. 2, D.O. No. 186-17]

Q10: Who are excluded from securing an alien employment permit?

A10:
1. Members of the governing board with voting 
rights only and do not intervene in the management of the
corporation or in the day to day operation of the enterprise. 

2. President and Treasurer, who are part-owner of the company. 

3. Those providing consultancy services who do not have employers in the Philippines. 

4. Intra corporate transferee who is a manager, executive or specialist as defined below in accordance with
Trade Agreements and an employee of the foreign service supplier for at least one (1) year continuous
employment prior to deployment to a branch, subsidiary, affiliate, or representative office in the Philippines.
a. an Executive: a natural person within the organization who primarily directs the management of
the organization and exercises wide latitude in decision making and receives only general
supervision or direction from higher level executives, the board of directors, or stockholders of
the business; an executive would not directly perform tasks related to the actual provision of the
service or services of the organization; 

b. a Manager: a natural person w/in the organisation who primarily directs the
organisation/department/subdivision and exercises supervisory and control functions over other
supervisory, managerial or professional staff; does not include first line supervisors unless
employees supervised are professionals; does not include employees who primarily perform tasks
necessary for the provision of the service; or 

c. a Specialist: a natural person within the organisation who possesses knowledge at an advanced
level of expertise essential to the establishment/provision of the service and/or possesses
proprietary knowledge of the organisation’s service, research equipment, techniques or
management; may include, but is not limited to, members of a licensed profession. 


All other intra-corporate transferees not within these categories as defined above are required to
secure an AEP prior to their employment in the Philippines.

5. Contractual service supplier who is a manager, executive, or specialist and an employee of a foreign service
supplier which has no commercial presence in the Philippines
a. Who enters the Philippines temporarily to supply a service pursuant to a contract between his/her
employer and a service consumer in the Philippines 

b. Must possess the appropriate educational and professional qualifications; and 

c. Must be employed by the foreign service supplier for at least one year prior to the supply of service
in the Philippines.
6. Representative of the Foreign Principal/Employer assigned in the Office of Licensed Manning Agency
(OLMA) in accordance with the POEA law, rules and regulations. [Sec. 3, D.O. No. 186-17]

Q11: What constitutes abandonment?

A11: As defined under established jurisprudence, abandonment is the deliberate and unjustified refusal of an
employee to resume his employment. It constitutes neglect of duty and is a just cause for tem1ination of employment
under paragraph (b) of Article 282 [now Article 296] of the Labor Code. To constitute abandonment, however, there
must be a clear and deliberate intent to discontinue one's employment without any intention of returning.

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In this regard, two elements must concur: (1) failure to report for work or absence without valid or justifiable reason;
and (2) a clear intention to sever the employer-employee relationship, with the second element as the more
determinative factor and being manifested by some overt acts. Otherwise stated, absence must be accompanied by
overt acts unerringly pointing to the fact that the employee simply does not want to work anymore. It has been ruled
that the employer has the burden of proof to show a deliberate and unjustified refusal of the employee to resume
his employment without any intention of returning. [Tan Brothers v. Escudero, G.R. No. 188711 (2013)]

Q12: Is abandonment compatible with constructive dismissal?

A12: No. Constructive dismissal exist when an act of clear discrimination, insensibility or disdain on the part of the
employer has become so unbearable as to leave an employee with no choice but to forego continued employment.
On the other hand, abandonment, as a just and valid cause for termination, requires a deliberate and unjustified
refusal of an employee to resume his work, coupled with a clear absence of any intention of returning to his or her
work. Abandonment is incompatible with constructive dismissal. [Veterans Security Agency v. Vargas, G.R. No. 159293
(2005)]

Note that the filing of the instant complaint for illegal dismissal indubitably negates the allegation of abandonment.
[Dimagan v. Dacworks, G.R. No. 191053 (2011)]

Q13: Dan hired Miko as a cook in his restaurant on a probationary basis. During the course of his
employment, Dan noticed Miko’s habitual tardiness and non-obervance of the proper dress code. Five
months later, Dan informed Miko that he failed to meet the regularization standards for the said position.
Miko filed a complaint for illegal dismissal. He claimed that he should have already been considered as a
regular and not a probationary employee given Dan’s failure to inform him of the reasonable standards for
her regularization upon his engagement. Will Miko’s complaint prosper?
A13: No, Miko’s complaint will not prosper. A probationary employee, like a regular employee, enjoys security of
tenure. However, in cases of probationary employment, aside from just or authorized causes of termination, an
additional ground is provided under Article 295 of the Labor Code, i.e., the probationary employee may also be
terminated for failure to qualify as a regular employee in accordance with the reasonable standards made known by
the employer to the employee at the time of the engagement.

Corollary thereto, the Rules provide that if the employer fails to inform the probationary employee of the reasonable
standards upon which the regularization would be based on at the time of the engagement, then the said employee
shall be deemed a regular employee. In other words, the employer is made to comply with two (2) requirements
when dealing with a probationary employee: first, the employer must communicate the regularization standards to
the probationary employee; and second, the employer must make such communication at the time of the
probationary employee’s engagement. If the employer fails to comply with either, the employee is deemed as a regular
and not a probationary employee.

The exception to the foregoing is when the job is self-descriptive in nature, for instance, in the case of maids, cooks,
drivers, or messengers. Miko’s case falls under this exception. The rule on notifying a probationary employee of the
standards of regularization should not be used to exculpate an employee who acts in a manner contrary to basic
knowledge and common sense in regard to which there is no need to spell out a policy or standard to be met. In the
same light, an employee’s failure to perform the duties and responsibilities which have been clearly made known to
him constitutes a justifiable basis for a probationary employee’s non-regularization. [Abbott Laboratories v. Alcaraz,
G.R. No. 192571 (2013)]

Q14: Does the presumption of work-related illness under the POEA SEC necessarily lead to
compensability?
A14: No. Under the 2010 POEA-SEC, "any sickness resulting to disability or death as a result of an occupational
disease listed under Section 32-A of this Contract with the conditions set therein satisfied" is deemed to be a "work-
related illness." On the other hand, Section 20 (A)(4) declares that "[t]hose illnesses not listed in Section 32 of this
Contract are disputably presumed as work related." The legal presumption of work-relatedness was borne out from
the fact that the said list cannot account for all known and unknown illnesses/diseases that may be associated with,
caused or aggravated by such working conditions, and that the presumption is made in the law to signify that the
non-inclusion in the list of occupational diseases does not translate to an absolute exclusion from disability benefits.

