Labor Law Notes Chan Original

UPDATED NOTES IN LABOR LAW
Prof. Joselito Guianan Chan

Professor of Law, Bar Reviewer, Book Author & Legal
Practitioner
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MAJOR TOPIC 1
GENERAL PROVISIONS
A.
BASIC POLICY ON LABOR
1. Under Article 3 of Labor Code:
a) Full protection to labor;

b) Promotion of full employment;
c) Promotion of equal work opportunities regardless of sex, race or creed;
d) Regulation of the relations between workers and employers;
e) Protection of the rights of workers to:
1. self-organization;
2. collective bargaining;
3. security of tenure; and
4. just and humane conditions of work.
2. Under Article XIII, Section 3 of the Constitution:
a) Full protection to labor, local and overseas, organized and unorganized;

b) Promotion of full employment;
c) Promotion of equality of employment opportunities for all;
d) Guarantee of the rights of all workers to:
1. self-organization;
2. collective bargaining and negotiations;
3. peaceful concerted activities, including the right to strike in accordance with law;
4. security of tenure;
5. humane conditions of work;
6. a living wage;
7. participate in policy and decision-making processes affecting their rights and benefits as may
be provided by law.
e) Promotion of 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.
f) Regulation of 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.
B.
CONSTRUCTION IN FAVOR OF LABOR
1. Under Article 1702 of the Civil Code.
“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.”
2. Article 4 of the Labor Code.
“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.”
3. Follow this rule in interpreting and construing:
a. DOUBTS OR AMBIGUITIES IN LABOR CONTRACTS such as employment contract and

collective bargaining agreement (CBA);
b. DOUBTS OR AMBIGUITIES IN EVIDENCE in labor cases.
.
C.
CONSTITUTIONAL AND CIVIL CODE PROVISIONS
RELATING TO LABOR LAW
1. Selected Constitutional Provisions.
 Under Article II (Declaration of Principles and State Policies):
a. “Section 18. The State affirms labor as a primary social economic force. It shall protect the
rights of workers and promote their welfare.”
This provision is invoked by the Supreme Court when it affirms the interest, rights and welfare of
labor. Example: When the SC nullifies a patently illegal provision in an employment contract or when
it invalidates a Quitclaim executed by a worker because of unconscionably low consideration.
 Under Article III (Bill of Rights):
a. Freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble
and petition the government for redress of grievances.
THIS FREEDOM GUARANTEED UNDER ARTICLE III, SECTION 4 OF THE CONSTITUTION

IS RELEVANT ONLY IN CONNECTION WITH PICKETING AND NOT IN RELATION TO
STRIKE WHICH HAS A DIFFERENT CONSTITUTIONAL BASIS (ARTICLE XIII, SECTION 3).
b. Right of public and private sector employees to form unions, associations, or societies for
purposes not contrary to law shall not be abridged.
THIS IS KNOWN AS “FREEDOM OF ASSOCIATION.” THIS PROVISION IS THE BASIS FOR

THE EMPLOYEES’ RIGHT TO SELF-ORGANIZATION.
c. Non-impairment of obligations of contracts.
THE CONCEPT OF THIS RIGHT IN POLITICAL LAW IS SIMILAR IN LABOR LAW.
d. Right to speedy disposition of cases in judicial, quasi-judicial or administrative bodies.
THIS CAN BE INVOKED IN LABOR CASES AT ALL LEVELS, to wit:
(1) Before quasi-judicial or administrative bodies, such as:

a) Labor Arbiters, NLRC;
b) Med-Arbiters/BLR;
c) DOLE Regional Directors/DOLE Secretary; and
d) Voluntary Arbitrators.
(2) Before judicial bodies, such as:

a) Court of Appeals; and
b) Supreme Court,
when labor cases reach these higher level courts.
e. Prohibition against involuntary servitude.
THIS PRINCIPLE IS RELEVANT ONLY IN THREE (3) SITUATIONS: NAMELY: (1)

RESIGNATION AND (2) RETURN-TO-WORK ORDER IN NATIONAL INTEREST CASES. THIS
MEANS THAT:
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(1) AN EMPLOYEE HAS THE RIGHT TO RESIGN SINCE HE CANNOT BE FORCED TO
WORK AGAINST HIS WILL;
(2) THE MOMENT AN ASSUMPTION OF JURISDICTION ORDER (AJO) IS ISSUED BY THE
DOLE SECRETARY IN NATIONAL INTEREST CASES, A STRIKER CAN BE ORDERED
TO RETURN TO WORK EVEN AGAINST HIS WILL IN CASE AT THE TIME OF SUCH
ISSUANCE OF THE AJO, THERE WAS ALREADY AN ON-GOING STRIKE; and
(3) WHEN EMPLOYEES ARE CALLED UPON TO RENDER MILITARY OR CIVIC DUTY.
 Under Article XIII (Social Justice and Human Rights):

Section 3. 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.
2. Selected Civil Code Provisions.

