REVIEWER (LABOR LAW 1)

1. Aliens required to secure AEP

Who are the foreign nationals required to secure AEP?

Foreign nationals who intend to engage in gainful employment in the Philippines with an
employer – employee relationship; foreign professionals allowed by the Professional
Regulation Commission (PRC) to practice their profession in the Philippines; and holders
of Special Investors Resident Visa (SIRV), Special Retirees Resident Visa (SRRV),
Treaty Traders Visa (9d) or Special Non-Immigrant Visa 47(a)2 who occupy any
executive, advisory, supervisory, or technical position in any establishment are required
to secure AEP from DOLE.

2. Aliens exempted from AEP

Who are exempted from securing an AEP?

Exemption. The following categories of foreign nationals are exempt from securing an
employment permit:

2.1 All members of the diplomatic service and foreign government officials accredited by
and with reciprocity arrangement with the Philippine government;

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

2.3 Foreign nationals elected as members of the Governing Board who do not occupy any
other position, but have only voting rights in the corporation;

2.4 All foreign nationals granted exemption by law;

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

2.6 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 on a reciprocal basis; and

2.7 Resident foreign nationals.

3. SVEG definition; rationale; who may avail

SPECIAL VISA FOR EMPLOYMENT GENERATION (SVEG)

-is a special visa issued to a qualified non-immigrant foreigner who shall actually employ
at least 10 Filipinos in a lawful and sustainable enterprise, trade, or industry. Qualified
foreign nationals who are granted the SVEG shall be considered special non-immigrants
 with multiple entry privileges and conditional extended stay, without the need of prior
departure from the Philippines.

What is the rationale for the SVEG?

EXECUTIVE ORDER NO. 758 
It is founded on public interest, particularly on an aspect of employment generation for
Filipinos. According to the April 2008 survey of the National Statistics Office (NSO),
there are 2.9 million Filipinos who are currently unemployed. On the other hand, there
are foreigners who want to maintain a lawful presence in the Philippines by actually
directly or exclusively engaging in lawful, viable, and sustainable trade, business,
industry, or activity offering local employment.

Under E.O. no. 758 SECTION 2. 

Who may avail - Non-immigrant foreigners who wish to avail of the SVEG should
comply with the following conditions:
a. The foreigner shall actually, directly or exclusively engage in a viable and
sustainablecommercial investment/enterprise in the Philippines, exercises/performs
management acts or has the authority to hire, promote and dismiss employees;
b. He evinces a genuine intention to indefinitely remain in the Philippines;
c. He is not a risk to national security; and
d. The foreigner’s commercial investment/enterprise must provide actual employment to
at least ten (10) Filipinos in accordance with Philippine labor laws and other applicable
special laws.
The above mentioned requirements must be continually satisfied by the foreigner for
him/her to continue to be a holder of the SVEG.

4. Goals and objectives of RA 7796

The goals and objectives of this Act are:

 Promote and strengthen the quality of technical education and skills development
programs to attain international competitiveness;

 Focus technical education and skills development on meeting the changing

demands for quality middle-level manpower;

 Encourage critical and creative thinking by disseminating the scientific and

technical knowledge  base of middle-level manpower development programs;

 Recognize and encourage the complementary roles of public and private

institutions in technical education and skills development and training systems;
and

 Inculcate desirable values through the development of moral character with

emphasis on work ethic, self-discipline, self-reliance and nationalism. (Sec.3 of
RA 7796)

5. Explain the dual training system

 Dual Training System is the framework where a worker-trainee receive training both in
school through theoretical instructions and in the workshop or factory with actual practice
or application. This is to:

a. Promote maximum protection and welfare of the worker-trainee;

b. Improve the quality, relevance, and accountability of technical education and skill
development;

c. Accelerate the employment-generation efforts of the government; and

d. Expand the range of opportunities for upward social mobility of the school-going
population beyond traditional higher levels of formal education (Sec.21 RA 7796)

6. Distinguish between special workers and special group of employees

Special workers are those whose earning power is reduced such as Apprentices, Learners,
and Handicapped workers. Special group of employees are those who receive certain
benefits as regards to their compensation or to their working conditions, namely, Women,
Minors, Househelpers, and Homeworkers. (Art. 57 Labor Code)

7. Distinctions between apprenticeship and learnership

Chapter I, Title II Training and Employment of special Workers under the LC provides
that “apprenticeship” means any training on the job supplemented by related theoretical
instruction. And an apprentice is a worker who is covered by a written apprenticeship
agreement with an individual employer or any of the entities involving apprenticeable
occupations cognized under this Chapter. Apprenticeable occupation means any trade,
form of employment or occupation which requires more than three (3) months of
practical training on the job supplemented by related theoretical instruction, the employer
binds himself through the apprenticeship agreement to train the apprentice and the
apprentice in turn accepts the terms of training. These are the qualifications of an
apprentice:

a. be at least fifteen (15) years of age, provided those who are at least fifteen (15)
years of age but less than eighteen (18) may be eligible for apprenticeship only in
non-hazardous occupation;

b. be physically fit for the occupation in which he desires to be trained;

c. possesses vocational aptitude and capacity for the particular occupation as

established through appropriate tests; and

d. possesses the ability to comprehend and follow oral and written instructions.

The following are the important principles applicable to a worker who is covered by a
written apprenticeship agreement:

a. Wage rate of apprentices is 75% of the statutory minimum wage.

b. Apprentices become regular employees if program is not approved by DOLE.

 c. Ratio of theoretical instructions and on-the-job training is 100 hours of theoretical
instructions for every 2,000 hours of practical training on-the-job.

On the otherhand, Chapter II, Title II of Book II of the Labor Code covers Learnership. Aa
“learner” is a person hired as a trainee in industrial occupations which are non-apprenticeable
and which may be learned through practical training on the job for a period not exceeding three
(3) months, whether or not such practical training is supplemented by theoretical instructions.
Wage rate of learners is 75% of the statutory minimum wage. These are the pre-requisites before
learners may be hired or validly employed:

a. when no experienced workers are available;

b. the employment of learners is necessary to prevent curtailment of employment
opportunities; and
c. the employment does not create unfair competition in terms of labor costs or
impair or lower working standards.

8. Prohibition on discrimination (a-i)

“Article 79. When employable.  Handicapped workers may be employed when their

employment is necessary to prevent curtailment of employment opportunities and when it
does not create unfair competition in labor costs or impair or lower working standards.”

No entity, whether public or private, shall discriminate against a qualified person with
disability by reason of disability in regard to job application procedures, the hiring, promotion, or
discharge of employees, employee compensation, job training, and other terms, conditions and
privileges of employment. The following constitutes acts of discrimination:

a.) Limiting, segregating or classifying a job applicant with disability in such a manner
that adversely affect his work opportunities;

b.) Using qualification standards, employment tests or other selection criteria that screen
out or tend to screen out a person with disability unless such standards, tests or rather
selection criteria are shown to be job-related for the position in question and are consistent
with business necessity;

c.) Utilizing standards, criteria, or methods of administration that:

1.) have the effect of discrimination on the basis of disability; or
2.) perpetuate the discrimination of others who are subject to common
administrative control

d.) Providing less compensation, such as salary, wage or other forms of remuneration
and fringe benefits, to a qualified employee with disability, by reason of his disability, than
the amount to which a non-disabled person performing the same work is entitled;

e.) Favoring a non-disabled employee over a qualified employee with disability with
respect to promotion, training opportunities, study and scholarship grants, solely on account of
the latter’s disability;

f.) Re-assigning or transferring an employee with disability with respect to a job or

position he cannot perform by reason of his disability;

g.) Dismissing or terminating the service of an employee with disability by reason

of his disability unless the employer can prove that he impairs the satisfactory
performance of the work involved to the prejudice of the business entity; provided
 however, that the employer first sought to provide reasonable accommodation for
persons with disability;

h.) Failing to select or to administer in the most effective manner employment tests
which accurately reflects the skills, aptitude or other factor of the applicant or
employee with disability that such tests purports to measure, rather than the
impaired sensory, manual or speaking skills of such applicant or employee, if any;
and

i.) Excluding persons with disability from membership in labor unions or similar
organizations

9. Employees not covered under Art. 82 LC

Article 82 of the labor Code and Section 2, Rule I, Book III of the Rules to Implement the Labor
Code, expressly exclude the following persons or employees from the coverage of Title I, Book
III thereof, to wit:
a. Government employees- they are governed by the Civil Service Law, rules and;
b. Managerial employees;
c. Other officers or members of a managerial staff;
d. Domestic servants and persons in the personal service of another, such as house
helpers;
e. Workers paid by result;
f. Field personnel; and
g. Members of the family of the employer

10. Art. 82 vs. 217 (M) of LC

Article 82
-“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.
- Used only for purposes of Book III (working conditions and rest periods and benefits)
-Supervisors are members of the managerial staff

Article 212 (M)

-"Managerial employee"is one who is vested with the powers or prerogatives to lay down
and execute management policies and/or to hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees.
-Used only for purposes of Book V (forming, joining and assisting of unions, certification
election and collective bargaining)
-Supervisors are not manager employees under Book V

11. Rule on domestic helper assigned to the employer’s business establishment

 -A laundrywoman is staff houses of a company or within the premises of the business of
the employer, not actually serving the family of the employer, is a regular employee.
(Apex Mining Co., Inc v NLRC)

12. 2 categories of employees paid by result; distinguish

1. Those whose time and performance are supervised by the employer.

-there is an essential element of control and supervision over the manner as how to
work is to be performed
2. Those whose time and performance are unsupervised
-The employer's control is over the result of the work.

13. Sime Darby case; Manila Jockey Club Employee Union case

 Sime Darby Case: The right to fix the work schedules of the employees rests principally
on their employer. The reason for the adjustment is for the efficient conduct of its
business operations and its improved production. It rationalizes that while the old work
schedule included a 30-minute paid lunch break, the employees could be called upon to
do jobs during that period as they were “on call.” Even if denominated as lunch break,
this period could very well be considered as working time because the factory employees
were required to work if necessary and were paid accordingly for working. Since the
employees are no longer required to work during this one-hour lunch break, there is no
more need for them to be compensated for this period.
Further, management retains the prerogative, whenever exigencies of the service so
require, to change the working hours of its employees. So long as such prerogative is
exercised in good faith for the advancement of the employer’s interest and not for the
purpose of defeating or circumventing the rights of the employees under special laws or
under valid agreements, such exercise is allowed.

 Manila Jockey Club Employee Case:

Valid Exercise of management prerogative
When the races were moved to 2:00 p.m., there was no other choice for
management but to change the employees' work schedule as there was no work to be
done in the morning. Evidently, the adjustment in the work schedule of the employees is
justified.
While the CBA provided for a schedule, it also reserved expressly to management
the right to change existing methods or facilities to change the schedules of work. The
CBA also grants respondent the prerogative to relieve employees from duty because of
lack of work.
No diminution of benefits
The CBA does not guarantee overtime work for all the employees but merely
provides that "all work performed in excess of seven (7) hours work schedule and on
days not included within the work week shall be considered overtime and paid as such."
Respondent was not obliged to allow all its employees to render overtime work
everyday for the whole year, but only those employees whose services were needed after
their regular working hours and only upon the instructions of management. The overtime
pay was not given to each employee consistently, deliberately and unconditionally, but as
a compensation for additional services rendered. Thus, overtime pay does not fall within
 the definition of benefits under Article 100 of the Labor Code on prohibition against
elimination or diminution of benefits.

14. Work day; work week; reckoning point

Work day means 24 consecutive-hour period which commences from the time the
employee regularly starts to work. It does not necessarily mean that it based on the
ordinary calendar day from 12:00 midnight to 12:00 midnight unless the employee starts
to work at this unusual hour.

Work week is a week consisting of 168 consecutive hours or 7 consecutive 24 hour work
days beginning at the same hour and on the same calendar day each calendar week.

The reckoning point on how a work day or work week is from the time the employee
regularly starts to work on a work day or from the time and day the employee regularly
starts to work on a work week.

15. Explain CWW

A compressed work week is allowed provided that the employees voluntarily agree
thereto, that there is no diminution in pay, and it is only for a temporary duration.

16. Flexi work schedule under RA 8972; during economic difficulties and emergencies

Under RA 8972 Solo Parents' Welfare Act of 2000, flexible work schedule is defined
as the right granted to a solo parent employee to vary his/her arrival and departure time
without affecting the core work hours as defined by the employer.
Who is a Solo Parent?

Any individual who falls under any of the following categories:

(1) A woman who gives birth as a result of rape and other crimes against chastity even
without a final conviction of the offender: Provided, That the mother keeps and raises the
child;

(2) Parent left solo or alone with the responsibility of parenthood due to death of spouse;

(3) Parent left solo or alone with the responsibility of parenthood while the spouse is
detained or is serving sentence for a criminal conviction for at least one (1) year;

(4) Parent left solo or alone with the responsibility of parenthood due to physical and/or
mental incapacity of spouse as certified by a public medical practitioner;

(5) Parent left solo or alone with the responsibility of parenthood due to legal separation
or de facto separation from spouse for at least one (1) year, as long as he/she is entrusted
with the custody of the children;

(6) Parent left solo or alone with the responsibility of parenthood due to declaration of
nullity or annulment of marriage as decreed by a court or by a church as long as he/she is
entrusted with the custody of the children;
 (7) Parent left solo or alone with the responsibility of parenthood due to abandonment of
spouse for at least one (1) year;

(8) Unmarried mother/father who has preferred to keep and rear her/his child/children
instead of having others care for them or give them up to a welfare institution;

(9) Any other person who solely provides parental care and support to a child or children;

(10) Any family member who assumes the responsibility of head of family as a result of
the death, abandonment, disappearance or prolonged absence of the parents or solo
parent.

A change in the status or circumstance of the parent claiming benefits under this Act, such that
he/she is no longer left alone with the responsibility of parenthood, shall terminate his/her
eligibility for these benefits.

Flexible Work Schedule. - The employer shall provide for a flexible working schedule for solo
parents: Provided, That the same shall not affect individual and company productivity: Provided,
further, That any employer may request exemption from the above requirements from the DOLE
on certain meritorious grounds.

Parental Leave. - In addition to leave privileges under existing laws, parental leave of not more
than seven (7) working days every year shall be granted to any solo parent employee who has
rendered service of at least one (1) year.