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Nonetheless, the presumption provided under Section 20 (B) (4) is only limited to the "work-relatedness" of an
illness. It does not cover and extend to compensability. In this sense, there exists a fine line between the work-
relatedness of an illness and the matter of compensability.

For an occupational disease and the resulting disability or death to be compensable, all of the following conditions
must be satisfied:
1. The seafarer's work must involve the risks described herein;
2. The disease was contracted as a result of the seafarer's exposure to the described risks;
3. The disease was contracted within a period of exposure and under such other factors necessary to contract
it;
4. There was no notorious negligence on the part of the seafarer. [Sec. 32-A, POEA SEC]

As differentiated from the matter of work-relatedness, no legal presumption of compensability is accorded in favor
of the seafarer. As such, he bears the burden of proving that these conditions are met. [Benedict Romana v. Magsaysay
Maritime Corporation, G.R. 192442 (2017)]

Q15: When is a seafarer’s death compensable?

A15: For a seafarer’s death to be compensable, the claimant bears the burden to establish that:
That the seafarer died during the duration of his/her contract; and
That the seafarer’s illness was work-related.

Employing a liberal interpretation of the POEA SEC, however, the Court in Racelis v. United Philippine Lines [G.R.
No. 198408 (2014)] carved out an exception to the general rule that the seafarer’s death should occur during his/her
employment; that is, when the seafarer is repatriated for medical reasons under the POEA SEC.

While it is true that a medical repatriation has the effect of terminating the seafarer’s contract of employment, it is,
however, enough that the work-related illness, which eventually becomes the proximate cause of death, occurred
while the contract was effective for recovery to be had.

In Canuel v. Magsaysay Maritime Corporation [G.R. No. 190161 (2014)], the Court clarified that while the general rule is
that the seafarer’s death should occur during the term of his employment, the seafarer’s death occurring after the
termination of his employment due to his medical repatriation on account of a work-related injury or illness
constitutes an exception thereto. This is based on a liberal construction of the 2000 POEA-SEC as impelled by the
plight of the bereaved heirs who stand to be deprived of a just and reasonable compensation for the seafarer’s death,
notwithstanding its evident work-connection.

Q16: What is the third physician rule?

A16: If a doctor appointed by the seafarer disagrees with the assessment [of the company-designated physician], a
third doctor may be agreed jointly between the employer and the seafarer. The third doctor’s decision shall be final
and binding on both parties. [Sec. 20, A.4, POEA-SEC]

Q17: What is the 120-240 day rule?

A17: The Labor Code provides that the seafarer is declared to be on temporary total disability during the 120-day
period within which the seafarer is unable to work. The significance of the 120-day period as one when the seafarer
is considered to be totally yet temporarily disabled, thus, entitling him to sickness wages. This is also the period given
to the employer to determine whether the seafarer is fit for sea duty or permanently disabled and the degree of such
disability. As a general rule, a temporary total disability lasting continuously for more than 120 days is considered as
a total and permanent disability. [C.F. Sharp v. Taok, G.R. No. 193679 (2012)]

The exception referred to above pertains to a situation when the sickness "still requires medical attendance beyond
the 120 days but not to exceed 240 days" in which case the temporary total disability period is extended up to a
maximum of 240 days. Note, however, that for the company-designated physician to avail of the extended 240-day
period, he must first perform some significant act to justify an extension (e.g., that the illness still requires medical
attendance beyond the initial 120 days but not to exceed 240 days); otherwise, the seafarer's disability shall be
conclusively presumed to be permanent and total.

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Accordingly, the following guidelines shall be observed when a seafarer claims permanent and total disability benefits:
1. The company-designated physician must issue a final medical assessment on the seafarer's disability grading
within a period of 120 days from the time the seafarer reported to him;
2. If the company-designated physician fails to give his assessment within the period of 120 days, without any
justifiable reason, then the seafarer's disability becomes permanent and total;
3. If the company-designated physician fails to give his assessment within the period of 120 days with a
sufficient justification (e.g., seafarer required further medical treatment or seafarer was uncooperative), then
the period of diagnosis and treatment shall be extended to 240 days. The employer has the burden to prove
that the company-designated physician has sufficient justification to extend the period; and
4. If the company-designated physician still fails to give his assessment within the extended period of 240 days,
then the seafarer's disability becomes permanent and total, regardless of any justification. [Talaroc v. Arpaphil
Shipping Corporation, G.R. No. 223731(2017)]

Q18: When is retirement due?

A18: Article 287 provides for two types of retirement:
1. Optional retirement - which may be availed of by an employee reaching the age of 60 years;

2. Compulsory retirement - which may be availed of by an employee upon reaching the age of 65 years. In
both instances, the law imposes requirement establishment.

In both instances, the law imposes a minimum service of five years with the establishment.

Q19: Are employees who are engaged on a task or contract basis or paid on purely commission
automatically exempted from the grant of service incentive leave?
A19: No. It is true that Section 1(D), Rule V provides that “field personnel and other employees whose performance
is unsupervised by the employer including those who are engaged on a task or contract basis, purely commission
basis…” are exempt from SIL. However, it bears emphasis that the SIL Law only excludes field personnel.