 Article 1700 of the Civil Code:
“Art. 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.”
In Davao Integrated Port Stevedoring Services v. Abarquez, March 19, 1993. It was held that a CBA, as
a labor contract within the contemplation of Article 1700 of the Civil Code, is not merely contractual in
nature but impressed with public interest, thus, it must yield to the common good.
Similarly, an employment contract or any other labor contract is treated as not merely contractual in
nature similar to an ordinary contract like a lease contract because it is impressed with public interest.
Consequently, all labor laws are deemed read or incorporated therein even if not so expressly provided or
stipulated in its provisions.
 Article 1702 of the Civil Code. (See discussion above of Article 1702 of the Civil Code, in relation
to Article 4 of the Labor Code regarding the rule on interpretation and construction provisions of law and
labor contracts).
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SYLLABUS
MAJOR TOPIC 2
PRE-EMPLOYMENT
A.
ILLEGAL RECRUITMENT
 Who may commit illegal recruitment?

Illegal recruitment may be committed by any of the following
(1) By Non-Licensee or Non-holder of authority; or
(2) By ANY PERSON, regardless of whether a non-licensee, non-holder, licensee or holder of
authority,
 What are illegal recruitment acts that can be committed by No. 1 above (NON-LICENSEE or NON-
HOLDER OF AUTHORITY)?
When what is committed by such NON-LICENSEES or ON-HOLDERS OF AUTHORITY is
any of the acts of recruitment allowed only to be done by licensees or holders of authority such as the
act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers
and includes referring, contract services, promising or advertising for employment abroad,
whether for profit or not.
In other words, had they possessed of license or authority, their commission of any of the
foregoing acts could have been valid and not constitutive of illegal recruitment.
NOTE: The non-licensee or non-holder of authority is presumed to be engaged in such
recruitment if he, in any manner, offers or promises for a fee employment abroad to two or more
persons.
 What are acts of illegal recruitment when committed by ANY PERSON, whether a NON-LICENSEE,
NON-HOLDER OF AUTHORITY or even by a 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 DOLE Secretary, or to make a worker pay or
acknowledge 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 the Labor Code, or
for the purpose of documenting hired workers with the POEA, which include the act of
reprocessing workers through a job order that pertains to non-existent work, work different
from the actual overseas work, or work with a different employer whether registered or not with
the POEA;
(d) To induce or attempt to induce a worker already employed to quit his employment in order to
offer him another unless the transfer is designed to liberate a worker from oppressive terms and
conditions of employment;
(e) To influence or attempt to influence any person or entity not to employ any worker who has
not applied for employment through his agency or who has formed, joined or supported, or has
contacted or is supported by any union or workers' organization;
(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 fail to submit 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 and Employment;
(h) To substitute or alter to the prejudice of the worker, employment contracts approved and
verified by the DOLE from the time of actual signing thereof by the parties up to and including
the period of the expiration of the same without the approval of the DOLE;
(i) For an officer or agent of a recruitment or placement agency 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 travel agency;
(j) To withhold or deny travel documents from applicant workers before departure for monetary
or financial considerations, or for any other reasons, other than those authorized under the Labor
Code and its implementing rules and regulations;
(k) Failure to actually deploy a contracted worker without valid reason as determined by the
Department of Labor and Employment;
(l) Failure to reimburse expenses incurred by the worker in connection with his documentation
and processing for purposes of deployment, in cases where the deployment does not actually
take place without the worker's fault. Illegal recruitment when committed by a syndicate or in
large scale shall be considered an offense involving economic sabotage; and
(m) To allow a non-Filipino citizen to head or manage a licensed recruitment/manning agency.”
PROHIBITED ACTIVITIES
IN RELATION TO ILLEGAL RECRUITMENT
 What are the PROHIBITED ACTIVITIES in connection with recruitment for overseas employment?
Besides illegal recruitment, the law additionally provides that it shall also be unlawful for any person
or entity to commit the following prohibited acts:
(1) Grant a LOAN to an overseas Filipino worker with interest exceeding eight percent (8%) per annum, which
will be used for payment of legal and allowable placement fees and make the migrant worker issue, either
personally or through a guarantor or accommodation party, post-dated checks in relation to the said loan;
(2) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to avail of a
LOAN only from specifically designated institutions, entities or persons;
(3) Refuse to condone or renegotiate a LOAN incurred by an overseas Filipino worker after the latter's
employment contract has been prematurely terminated through no fault of his or her own;
(4) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to
undergo HEALTH EXAMINATIONS only from specifically designated medical clinics, institutions, entities
or persons, except in the case of a seafarer whose medical examination cost is shouldered by the
principal/shipowner;
(5) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to
undergo TRAINING, SEMINAR, INSTRUCTION OR SCHOOLING of any kind only from specifically
designated institutions, entities or persons, except for recommendatory trainings mandated by
principals/shipowners where the latter shoulder the cost of such trainings;
(6) For a SUSPENDED RECRUITMENT/MANNING AGENCY to engage in any kind of recruitment activity
including the processing of pending workers' applications; and
(7) For a recruitment/manning agency or a foreign principal/employer to pass on the overseas Filipino worker or
deduct from his or her salary the payment of the cost of INSURANCE fees, premium or other
insurance related charges, as provided under the compulsory worker's INSURANCE coverage.
LICENSE VS. AUTHORITY
 What is a “license” for overseas recruitment?
“License” refers to the document issued by the DOLE Secretary authorizing a person, partnership
or corporation to operate a private recruitment or manning agency.
 What is an “authority” for overseas employment?
“Authority” refers to the document issued by the DOLE Secretary authorizing the officers, personnel,
agents or representatives of a licensed recruitment or manning agency to conduct recruitment and placement
activities in a place stated in the license or in a specified place.
ELEMENTS OF ILLEGAL RECRUITMENT
 What are the elements of illegal recruitment?