A flexible work schedule of a solo parent employee may only be denied if:
1.    The core work-hours are affected.
2.    The employer is exempted on meritorious grounds. In such case, the employer files a request
for exemption with the Department of Labor and Employment.
3.    The employee is in government service in which case flexible work schedule is subject to
the discretion of the head of agency.

Flexible Work Schedule in times of Economic difficulty and emergencies, there are 6 flexible
work arrangements in instances mentioned above , as stated in DOLE Department Advisory
No.2, Series of 2009.

1. “Compressed work week.” This refers to one where the normal work week is reduced to less
than six days but the total number of work hours of 48 hours per week shall remain. The normal
work day is increased to more than eight hours but not to exceed 12 hours, without
corresponding overtime premium. The concept can be adjusted accordingly depending on the
normal work week of the company pursuant to the provisions of Department of Labor and
Employment Department Advisory 2, s. 2004 or the “Implementation of compressed work week
schemes.”

2. “Reduction of work days.” This arrangement refers to one where the normal work days per
week are reduced but should not last for more than six months.

3. “Rotation of workers.” This refers to one where the employees are rotated or alternatively
provided work within the work week.

4. “Forced leave,” where employees are required to go on leave for several days or weeks using
their leave credits if there are any.

5. “Broken time schedule,” refers to one where the work schedule is not continuous but the work
hours within the day or week remain.
6. “Flexi-holidays schedule” where the employees agree to avail the holidays at some other days
provided there is no diminution as a result of such arrangement.

Under these flexible work arrangements, the employers and the employees are encouraged to
explore alternative schemes under any agreement and company policy or practice in order to
cushion and mitigate the effect of the loss of income of the employees.

17. Policy instruction No. 54

Policy Instruction No. 54

To: All Concerned

Subject: Working Hours and Compensation of Hospital/Clinic Personnel

This issuance clarifies the enforcement policy of this Department on the working hours and
compensation of personnel employed by hospitals/clinics with a bed capacity of 100 or more and
those located in cities and municipalities with a population of one million or more.

Republic Act 5901 took effect on 21 June 1969 prescribes a 40-hour/5 day work week for
hospital/clinic personnel. At the same time, the Act prohibits the diminution of the compensation
of these workers who would suffer a reduction in their weekly wage by reason of the shortened
workweek prescribed by the Act. In effect, RA 5901 requires that the covered hospital workers
who used to work seven (7) days a week should be paid for such number of days for working
only 5 days or 40 hours a week.

The evident intention of RA 5901 is to reduce the number of hospital personnel, considering the
nature of their work, and at the same time guarantee the payment to them of a full weekly wage
for seven (7) days. This is quite clear in the Exemplary Note of RA 5901 which states:

As compared with the other employees and laborers, these hospital and health
clinic personnel are over-worked despite the fact that their duties are more
delicate in nature. If we offer them better working conditions, it is believed that
the "brain drain", that our country suffers nowadays as far as these personnel are
concerned will be considerably lessened. The fact that these hospitals and health
clinics personnel perform duties which are directly concerned with the health and
lives of our people does not mean that they should work for a longer period than
most employees and laborers. They are also entitled to as much rest as other
workers. Making them work longer than is necessary may endanger, rather than
protect the health of their patients. Besides, they are not receiving better pay than
the other workers. Therefore, it is just and fair that they may be made to enjoy the
privileges of equal working hours with other workers except those excepted by
law. (Sixth Congress of the Republic of the Philippines, Third Session, House of
Representatives, H. No. 16630)

The Labor Code in its Article 83 adopts and incorporates the basic provisions of RA 5901
and retains its spirit and intent which is to shorten the workweek of covered hospital personnel
and at the same time assure them of a full weekly wage.

Consistent with such spirit and intent, it is the position of the Department that personnel in
subject hospital and clinics are entitled to a full weekly wage for seven (7) days if they have
completed the 40-hour/5-day workweek in any given workweek.
All enforcement and adjudicatory agencies of this Department shall be guided by this issuance in
the disposition of cases involving the personnel of covered hospitals and clinics.

Done in the City of Manila, this 12th day of April, 1988.

(Sgd.) FRANKLIN
M. DRILON
Secretary

In SAN JUAN DE DIOS HOSPITAL EMPLOYEES ASSOCIATION-AFW/MA, et al. vs.

NLRC and SAN JUAN DE DIOS HOSPITAL. SC held that “ Policy Instructions No. 54 to
our mind unduly extended the statute. The Secretary of Labor moreover erred in invoking the
"spirit and intent" of Republic Act No. 5901 and Article 83 of the Labor Code for it is an
elementary rule of statutory construction that when the language of the law is clear and
unequivocal, the law must be taken to mean exactly what it says. No additions or revisions may
be permitted. Policy Instructions No. 54 being inconsistent with and repugnant to the provision
of Article 83 of the Labor Code, as well as to Republic Act No. 5901, should be, as it is hereby,
declared void”

If petitioners are entitled to two days off with pay, then there appears to be no sense at all why
Section 15 of the implementing rules grants additional compensation equivalent to the regular
rate plus at least twenty-five percent thereof for work performed on Sunday to health personnel,
or an "additional straight-time pay which must be equivalent at least to the regular rate" "[f]or
work performed in excess of forty hours a week.

A perusal of Republic Act No. 5901 reveals nothing therein that gives two days off with pay for
health personnel who complete a 40-hour work or 5-day workweek. In fact, the Explanatory
Note of House Bill No. 16630 (later passed into law as Republic Act No. 5901) explicitly states
that the bill's sole purpose is to shorten the working hours of health personnel and not to dole
out a two days off with pay.

18. Principles in determining hours worked (a-d)

Under Book Three of the Labor Code

SECTION 4. Principles in determining hours worked. — The following general principles shall
govern in determining whether the time spent by an employee is considered hours worked for
purposes of this Rule:
(a) All hours are hours worked which the employee is required to give his employer, regardless
of whether or not such hours are spent in productive labor or involve physical or mental exertion.
(b) An employee need not leave the premises of the work place in order that his rest period shall
not be counted, it being enough that he stops working, may rest completely and may leave his
work place, to go elsewhere, whether within or outside the premises of his work place.
(c) If the work performed was necessary, or it benefited the employer, or the employee could not
abandon his work at the end of his normal working hours because he had no replacement, all
time spent for such work shall be considered as hours worked, if the work was with the
knowledge of his employer or immediate supervisor.
(d) The time during which an employee is inactive by reason of interruptions in his work beyond
his control shall be considered working time either if the imminence of the resumption of work
requires the employee's presence at the place of work or if the interval is too brief to be utilized
effectively and gainfully in the employee's own interest.
 19. Effects of power interruptions

The following are effects of power interruptions or brown-outs:

1. Brown-outs of short duration but not exceeding twenty (20) minutes shall be treated
as worked or compensable hours whether used productively by the employees or not.
2. Brown-outs running for more than twenty (20) minutes may not be treated as hours
worked provided any of the following conditions are present:
a. The employees can leave their workplace or go elsewhere whether within or
without the work premises; or
b. The employees can use the time effectively for their own interest.
3. In each case, the employer may extend the working hours of his employees outside
regular schedules to compensate for the loss of productive man-hours without being
liable for overtime pay.
4. Industrial enterprises with one or two workshifts may adopt any of the workshifts
prescribed for enterprises with three (3) workshifts to prevent serious loss or damage
to materials, machineries or equipment that may result in case of power interruptions.
5. The days when work was not required and no work could be done because of
shutdown due to electrical power interruptions, lack of raw materials and repair of
machines, are not deemed hours worked.

20. Meal time not less than 20 mins. a) when compensable; b) when not compensable (a-
f)

1. Shortening of meal time to not less than 20 minutes, WHEN COMPENSABLE.

In the following cases, however, a meal period of not less than twenty minutes may be
given by the employer provided that such meal period is credited as compensable hours worked
of the employee:
a. Where the work is a non-manual work in nature or does not involve strenuous
physical exertion;
b. Where the establishment regularly operates for not less than sixteen hours a
day;
c. In cases of actual or impending emergencies, or when there is urgent work to
be performed on machineries, equipment or installations to avoid serious loss
which the employer would otherwise suffer; and
d. Where the work is necessary to prevent serious loss of perishable goods.

2. Shortening of meal time to not less than 20 minutes, WHEN NOT COMPENSABLE.
The law allows a situation where the employees themselves request for the shortening of
meal period to not less than 20 minutes for the purpose of allowing them to leave work earlier
than the lapse of the eight hours required by law. This shortened period, however, shall not be
considered compensable working time provided the following conditions are complied with:
a. The employees voluntarily agree in writing to a shortened meal period of
thirty (30) minutes and are willing to waive the overtime pay for such
shortened meal period.
b. There should be no diminution in the benefits of the employees which they
receive prior to the effectivity of the shortened meal period;
 c. The work of the employees does not involve strenuous physical exertion and
they are provided with adequate coffee breaks in the morning and afternoon.
d. The value of the benefits derived by the employees from the proposed work
arrangement is equal to or commensurate with the compensation due them for
the shortened meal as well as the overtime pay for 30 minutes as determined
by the employees concerned;
e. The overtime pay of the employees will become due and demandable if ever
they are permitted or made to work beyond 4:30 p.m.; and
f. The effectivity of the proposed working time arrangement shall be for a
temporary duration as determined by the Secretary of Labor and Employment.

21. Illustrations on pages 400-402 on NSD

a. For regular work in the night shift on an ordinary day, the night shift differential pay is plus 10%
of the basic hourly rate or a total of 110% of the basic hourly rate. Thus using as basis P382.00
which is the minimum daily wage rate of a private sector non-agricultural workers and employees
in the NCR, the night shift differential pay under this situation may be computed as follows:
Night shift differential pay for regular night shift work on an ordinary day
P382 + 10% of P382 = P382 + (0.10 x P382)
= 382 + P38.20
P420.20/day
Or

110% of P382 = 1.1 x P382

=P420.20/day

b. For regular work in the night shift on a rest day, the night shift differential pay is plus 10% of the
basic hourly rate on a rest day or a total of 110% of the regular hourly rate. Thus, using the same
P382.00 as basis, the night shift differential pay under this situation may be computed as follows:
Night shift differential pay for regular night shift work on a rest day:
(130% of P 382) + 10% of (130% of P382)
= (1.3 x P382) + 0.10 x (1.3 x P382)
= P496.60 + P49.66
= P546.26/day

Or

110% of (130% of P382)

=1.1 x (1.3 x P382)
=P546.26/day

c. For regular work in the night shift on a special holiday or regular holiday, it is important to note
that since special holidays and regular holidays are calendar days (i.e., 24-hour period from 12
midnight to 12 midnight of the following day), the night shift is either cut-off at 12 midnight or
starts only at 12 midnight. Hence, the night shift differential pay for such days may be determined
by the hour on the basis of the hourly rate not the daily rate.

Thus, using the same P382.00 or the equivalent hourly rate of P47.75 (P382/8 hours) as
basis, the night shift differential pay may be computed as follows:

c.1. On a special day:

Night shift differential pay for regular night shift work on a special holiday:

(130% of P47.75) + 10% of (130% of P47.75)

= (1.3 x P47.75) + 0.10 x (1.3 x P47.75)
=P62.08 + P6.21
 =P68.29/hour
Or

110% of (130%of 47.75)

=1.1 x (1.3 x P47.75)
=P68.29/hour

c. 2. On a regular holiday:
Night shift differential pay for regular night shift work on a regular holiday:

(200% of P47.75) + 10% of (200% of 47.75)

= (2.0 x P47.75) + 0.10 x (2.0 x P47.75)
=95.50 + P9.55
=P105.05/hour
Or
=110% of (200% of P47.75)
=1.1 x (2.0 x P47.75)
=105.05/hour

d. For overtime night shift work falling on an ordinary day, the overtime night shift differential pay
is plus 100% of 125% of basic hourly rate or a total of 110% of 125% of basic hourly rate. Thus,
using P382.00 or the hourly rate of P47.75 (P382/8 hours) as basis, the overtime night shift
differential pay under this situation may be computed as follows:

Overtime night shift differential pay for overtime night shift work on an ordinary day:
(125% of P47.75) + 10% of (125% of P47.75)
= (1.25 x P47.75) + 0.10 x (1.25 x P47.75)
=P59.69 + P5.97
= P65.66/hour

Or

=110% of (125% of P47.75)

= 1.1 x (1.25 x P47.75)
=P65.66/hour

e. For overtime night shift work falling on rest day, special holiday or regular holiday, the following
illustrations of computation may prove helpful (using the same basis as above, i.e., P382.00 or
P47.75 per hour):

e.1. On a special holiday or rest day:

Overtime night shift differential pay for overtime night shift work on a special holiday or
rest day:
130% x (130% of P47.75) + 10% of (130% of 130% of P47.75)
=1.3 x (1.3 x P47.75) + 0.10 x (1.3 x 1.3 x P47.75)
=P80.70 + P8.07
=P88.77/hour

Or

169% of P47.75 + 10% of (169% of P47.75)

=80.70 + P8.07
=P88.77/hour

e.2. On a regular holiday:

Overtime night shift differential pay for overtime night shift work on a regular holiday:
130% x (200% of P47.75) + 10% of (130% of 200% of P47.75)
 =1.3 x (2.0 x P47.75) + 0.10 x (1.3 x 2.0 x P47.75)
=P124.15 + P12.42
=P136.57/hour

Or

260% of P47.75 + 10% of (260% of P47.75)

=P124.15 + P12.42
=P136.57/hour

22. Illustrations on pages 407-408 on OT

GUIDE IN THE COMPUTATION OF NIGHT SHIFT DIFFERENTIAL PAY

Ordinary day 100& or 1

Sunday or rest day 130 % or 1.3
Special day 130% or 1.3
Special day falling on a rest day 150% or 1.5
Regular Holiday 200% or 2
Regular holiday falling on rest day 260% or 2.6
Ordinary day, night shift 1 x 1.1 = 1.1 or 110%
Rest day, night shift 1.3 x 1.1 =1.43 or 143%
Special day, night shift 1.3 x 1.1 = 1.43 or 143%
Special day, rest day, night shift 1.5 x 1.1 = 1.65 or 165%
Regular holiday, night shift 2 x1.1 = 2.2 or 220%
Regular holiday. Rest day, night shift 2.6 x 1.1 = 2.86 or 286%
Double holiday, night shift 3 x 1.1 = 3.3 or 330%
Double holiday, rest day, night shift 3.9 x 1.1 = 4.29 or 429
Ordinary day, overtime (OT) 1 x 1.25 = 1.25 or 125%
Rest day, overtime 1.3 x 1.3 = 1.69 or 169%
Special day, rest day, overtime 1.5 x 1.3 = 1.95 or 195%
Regular holiday, overtime 2 x 1.3 = 2.6 or 260%
Regular holiday, rest day. Overtime 2.6 x 1.3 = 3.38 or 338%
Double holiday, overtime 3 x 1.3 = 3.9 or 390%
Double holiday, rest day, overtime 3.9 x 1.3 = 5.07 or 507%
Ordinary day. Night shift, overtime 1 x 1.1 x 1.25 = 1.375 or 137.5%
Rest day, night shift, overtime 1.3 x 1.1 x 1.3 = 1.859 or 185.9%
Special day, night shift, overtime 1.3 x 1.1 x 1.3 = 1.859 or 185.9%
Special day, rest day, night shift, OT 1.5 x 1.1 x 1.3 = 2.145 or 214.5%
Regular holiday, night shift, OT 2 x 1.1 x 1.3 = 286 or 286%
Regular holiday, rest day, night shift, OT 2.6 x 1.1 x 1.3 = 3.718 or 317.8%
Double holiday, night shift, OT 3 x 1.1 x 1.3 = 4.29 or 429%
Double holiday, rest day, night shift, OT 3.9 x 1.1 x 1.3 = 5.577 or 557.7%

23. Validity of stipulated OT on CBA + Built in OT + Seafarer’s OT

Generally, the premium pay for work performed on rest days, special days, or regular
holidays is included as part of the regular rate of the employee in the computation of overtime
pay for the overtime work rendered on said days, especially if the employer pays only the
minimum rates prescribed by law. The employees and employer, however, may stipulate in their
collective agreement the payment for overtime work at rates higher than those provided by law.