In Serrano v. Santos Transit, the Court held that the phrase "other employees whose performance is unsupervised
by the employer" must not be understood as a separate classification of employees to which service incentive leave
shall not be granted. Rather, it serves as an amplification of the interpretation of the definition of field personnel
under the Labor Code as those "whose actual hours of work in the field cannot be determined with reasonable
certainty."

The same is true with respect to the phrase "those who are engaged on task or contract basis, purely commission
basis." Said phrase should be related with "field personnel," applying the rule on ejusdem generis that general and
unlimited terms are restrained and limited by the particular terms that they follow. Hence, employees engaged on
task or contract basis or paid on purely commission basis are not automatically exempted from the grant of service
incentive leave, unless, they fall under the classification of field personnel.

Q20: What are the leave benefits solely available to women?

A20: Maternity Leave is a benefit which may be availed of by a woman-employee, married or unmarried, to undergo
and recuperate from childbirth or miscarriage during which she is allowed to retain her rights and benefits flowing
from such employment and is granted a maternity leave benefit in the form of daily cash allowance during the period
that she was not able to work due to such childbirth or miscarriage.

To avail of maternity leave, the woman-employee must comply with the following requirements:
1. She must be an SSS member;
2. She has paid at least 3 monthly contributions within the 12 month period preceding the semester of her
childbirth or miscarriage;
3. She has given the required notification of her pregnancy through her employer if employed; or submitted
the maternity notification directly to the SSS if separated from employment, a voluntary or self-employed
member
Note that maternity leave is only available for the first four deliveries or miscarriages. [Sec. 14-A, R.A. No. 8282]

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Gynecological Leave is a leave entitlement of two (2) months with full pay from her employer based on her gross
monthly compensation following surgery caused by gynecological disorders, provided that she has rendered
continuous aggregate employment service of at least six (6) months for the last 12 months. [RA 9710]

Any female employee, regardless of age and civil status, shall be entitled to a special leave benefit, provided she has
complied with the following conditions:
1. She has rendered at least 6 months continuous aggregate employment service for the last 12 months prior
to surgery; 

2. She has filed an application for special leave; and

3. She has undergone surgery due to gynecological disorders as certified by a competent physician. 
[Sec. 2,
D.O. No. 112] 


Victim’s Leave – victims of any of the acts covered by VAWC shall be entitled to take a paid leave of absence up to
ten (10) days in addition to other paid leaves under the Labor Code and Civil Service Rules and Regulations,
extendible when the necessity arises as specified in the protection order [Sec. 43, RA 9262]

In order to be entitled to the leave benefit, the only requirement is for the victim-employee to present to her employer
a certification from the barangay chairman, barangay councilor or prosecutor or the Clerk of Court, as the case may
be, that an action relative to the matter is pending [Sec. 42, Rule VI, IRR].

Q21: What are the types of illegal recruitment under the Labor Code and R.A. N0. 8042 (Migrant Worker’s
Act)
A21:
1. Simple Illegal Recruitment
a. Illegal recruitment for Local Workers
i. First type: Licensee/holder of authority [Art. 34, LC] 

ii. Second type: Non-licensee/non-holder of authority [Art. 38, LC] 

b. Illegal recruitment for Migrant Workers 

i. First type: Non-licensee/non-holder of authority [Sec. 6, R.A. No. 8042]
ii. Second type: Licensee/non-licensee or holder of authority/non-holder of authority [Sec.
6, R.A. No. 8042]
2. Illegal Recruitment Constituting Economic Sabotage
a. Syndicated [Art. 38 for local; Sec. 6, R.A. No. 
8042 for migrant] 

b. Large Scale [Art. 38 for local; Sec. 6, R.A. 
No. 8042 for migrant] 


Q22: Where to appeal the decisions of Regional Directors, Labor Arbiters and Voluntary Arbitrators?
A22:
Appeal to the NLRC
1. All cases decided by the Labor Arbiters including contempt cases
2. Cases decided by the DOLE Regional Directors or his duly authorized Hearing Officers (under Article 129)
involving recovery of wages, simple money claims and other benefits not exceeding P5,000 and not
accompanied by claim for reinstatement.

Appeal to the CA (Rule 43)

Since the office of a Voluntary Arbitrator or a panel of Voluntary Arbitrators is considered a quasi-judicial agency,
this court concluded that a decision or award rendered by a Voluntary Arbitrator is appealable before the Court of
Appeals. The rule, therefore, is that a Voluntary Arbitrator’s award or decision shall be appealed before the Court of
Appeals within 10 days from receipt of the award or decision.

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Q23: Lady G, who wanted to become a nun, sought admission in the RVM Congregation, volunteering to
assist as librarian and continued working as such even after she decided she didn’t want to become a nun.
The RVM sisters received various complaints from students and teachers about Lady G’s difficult and
callous personality allegedly causing the chief librarian to resign. When she was informed of the negative
reports about her, Lady G reacted violently saying “Bahala kayo diyan mga pota!” and angrily offered to
resign. Thereafter, she stormed out of the office in discourteous disregard of authority. The RVM sisters
sent at least three persons to convince Lady G to settle the conflict amicably. Lady G, however, remained
adamant in her refusal to submit to authority. Later, the RVM sisters decided to dismiss Lady G from
employment. Lady G thereafter filed a case for illegal dismissal. The RVM sisters argue that Lady G’s
dismissal on the ground of her quarrelsome, bossy, unreasonable and very difficult to deal with character
is warranted. Decide.
A23: No, Lady G was rightfully dismissed. An evaluative review of this case supports a finding of a just cause for
termination. The reason for which Lady G’s services were terminated, namely, her unreasonable behavior and
unpleasant deportment in dealing with the people she closely works with in the course of her employment and her
"quarrelsome, bossy, unreasonable and very difficult to deal with" character, is analogous to the other "just causes"
enumerated under the Labor Code. Further, the complaints about her objectionable behavior were confirmed by her
reproachable actuations during her meeting with the the RVM sisters when Lady G, upon being advised of the need
to improve her working relations with others, obstreperously reacted and unceremoniously walked out on her
superior, and arrogantly refused to subsequently clear up matters or to apologize therefor. To make matters worse,
she ignored the persons sent by petitioners on separate occasions to intervene in an effort to bring the matter to a
peaceful resolution. The conduct she exhibited on that occasion smacks of sheer disrespect and defiance of authority
and assumes the proportion of serious misconduct or insubordination, any of which constitutes just cause for
dismissal from employment. [See Cathedral School v. NLRC, G.R. No. 101438(1992)].