The essential elements of illegal recruitment vary in accordance with the following classifications:
(1) Simple illegal recruitment;
(2) When committed by a syndicate; or
(3) When committed in large scale.
When illegal recruitment is committed under either Nos. 2 or 3 above or both, it is considered an
offense involving economic sabotage.
SIMPLE ILLEGAL RECRUITMENT
 What are the 2 elements of simple illegal recruitment?
(1) The offender has no valid license or authority required by law to enable one to lawfully engage
in recruitment and placement of workers; and
(2) He undertakes either any activity within the meaning of “recruitment and placement” defined under
Article 13(b), (see above enumeration) or any prohibited practices (see above enumeration) under
Article 34 of the Labor Code.
 Can a recruiter be a natural or juridical person?
Yes.
 What are some relevant principles on illegal recruitment?
1. Mere impression that a person could deploy workers overseas is sufficient to constitute illegal recruitment.
But if no such impression is given, the accused should not be convicted for illegal recruitment.
2. Mere promise or offer of employment abroad amounts to recruitment.
3. There is no need to show that accused represented himself as a licensed recruiter.
4. Referrals may constitute illegal recruitment.
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5. It is illegal recruitment to induce applicants to part with their money upon false misrepresentations and
promises in assuring them that after they paid the placement fee, jobs abroad were waiting for them and that
they would be deployed soon.
6. Recruitment whether done for profit or not is immaterial.
7. The act of receiving money far exceeding the amount as required by law is not considered as
“recruitment and placement” as this phrase is contemplated under the law.
8. Actual receipt of fee is not an element of the crime of illegal recruitment.
9. Conduct of interviews amounts to illegal recruitment.
10. Absence of receipt is not essential to hold a person guilty of illegal recruitment.
11. Conviction for illegal recruitment may be made on the strength of the testimonies of the complainants.
12. Absence of documents evidencing the recruitment activities strengthens, not weakens, the case for
illegal recruitment.
13. Only one person recruited is sufficient to convict one for illegal recruitment.
14. Non-prosecution of another suspect is immaterial.
15. Execution of affidavit of desistance affects only the civil liability but has no effect on the criminal liability
for illegal recruitment.
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16. Defense of denial cannot prevail over positive identification. Positive identification where categorical
and consistent and not attended by any showing of ill motive on the part of the eyewitnesses on the matter
prevails over alibi and denial. Between the categorical statements of the prosecution witnesses, on the one
hand, and bare denials of the accused, on the other hand, the former must prevail.
ILLEGAL RECRUITMENT AS A FORM OF ECONOMIC SABOTAGE
 When is illegal recruitment considered a crime involving economic sabotage?
1. When committed by a syndicate; or