Built-in Overtime Pay

 In case the employment contract stipulates that the compensation includes built-in
overtime pay and the same is duly approved by the Director of the Bureau of Local Employment,
the non-payment of any overtime pay for overtime work is justified and valid.
In PAL Employees Savings and Loan Association, Inc (PESALA) vs NLRC, where the
period of normal working hours per day was increased to twelve (12) hours, it was held that the
employer remains liable for whatever deficiency in the amount for overtime work in excess of
the first 8 hours, after recomputation shows such deficiency.

Entitlement of Seafarers to Overtime Pay

a) Actual overtime service necessary to justify claim for overtime pay
The correct criterion in determining whether or not seafarers are entitled to
overtime pay is not whether they were on board and a cannot leave ship beyond the
regular 8 working hours a day, but whether they actually rendered service in excess of
said number of hours.
In the case of Stolt-Nielsen, the SC ruled that the rendition of overtime work and
the submission of sufficient proof that said work was actually performed are conditions to
be satisfied before a seaman could be entitled to overtime pay which should be computed
on the basis of 30% of the basic monthly salary.
In PCL Shipping, the SC found that the private respondent was not entitled to
overtime pay because he failed to present any evidence to prove that he rendered service
in excess of regular 8 working hours a day. But in Acuña, petitioners’ claims for overtime
pay were allowed despite their failure to substantiate them. It was declared that the claims
of OFWs against foreign employers could not be subjected to the same rules of evidence
and procedure applicable to complainants whose employers are locally based.
b) Guaranteed overtime pay, not included in the computation of salary for unexpired
portion
In the computation of the monetary award to an illegally dismissed OFW, the
“guaranteed overtime” pay should not be included as part of his salary for the
unexpired portion of his contract. This is so because it is improbable that the
OFW has rendered overtime work during the unexpired term of his contract.
Consequently, there is no factual or legal basis therefor.

24. Waiver and Laches on OT

a. Waiver
The right to claim overtime pay is not subject to waiver. Such right is governed by
law and not merely by the agreement of the parties. While rights may be waived, the
same must not be contrary to law, public order, public policy, morals, good customs or
prejudicial to a third person with a right recognized by law.
But if the waiver is done in exchange for and in consideration of certain valuable
privileges, among them that the value of said privileges did not compensate for such
work, such waiver may be considered valid.

b. Effect of laches or estoppel

The principle of laches or estoppel does not apply to the right of employees to
claim past overtime pay. Mere lapse of time or silence of the employees is not sufficient
to defeat and frustrate the purpose of the law in granting such right by mere indirection.
Laches is the failure or neglect for an unreasonable and unexplained length of
time to do that which, by exercising due diligence, could or should have been done
earlier. Stated differently, laches may also be defined as such neglect or omission to
assert a right taken in conjunction with the lapse of time and other circumstances causing
prejudice to an adverse party as will operate as a bar in equity.
The question of laches is addressed to the sound discretion of the court, and since
it is an equitable doctrine, its application is controlled by equitable considerations. It
cannot work to defeat justice or to perpetrate fraud or injustice. Laches cannot be charged
 against a worker when he has not incurred undue delay in the assertion of his rights
because he filed his complaint within the 3-year reglementary period for the filing of
monetary claims. Under this situation, he cannot be said to have slept on his rights for an
unreasonable length of time.
When an employee fails to assert his right immediately upon violation thereof,
such failure cannot ipso facto be deemed as a waiver of the oppression. The worker and
his employer are not equally situated. When a worker keeps silent inspite of flagrant
violations of his rights, it may be because he is seriously fearful of losing his job. The
dire consequences thereof on his family and his dependents must have prevented him
from complaining. In short his thoughts of sheer survival weigh heavily against
launching an attack upon his more powerful employee.

25. Rationale behind Art. 88 on undertime & leave of absence offsetting

Undertime work on any particular day shall not be offset by overtime work on any other
day. Permission given to the employee to go on leave on some other day of the week
shall not exempt the employer from paying the additional compensation required by law.
(Art. 88 LC)

When undertime is offset against the overtime, the employee is ‘made to pay’ twice for
his undertime hours. This is because the employee’s leave credits are reduced to the
extent of the undertime hours while he is made to pay for the undertime hours with work
beyond the regular working hours. Clearly, this is not a fair situation for the employee,
even when the undertime is his fault.

The proper approach should be to deduct the undertime hours from the available leave
credits of the employee and to pay the employee overtime for the extended hours of
work.

If the employee has consumed his leave credits, his undertime hours may be deducted
from his salary, but he should still be paid his overtime compensation for work performed
beyond his regular working hours. (NATIONAL WATERWORKS and SEWERAGE
AUTHORITY, vs. NWSA CONSOLIDATED UNIONS, ET AL.)

26. Blue Sunday Law

No commercial, industrial, or agricultural enterprise or establishment including stores and

shops of any kind shall be open on any Sunday, Christmas Day, New Year’s Day, Holy
Thursday, and Good Friday, from 12:00 midnight to 12:00 midnight.

27. Rule on rest day based on religious grounds

The employer shall determine and schedule the weekly rest day of the employees subject
to collective bargaining agreement and to such rules and regulations as the Secretary of
Labor and Employment may provide. However, the employer shall resoect the preference
of employees as to their weekly rest day when such preference is based on religious
grounds. (Art. 91 (b) LC)
 28. Illustration on page 423 on rest day

The minimum statutory premium pay rates for the situations contemplated under Article
93 are as follows:
a. For work performed on rest days or on special holidays, the premium pay is plus
30% of the daily wage rate of 100% or a total of 130%. Thus, using as basis Php.382.00 which is
the minimum daily wage rate of private sector non-agricultural workers and employeesin the
National capital region, as mandated by Wage Order No. NCR-14 effevtive on June 14, 2008:
For work performed on rest days or on special holidays - plus 30% of the daily
basic rate of 100% or a total of 130%:
30% of P382 = 0.30 x P382.00 = P114.60
P382.00 + P114.60 = P496.60
or
130% of P382 = 1.3 x P382 = P496.60
b. For work performed on a rest day which is also a special holiday, the premium pay
is plus 50% of the daily wage rate at 100% or a total of 15%. Thus, using the same P382.00 as
basis.
For work performed on a rest day which is also a special day – plus 50% of the daily
basic rate of 100% or a total of 150%:
50% of P382.00 = 0.5 x P382.00 = P191.00
P382.00 + P191.00 = P573.00
or
150% of Php.382.00 = 1.5 x Php382.00 = Php 573.00

29. 7 salient features of the LC

1. It reorients labor laws towards development and employment goals.

2. It institutionalizes the NLRC. NLRC procedures assure due process.
3. It abolishes the workmen’s compensation system and integrates workmen’s
compensation into the SSS to be administered by the SSS for private sector and
GSIS for the government sector.
4. It establishes an Overseas Employment Development Board and a National
Seamen Board to undertake the systematic employment of Filipinos overseas and
optimize the national benefit therefrom.
5. It implements the provision of theConstitution placing employees of GOCC’s
under the Civil Service and mandating the National Assembly to standardize their
salaries.
6. It ends the wasteful energy-snapping anarchy and opportunism in the Philippine
labor movement by restructuring it by region and by industry.
7. It abolishes the wage-fixing function of the Wage Commission by transforming it
into a study and research body.
8. It adjusts labor standards laws to the requirements of development and
employment.
 30. General structure of LC

a. The 7 Books composing the Labor Code.

The Labor Code is composed of a Preliminary Title and seven (7) books as follows:
Preliminary Title
Chapter I – General Provisions (Articles 1 to 6)
Chapter II – Emancipation of Tenants (Articles 7 to 11)
Book I – Pre-Employment (Article 12)
Title I – Recruitment and Placement of Workers
Chapter I – General Provisions (Articles 13 to 24)
Chapter II – Regulation of Recruitment and Placement Activities
(Articles 25 to 35)
Chapter III – Miscellaneous Provisions (Articles 36 to 39)
Title II – Employment of Non Resident Aliens (Articles 40 to 42)

Book II – Human Resources Development Program

Title I – National Manpower Development Program
Chapter I – National Policies and Administrative Machinery for
Their Implementation (Articles 43 to 56)
Title II – Training and Employment of Special Workers
Chapter I – Apprentices (Articles (57 to 72)
Chapter II – Learners (Articles 73 to 77)
Chapter III – Handicapped Workers (Articles 78 to 81)

Book III – Conditions of Employment

Title I – Working Conditions and Rest Periods
Chapter I – Hours of Work (Articles 82 to 90)
Chapter II – Weekly Rest Periods (Articles 91 to 93)
Chapter III – Holidays, Service Incentive Leaves and Service
Charges (Articles 94 to 96)
Title II – Wages
Chapter I – Preliminary Matters (Articles 97 to 98)
Chapter II – Minimum Wage Rates (Articles 99 to 101)
Chapter III – Payment of Wages (Articles 102 to 111)
Chapter IV – Prohibitions Regarding Wages (Articles 112 to 119)
Chapter V – Wage Studies, Wage Agreements and Wage
Determination (Articles 120 to 127)
Chapter VI – Administration and Enforcement (Articles 128 to
129)
Title III – Working Conditions for Special Groups of Employees
Chapter I – Employment of Women (articles 130 to 138)
Chapter II – Employment of Minors (Articles 139 to 140)
Chapter II – Employment of Househelpers (Articles 141 to 152)
Chapter IV – Employment of Homeworkers (Articles 153 to 155)

Book IV – Health, Safety and Social Welfare Benefits

Title I – Medical, Dental and Occupational Safety
Chapter I – Medical and Dental Services (Articles 156 to 161)
Chapter II – Occupational Health and Safety (Articles 162 to 165)
Title II – Workmen’s Compensation and State Insurance Fund
Chapter I – Policy and Definitions (Articles 166 to 167)
Chapter II – Coverage and Liability (Articles 168 to 175)
Chapter III – Administration (Articles 176 to 182)
Chapter IV – Contributions (Articles 183 to 184)
Chapter V – Medical Benefits (Articles 185 to 190)
 Chapter VI – Disability Benefits (Articles 191 to 193)
Chapter VII – Death Benefits (Article 194)
Chapter VIII – Provisions Common to Income Benefits (Articles
195 to 204)
Chapter IX – Records, Reports and Penal Provisions (Articles 205
to 208)
Title III – Medicare (Article 209)
Title IV – Adult Education (Article 210)

Book V – Labor Relations

Title I – Policy and Definitions
Chapter I – Policy (Article 211)
Chapter II – Definitions (Article 212)
Title II – National Labor Relations Commission
Chapter I – Creation and Composition (Articles 213 to 216)
Chapter II – Powers and Duties (Articles 217 to 222)
Chapter III – Appeal (Articles 223 to 225)
Title III – Bureau of Labor Relations (Articles 226 to 233)
Title IV – Labor Organizations
Chapter I – Registration and Cancellation (Articles 234 to 240)
Chapter II – Rights and Conditions of Membership (Article 241)
Chapter III – Rights of Legitimate Labor Organizations (Article
242)
Title V – Coverage (Articles 243 to 246)
Title VI – Unfair Labor Practices
Chapter I – Concept (Article247)
Chapter II – Unfair Labor Practices of Employers (Article 248)
Chapter III – Unfair Labor Practices of Labor Organizations
(Article 249)
Title VII – Collective Bargaining and Administration of Agreements
(Articles 250 to 259)
Title VII-A – Grievance Machinery and Voluntary Arbitration (Articles
260 to 262-B)
Title VIII – Strikes and Lockouts and Foreign Involvement in Trade
Union Activities
Chapter I – Strikes and Lockouts (Articles 263 to 266)
Chapter II – Assistance to Labor Organizations (Articles 267 to
268)
Chapter III – Foreign Activities (Articles 269 to 271)
Chapter IV – Penalties for Violation (Article 272)
Title IX – Special Provisions (Articles 273 to 277)

Book VI – Post Employment

Title I – Termination of Employment (Articles 278 to 286)
Title II – Retirement from the Service (Article 287)

Book VII – Transitory and Final Provisions

Title I – Penal Provisions and Liabilities (Articles 288 to 289)
Title II – Prescription of Offenses and Claims (Articles 290 to 292)
Title III – Transitory and Final Provisions (Articles 293 to 302)