Q24: What is the totality of infractions rule?

A24: The totality of infractions or the number of violations committed during the period of employment shall be
considered in determining the penalty to be imposed upon an erring employee. Fitness for continued employment
cannot be compartmentalized into tight little cubicles of aspects of character, conduct and ability separate and
independent of each other. While it may be true that petitioner was penalized for his previous infractions, this does
not and should not mean that his employment record would be wiped clean of his infractions. After all, the record
of an employee is a relevant consideration in determining the penalty that should be meted out since an employee's
past misconduct and present behavior must be taken together in determining the proper imposable penalty. [Merin
v. NLRC, G.R. No. 171790 (2008)]

Q25: What is the twin-notice requirement in dismissal cases?

A25: The employer has the burden of proving that a dismissed worker has been served two notices:
1. First written notice: served on the employee 
specifying the ground or grounds for termination, and giving
said employee reasonable opportunity within which to explain his side. 

2. Second written notice: served upon the employee, indicating that upon due consideration of all the
circumstances, grounds have been established to justify his termination. 


The first notice shall contain the following:

1. Contain the specific causes or grounds for termination against them, and 

2. Contain a directive that the employees are given the opportunity to submit their written explanation within
a “reasonable period” or every kind of assistance that management must accord to the employees to enable
them to prepare adequately for their defense. This should be construed as a period of at least five (5)
calendar days from receipt of the notice 

3. Contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the
employees. A general description of the charge will not suffice. [Unilever v. Rivera, G.R. No. 201701 (2013)]


4. Specifically mention which company rules, if any, are violated and/or which among the grounds under Art.
288 is being charged against the employees. [United Tourist Promotions v. Kemplin, G.R. No. 205453 (2014)]



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The second notice shall contain the following:

1. Indicate all circumstances involving the charge against the employees considered; and 

2. Indicate grounds established to justify the severance of their employment [United Tourist Promotions v. Kemplin,
G.R. No. 205453 (2014)] 


Q26: Who are exempt from the twin-notice requirement?

A26: A different procedure is applied when terminating a probationary employee; the usual two-notice rule does not
govern. Section 2, Rule I, Book VI of the Implementing Rules of the Labor Code states that "if the termination is
brought about by the… failure of an employee to meet the standards of the employer in case of probationary
employment, it shall be sufficient that a written notice is served the employee, within a reasonable time from the
effective date of termination."

The employer, however, must still observe due process of law in the form of:
1. informing the employee of the reasonable standards expected of him/her during his/her probationary
period at the time of his engagement; and
2. serving the employee with a written notice within a reasonable time from the effective date of termination.

By the very nature of a probationary employment, the employee needs to know from the very start that he/she will
be under close observation and his performance of his/her assigned duties and functions would be under continuous
scrutiny by his/her superiors. It is in apprising him/her of the standards against which his/her performance shall be
continuously assessed where due process lies. [Philippine Daily Inquirer v. Magtibay, Jr., G.R. No. 164532 (2007)]

Q27: When is there legitimate job contracting or subcontracting?

A27: Contracting or subcontracting refers to an arrangement whereby a principal agrees to farm out to a contractor
the performance or completion of a specific job or work within a definite or predetermined period, regardless of
whether such job or work is to be performed or completed within or outside the premises of the principal. [Sec. 3(c),
D.O. No. 174-17]

Contracting or subcontracting shall only be allowed if all the following circumstances occur:
1. The contractor or subcontractor is engaged in a 
distinct and independent business and under-takes to
perform the job or work on its own responsibility, according to its own manner and method; 

2. The contractor or subcontractor has substantial capital to carry out the job farmed out by the principal on
his account, manner and method, investment in the form of tools, equipment, machinery and supervision;


3. In performing the work farmed out, the con- tractor or subcontractor is free from the control and/or
direction of the principal in all matters connected with the performance of the work except as to the result
thereto; and 

4. The Service Agreement ensures compliance with all the rights and benefits for all the employees of the
contractor or subcontractor un-der the labor laws. [Sec. 8, D.O. No. 174-17] 


Q28: When is there labor-only contracting?

A28: Labor-only contracting shall refer to an arrangement where:
1. The contractor does not have substantial capital or investments in the form of tools, equipment,
machineries, work premises, among others, and the employees recruited and placed are performing activities
which are usually necessary or desirable to the operation of the company, or directly related to the main
business of the principal within a definite or predetermined period, regardless of whether such job, work or
service is to be performed or completed within or outside the premises of the principal; or
2. The contractor does not exercise the right to control over the performance of the work of the employee.

Labor-only contracting is not really contracting because it is just an arrangement to recruit people to be employed,
supervised, and paid by another. In such cases, the contractor shall be merely an agent of the principal who is
considered the direct employer of the workers; the employees supplied by said contractor to the principal employer
become regular employees of the latter. Having gained regular status, the employees are entitled to security of tenure

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and can only be dismissed for just or authorized causes and after they had been afforded due process. [Norkis Trading
v. Buenavista, G.R. No. 182018 (2012)]

Q29: What happens when the Contractor fails to pay wages?