2. When committed in large scale.
NOTE: THE FIGURE THREE (3) MAKES THE DIFFERENCE, THUS:
 3 OR MORE RECRUITERS REGARDLESS OF NO. OF RECRUITEES = BY A SYNDICATE

 3 OR MORE RECRUITEES REGARDLESS OF NO. OF RECRUITERS = IN LARGE SCALE
 When is illegal recruitment committed by a syndicate?
If it is carried out by a group of three (3) or more persons conspiring or confederating with one another.
 Elements of illegal recruitment by a syndicate.
The essential elements of the crime of illegal recruitment committed by a syndicate are as follows:
1. There are at least three (3) persons who, conspiring and/or confederating with one another, carried
out any unlawful or illegal recruitment and placement activities as defined under Article 13(b) or
committed any prohibited activities under Article 34 of the Labor Code; and
2. Said persons are not licensed or authorized to do so, either locally or overseas.
The law does not require that the syndicate should recruit more than one (1) person in order to
constitute the crime of illegal recruitment by a syndicate. Recruitment of one (1) person would suffice to qualify
the illegal recruitment act as having been committed by a syndicate.
 When is illegal recruitment considered in large scale?
If committed against three (3) or more persons individually or as a group.

 Elements of illegal recruitment in large scale.
The elements of illegal recruitment in large scale, as distinguished from simple illegal recruitment, are as
follows
: 1. The accused engages in the recruitment and placement of workers as defined under Article 13(b)
or committed any prohibited activities under Article 34 of the Labor Code; and
2. The accused commits the same against three (3) or more persons, individually or as a group.
 Distinguished from illegal recruitment by a syndicate.
As distinguished from illegal recruitment committed by a syndicate, illegal recruitment in large scale may be
committed by only one (1) person. What is important as qualifying element is that there should be at least three
(3) victims of such illegal recruitment, individually or as a group.
 Recruitment in large scale or by a syndicate is malum prohibitum and not malum in se.
ILLEGAL RECRUITMENT VS. ESTAFA
 Can a person be charged and convicted separately for illegal recruitment and estafa involving one and
the same act of recruitment?
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a UPDATED LAST-MINUTE PRE-WEEK NOTES FOR THE 2019 BAR EXAM IN LABOR LAW
Yes. It is clear that conviction under the Labor Code does not preclude conviction for estafa or other
crimes under other laws.
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Some relevant principles:
 Same evidence to prove illegal recruitment may be used to prove estafa.
 Conviction for both illegal recruitment and estafa is not double jeopardy.
NATURE OF LIABILITY OF LOCAL RECRUITMENT AGENCY