31. Relevant Civil Code, RPC provisions to LC

Civil Code provisions related to Labor Code

 Article 1700 in Civil Code provides that the relations between capital and labor are not
merely contractual. They are so impressed with public interest that labor contracts must yield to
the common good. Therefore, such contracts are subject to the special laws on labor unions,
collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of
labor and similar subjects. (Servidad v. NLRC, GR No. 128682, March 18, 1999)
Neither capital nor labor shall act oppressively against the other or impair the interest or
convenience of the public. (Art. 1701, NCC)
The concern of the law for the workers is further stressed in the provision in the Civil
Code which ordains that in case of doubt, all labor legislations and all labor contracts shall be
construed in favor of the safety and decent living for the laborers. (Art. 1702, NCC)
SC consistently ruled that both the provisions of Art. 1702 of the civil code and Art. 4 of
the labor code which mandate that all doubts shall be resolved in favor of labor, should be
applied in resolving any doubt or ambiguity in contracts between management and the union.
(Plastic town Center Corp. v. NLRC, GR No. 81176, April 19, 1989)
Civil Code Provisions relevant to Labor:
 Article 1700. The relations between capital and labor are not merely contractual. They
are so impressed with public interest that labor contracts must yield to the common good.
Therefore, such contracts are subject to the special laws on labor unions, collective
bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor
and similar subjects.
 Article 1701. Neither capital nor labor shall act oppressively against the other, or impair
the interest or convenience of the public.
 Article 1702. In case of doubt, all labor legislation and all labor contracts shall be
construed in favor of the safety and decent living for the laborer.
 Article 1703. No contract which practically amounts to involuntary servitude, under any
guise whatsoever, shall be valid.
 Article 1704. In collective bargaining, the labor union or members of the board or
committee signing the contract shall be liable for non-fulfillment thereof.
 Article 1705. The laborer's wages shall be paid in legal currency.
 Article 1706. Withholding of the wages, except for a debt due, shall not be made by the
employer.
 Article 1707. The laborer's wages shall be a lien on the goods manufactured or the work
done.
 Article 1708. The laborer's wages shall not be subject to execution or attachment, except
for debts incurred for food, shelter, clothing and medical attendance.
 Article 1709. The employer shall neither seize nor retain any tool or other articles
belonging to the laborer.
 Article 1710. Dismissal of laborers shall be subject to the supervision of the Government,
under special laws.
 Article 1711. Owners of enterprises and other employers are obliged to pay compensation
for the death of or injuries to their laborers, workmen, mechanics or other employees,
even though the event may have been purely accidental or entirely due to a fortuitous
cause, if the death or personal injury arose out of and in the course of the employment.
The employer is also liable for compensation if the employee contracts any illness or
disease caused by such employment or as the result of the nature of the employment. If
the mishap was due to the employee's own notorious negligence, or voluntary act, or
drunkenness, the employer shall not be liable for compensation. When the employee's
lack of due care contributed to his death or injury, the compensation shall be equitably
reduced.
  Article 1712. If the death or injury is due to the negligence of a fellow worker, the latter
and the employer shall be solidarily liable for compensation. If a fellow worker's
intentional or malicious act is the only cause of the death or injury, the employer shall not
be answerable, unless it should be shown that the latter did not exercise due diligence in
the selection or supervision of the plaintiff's fellow worker.

RPC provisions related to Labor Code

The Revised Penal Code contains provisions relevant to labor law. For instance, the
penalty of arresto mayor and a fine not exceeding 300 pesos shall be imposed upon any person
who, for the purpose of organizing, maintaining or preventing coalitions of capital or labor,
strike or laborers or lockout of employers, shall employ violence or threats in such a degree as to
compel or force the laborers or employers in the free and legal exercise of their industry or work,
if the act shall not constitute a more serious offense in accordance with the provisions of the
Revised Penal Code. (Article 289, RPC)
The Revised Penal Code also imposes the penalty of arresto mayor or a fine ranging from
200 to 500 pesos, or both, upon any person, agent, or officer of any association or corporation
who shall force or compel, directly or indirectly, or shall knowingly permit any laborer or
employee employed by him or by such firm or corporation, to be forced or compelled, to
purchase merchandise or commodities of any kind.
The same penalties are imposed upon any person who shall pay the wages due a laborer
or employee employed by him, by means of tokens or objects other than the legal tender
currency of the Philippines, unless expressly requested by the laborer or employee. (Art. 288,
RPC)
Other Relevant Provisions of RPC:
 Article 272. Slavery. - The penalty of prision mayor and a fine of not exceeding 10,000
pesos shall be imposed upon anyone who shall purchase, sell, kidnap or detain a human
being for the purpose of enslaving him. If the crime be committed for the purpose of
assigning the offended party to some immoral traffic, the penalty shall be imposed in its
maximum period.
 Article 273. Exploitation of child labor. - The penalty of prision correccional in its
minimum and medium periods and a fine not exceeding 500 pesos shall be imposed upon
anyone who, under the pretext of reimbursing himself of a debt incurred by an ascendant,
guardian or person entrusted with the custody of a minor, shall, against the latter's will,
retain him in his service.
 Article 274. Services rendered under compulsion in payment of debt. - The penalty
of arresto mayor in its maximum period to prision correccional in its minimum period
shall be imposed upon any person who, in order to require or enforce the payment of a
debt, shall compel the debtor to work for him, against his will, as household servant or
farm laborer.
 Article 278. Exploitation of minors. - The penalty of prision correccional in its minimum
and medium periods and a fine not exceeding 500 pesos shall be imposed upon:
1. Any person who shall cause any boy or girl under sixteen years of age to perform any
dangerous feat of balancing, physical strength, or contortion.
2. Any person who, being an acrobat, gymnast, rope-walker, diver, wild-animal tamer or
circus manager or engaged in a similar calling, shall employ in exhibitions of these
kinds children under sixteen years of age who are not his children or descendants.
3. Any person engaged in any of the callings enumerated in the next paragraph
preceding who shall employ any descendant of his under twelve years of age in such
dangerous exhibitions.
 4. Any ascendant, guardian, teacher or person entrusted in any capacity with the care of
a child under sixteen years of age, who shall deliver such child gratuitously to any
person following any of the callings enumerated in paragraph 2 hereof, or to any
habitual vagrant or beggar.
If the delivery shall have been made in consideration of any price, compensation, or
promise, the penalty shall in every case be imposed in its maximum period.
In either case, the guardian or curator convicted shall also be removed from office as
guardian or curator; and in the case of the parents of the child, they may be deprived,
temporarily or perpetually, in the discretion of the court, of their parental authority.
5. Any person who shall induce any child under sixteen years of age to abandon the
home of its ascendants, guardians, curators, or teachers to follow any person engaged
in any of the callings mentioned in paragraph 2 hereof, or to accompany any habitual
vagrant or beggar.
 Article 291. Revealing secrets with abuse of office. - The penalty of arresto mayor and a
fine not exceeding 500 pesos shall be imposed upon any manager, employee, or servant
who, in such capacity, shall learn the secrets of his principal or master and shall reveal
such secrets.
 Article 292. Revelation of industrial secrets. - The penalty of prision correccional in its
minimum and medium periods and a fine not exceeding 500 pesos shall be imposed upon
the person in charge, employee or workman of any manufacturing or industrial
establishment who, to the prejudice of the owner thereof, shall reveal the secrets of the
industry of the latter.
 Article 310. Qualified theft. - The crime of theft shall be punished by the penalties next
higher by two degrees than those respectively specified in the next preceding article, if
committed by a domestic servant, or with grave abuse of confidence, or if the property
stolen is motor vehicle, mail matter or large cattle or consists of coconuts taken from the
premises of the plantation or fish taken from a fishpond or fishery, or if property is taken
on the occasion of fire, earthquake, typhoon, volcanic erruption, or any other calamity,
vehicular accident or civil disturbance. (As amended by R.A. 120 and B.P. Blg. 71. May
1, 1980).
 Article 316. Other forms of swindling. - The penalty of arresto mayor in its minimum and
medium period and a fine of not less than the value of the damage caused and not more
than three times such value, shall be imposed upon: xxx 5. Any person who shall accept
any compensation given him under the belief that it was in payment of services rendered
or labor performed by him, when in fact he did not actually perform such services or
labor.

32. Relevant Constitutional provisions

Article 3 of the Labor Code reflects certain basic principles enshrined in the constitution aimed
at protecting the interest of labor, promoting full employment and equal work opportunities
irrespective of sex, race, or creed. Substantially, it was based on the provisions of Section 9,
Article II of the 1973 Constitution.
Section 3, Article XIII, 1987 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.”
Other Constitutional Provisions related to Labor Law:
a. “ The State shall promote a just and dynamic social order that will ensure the prosperity
and independence of the nation and free the people from poverty through policies that
provide adequate social services, promote full employment, a rising standard of living,
and an improved quality of life for all.” (Section 9, Article II, 1987 Constitution)
b. “The State affirms labor as a primary social economic force. It shall protect the rights of
workers and promote their welfare.” (Section 18, Article II, 1987 Constitution)
c. “The right of the people, including those employed in the public and private sectors, to
form unions, associations, or societies for purposes not contrary to law shall not be
abridged.” (Section 8, Article III, 1987 Constitution)
d. “The State affirms labor as a primary social economic force. It shall protect the rights of
workers and promote their welfare.” (Section 18 [2], Article III [Bill of Rights], 1987
Constitution)
e. Section 5, Article VI [The Legislative Department] provides that along with other sectors,
labor is entitled to seats allotted to party-list representatives for three consecutive terms
after the ratification of the Constitution.
f. “No officer or employee of the civil service shall be removed or suspended except for
cause provided by law. (5) The right to self-organization shall not be denied to
government employees. (6) Temporary employees of the Government shall be given such
protection as may be provided by law.” (Section 2 [3], [5] and [6] of Article IX [B], 1987
Constitution).
g. “The Congress shall provide for the standardization of compensation of government
officials and employees, including those in government-owned or controlled corporations
with original charters, taking into account the nature of the responsibilities pertaining to,
and the qualifications required for, their positions.” (Section 5, Art. IX (B), 1987
Constitution)
h. “The goals of the national economy are a more equitable distribution of opportunities,
income, and wealth; a sustained increase in the amount of goods and services produced
by the nation for the benefit of the people; and an expanding productivity as the key to
raising the quality of life for all, especially the underprivileged.
“The State shall promote industrialization and full employment based on sound
agricultural development and agrarian reform, through industries that make full of
efficient use of human and natural resources, and which are competitive in both domestic
and foreign markets. However, the State shall protect Filipino enterprises against unfair
foreign competition and trade practices.
“In the pursuit of these goals, all sectors of the economy and all region s of the country
shall be given optimum opportunity to develop. Private enterprises, including
corporations, cooperatives, and similar collective organizations, shall be encouraged to
broaden the base of their ownership.” (Section 1, Article XII, 1987 Constitution)
i. “The State shall promote the preferential use of Filipino labor, domestic materials and
locally produced goods, and adopt measures that help make them competitive.” (Section
12, Article XII, 1987 Constitution)
j. “The sustained development of a reservoir of national talents consisting of Filipino
scientists, entrepreneurs, professionals, managers, high-level technical manpower and
skilled workers and craftsmen in all fields shall be promoted by the State. The State shall
encourage appropriate technology and regulate its transfer for the national benefit. The
practice of all professions in the Philippines shall be limited to Filipino citizens, save in
cases prescribed by law.” (Section 14, Article XII, 1987 Constitution)
k. “The Congress shall give highest priority to the enactment of measures that protect and
enhance the right of all the people to human dignity, reduce social, economic, and
political inequalities, and remove cultural inequities by equitably diffusing wealth and
political power for the common good.” (Section 1, Article XIII, 1987 Constitution)
l. “The promotion of social justice shall include the commitment to create economic
opportunities based on freedom of initiative and self-reliance.”(Section 2, Article XIII,
1987 Constitution)
m. “Section 4. The State shall, by law, undertake an agrarian reform program founded on the
right of farmers and regular farmworkers who are landless, to own directly or collectively
the lands they till or, in the case of other farmworkers, to receive a just share of the fruits
thereof. To this end, the State shall encourage and undertake the just distribution of all
agricultural lands, subject to such priorities and reasonable retention limits as the
Congress may prescribe, taking into account ecological, developmental, or equity
considerations, and subject to the payment of just compensation.
“Section 5. The State shall recognize the right of farmers, farmworkers, and landowners,
as well as cooperatives, and other independent farmers' organizations to participate in the
planning, organization, and management of the program, and shall provide support to
agriculture through appropriate technology and research, and adequate financial,
production, marketing, and other support services.
“Section 6. The State shall apply the principles of agrarian reform or stewardship,
whenever applicable in accordance with law, in the disposition or utilization of other
natural resources, including lands of the public domain under lease or concession suitable
to agriculture, subject to prior rights, homestead rights of small settlers, and the rights of
indigenous communities to their ancestral lands. The State may resettle landless farmers
and farmworkers in its own agricultural estates which shall be distributed to them in the
manner provided by law.
“Section 7. The State shall protect the rights of subsistence fishermen, especially of local
communities, to the preferential use of the communal marine and fishing resources, both
inland and offshore. It shall provide support to such fishermen through appropriate
technology and research, adequate financial, production, and marketing assistance, and
other services. The State shall also protect, develop, and conserve such resources. The
protection shall extend to offshore fishing grounds of subsistence fishermen against
foreign intrusion. Fishworkers shall receive a just share from their labor in the utilization
of marine and fishing resources.
“Section 8. The State shall provide incentives to landowners to invest the proceeds of the
agrarian reform program to promote industrialization, employment creation, and
privatization of public sector enterprises. Financial instruments used as payment for their
lands shall be honored as equity in enterprises of their choice.” (Sections 4, 5, 6, 7 & 8,
Article XIII, 1987 Constitution)
n. “The State shall, by law, and for the common good, undertake, in cooperation with the
private sector, a continuing program of urban land reform and housing which will make
available at affordable cost, decent housing and basic services to under-privileged and
homeless citizens in urban centers and resettlement areas. It shall also promote adequate
employment opportunities to such citizens. In the implementation of such program the
State shall respect the rights of small property owners.” (Section 9, Article XIII, 1987
Constitution)
 o. “The State shall protect working women by providing safe and healthful working
conditions, taking into account their maternal functions, and such facilities and
opportunities that will enhance their welfare and enable them to realize their full potential
in the service of the nation.” (Section 14, Article XIII, 1987 Constitution)
p. “The State shall, provide adult citizens, the disabled, and out-of-school youth with
training in civics, vocational efficiency, and other skills.” (Section 2 [5], Article XIV,
1987 Constitution)
q. “The State shall, from time to time, review to increase the pensions and other benefits
due to retirees of both the government and the private sectors.” (Section 8, Article XVI,
1987 Constitution)

33. Rule of interpretation of LC

a. Doubts should be resolved in favor of labor.