A29: In the event of any violation of any provision of the Labor Code, including the failure to pay wages, there exists
a solidary liability on the part of the principal and the contractor for purposes of enforcing the provisions of the
Labor Code and other social legislations, to the extent of the work performed under the employment contract. [Sec.
9, D.O. No. 174-17]

Q30: Mikay was employed to serve as Manager of Corporation ABC, an American company which is not
registered with the Securities and Exchange Commission, but whose function then was to provide sales
and marketing support for Corporation XYZ, another American company which is registered with the SEC.
Since Corporation ABC was unregistered but doing business in the country, Mikay was included in the list
of employees and payroll of Corporation XYZ. Thereafter, Corporation 123 was established in the country,
acquired Corporation XYZ, and continued the latter’s business here. During his employment, Mikay was
supervised by Corporation 456, another foreign corporation which was then based in Singapore. Mikay was
promoted as Regional Manager of Corporation ABC. A month after his promotion, Mikay was informed of
a supposed company restructuring which rendered his position as Regional Manager of Corporation ABC
redundant. Mikay then filed a case for illegal dismissal against all three Corporations. Corporation 123
argues that Mikay should have only impleaded Corporation ABC, as it is with the latter that he entered into
an employment contract. Decide.
A30: We have this unique situation where Mikay was hired directly by Corporation ABC of America, but was being
paid his remuneration by a separate entity, Corporation 123 of the Philippines, and is supervised and controlled
Corporation 456 – in furtherance of Corporation ABC’s objective of doing business here unfettered by government
regulation.

To determine the existence of an employer-employee relationship, four elements generally need to be considered,
namely: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and
(4) the power to control the employee's conduct. These elements or indicators comprise the so-called 'four-fold' test
of employment relationship.

In the present case, it would seem that all of the corporations are, for practical purposes, Mikay's employers. He was
selected and engaged by Company ABC. His salaries and benefits were paid by Company 123. And he is under the
supervision and control of Company 456. But of course, there is no such thing in legitimate employment
arrangements.

It is conceded that Company ABC is Mikay's direct employer. However, this should not prevent Mikay from
recovering from all the corporations. For all purposes beneficial to Mikay, all the corporations should be considered
as his employers since they all benefited from his industry and used him in their elaborate scheme and to further
their aim. And from a labor standpoint, they are all guilty of violating the Labor Code as a result of their concerted
acts of fraud and misrepresentation upon the respondent, using him and placing him in a precarious position without
risk to themselves, and thus deliberately disregarding their fundamental obligation to afford protection to labor and
insure the safety of their employees. [APCC v. Lim, G.R. No. 214219 (2018)]

Q31: Toni was employed by Kelly Philippines as a Metrics Solutions Analyst. He was promoted several
times over the years. Nine years later, Toni applied and got accepted for a Financial Manager position at
Kelly U.S.A. Toni then asked the process he needed to go through regarding the benefits and clearances
in Kelly Philippines. He also clarified whether he will receive retirement benefits considering he will be in
service for 10 years with Kelly should he accept the offer of Kelly U.S.A. Kelly Philippines replied that he
will not be eligible to receive the retirement benefit not having reached 10 years of service by the time he
moves to U.S.A. Toni accepted the offer and permanently transferred to Kelly U.S.A. Seven months later,
Toni resigned. He then filed a complaint for non-payment of retirement benefits against Kelly Philippines
with the NLRC. Toni argues that his employment in Kelly U.S.A. was an extension of his employment
with Kelly Philippines i.e., that he merely entered into a secondment contract with Kelly U.S.A. Decide.

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A31: The continuity, existence or termination of an employer-employee relationship in a typical secondment contract
is measured by the following yardsticks:
1. the selection and engagement of the employee;
2. the payment of wages;
3. the power of dismissal; and
4. the employer’s power to control the employee’s conduct

As applied, all of the above benchmarks ceased upon Toni’s assumption of duties with Kelly U.S.A. Kelly U.S.A.
became the new employer. It provided Toni his compensation. Toni then became subject to American labor laws,
and necessarily, the rights appurtenant thereto, including the right of Kelly U.S.A. to fire him on available grounds.
Lastly, Kelly U.S.A. had control and supervision over him as its new Finance Manager. Evidently, Kelly Philippines
no longer had any control over him.

It is well-settled that no permanent transfer can take place unless the officer or employee is first removed from the
position held, and then appointed to another position. Undoubtedly, Toni’s decision to move to Kelly U.S.A.
required the abandonment of his permanent position with Kelly Philippines in order for him to assume a position
in an entirely different company. Clearly, the "transfer" was more than just an assignment. It constituted a severance
of Toni’s relationship with Kelly Philippines, for the assumption of a position with a different employer, rank,
compensation and benefits. [Intel v. NLRC, G.R. No. 200575 (2014)]

Q32: Shay entered into a company contest and won for her performance as top salesperson of the year
which entitled her to additional compensation. Her company, however failed to compensate her for the
award. Shay then filed a complaint for money claims before the NLRC. Does NLRC have jurisdiction?
A32: Yes, NLRC has jurisdiction because the money claims arose from an employer-employee relationship [Art. 224,
LC]. Shay would not have qualified for the award, much less won the prize, if she was not an employee of the
company at the time of the holding of the contest.

Q33: What is the rule on CBA creditability vs. Wage Orders?

A33: In determining an employee’s regular wage, the pertinent stipulations in the CBA are controlling, provided the
result is not less than the statutory requirement [Philippine National Bank v. PEMA, G.R. No. L-30279 (1982)]

Q34: When do voluntary arbitrators have jurisdiction over labor cases?