AND FOREIGN EMPLOYER
 What is the nature of the liability between local recruiter and its foreign principal?
The nature of their liability is “solidary” or “joint and several” for any and all claims arising out of
the employment contract of OFWs.
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 Is the solidary liability of corporate officers with the recruitment agency “automatic” in character?
No. In order to hold the officers of the agency solidarily liable, it is required that there must be proof of
their culpability therefor. Thus, it was held in the 2013 case of Gagui v. Dejero,1 that while it is true that R.A. 8042
and the Corporation Code provide for solidary liability, this liability must be so stated in the decision sought to be
implemented. Absent this express statement, a corporate officer may not be impleaded and made to personally
answer for the liability of the corporation.
 What are some relevant principles on the persons liable for illegal recruitment?
1. Employees of a licensed recruitment agency may be held liable for illegal recruitment as principal by
direct participation, together with his employer, if it is shown that he actively and consciously participated
in illegal recruitment.
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2. Good faith and merely following orders of superiors are not valid defenses of an employee.
3. A manager of a recruitment/manning agency is not a mere employee. As such, he receives job
applications, interviews applicants and informs them of the agency’s requirement of payment of
performance or cash bond prior to the applicant’s deployment. As the crewing manager, he was at the
forefront of the company’s recruitment activities.
THEORY OF IMPUTED KNOWLEDGE
 What is meant by this theory?
Knowledge of the agent is deemed knowledge of the principal but not the other way around.
The theory of imputed knowledge is a rule that any information material to the transaction, either possessed
by the agent at the time of the transaction or acquired by him before its completion, is deemed to be the knowledge
of the principal, at least insofar as the transaction is concerned, even though the knowledge, in fact, is not
communicated to the principal at all.
Sunace International Management Services, Inc. v. NLRC2 - The High Court here has the opportunity
to discuss the application of the theory of imputed knowledge. The OFW (Divina), a domestic helper in
Taiwan, has extended her 12-month contract, after its expiration, for two (2) more years after which she returned to
the Philippines. It was established by evidence that the extension was without the knowledge of the local
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recruitment agency, petitioner Sunace. The Court of Appeals, however, affirmed the Labor Arbiter’s and NLRC’s
finding that Sunace knew of and impliedly consented to the extension of Divina’s 2-year contract. It went on to
state that “It is undisputed that [Sunace] was continually communicating with [Divina’s] foreign employer.” It
thus concluded that “[a]s agent of the foreign principal, ‘petitioner cannot profess ignorance of such extension
as obviously, the act of the principal extending complainant (sic) employment contract necessarily bound it.’”
In finding that the application by the CA of this theory of imputed knowledge was misplaced, the High
Court ruled that this theory ascribes the knowledge of the agent, Sunace, to the principal, employer Xiong, not the
other way around. The knowledge of the principal-foreign employer cannot, therefore, be imputed to its agent,
Sunace. There being no substantial proof that Sunace knew of and consented to be bound under the 2-year
employment contract extension, it cannot be said to be privy thereto. As such, Sunace and its owner cannot be held
solidarily liable for any of Divina’s claims arising from the 2-year employment extension. As the New Civil Code
provides: “Contracts take effect only between the parties, their assigns, and heirs, except in case where the
rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by
provision of law.”
TERMINATION OF CONTRACT OF MIGRANT WORKER

WITHOUT JUST OR VALID CAUSE
 Can an OFW acquire regularity of employment?
1 G.R. No. 196036, Oct. 23, 2013.

2 G.R. No. 161757, Jan. 25, 2006.
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No. The prevailing rule is that OFWs are contractual (fixed-term only), not regular, employees. In fact,
they can never attain regularity of employment. The nature of their employment is always fixed-term.
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 What are some relevant principles?
1. Indefinite period of employment of OFWs is not valid as it contravenes the explicit provision of
the POEA Rules and Regulations on fixed-period employment.
2. OFWs do not become regular employees by reason of nature of work, that is, that they are made
to perform work that is usually necessary and desirable in the usual business or trade of the
employer. The exigencies of their work necessitate that they be employed on a contractual basis. This
notwithstanding the fact that they have rendered more than twenty (20) years of service.
3. Regular employment does not result from the series of re-hiring of OFWs.
4. The fixed-period employment of OFWs is not discriminatory against them nor does it favor
foreign employers. It is for the mutual interest of both the seafarer and the employer why the
employment status must be contractual only or for a certain period of time.
5. The expiration of the employment contracts of OFWs marks its ending.
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 What is the effect of hiring a seafarer for overseas employment but assigning him to local vessel?
As held in OSM Shipping Philippines, Inc. v. NLRC,1 the non-deployment of the ship overseas did not
affect the validity of the perfected employment contract. After all, the decision to use the vessel for coastwise
shipping was made by petitioner only and did not bear the written conformity of private respondent. A
contract cannot be novated by the will of only one party. The claim of petitioner that it processed the contract of
private respondent with the POEA only after he had started working is also without merit. Petitioner cannot use its
own misfeasance to defeat his claim.
 What is the effect of non-deployment of OFW to overseas employment?
Petitioner-seafarer, in Santiago v. CF Sharp Crew Management, Inc.2 was not deployed overseas
despite the signing of a POEA-approved employment contract. One of his contentions is that such failure to deploy
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was an act designed to prevent him from attaining the status of a regular employee. The Supreme Court, however,
disagreed and ruled that “seafarers are considered contractual employees and cannot be considered as regular
employees under the Labor Code. Their employment is governed by the contracts they sign every time they are
rehired and their employment is terminated when the contract expires. The exigencies of their work necessitate that
they be employed on a contractual basis.”
 What is the doctrine of processual presumption?
“Presumed-identity approach” or “processual presumption” is an International Law doctrine which