Article 4 of the Labor Code enunciates the time-honored principle that all doubts in the
implementation and interpretation of its provisions should be resolved in favor of labor. (Asian
Transmission Corporation v. CA, GR No. 144664, March 15, 2004)
This rule applies not only in the interpretation of the provisions of the Labor Code but
also of its Implementing Rules. (Article 4, Labor Code; Section 3, Preliminary Provisions, Rules
to Implement the Labor Code)
It is in keeping with the constitutional mandate of promoting social justice and affording
protection to labor. (Manila Electric Company v. NLRC, GR No. 78763)
Thus, when conflicting interests of labor and capital are to be weighed on the scales of
social justice, the heavier influence of the latter should be counter-balanced by sympathy and
compassion the law must accord the underprivileged worker. (Marcopper Mining Corporation v
NLRC, GR No. 103525)
b. Civil Code provisions related to Article 4 of the Labor Code.
Article 10 of the Civil Code states: “In case of doubt in the interpretation or application
of laws, it is presumed that the law-making body intended right and justice to prevail.”
More specifically, Article 1702 of the Civil Code directs that: “In case of doubt, all labor
legislation and all labor contracts shall be construed in favor of the safety and decent living of
the laborer.” (PNCC v. NLRC, GR No. 101535, Jan. 22, 1993, 217 SCRA 455)
Compared to the provision of Article 4 of the Labor of the Labor Code, it appears that
Article 1702 is broader in scope in that it pertains to “all labor legislation and all labor contracts”
and not merely to the “implementation and interpretation of the provisions of the Labor Code,
including its implementing rules and regulations,” as enunciated in Article 4. Moreover, the Civil
Code mentions a standard which would justify the invocation of the rule of interpretation in
favor of labor in that the same should be done “in favor of the safety and decent living for the
laborer.”
Having made such observation, it may well be said that the provisions of the Civil Code
and the Labor Code do not really differ since the policy of the law is clear – any doubt should
always be interpreted or construed in favor of labor – which means, in more specific terms, the
safety and decent living for the laborer. (PNCC v NLRC, GR No. 101535)
c. Rule of interpretation embodied in the law itself
The Labor Code is one of the few laws which mandates the appropriate rule of
interpreting its provisions. This is one unique feature of the Labor Code. From the inception of a
legal controversy or case, labor has already an upper hand over the employer. Once the doubt is
not effectively overturned by clear and convincing evidence expected to be propounded by the
employer which, in most cases, has the burden of proof, the controversy should, by clear
directive of the law, be decided in favor of labor.
This is, of course, not a harsh rule. The framers of the law (Labor and the Civil Code) had
fully taken cognizance of the disparity in terms of resources and standing between labor and
capital. In any legal controversy between them, the former always suffers the most. Hence, the
common adage that those who have less in life should have more in law is best exemplified and
made real in Articles 4 and 1702 of the Labor Code and Civil Code, respectively. The worker
must look up to the law for his protection. The law regards him with tenderness and even favor
and always with faith and hope in his capacity to help in shaping the nation’s future. He must not
be taken for granted. (Cebu Royal Plant [San Miguel Corp] v Minister of Labor, GR No. 58639)
Certainly, this rule of interpretation and construction in favor of labor does not mean that
the capital or employer should, at all times, be at the losing end of a controversy. The law does
not say so. For while the Constitution and the law tend to favor the working man, protection to
the employer is assured. Protection of the rights of the laborer authorizes neither the oppression
nor self-destruction of the employer. While the Constitution is committed to the policy of social
justice and the protection of the working class, it should not be supposed that every labor dispute
will be automatically decided in favor of labor. Management also has its own rights, which, as
such, are entitled to respect and enforcement in the interest of simple fair play. Out of its concern
for those with less privilege in life, the Supreme Court has inclined more often than not towards
the worker and upheld his cause with his conflicts with the employer. Such favoritism, however,
has not blinded the court to rule that justice is, in every case, for the deserving, to be dispensed in
the light of the established facts and applicable law and doctrine. (Rolando Revidad v NLRC and
Atlantic, Gulf and Pacific Company of Manila, Inc., GR No. 111105)
The Supreme Court, in Philippine Long Distance Telephone Co. v NLRC, underscored
that although it is bound by the social justice mandate of the Constitution and the laws, however,
such policy of social justice is not intended to countenance wrongdoing.
Doubt or Ambiguity in Labor Contracts
In case of doubt or ambiguity, labor contracts should be interpreted liberally in favor of
the worker. (Ditan v POEA, GR 79560)
Doubt or Ambiguity in Evidence
The rule enunciated in Art 4 of the Labor Code likewise applies in the appreciation of
evidence in labor proceedings. Consequently, when there is a doubt between the evidence
presented by the employer and the employee, such doubt should be resolved in favor of the latter.
(Ph Employ Services and Resources, Inc. Paramio, GR No 144786)
When Rule in Article 4 does not apply
The provision that in case of doubt in the interpretation of the provisions of the Labor
Code, the doubt should be resolved in favor of the laborer does not apply where the pertinent
provisions of the Labor Code leave no room for doubt either in their interpretation or application.
(Bonifacio v GSIS, GR 62207)

34. 1702 CC vs Art. 4 LC

Both Article 1702 of the Civil Code and Article 4 of the Labor Code speak on the rule on
interpretation and construction of law and labor contracts.
 Art 1702 of the Civil Code provides:
“Article 1702. In case of doubt, all labor legislation and all labor contracts shall be
construed in favor of the safety and decent living for the laborer. “

Article 4 of the Labor Code states:

“Article 4. Construction in favor of labor. All doubts in the implementation and

interpretation of the provisions of this Code, including its implementing rules and
regulations, shall be resolved in favor of labor.”

Both articles above may be applied to doubts and ambiguities in

1. Labor contracts such as an employment contract or a CBA
2. Evidence presented in labor cases

This rule applies not only in the interpretation of the provisions of the Labor Code but also of its
Implementing Rules. It applies to all workers - whether in the government or in the private
sector- in order to give flesh and vigor to the pro-poor and pro-labor provisions of the
Constitution.

It is in ·keeping with the constitutional. mandate of promoting social justice and affording
protection to labor. Thus, when conflicting interests of labor and capital are to be weighed on the
scales of social justice, the heavier influence of the latter should be counter-balanced by
sympathy and compassion the law must accord the underprivileged worker.

Compared to the provision of Article 4 of the Labor Code, it appears that Article 1702 is
broader in scope in that it pertains to "all labor legislation and all labor contracts" and not
merely to the "implementation and interpretation of the provisions of the Labor Code, including
its implementing rules and regulations," as enunciated in Article 4. Moreover, the Civil Code
mentions a standard which would justify the invocation of the rule of interpretation in favor of
labor in that the same should be done "in favor of the safety and decent living for the laborer."

DOUBT OR AMBIGUITY IN LABOR CONTRACTS.

In case of doubt or ambiguity, labor contracts should be interpreted liberally in favor of the
worker. Article 1702 of the Civil Code and Article 4 of the Labor Code should be applied in
resolving such. doubt or ambiguity in contracts between management and the union. Contracts
which are not ambiguous are to be interpreted according to their literal meaning and not beyond
their obvious intendment.5 In Colegio de San Juan de Letran - Calarnba v. Villas/ the Supreme
Court re-affrrmed the rule that the ambiguity in labor contracts should be strictly construed
against whoever is the author thereof.'

DOUBT OR AMBIGUITY IN EVIDENCE.

The rule emmciated in Article 4 of the Labor Code likewise applies in the appreciation of
evidence in labor proceedings. Consequently, when there is a doubt between the evidence
presented by the employer and the employee, such doubt should be resolved in favor of the
latter.1 Time and again, the Supreme Court has pronounced that "if doubt exists between the
evidence presented by the employer and the employee, the scales of justice must be tilted in
favor of the latter." The policy is to extend the doctrine to a greater number of employees who
can avail themselves of the benefits under the law, which is in consonance with the avowed
policy of the State to give maximum aid and protection to labor.

35. When rule does not apply (Art. 4 LC)

 The provisions that in case of doubt in the interpretation of the provisions of the Labor
Code, the doubt should be resolved in favor of the laborer does not apply where the
pertinent provisions of the labor code leave no room for doubt either in the interpretation
or application.
* When there is no doubt and its stead, there is clear evidence that an employee is not an asset to
the management but a liability that delays production and sets a bad example to his co-workers,
the SC will not only concur in his dismissal but will insist in an order to that effect.
*while no doubt, it must still protect the right of the employer to exercise whar are clearly
management prerogative.
*law imposes great burneds on the employer.

36. Nature and limitation of the rule making power

a. Power to promulgate implementing rules and regulations

-Administrative bodies like the DOLE are granted under the law the power and
authority to issue administrative rules, regulations and policies to implement and
interpret the law which they are entrusted to enforce. It is an elementary rule in
administrative law that such administrative rules, regulations and policies have the force
and effect of law and are entitled to great respect.

 Venture of powers to administrative bodies is not unconstitutional, unreasonable and

oppressive but has been necessitated by the growing complexity of modern society to
help in the regulations of society’s ramified activities.

b. Implementing rules and regulations must not conflict with law.

1. It is a basic legal tenet that the rules and regulations issued by administrative bodies
should not be in conflict with or contrary to the provisions of the law they seek to
implement or enforces.
2. The grant of authority to the DOLE & other gov’t agencies charged with the
administration and enforcement of the LC or any of it’s parts, to promulgate the
necessary implementing rules and regulation, is not unlimited.
3. The Sec of Labor and Employment has no legal power to amend or alter in any
material sense whatever the law (LC) itself unequivocally specifies or fixes.
4. The rule making power should be confined to details for regulating the mode or
proceeding to carry into effect the law and it has been enacted. The power cannot be
extended to amending or expanding the statutory requirements or to embrace
matters not covered by the statute. Rules that subvert the statute cannot be
sanctioned.

37. Rule on publication

As stated, laws in the Philippines take effect after 15 days following the completion of their
publication either in the Official Gazette or in a newspaper of general circulation in the
Philippines.
However, the law may provide that it is effective immediately upon publication, or that will be
effective on a particular date.
As for the Labor Code,
ART. 2. Date of effectivity. - This Code shall take effect six (6) months after its promulgation.

38. Applicability of LC; excepted worker 1-4 enumeration

Article 6 of Labor Code. Applicability. All rights and benefits granted to workers under this
Code shall, except as may otherwise be provided herein, apply alike to all workers, whether
agricultural or non-agricultural. (As amended by Presidential Decree No. 570-A, November 1,
1974)
Exceptions:
Employees not covered:
a. Government employees;
b. Managerial employees;
c. Other officers or members of a managerial staff;
d. Domestic servants and persons in the personal service of another;
e. Workers paid by results;
f. Non-agricultural field personnel; and
g. Members of the family of the employer.

39. 4 test of er-ee relationship (explain each)

To ascertain the existence of an employer-employee relationship[,] jurisprudence has invariably

adhered to the four-fold test, to wit:
1) the selection and engagement of the employee;
The employer must generate a prioritized list of job requirements including special
qualifications, characteristics, and experience wanted from a candidate. power to select
and engage, the circumstance likewise rendered concomitant the power of the employer
to dismiss.

2) the payment of wages;

"Wage" paid to any employee shall mean the remuneration or earnings, however designated,
capable of being expressed in terms of money, whether fixed or ascertained on a time, task,
piece, commission basis, or other method of calculating the same, which is payable by an
employer to an employee under a written or unwritten contract of employment for work done
or to be done or for services rendered or to be rendered, and includes the fair and reasonable
value, as determined by the Secretary of Labor,

3) (3) the power of dismissal; -It Must be done for authorized or just causes only. An
employer shall observe procedural due process before terminating one’s employment.

4) the power to control the employee's conduct, or the so-called "control test."
 The employer reserves the right to control not only the end achieved but also the manner
and means used to achieve that end.

40. Two tiered test of ee-er (explain each)

While the control test may be the most important index to determine the existence of the employer-
employee relationship, however, in certain cases, the control test is not sufficient to give a complete
picture of the relationship between the parties.
Thus, the Supreme Court in Francisco v. NLRC, enunciated that the better approach would,
therefore, be to adopt a two-tiered test involving:
1. Control Test – It is the putative employer’s power to control the employee with respect to the
means and methods by which the work is to be accomplished
2. Economic Reality Test – It is the underlying economic realities of the activity or relationship.
Here, the proper standard of economic dependence is whether the worker is dependent on the
alleged employer for his continued employment in that line of business.