A34: Voluntary arbitrators have original and exclusive jurisdiction to hear and decide all unresolved grievances arising
from the interpretation or implementation of the Collective Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel policies. [Art. 274, LC]

Voluntary arbitrators may also have jurisdiction over labor disputes including ULPs and bargaining deadlocks when
the party so agrees by stipulation. [Art. 275, LC]

The jurisdiction of voluntary arbitrators under Art. 262 [now Art. 275] must be voluntarily conferred upon by both
labor and management. The labor disputes referred to in the same Article 262 can include all those disputes
mentioned in Article 217 [now Art. 224] over which the Labor Arbiter has original and exclusive jurisdiction. [UST
Faculty Union v. UST, G.R. No. 180892 (2009)]

Q35: What is a strike?

A35: A strike is a temporary stoppage of work by the concerted action of employees as a result of an industrial or
labor dispute. [Art. 219(o), Labor Code]: The term “strike” shall comprise not only concerted work stoppages, but
also slowdowns, mass leaves, sit-downs, attempts to damage, destroy or sabotage plant equipment and facilities, and
similar activities. [Samahang Manggagawa v. Sulpicio Lines, G.R. No. 140992 (2004)]

Q36: When can a strike/lockout be declared?

A36: A strike or lockout may be declared in cases of:
1. Bargaining deadlocks
2. Unfair Labor Practice [Art. 278, LC]

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No lawful strike can be declared on the following grounds:

1. When the ground is an inter-union or intra-union dispute
2. Non-compliance with the procedural requirements
3. After assumption or certification by the SOLE [Art. 278(g)]
4. “No Strike, No Lockout” Clause (for Economic Strike or Lockout only)
5. Wage Distortion

Q37: What is a lockout?

A37: A lockout is a temporary refusal of an employer to furnish work as a result of an industrial or labor dispute.
[Art. 219(p), Labor Code]

When no lawful lockout can be declared

1. Inter- and Intra-Union Disputes
2. During Assumption of jurisdiction by the President or SOLE or after certification or submission of the
dispute to compulsory or voluntary arbitration
3. Violation of Injunction order
4. Without first having bargained collectively in good faith (e.g. Blue Sky or Surface Bargaining)
5. Non-compliance w/ Procedural Requirements
6. Violation of No strike/lockout provisions in the CBA

Q38: What are the procedural requirements for a valid strike/lockout?

A38:
1. Effort to Bargain - No labor organization shall declare a strike without first having bargained collectively
in good faith.
2. Filing and Service of Notice of Strike with the NCMB
3. Cooling- Off Period: Notice must be filed observing the following cooling-off periods:
4. Bargaining Deadlock – At least 30 days from the intended date of strike
5. ULP – At least 15 days from intended date of strike

Exception from Cooling Off Period, concurrence of:

1. Dismissal from employment of union officers duly elected in accordance with the union CBL which may
constitute union busting (ULP), where the existence of the union is threatened
2. 24 Hour Notice of Strike Vote - In every case, the union or the employer shall furnish the regional branch
of the Board the notice of meetings referred to in the preceding paragraph at least twenty-four (24) hours
before such meetings (§10, Rule XXII, Book V)
3. Strike Vote - Requisites for a Valid Stike Vote:
4. approval by a majority of the total union membership in the bargaining unit concerned
5. approval is obtained by secret ballot in a meeting/referendum called for the purpose
6. Strike Result - In every case, the union or the employer shall furnish the Department (NCMB) the results
of the voting at least 7 days before the intended strike or lockout, subject to the cooling-off period herein
provided. (278(f))
7. 7-Day Strike Ban — The 7-day Strike ban will be counted after the Cooling-Off Period (e.g. 37 days for a
Bargaining Deadlock or 22 days for Unfair Labor Practices) [National Federation of Sugar Workers v. Ovejera].
Should the dispute remain unsettled after the lapse of the requisite number of days from the filing of the
notice of strike or lockout and of the results of the election, the labor union may strike and the NCMB shall
continue mediating and conciliating

Q39: When is there unfair labor practice?

A39:
ULP Committed By Employer – IRCDET VPV
1. Interfere with, restrain, or coerce in the exercise of their right to self-organization
2. Require non-membership or withdrawal (Yellow dog contract)
3. Contracting out of services or functions (Note that contracting out may be a valid management
prerogative, thus intent must be clear to be anti-union, i.e. if it will interfere with right to self-organization)
4. Initiate, dominate, or assist union formation, i.e. forming a Company union

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5. Discrimination to encourage or discourage unionism (Note however that a union security clause and
agency fees are valid)
6. Retaliation for testimony by the Employee against the employer
a. Even if the testimony has nothing to do with right to self-organization or if the testimony is for
provisions under the Labor Code
7. Violate duty to bargain
8. Pay fees for settlement
9. Violate CBA (now qualified because only gross and economic violations are considered to be ULP) [Art.
259, LC]

ULP Committed By Employees - RCBFAV

1. To restrain or coerce employees in the exercise of their right to self-organization. However, a labor
organization shall have the right to prescribe its own rules with respect to the acquisition or retention of
membership;
2. Cause or attempt to cause employer to discriminate
3. Violate or refuse to bargain collectively
4. Featherbedding (i.e. illegal exaction)
5. Ask or accept fees for settlement
6. Violate duty to bargain [Art. 260, LC]

Q40: When is there refusal to bargain?

A40: Where the employer did not even bother to submit an answer to the bargaining proposals of the union, there
is a clear evasion of the duty to bargain collectively. Failing to comply with the mandatory obligation to submit a
reply to the union’s proposals, the employer violated its duty to bargain collectively, making it liable for unfair labor
practice. [General Milling Corporation v. CA, G.R. No. 146728 (2004)]

Q41: Differentiate the two types of union security clauses i.e., closed-shop v. union shop
A41:
Closed-Shop Union Shop

The employer undertakes not to employ any
individual who is not a member of the union and
said individual, once employed, for the duration of the
agreement, must remain a member in good standing
as a condition for continued employment.
Any person can be employed by the employer but once
employed, such employee must, within a specific
period, become a member of the union and remain as
such in good standing for continued employment for
the duration of the CBA.