This is especially appropriate in cases where there is no written agreement or terms of reference
to base the relationship on and due to the complexity of the relationship based on the various positions
and responsibilities given to the worker over the period of the latter’s employment.
Thus, the determination of the relationship between the employer and the employee depends upon
the circumstances of the whole economic activity

41. Cases where er-ee exist; does not exist

Employment relationship exists in the following cases:

1. Carpenters and maintenance personnel – a person who is engaged in maintenance and
repair jobs and perform carpentry, plumbing, electrical and masonry work for apartments and
residential buildings owned by the employer.
2. Dispatchers of a transportation company – as between the operator of a transportation
company and the dispatches hired by one of his employees
3. Janitors – following the right of control test, the fact that the person in charge of the school
supervised the janitor in his work and had control over the method and manner by which he
performed his job
4. Messengers – the messengers who were supplied by a service agency and who were required
to work in the premises of the agency’s client and were paid their salaries through the service
agency are employees of said client. The client company controlled the performance of the
duties of the messenger.
5. Security guards – security guards by the security agency to its client company are the
employees of said agency.
6. Professors and instructors – professors and instructors are not independent contractors but
are employees in that their work is controlled by their employer – the university.
7. Jeepney drivers and conductors – under the “boundary system” the relationship between
the driver and conductor of a bus and the owner thereof is not that of a lessee and lessor but
that of employee and employer. The management of the business is in the owner’s hands.
8. Taxi drivers – same as #7
9. Auto-calesa driver and bus driver – same as #7
 10. Musicians – musicians who were employed by a company producing motion pictures for
purposes of making music recordings, without which the motion picture is not complete, are
employees.
11. Fishermen – fishermen-crew who rendered services in various capacities aboard the fishing
vessels of a company and whose compensation was paid in cash on percent commission
basis, are employees following the right of control test.
12. Stevedores – although supplied to the company by the labor organization, are employees of
the company
13. Lawyers, doctors, nurses, dentists, public relations practitioners and other professionals
– a lawyer may very well be an employee of a private corporation or even of the government.
A similar arrangement may exist as to doctors, nurses, dentists, public relations practitioners,
and other professionals
14. Resident physicians – there is employer-employee relationship between resident physicians
and the training hospitals unless:
a. There is a training agreement between them; and
b. The training program is duly accredited or approved by the appropriate government
agency
15. Employees of cooperatives – as long as the four elements of employer-employee
relationship are present (i.e. they work under the supervision of the cooperative manager and
worked on regular working hours)
16. Insurance agent – an insurance agent is an employee of the insurance company

Employment relationship does not exist in the following cases:

1. Commission salesman
2. Contract of agency
3. Working scholars
4. Medical consultants and visiting physicians
5. Independent contractors or their employees
6. Persons rendering caddying services to club members

42. Cases where er-ee relationship is suspended

1. In case of preventive suspension – where an employee is undergoing an

administrative investigation for an offense and his presence in the company premises
poses serious or imminent threat to the life or property of the employer or of his co-
employees
2. In case of imposition of suspension as a form of disciplinary penalty – on an
employee who is found guilty of committing a wrongful act under Article 282 of the
Labor Code or under the Company Rules and Regulations
3. During off-season in case of regular seasonal employment – such that during off-
season, they are temporarily laid off but they are re-employed during the season or
when their services may be needed
4. Under the following circumstances in Article 286 of the Labor Code:
a. Bona fide suspension by the employer of the operation of his business or
undertaking for a period not exceeding six (6) months;
b. Fulfillment by the employee of a military duty; or
c. Fulfillment by the employee of a civic duty

43. Termination of employment (er,ee, gov’t, automatic)

Termination of Employment by the Employer

 A. Just Cause
1. Serious misconduct or willful disobedience by the employee (Ee) of the lawful orders
of his employer (Er) or representative in connection with his work
2. Gross and habitual neglect by the Ee of his duties
3. Fraud or willful breach by the Ee of the trust reposed in him by his Er or duly
organized representative
4. Commission of a crime or offense by the Ee against the person of his Er or any
immediate member of his family or his duly authorized representative.
5. Other causes analogous to the foregoing

B. Authorized Causes

1. Installation of labor‐saving devices (automation/robotics)

2. Redundancy (superfluity in the performance of a particular work) – exists where the

services of an employee (Ee) are in excess of what is reasonably demanded by the
actual req’ts of the enterprise.
Note: The redundancy should not have been created by the Er.
3. Reorganization
Note: An Er is not precluded from adopting a new policy conducive to a more
economical and effective management, and the law does not require that the Er should
be suffering financial losses before he can terminate the services of the employee on
the ground of redundancy
4. Retrenchment – cutting of expenses and includes the reduction of personnel; It is a
management prerogative, a means to protect and preserve the Er’s viability and ensure
his survival. To be an authorized cause it must be affected in good faith (GF) and for
the retrenchment, which is after all a drastic recourse with serious consequences for
the livelihood of the Ee’s or otherwise laid‐off.
Note: The phrase “to prevent losses” means that retrenchment or termination from the
service of some Ees is authorized to be undertaken by the Er sometime before the
anticipated losses are actually sustained or realized. Evidently, actual losses need not
set in prior to retrenchment.
5. Closing or cessation of operation of the establishment or undertaking – must be done
in good faith and not for the purpose of circumventing pertinent labor laws.
6. Disease – must be incurable within 6 months and the continued employment is
prohibited by law or prejudicial to his health as well as to the health of his co‐Ees
with a certification from the public health officer that the disease is incurable within
6 months despite due to medication and treatment

Termination by the Employee

 Resignation
General rule: Written notice to resign submitted one (1) month in advance
Exception: No notice required for any of the following:
(1) Serious insult by the employer or his representative on the honor and
person of the employee;
(2) Inhuman and unbearable treatment accorded the employee by the employer or his
representative;
(3) Commission of a crime or offense by the employer or his representative against the
person of the employee or any of the immediate members of his family; and
(4) Other causes analogous to any of the foregoing.
 44. Elements of recruitment & placement of workers (3)

Elements of illegal recruitment:

a. First element: Recruitment and placement activities.

Any act of CETCHUP (canvassing, enlisting, contracting, transporting, utilizing, hiring,

or procuring workers) and includes CRAP (referring, contract services, promising or
advertising for employment abroad), whether for profit or not, when undertaken by a
non-licensee or non-holder of authority: Provided, That any such non-licensee or non-
holder who, in any manner, offers or promises for a fee employment abroad to two or
more persons shall be deemed as engaged in such act.

b. Second element: Non-licensee or non-holder of authority - means any person,

corporation or entity which has not been issued a valid license or authority to engage in
recruitment and placement by the Secretary of Labor and Employment, or whose license
or authority has been suspended, revoked or canceled by the POEA or the Secretary of
Labor and Employment.

45. Distinctions bet. PEA & PRE

Private Employment Agency refers to 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. Private Recruitment Entity refers Any person or association engaged in the recruitment and
placement of workers, locally or overseas, without charging, directly or indirectly, any fee.

PEA is issued a license while a PRE is issued an authority.

46. OFW in distress, meaning

 An OFW in distress is an overseas Filipino employee who has medical or psycho-social

problems requiring treatment, hospitalization, and/or counseling; and/or problems like
labor, immigration and other issues requiring legal representation as defined by R.A.
8042 and may need to be repatriated to the Philippines.

47. Documented vs undocumented workers

 Regular or documented migrant workers are those employed in another country with
the requisite legal documents, like valid passports and work permits. Their rights are
protected under international law and their safety and well-being protected from any
exploitation or abuse.

 Undocumented workers are foreign-born workers who lack the legal documentation
required to work in the country in which they live. These workers, like others, working
and living in a country illegally, are often referred to as “illegal aliens,” or “illegal
immigrants.” In the case of Filipino overseas workers, these are Filipinos who are not
properly documented or without valid residence or work permits, or who may be
overstaying their visa. Usually, the rights of these undocumented worker are unprotected
and prone to abuse, their safety and well-being are not guarded from any exploitation.
 48. What is PESO (RA 8759)

 Pursuant to RA 8759, the law requires the establishment of a “public employment

service office” in capital towns, cities, and other strategis areas. A PESO is intended to
serve as employment service and information center in its area of operation. It regularly
obtains lists of job vacancies from employers, publicizes them, invites and evaluates
applicants, and refers them for probable hiring. It also provides training and educational
guidance and employment counselling services.

49. Nationality of Er not material

Foreign employer shall assume joint and solidary liability with the local employer for all claims
and liabilities which may arise in connection with the implementation of contract, including but
not limitied to payment of wages, death and disability compensation and repatriation. the purpose
of solidary liability is to assure aggrieved workers of immediate and sufficient payment of what is
due to them (Osm Shipping Inc. v. Nlrc)

50. Rules on repatriation (a-h)

SECTION 214.Repatriation Procedures. —

A) In case a request for repatriation is filed by an Overseas Filipino Worker at POLO, the Labor
Attaché and/or Welfare Officer shall evaluate the request. Should there be a need for the
immediate repatriation of the Overseas Filipino Worker, the Labor Attaché shall notify the
principal/employer about the request for repatriation. If the principal/employer fails or refuses to
provide for the ticket or costs thereof, the Labor Attaché shall notify the OWWA and the POEA
simultaneously of such need to repatriate. In case the request is received or filed at the POEA,
the POEA shall immediately notify the principal/employer, the licensed recruitment agency, and
the POLO, of such request.

B) The POEA shall immediately issue a notice requiring the licensed recruitment agency to
provide, within forty eight (48) hours from such notice, the plane ticket or the prepaid ticket
advice (PTA) to the POLO or Philippine Embassy. The licensed recruitment agency shall notify
the POEA of such compliance, which shall then inform OWWA of the action of the licensed
recruitment agency. If the licensed recruitment agency fails to provide the ticket or PTA within
forty-eight (48) hours from receipt of the notice, the Administration shall suspend the
documentary processing of the licensed recruitment agency or impose such other sanctions as it
may deem necessary.

C) In case the repatriation of the Overseas Filipino Worker is dependent upon the issuance of an
exit visa/clearance, the principal/employer shall have fifteen (15) days from notice to secure such
exit visa. The licensed recruitment agency which recruited and/or deployed said worker shall
exert earnest efforts in coordinating with the principal/employer to ensure the issuance of said
visa.

D) When the repatriation is dependent upon the issuance of an exit visa and the
principal/employer fails to secure the exit visa within a period of fifteen (15) days from receipt of
the POEA notice, the Administration shall suspend the principal/employer from participating in
the overseas employment program. In the same manner, where the licensed recruitment agency,
despite issuing the PTA for the repatriation of the Overseas Filipino Worker, does not exert
earnest efforts in coordinating with the principal/employer to ensure the issuance of said visa, the
Administration shall suspend the documentary processing of the licensed recruitment agency.
E) Upon request, the Administrator may issue an Order lifting the suspension of documentary
processing only upon compliance with the directive for which the Order of suspension of
documentary processing was issued.

F) When those primarily responsible for the repatriation fail to fulfill their obligations, the
Administration shall notify OWWA to advance the costs of repatriation with right of
reimbursement against the licensed recruitment agency or principal/employer. The OWWA shall
notify the POEA of the arrival of the repatriated Overseas Filipino Worker. It shall likewise
notify the agency that has the obligation to repatriate the Overseas Filipino Worker and demand
payment, within fifteen (15) days from notice, of the costs it has advanced for the repatriation of
the Overseas Filipino Worker, including legal interest in case of default. In case the licensed
recruitment agency fails to reimburse the OWWA, the latter may recommend to the POEA the
imposition of suspension of documentary processing. The POEA will direct the licensed
recruitment agency to settle its obligation with the OWWA within ten (10) days from notice.
Noncompliance with the directive of the POEA shall result in the suspension of documentary
processing. 63 The suspension of documentary processing imposed against the licensed
recruitment agency and the principal/employer shall be lifted by the Administration only upon
clearance by the OWWA

SECTION 216.Emergency repatriation. — The OWWA, in coordination with DFA, and in

appropriate situations, with international agencies, shall undertake the repatriation of Overseas
Filipino Workers in cases of war, epidemic, disasters or calamities, natural or man-made, and
other similar events, without prejudice to reimbursement by the responsible principal/employer
or licensed recruitment agency within sixty (60) days from notice. In such cases, the POEA shall
simultaneously identify and give notice to the licensed recruitment agencies concerned, copy
furnished the corresponding insurance companies. SECTION 217.Mandatory Repatriation of
Underage Overseas Filipino Worker. — Upon discovery or upon being informed of the presence
of an Overseas Filipino Worker whose actual age falls below the minimum age requirement for
overseas deployment, the responsible officers in the foreign service shall, without delay,
repatriate the said Overseas Filipino Worker and advise the DFA through the fastest means of
communication available of such discovery and other relevant information

51. 4 requisites of Sec. 4 RA 8042

SEC. 4. Deployment of Migrant Workers – The State shall deploy overseas Filipino workers only
in countries where the rights of Filipino migrant workers are protected. The government
recognizes any of the following as guarantee on the part of the receiving country for the
protection and the rights of overseas Filipino workers:

(a) It has existing labor and social laws protecting the rights of migrant workers;

(b) It is a signatory to multilateral conventions, declaration or resolutions relating to the

protection of migrant workers;

(c) It has concluded a bilateral agreement or arrangement with the government

protecting the rights of overseas Filipino workers; and

(d) It is taking positive, concrete measures to protect the rights of migrant workers.

52. Nature of employment of OFWs (a-i)

a. OFW’s can never acquire regular employment

- OFW’s are contractual, NOT REGULAR
Related cases:
1. Brent School Inc. v Zamora (G. R. No. 48494, February 5, 1990, 181 SCRA 702)
- Seamen (now Seafarers) and overseas contract workers are NOT COVERED by the
term “regular employment” as defined in Article 280 of the Labor Code;

2. Coyoca v. NLRC (G. R. No. 113658, March 31, 1995, 240 SCRA 190, 194)
- Employment of Filipino Seamen is governed by the Rules and Regulations of the
POEA. The Standard Employment Contract governing the Employment of All
Filipino Seamen on Board Ocean-Going Vessels of the POEA, particularly Part 1,
Sec. C which provides that contract of Seamen shall be for a fixed period, shall not be
longer than twelve (12) months;

3. Millares v. NLRC (G. R. No. 110524, July 29, 2002, 385 SCRA 306)
- OFW’s cannot acquire regular employment, the fact that employment of seafarers is
governed by the contracts they sign everytime they are re-hired and their employment
is terminated when the contract expires;
- Employment is fixed for a certain period of time;
- They fall under the exception of Art. 280 whose employment has been fixed for a
specific project or undertaking the completion or termination of which has been
determined at the time of engagement of the employee or where the work or service
to be performed is seasonal in the nature and the employment is for the duration of
the season.
-
b. Indefinite Period of Employment of OFW’s held NOT VALID
Pentagon international Shipping, Inc. v Adelantar (G. R. No. 157373, July 27, 2004)
- Even if the employment contract of an OFW provides for an unlimited period, it is
not valid as it contravenes the explicit provision of the POEA Rules and Regulations
on fixed-period employment
-
c. OFW’s do not become regular employees by reason of nature of work
An OFW cannot be considered a regular employee by reason of the fact that the
work he performs is usually necessary and desirable in the usual business or trade of the
employer.
1. Millares v. NLRC (G. R. No. 110524, July 29, 2002, 385 SCRA 306)
4. Petitioners Claim: they be considered as regular employees since they are performing
useful and desirable works and that they have rendered 20 years of service; in Brent
School Inc. v Zamora (G. R. No. 48494, February 5, 1990, 181 SCRA 702) Ruling, there
are certain forms of employment which also require the performance of usual and
desirable functions and which exceed one year but do not necessarily attain regular
employment status; OFWs and seafarers fall under this type of employment which are
governed by mutual agreement of the parties.

d. Regular employment does not result from the series of re-hiring of OFWs
- Gu-Miro v. Adorable (G. R. No. 160952, August 20, 2004); continued re-hiring by the
company of the OFW to serve as Radio Officer on board the employer’s different vessels
should be interpreted not as a basis of regularization but rather as a series of contract
renewals.
e. Unique cases where OFWs were declared regular employees
ATCI Overseas Corp. v CA (G. R. No. 143949, August 9, 2001); OFWs may attain
regularity of employment. Here the Filipino doctors were hired by the Ministry of public
health of Kuwait for a period of two years but were summarily terminated after 2 months
on the ground that they are physically unfit for the job. After seven months they had
ceased to work, they were repatriated to the Philippines. They claimed that they are
probationary employees at the time of their termination. Supreme Court said they are
regular employees because of the following reasons:

1. there is nothing in the record that shows and proves that they are probationary
employees at the time they were dismissed from employment;
2. there is no stipulation included in the employment contract and Memorandum of
Understanding of the petitioner and the Ministry providing for a probationary period;
3. there’s no finding of probationary employment in the decisions of POEA, NLRC and
CA;
4. petitioners were not apprised of the fact that they were to be placed on a probationary
period;
(this decision was reversed: OFWs can never become regular employees as their
engagement is required under the law to be on a fixed-term basis, Millares v. NLRC
GR No. 110524)
F . The fixed –period employment of OFWs not discriminatory
- not discriminatory against them nor does it favor foreign employers (particularly
seafarers); seafarers nature of employment are peculiar and unique, they cannot stay
for a long and indefinite period of time at sea; national, cultural and lingual diversity
necessitates the limitation of its period.

g. The expiration of employment contracts of OFWs marks its ending

- since OFWs are not regular employees, their employment ceases upon the expiration
of their employment contracts
h. Effect of hiring of seamen for overseas employment but assigning him to local vessel
- The non-deployment of the ship overseas does not affect the validity of the perfected
employment contract (OSM Shipping Philippines Inc. v NLRC GR No. 138193, March 5,
2013);
i. Effect on the status of a seaman hired for overseas deployment but later assigned to
domestic operations after the expiration of his overseas contract
- the employee is considered now as a domestic employee (his overseas employment is
automatically terminated upon expiration of his overseas employment contract) Delos Santos v,
jebsen Maritime, Inc. GR No. 154185

53. Termination of OFWs (a-c)

a. OFWs deserve to be protected by our laws

Most OFWS come from the poorest sector of the society, they are hardly illiterate and of
ill-health.
 - Their unfortunate circumstance makes them easy prey to avaricious employers. They
will climb mountains, cross the seas, endure slave treatment in foreign lands just to
survive. They will work under sub-human conditions and accept salaries below the
minimum
- No one should be made to unjustly profit from their sufferings
b. The due process mandated under Philippine Law applies to dismissal of OFWs
- In the absence of proof of the applicable laws of the foreign employer, Labor Code
Provisions will govern the termination of employment of OFWs;
- As vital component of due process, twin requirement of Notice and hearing should
strictly be effected;
c. Award of Indemnity in the form of Nominal Damages in case of dismissal of OFWs for
just authorized cause but without due process

54. Awards of indemnity (Agabon case)

- The Agabon v. NLRC Case: the dismissal for a just cause but without due process is
not illegal or ineffectual, but legal; however, the employer SHOULD INDEMNIFY THE
EMPLOYEE WITH NOMINAL DAMAGES FOR NON-COMPLIANCE WITH
STATUTORY DUE PROCESS.

55. Monetary awards to OFWs (a-k)

a) The reliefs under Art. 279 of the Labor Code are not available to OFWs.
- Any and all claims arising from the employment of OFWs, including those for death
or illness compensations, are not rooted from the provisions of the Labor Code.
- It is Section 10 of RA No. 8042 (Migrant Workers and Overseas Filipinos Act of
1995) and not Art. 279 of the Labor Code, which is appropriate legal basis for such
claims.
- The remedies provided for under Art. 279 such as reinstatement or separation pay in
lieu of reinstatement or full backwages, are not available to OFWs. This is as it
should be since OFWs are contractual employees whose rights and obligations are
governed primarily by the POEA Standard Employment Contract (POEA-SEC), the
Rules and Regulations Governing Overseas Employment and more importantly, by
said RA no. 8042.
b) A validly dismissed OFW is not entitled to his salary for the unexpired portion of his
employment contract.
- However, if he is dismissed without observance of procedural due process, he is
entitled to an indemnity I the form of nominal damages.
c) How to reckon the monetary awards to OFWs illegally dismissed prior to the
effectivity of RA 8042
- Effectivity of RA 8042 is on August 25, 1995 and approved on June 7, 1995
- Entitled to the payment of their salaries corresponding to the unexpired portion of
their fix-term contract even without the qualification now found in Section 10 of said
law.
d) Qualification in par.5, Section 10 of RA 8042 declared unconstitutional (Serrano
Doctrine)
 - In case of termination of overseas employment without just, valid or authorized cause
as defined by law or contract, the workers shall be entitled to the full reimbursement
of his placement fee with interest of twelve percent (12%) per annum, plus his
salaries for the unexpired portion of his employment contract or for three (3) months
for every year of the unexpired term, whichever is less.
- The subject clause “or for three (3) months for every year of the unexpired term,
whichever is less” is declared unconstitutional for being discriminatory, among other
significant reasons cited therein. Consequent to this ruling, illegally dismissed OFWs
are now entitled to all the salaries for the entire unexpired portion of their
employment contracts, irrespective of the stipulated term or duration thereof. (In
other words, the SC reverted to the old rule prior to effectivity of RA No. 8042)
- The SC ruled concluded that the subject clause contains a suspect classification in
that, in the computation of the monetary benefits of fixed term employees who are
illegally discharged, it imposes a 3-month cap on the claim of OFWs with an
unexpired portion of one year or more in their contracts, but none on the claims of
OFWs or local workers with fixed-term employment. The subject clause singles out
one classification of OFWs and burdens it with a peculiar disadvantage.
e) Monetary award to OFW is not in the nature of separation pay or backwages but a
form of indemnity
- The award of salaries for the unexpired portion of an OFW’s employment contract is
not an award of backwages or separation pay but a form of indemnity for the OFW
who was illegally dismissed.
f) Only salaries are to be included in the computation of the amount due for the
unexpired portion of the contracts
- Allowances are excluded. There is no basis in including the OFW’s living allowance
as part of the three months salary to which he is entitled under Section 10 of RA
8042.
- There is likewise no basis to include overtime, holiday and leave pay in the said
computation.
g) Entitlement to overtime pay of OFW
- The criterion in determining whether or not sailors are entitled to overtime pay is not
whether they are on board and cannot leave ship beyond regular 8 working hours a day
but whether they actually rendered service in excess of said number of hours.
h) Reimbursement of placement fee included in the monetary award to an OFW
- An illegally dismissed OFW is entitled to the full reimbursement of the of his
placement fee with 12% interest per annum.
i) Costs of repatriation and transport of personal belongings should be included in the
monetary award to an illegally dismissed OFW
- Under Section 15 of RA 8042, the repatriation of OFW and the transport of his
personal belongings are the primary responsibilities of the agency which recruited or
deployed him. All the costs attendant thereto should be borne by the agency
concerned and/or its principal.
j) Right to recover cost of repatriation from OFW’s wages
- The right of the employer to recover cost of repatriation from the OFW’s wages an
earnings hinges on whether the OFW was legally dismissed or not. The right exists if
OFW is validly discharged for disciplinary measures.
k) Effect of Unauthorized substitution or alteration of POEA-approved employment
contract
- RA 8042 explicitly prohibits the substitution or alteration to the prejudice of the
worker, of employment contracts already approved and verified by the POEA from
the time of the actual signing thereof by the parties up to and including the period of
their expiration without the approval of the POEA.
 56. Indemnity for OFWs not separation pay or backwages

A seafarer is not a regular employee as defined in Article 280 of the Labor Code. Hence, he is
not entitled to full backwages and separation pay in lieu of reinstatement as provided in Article
279 of the Labor Code. Seafarers are contractual employees whose rights and obligations are
governed primarily by the POEA Standard Employment Contract for Filipino Seamen, the Rules
and Regulations Governing Overseas Employment, and, more importantly, by Republic Act
(R.A.) No. 8042, or the Migrant Workers and Overseas Filipinos Act of 1995. While the POEA
Standard Employment Contract for Filipino Seamen and the Rules and Regulations Governing
Overseas Employment do not provide for the award of separation or termination pay, Section 10
of R.A. 8042 provides for the award of money claims in cases of illegal dismissals.

The award of salaries for the unexpired portion of his employment contract or for three (3)
months for every year of the unexpired term, whichever is less, is not an award of backwages or
separation pay, but a form of indemnity for the worker who was illegally dismissed. The Labor
Arbiter may have mislabeled it as separation pay, nonetheless, the award was made in
conformity with law.

57. Entitlement of OFWs of damages & attorney’s fees

A. Entitlement of OFWs to Actual Damages

In the 2007 case of Santiago v. CF Sharp Crew Management, Inc., [G.R. No. 162419,
July 10, 2007], the High Court ruled that the respondent which failed to deploy the petitioner
overseas after a POEA-approved employment contract was signed by them, is liable to the latter
for actual damages. Respondent’s act of preventing petitioner from departing the port of Manila
and boarding “MSV Seaspread” constitutes a breach of contract, giving rise to petitioner’s cause
of action. Respondent unilaterally and unreasonably reneged on its obligation to deploy
petitioner and must, therefore, answer for the actual damages he suffered. Article 2199 of the
Civil Code provides that one is entitled to an adequate compensation only for such pecuniary
loss suffered by him as he has duly proved. Respondent is thus liable to pay petitioner actual
damages in the form of the loss of nine (9) months’ worth of salary as provided in the contract.

B. Entitlement of OFWs to Moral and Exemplary Damages and Attorney’s Fees

In the 2005 case of Athenna International Manpower Services, Inc. v. Villanos [G.R. No.
151303, April 15, 2005], the High Tribunal ruled that because of the breach of contract and bad
faith alleged against the employer and the petitioner recruitment agency, the award of
P50,000.00 in moral damages and P50,000.00 as exemplary damages, in addition to attorney’s
fees of ten percent (10%) of the aggregate monetary awards, must be sustained. These were also
the amounts awarded by way of moral and exemplary damages and attorney’s fees in the case of
Oriental Shipmanagement Co., Inc. v. Hon. CA, [G.R. No. 153750, January 25, 2006].

Also, in the case of ATCI Overseas Corporation v. CA, [G.R. No. 143949, August 9,
2001, 414 Phil. 883, 893], the award of attorney’s fees equivalent to ten percent (10%) of the
total award was held legally and morally justified as the OFWs were compelled to litigate and
thus incur expenses to protect their rights and interest.

However, in Acuña v. Hon. CA, [G.R. No. 159832, May 5, 2006], petitioners alleged that
they suffered humiliation, sleepless nights and mental anguish, thinking how they would pay the
money they borrowed for their placement fees. The Supreme Court, however, did not consider
this allegation sufficient to merit the award of moral damages, absent any evidence to prove bad
faith, fraud or ill motive on the part of private respondents. Consequently, without the award of
moral damages, there can be no award of exemplary damages, nor attorney’s fees.

58. Basis of computation of death benefits of OFW

Where the contract of a Filipino seaman provides that the workmen’s compensation
benefit shall be computed on the basis of whichever is greater between Philippine law or the law
of the registry of the vessel, it is correct to resolve the award based on the law of registry of the
vessel providing greater benefit. [Principe v. Philippine-Singapore Transport Service, Inc., G.R.
No. 80918, Aug. 16, 1989].
The standard contract of employment for Filipino seamen allows the payment of death
benefit pension, funeral benefit and burial gratuity to the private respondent-worker. [Eastern
Shipping Lines, Inc. v. POEA, G.R. No. L-76633, October 18, 1988].
The death of a seaman during the term of employment makes the employer liable to his
heirs for death compensation benefits. Once it is established that the seaman died during the
effectivity of his employment contract, the employer is liable. However, if the seaman dies after
the termination of his contract of employment, his beneficiaries are not entitled to death benefits.
[Hermogenes v. Osco Shipping Services, Inc., G.R. No. 141505, August 28, 2005].
Thus, in Prudential Shipping and Management Corp. v. Sta. Rita [G.R. No. 166580,
February 8, 2007], Virgilio, respondent’s deceased husband, was repatriated for medical
reasons. He arrived in the Philippines on March 8, 2000 for surgical repair after he was
diagnosed with umbilical hernia. Virgilio’s employment was thus terminated upon his
repatriation on March 8, 2000. Consequently, when he died on March 18, 2001, his
employment with petitioners had long been terminated. Hence, respondents are not
entitled to receive death benefits under the Contract from petitioners.

In Mabuhay Shipping Services, Inc., v. NLRC, [G.R. No. 94167, January 21, 1991], the
Supreme Court held that the death of a seaman during the term of employment does not
automatically give rise to compensation. The circumstances which led to the death as well as the
provisions of the contract, and the right and obligation of the employer and the seaman must be
taken into consideration, in consonance with the due process and equal protection clauses of the
Constitution.

59. “during the term” meaning

Means that during the effectivity of his employment contract.

60. Existence of degree of seafarer’s disability; how determined and declared

Pursuant to Sec. 20 (A) of the 2010 POEA-SEC, the employer is liable for disability
benefits when the seafarer suffers from work-related injury or illness during the term of
his contract. In this regard, Sec. 20 (E) thereof mandates the seafarer to disclose all pre-
existing illnesses or conditions in his PEME; failing in which shall disqualify him from
receiving disability compensation. Sec. 20 (E) “A seafarer who knowlingly conceals a
pre-existing illness or condition in the Pre-Employment Medical Examination (PEME)
shall be liable for misrepresentation and shall be disqualified from any compensation and
benefits. This is likewise a just cause for termination of employment and imposition of
appropriate administrative sanctions.”

An illness shall be considered as pre-existing if prior to the processing of the POEA

contract, any of the following conditions are present:
 a. The advice of a medical doctor on treatment was given for such continuing illness or
condition; or
b. The seafarer had been diagnosed and has knowledge of such illness or condition but
failed to disclose the same during the PEME, and such cannot be diagnosed during the
PEME.

61. Award in foreign currency; how computed

In Section 7 of Republic Act No. 10022 amending Section 10 of Republic Act No. 8042 states
that:

"In case of termination of overseas employment without just, valid or authorized cause
as defined by law or contract, or any unauthorized deductions from the migrant
worker's salary, the worker shall be entitled to the full reimbursement if (of) his
placement fee and the deductions made with interest at twelve percent (12%) per
annum, plus his salaries for the unexpired portion of his employment contract or for
three (3) months for every year of the unexpired term, whichever is less.

However, the clause, "or for three (3) months for every year of the unexpired term,
whichever is less" in Section 7 of Republic Act No. 10022 amending Section 10 of
Republic Act No. 8042 is declared unconstitutional and, therefore, null and void (Sameer v
Cabiles GR170139, Aug 5, 2014).