Q42: Who are exempted from union security clauses?

A42: The general rule is settled: all employees in the bargaining unit covered by the union security clause are subject
to its terms.

Exceptions:
1. Employees who are already members of another union at the time of the signing of the collective bargaining
agreement may not be compelled by any union security clause to join any union. [Art. 254 (e)] 

2. Employees already in service at the time the closed shop union security clause took effect.

A closed shop provision in a CBA is not to be given a retroactive effect as to preclude its being applied to
employees already in service. [Guijarno v. CIR, G.R. No. L-28791-93 (1973)] 


3. Any employee who at the time the union security clause took effect is a bona fide member of religious
organization which prohibits its members from joining labor unions on religious grounds [Reyes v. Trajano,
209 SCRA 484 (1992)] 

4. Confidential employees who are excluded from the rank-and-file bargaining unit 


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Q43: When is the freedom period for purposes of certification election?

A43: No petition questioning the majority status of the incumbent bargaining agent shall be entertained and no
certification election shall be conducted by the DOLE outside of the sixty-day period immediately before the
date of the expiry of such five year term of the Collective Bargaining Agreement. [Art. 265]

Q44: What are the requisites and exceptions to the Contract Bar Rule?
A44: The Rule: BLR shall not entertain any petition for certification election or any other action which may disturb
the administration of DULY REGISTERED existing collective bargaining agreements affecting the parties. except
under Arts. 264, 265, and 268 [(60-day freedom period)]. [Art. 238]

Requisites for Contract-Bar Rule

1. The CBA is existing (i.e., the parties have duly executed it in conformity with the necessary formalities);
2. It encompasses the employees in the appropriate bargaining unit;
3. It was ratified by the union membership;
4. It is adequate for it contains substantial terms and conditions of employment;
5. It was not prematurely extended, the CBA was not hastily entered into (Doctrine of Premature Extension
does not bar a certification election);
6. It is for a definite period;
7. No schism or mass disaffiliation affects the contracting union during the lifetime of the agreement;
8. The contracting union is not defunct; and
9. The contracting union is not company-dominated
10. CBA must be registered; an unregistered CBA does not bar certification election. [Battad Lecture]

Deviation from the contract-bar rule is justified only where the need for industrial stability is clearly shown to be
imperative. Subject to this singular exception, contracts where the identity of the authorized representative of the
workers is in doubt must be rejected in favor of a more certain indication of the will of the workers. Any stability
that does not establish the type of industrial peace contemplated by the law must be subordinated to the employees'
freedom to choose their real representative. [PWUP v. Honorable Bactin, G.R. No. 94929-30 (1992)]

Q45: What are the cardinal labor rights in the 1987 Constitution?
A45:
1. Right to self-organization 

2. Right to collective bargaining and negotiation 

3. Right to peaceful concerted activities, including the right to strike 

4. Right to security of tenure 

5. Right to humane conditions of work 

6. Right to a living wage 

7. Right to participate in policy and decision making [Sec. 3, Art. 13 1987 CONST]

Q46: Who are night workers?

A46: A night worker is any employed person whose work covers the period from 10 o’clock in the evening to 6
o’clock the following morning, provided that the worker performs no less than 7 consecutive hours of work. [Sec.
2, Rule XV , Book III, Rule XV , Sec. 2, IRR, through D.O. No. 119-12] Every employee shall be paid a night shift
differential of not less than 10% of his regular wage for each hour of work performed between 10:00 pm and 6:00
am. [Art. 86, LC]

Exceptions
1. Those of the government and any of its political subdivisions, including government-owned and/or controlled
corporations;
2. Those of retail and service establishments regularly employing not more than five (5) workers;
3. Domestic helpers and persons in the personal service of another;
4. Managerial employees as defined in Book Three of this Code;
5. Field personnel and other employees whose time and performance is unsupervised by the employer including those who are
engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing
work irrespective of the time consumed in the performance thereof. [Sec. 1, Rule II]

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Q47: When is there resignation?

A47: To constitute a resignation, it must be unconditional and with the intent to operate as such. There must be an
intention to relinquish a portion of the term of office accompanied by an act of relinquishment. The fact that the
employee signified his desire to resume his work when he went back to AZCOR after recuperating from his illness,
and actively pursued his case for illegal dismissal before the labor courts when he was refused admission by his
employer, negated any intention on his part to relinquish his job at AZCOR. [Azcor Manufacturing Inc. v. NLRC, G.R.
No. 117963 (1999)]

“Well-entrenched is the rule that resignation is inconsistent with the filing of a complaint for illegal dismissal.” [Blue
Angel Manpower and Security Services Inc. v Court of Appeals, G.R. No. 161196 (2008)]

Q48: When is reinstatement proper and improper?

A48: Reinstatement means restoration to a state or condition from which one had been removed or separated. The
person reinstated assumes the position he had occupied prior to his dismissal. [Asian Terminals, Inc. v. Villanueva, G.R.
No. 143219 (2006)]

General Rule: Reinstatement with full backwages

Exceptions:
1. Separation pay in lieu of reinstatement
2. Closure of business [Retuya v. Hon. Dumarpa, G.R. 
No. 148848 (2003)] 

3. Economic business conditions [Union of Supervisors 
v. Secretary of Labor, G.R. No. L-39889 (1981)] 

4. Employee’s unsuitability [Divine Word High School v. 
NLRC, G.R. No. 72207 (1986)] 

5. Employee’s retirement/overage [New Philippine 
Skylanders, Inc. v. Dakila, G.R. No. 199547 (2012)] 

6. Antipathy and antagonism [Wensha Spa Center v. 
Yung, G.R. No. 185122 (2010)]
7. Job with a totally different nature [DUP Sound Phils. v. CA, G.R. No. 168317 (2011)] 

8. Long passage of time 

9. Inimical to the employer's interest 

10. When supervening facts have transpired which 
make execution on that score unjust or inequitable or, to
an increasing extent [Emeritus Security & Maintenance Systems, Inc. v. Dailig, G.R. No. 204761 (2014)] 



Q49: What is the extent of backwages in illegal dismissal cases?
A49: An illegally dismissed employee is entitled to full backwages.