Additionally, the Supreme Court in the case of Antonio M. Serrano vs. Gallant Maritime
Services, Inc. and Marlow Navigation Co., Inc. (G.R. No. 167614, March 24, 2009) has brought
clarity and definitiveness to the issue of entitlement to benefits of a seafarer in case he is illegally
dismissed. It made certain that the seafarer should receive his salaries for the entire unexpired
portion of his contract, and not just for three months. With the above ruling, the Supreme Court
has reverted to the old, simple, and logical manner by which claims of illegally dismissed OFWs
are computed, i.e., their basic salaries multiplied by the entire unexpired portions of their
contracts.

62. Migrant workers and other OFW Resource Center services (a-k)

Pursuant to Sections 19 and 23 of the Migrant Workers and Overseas Filipinos Act of 1995, a
Migrant Workers and Overseas Filipinos Resource Center (Filipinos Resource Center) shall be
established in countries where there are at least 20,000 migrant workers. Where feasible it shall
be established within the premises of the Embassy. 

When the Filipinos Resource Center is established out side the premises of the Embassy, the
Department of Foreign Affairs shall exert its best effort to secure appropriate accreditation from
the host government in accordance with applicable laws and practices. 

Services
The Filipinos Resource Center shall provide the following services: 

a. Counseling and legal services; 

b. Welfare assistance including the procurement of medical and hospitalization services; 
c. Information, advisory programs to promote social integration such as post-arrival
orientation, settlement and community networking services and activities for social
interaction; 
d. Registration of undocumented workers to bring them within the purview of the Act; 
e. Implementation of the Voluntary Membership Program of OWWA; 
f. Human resource development, such as training and skills upgrading; 
g. Gender-sensitive programs and activities to assist particular needs of migrant workers; 
h. Orientation program for returning workers and other migrants; 
i. Monitoring of daily situation, circumstances and activities affecting migrant workers and
other overseas Filipinos; 
j. Seeing to it that labor and social welfare laws in the host country are fairly applied to
migrant workers and other overseas Filipinos, and 
k. Conciliation of disputes arising from employer-employee relationship. 

63. Funds established for OFWs (1-4)

Section 18 of Republic Act No. 10022

Section 18. Section 25 of Republic Act No. 8042, as amended, is hereby amended to read as
follows:

"SEC. 25. Legal Assistance Fund. - There is hereby established a legal assistance fund for
migrant workers, hereinafter referred to as the Legal Assistance Fund, in the amount of one
hundred million pesos (P100,000,000.00) to be constituted from the following sources.

(1)"Fifty million pesos (50,000,000.00) from the Contingency Fund of the President;

(2)"Thirty million pesos (30,000,000.00) from the Contingency Fund of the President Social
Fund;

(3)"Twenty million pesos (20,000,000.00) from the Welfare Fund for Overseas Workers
established under Letter of Instructions No. 537 as amended by Presidential Decree Nos. 1694
and 1809; and

(4)"An amount appropriated in the annual General Appropriations Act (GAA) which shall not be
less than Thirty million pesos (30,000,000.00) per year: Provided, that the balance of the Legal
Assistance Fund (LAF) including the amount appropriated for the year shall not be less than One
hundred million pesos (P100,000,000.00) : Provided, further, That the fund shall be treated as a
special fund in the National Treasury and its balance, including the amount appropriated in the
GAA, which shall form part of the Fund, shall not revert to the General Fund.

" Any balances of existing funds which have been set aside by the government specifically as
legal assistance or defense fund to help migrant workers shall upon effectivity of this Act, be
turned over to, and form part of, the Fund created under this Act."
 64. Mandatory obligation to remit foreign exchange earnings (a-u)

Article 22 of Presidential Decree No 442, Labor Code

ART. 22. Mandatory remittance of foreign exchange earnings. - It shall be mandatory for all
Filipino workers abroad to remit a portion of their foreign exchange earnings to their families,
dependents, and/or beneficiaries in the country in accordance with rules and regulations
prescribed by the Secretary of Labor.

It is thus mandatory for a worker or seaman to remit regularly a portion of his foreign exchange
earnings abroad to his beneficiary through the Philippine banking system. The obligation to remit
is required to be stipulated in the following documents:

1. Contract of employment and/or service between a foreign-based employer and a worker;

2. Affidavit of undertaking whereby a worker obligates himself to remit a portion of his

earnings to his beneficiaries;

3. Application for a license or authority to recruit workers;

4. Recruitment agreement and/or service contract between a licensed agency or authority

holder and its foreign employer or principal; and

5. Application for accreditation of a principal or project (Section 2, Rule XIII, Book I, Rules
to Implement the Labor Code)

Amount of Foreign Exchange Remittances

The percentage of foreign remittance shall be as follows:

1. Seamen and mariners: Eighty percent (80%) of the basic salary

2. Workers of Filipino contractors and construction companies: Seventy percent (70%) of

the basic salary;

3. Doctors, engineers, teachers, nurses, and other professional workers whose employment
contracts provide for free board and lodging facilities; Seventy percent (70%) of the basic
salary;

4. All other professionals whose employment contracts do not provide free board and
lodging facilities: Fifty percent (50%) of the basic salary;

5. Domestic and other service workers: Fifty percent (50%) of the basic salary;

6. All other workers not falling under the afore-mentioned categories: Fifty percent (50%)of
the basic salary. (Section 2, Executive Order No. 857)

Performing artists overseas are required to remit at least fifty percent (50%) of their monthly
salary to the Philippines. (Section B [7], DOLE Order No. 35, Series of 1994)

65. Employment standards for land-based OFWs (a-d)

EMPLOYMENT STANDARDS FOR LAND-BASED OVERSEAS FILIPINO WORKERS

 (According to the Revised POEA Rules and Regulations Governing Recruitment and
Employment of Land-based Overseas Filipino Workers of 2016)

PART V
EMPLOYMENT STANDARDS

RULE I

Formulation of Employment Standards

SECTION 134. Employment Standards. – The Administration shall secure the best possible
terms and conditions of employment for Overseas Filipino Workers. As such, it shall develop
and continually review employment standards in accordance with policy thrusts and market
developments.

SECTION 135. Minimum Provisions of Employment Contracts. – Consistent with welfare

promotion thrusts of the Administration, the following shall be the minimum provisions in
employment contracts for Overseas Filipino Workers:
a. Complete name and address of the employer/company;
b. Position and jobsite of the Overseas Filipino Worker;
c. Basic monthly salary, including benefits and allowances and mode of payment. The
salary shall not be lower than
the prescribed minimum wage in the host country or prevailing minimum wage in the
National Capital Region
of the Philippines, whichever is higher;
d. Food and accommodation or the monetary equivalent which shall be commensurate to
the cost of living in the
host country, or off-setting benefits;
e. Commencement and duration of contract;
f. Free transportation from and back to the point of hire, off-setting benefits, and free
inland transportation at the
jobsite or off-setting benefits;
g. Regular work hours and day off;
h. Overtime pay for services beyond the regular working hours, rest days and holidays;
i. Vacation leave and sick leave for every year of service;
j. Free emergency medical and dental treatment;
k. Just/valid/authorized causes for termination of the contract or of the services of the
workers, taking into
consideration the customs, traditions, norms, mores, practices, company, policies and
the labor laws and social
legislations of the host country;
l. Settlement of disputes;
m. Repatriation of worker in case of imminent danger due to war, calamity, and other
analogous circumstances, at
the expense of employer; and
n. In case of worker’s death/repatriation of Overseas Filipino Workers human remains
and personal belongings, at
the expense of the employer.

The Administration may formulate country- or skills- specific policies and guidelines based on
the following:
a. Existing labor and social laws of the host country;
b. Relevant bilateral and multilateral agreements or arrangements with the host country;
and
c. Prevailing conditions/realities in the market.
SECTION 136. Freedom to Stipulate. – Parties to overseas employment contracts are allowed to
stipulate other terms and conditions and other benefits. These benefits should be over and above
the minimum requirements. Said benefits shall not be contrary to law, public policy and morals.

SECTION 137. Disclosure of Terms and Conditions of Employment. – The licensed recruitment
agency shall, prior to the signing of the employment contracts, inform the Overseas Filipino
Workers of their rights and obligations, and disclose the full terms and conditions of
employment. The licensed recruitment agency shall likewise ensure that the Overseas Filipino
Worker is provided with a copy of the POEA-approved contract, to give the Overseas Filipino
Worker ample opportunity to examine the same.

66. Employment standards for seafarers (a-b)

EMPLOYMENT STANDARDS FOR SEAFARERS

(According to the 2016 Revised POEA Rules and Regulations Governing the Recruitment and
Employment of Seafarers, Issue on February 26, 2016)

PART IV
EMPLOYMENT STANDARDS

RULE I

Formulation of Standard Employment Contracts

SECTION 115. Standard Employment Contracts. – The Administration, through tripartite

consultation involving the seafarers and the private sector, shall determine, formulate and
establish minimum, separate and distinct standard employment contracts for seafarers, in
accordance with accepted international standards and maritime practices. These standard
employment contracts, which shall be reviewed periodically to keep them attuned to
international requirements and demands, shall be minimum requirement in every individual
contract approved by the Administration.

SECTION 116. Freedom to Stipulate. – Parties to the individual employment contract are
allowed to stipulate and mutually agree to other terms and conditions over and above the
minimum standards; provided, that the stipulations are mutually beneficial to both parties and are
not contrary to law, public policy and morals.

SECTION 117. Disclosure of Terms and Conditions of Employment. – The licensed manning
agency and the seafarer shall fully disclose all relevant information in relation to the recruitment
and employment of the seafarer.

67. Validity of POEA – SEC (a-d)

VALIDITY OF POEA STANDARD EMPLOYMENT CONTRACTS (POEA-SEC)

a. Validity of standard form contracts
b. Invalidity of contract diminishing salary
c. Interpretation of overseas employment contract
d. Stipulation on SSS coverage of OFWs
Validity of standard form contracts
The POEA Standard Employment Contract(POEA-SEC) for OFW is designed primarily
for the protection and benefit in the pursuit of their employment overseas. Its provisions must,
therefore, be construed and applied fairly, reasonably and liberally in their favor. Only then can
its beneficent provisions be carefully carried into effect. (Philippine Transmarine Carriers Inc. v.
NLRC; Wallem Maritime services Inc. v. NLRC)

- In another case (Vir-Jen Shipping and Marine Services v. NLRC), an issue was raised by
the movants on whether or not the seamen violated their contracts of employment when
they demanded 50 % increase in salaries and benefits. The Supreme Court ruled that the
form contracts approved by the National Seamen Board (now POEA) are designed to
protect Filipinos, not foreign shipowners who can take care of themselves.

The standard forms embody the basic minimum which must be incorporated as parts of
the employment contracts (Sec. 15 Rule V, Rules and Regulations Implementing the
Labor Code). They are not collective bargaining agreements or immutable contracts
which the parties cannot improve upon or modify in the course of an agrred peril of time.

To state therefore, that the affected seamen cannot petition the employer for higher
salaries during the 12 months duration of the contract runs counter the established
principles of labor legislation. The National Labor Relations Commission, as the
appellate tribunal from the decisions of the National Seamen Board, correctly ruled that
the seamen did not violate their contracts to warrant their dismissal.

In Suzara v. NLRC, the SC ruled that the act of the dismissed seamen in asking for
increases in their salaries does not constitute a breach of their employment contracts.

Invalidity of contract diminishing salary

A contract which diminishes the pay and benefits of the employee as embodied in the
contract duly approved by the POEA is null and void. The EXCEPTION is when such
subsequent contract providing for lesser pay and benefits is approved by the POEA. ( Chavez v.
Bonto-Perez)

Interpretation of overseas employment contract

Any ambiguity in the overseas employment contract shall be interpreted against the
parties that drafted it. (Cadalin v. POEA’s Administrator)
Labor contracts must be interpreted liberally in favor of the worker. (Ditan v. POEA)
The provisions contained in the standard contract of employment for Filipino seamen
pursuant to Memorandum Circular No. 2 (effective on February 1, 1984), are manifestations of
the State in favor of the working class consistent with the social justice and protection of the
working class provisions of the Constitution. Consequently, the payment of death benefit
pension, funeral benefit and gratuity to private respondent, will not preclude allowance to private
respondent’s claim against petitioner which is specifically reserved in the said contract or
employment. (Eastern Shipping Lines, Inc. v. POEA)
Stipulation on SSS coverage of OFWs
 Foreign Shipowners and manning agencies had generally expressed their conformity to
the inclusion of Filipino seafarers on board foreign vessels, within the coverage of the Social
Security Act.
The extension of coverage of the Social Security System to Filipino Seafarers arises by
virtue of the assent given in the contract of employment signed by the employer and the seafarer.
By extending the benefits of the Social Security Act to Filipino Seafarers , the individual
employment agreement entered into with a stipulation of such coverage contemplated in the
DOLE-SSS Memorandum Agreement merely gives the effect to the constitutional mandate
affording protection to labor. (Sta. Rita v. CA)

68. Prohibited practices under Art. 34

Art. 34. Prohibited practices. It shall be unlawful for any individual, entity, licensee, or holder
of authority:

a. To charge or accept, directly or indirectly, any amount greater than that specified in the
schedule of allowable fees prescribed by the Secretary of Labor, or to make a worker pay
any amount greater than that actually received by him as a loan or advance;
b. To furnish or publish any false notice or information or document in relation to
recruitment or employment;
c. To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under this Code.
d. To induce or attempt to induce a worker already employed to quit his employment in
order to offer him to another unless the transfer is designed to liberate the worker from
oppressive terms and conditions of employment;
e. To influence or to attempt to influence any person or entity not to employ any worker
who has not applied for employment through his agency;
f. To engage in the recruitment or placement of workers in jobs harmful to public health or
morality or to the dignity of the Republic of the Philippines;
g. To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly
authorized representatives;
h. To fail to file reports on the status of employment, placement vacancies, remittance of
foreign exchange earnings, separation from jobs, departures and such other matters or
information as may be required by the Secretary of Labor.
i. To substitute or alter employment contracts approved and verified by the Department of
Labor from the time of actual signing thereof by the parties up to and including the
periods of expiration of the same without the approval of the Secretary of Labor;
j. To become an officer or member of the Board of any corporation engaged in travel
agency or to be engaged directly or indirectly in the management of a travel agency; and
k. To withhold or deny travel documents from applicant workers before departure for
monetary or financial considerations other than those authorized under this Code and its
implementing rules and regulations.