Exceptions
1. The Court awarded limited backwages where the employee was illegally dismissed but the employer was
found to be in good faith. [San Miguel Corporation v. Javate, Jr., G.R. No. L-54244 (1992)]
2. Delay of the EE in filing the case for illegal dismissal [Mercury Drug Co., Inc. v. CIR] 


Q50: When is an illegally dismissed employee entitled to moral and exemplary damages?
A50: The employee is entitled to moral damages when the employer acted in bad faith or fraud; in a manner
oppressive to labor; or in a manner 
contrary to morals, good customs, or public policy [Montinola v. PAL, G.R.
No. 198656 (2014).]

In labor cases, the court may award exemplary damages "if the dismissal was effected in a wanton, oppressive or
malevolent manner." [Garcia v. NLRC, GR. No. 110518 (1994)]

Q51: What are the elements of work-related sexual harassment?

A51:
1. The sexual favor is made as a condition
a. in the hiring or in the employment, re- employment or continued employment of said individual
or 


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b. in granting said individual favorable 
compensation, terms, conditions, promotions, or privileges,

or
c. in the refusal to grant the sexual favor results in limiting, segregating or classifying the EE which
in any way would discriminate, deprive or diminish employment opportunities or otherwise
adversely affect said employee;
2. The above acts would either:

a. impair the employee’s rights or privileges under existing labor laws; or
b. result in an intimidating, hostile, or offensive environment for the employee.

Q52: What is the interest rate for monetary awards?

A52: According to Nacar v. Gallery Frames, when the judgment of the court awarding a sum of money becomes final
and executory, the rate of legal interest .... shall be 6% per annum from such finality until its satisfaction, this interim
period being deemed to be by then an equivalent to a forbearance of credit. [Nacar v. Gallery Frames, G.R. No. 189871,
(2013)]

Q53: Distinguish Apprentice from Learners

A53:
Apprentice Learners
Highly technical industries Semi-skilled industrial occupations

Practical training supplemented by related theoretical Practical training whether or not such practical training is
instruction supplemented by theoretical instructions

Apprenticeable occupations approved by the SOLE Non-apprenticeable occupations

Written apprentice agreement ratified by the Learnership agreement

appropriate committees
More than 3 months, shall not exceed 6 months Shall not exceed 3 months

(1) The person is at least 15 years of age, provided (1) When no experienced workers are available;
those who are at least 15 years of age but less than 18
may be eligible for apprenticeship only in non- (2) The employment of 
learners is necessary to prevent
hazardous occupation; 
 curtailment of employment opportunities; and 

(2) The person is physically fit for the occupation in (3) The employment does not create unfair competition in
which he desires to be trained; 
 terms of labor costs or impair or lower working standards. 

(3) The person possesses 
vocational aptitude and
capacity for the 
 particular occupation as established
through appropriate tests; and

(4) The person is able to comprehend and follow oral

and written instructions.
Wage rate shall begin at not less than 75% of the Wage rate shall begin at not less than 75% of the minimum
minimum wage. No compensation if SOLE wage.
authorizes, as OJT is required by the school [Art. 72].

Q54: What is the difference between redundancy, retrenchment and closure of business?
A54:
Retrenchment Redundancy Closure
Reduction of personnel usually due The service of an employee is in The reversal of the fortune of the
to poor financial returns so as to excess of what is required by an employer whereby there is a
cut down on costs of operations in enterprise complete cessation of business
terms of salaries and wages operations and/or actual locking-
up of the doors of the
establishment, usually due to

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Resorted to primarily to avoid or
minimize business losses
Employee is entitled to separation
pay of 1 month pay or 1⁄2 month
pay per year of service, whichever
is higher
To save production costs
Employee is entitled to separation
pay of 1 month pay or 1⁄2 month
pay per year of service, whichever
is higher
financial losses
Aims to prevent further financial
drain upon the employer
In case of closure of business not
due to serious business losses, the
employer pays the employees
terminated separation pay of 1
month pay or 1/2 month pay per
year of service, whichever is higher.
In case closure of business is due
to serious business losses, no
separation pay is required. [Manila
Polo Club Employees' Union v. Manila
Polo Club, Inc., G.R. No. 172846
(2013)]

Q55: When is there separation in lieu of reinstatement?

A55: Instances when the award of separation pay, in lieu of reinstatement to an illegally dismissed employee, is
proper:
1. When reinstatement is no longer possible, in cases 
where the dismissed employee's position is no 
longer
available;
2. The continued relationship between the employer 
and the employee is no longer viable due to the 
strained
relations between them; and 

3. When the dismissed employee opted not to be 
reinstated, or the payment of separation benefits would be
for the best interest of the parties involved. [Sec. 4(b), Rule I, Book VI, IRR] 


Note: The payment of separation pay and reinstatement are exclusive remedies. The payment of separation pay
replaces the legal consequences of reinstatement to an employee who was illegally dismissed. [Bani Rural Bank, Inc.
v. De Guzman, G.R. No. 170904 (2013)]

Q56: What is the financial assistance rule?

A56: As a general rule, separation pay shall be allowed as a measure of social justice only in those instances where
the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral
character. Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving
moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be required to give
the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of
social justice.
In PLDT v. NLRC, the Court required that the grant of separation pay as financial assistance given in light of social
justice be allowed only when the dismissal: (a) was not for serious misconduct; and (b) does not reflect on the moral
character of the employee or would involve moral turpitude. [Security Bank Savings Corp. v. Singson, G.R. No. 214230
(2016)]

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