dictates that where a foreign law is not pleaded or, even if pleaded, is not proved, the presumption is that foreign
law is the same as Philippine law. Thus, under this situation, Philippine labor laws should apply in determining the
issues presented in a case.
 Is due process under Philippine law applicable to termination of employment of OFWs?
Yes. In the absence of proof of applicable foreign law, OFWs are entitled to due process in accordance
with Philippine laws.
 Is the Agabon doctrine applicable to OFWs who are dismissed for cause but without due process?
Yes. The Agabon doctrine of awarding indemnity in the form of nominal damages in cases of valid
termination for just or authorized cause but without procedural due process also applies to termination of OFWs.
 Who has the burden of proof to show that the dismissal of the OFW is legal?
Burden of proof devolves on both recruitment agency and its foreign principal. ChanRobles
 Are OFWs entitled to the reliefs under the Labor Code?
No. They are not entitled to such reliefs under Article 279 as reinstatement or separation pay in lieu
of reinstatement or full backwages. REASON: Because their employment is fixed-term in nature. The nature of
their claim therefore is purely monetary, such as the payment of the salary for the unexpired portion of the
employment contract in case their dismissal is declared illegal.
 What are the reliefs to which OFWs are entitled?
They are entitled to the reliefs provided under Section 10 of R.A. No. 8042, as amended, to wit:
(1) All salaries for the unexpired portion of the contract;

(2) Full reimbursement of placement fees and deductions made with interest at 12% per annum.
As pointed out above, all the reliefs available to an illegally dismissed OFW are always monetary in nature.
It must be noted that under the 2009 Serrano doctrine, (Serrano v. Gallant Maritime Services, Inc.,),3
an illegally dismissed OFW is now entitled to all the salaries for the entire unexpired portion of their
employment
1 G.R. No. 138193, March 5, 2003.

2 G.R. No. 162419, July 10, 2007.
3 G.R. No. 167614, March 24, 2009.
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contracts, irrespective of the stipulated term or duration thereof. The underlined phrase in Section 10 below
has been declared unconstitutional in this case:
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“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 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, R.A. No. 10022 (March 8, 2010), which amended R.A. No. 8042 (Migrant Workers and
Overseas Filipinos Act of 1995), has replicated and re-enacted the same unconstitutional provision exactly as
above quoted. The question is: was the unconstitutionality of the above-underlined part of the provision
cured by such replication or re-enactment in the amendatory law?
The 2014 en banc case of Sameer Overseas Placement Agency, Inc. v. Joy C. Cabiles,1 answered this in
the negative. The said provision was thus declared still unconstitutional and null and void despite its replication
in R.A. No. 10022.
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 What are some principles in regard to monetary awards to OFWs?
1. Monetary award to OFW is not in the nature of separation pay or backwages but a form of indemnity.
2. Only salaries are to be included in the computation of the amount due for the unexpired portion of the contract.
Overtime, holiday and leave pay and allowances are not included. However, this rule on exclusion of allowance does not
apply in case it is encapsulated in the basic salary clause.
3. Entitlement to overtime pay of OFWs. - As far as entitlement to overtime pay is concerned, the correct criterion in
determining whether or not sailors are entitled to overtime pay is not whether they were on board and cannot leave ship
beyond the regular eight (8) working hours a day, but whether they actually rendered service in excess of said number of
hours. An OFW is not entitled to overtime pay, even if guaranteed, if he failed to present any evidence to prove that he
rendered service in excess of the regular eight (8) working hours a day.
4. In case of unauthorized deductions from OFW’s salary, he shall be entitled to the full reimbursement of the
deductions made with interest at 12% per annum. This is in addition to the full reimbursement of his placement fee with
the same interest of 12% per annum plus his salaries for the unexpired portion of his employment contract if he is
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terminated without just, valid or authorized cause as defined by law or contract.
BAN ON DIRECT HIRING
What is direct hiring?
“Direct Hiring” refers to the process of directly hiring workers by employers for overseas employment as authorized
by the DOLE Secretary and processed by the POEA, including:
Those hired by international organizations;

Those hired by members of the diplomatic corps;
Name hires or workers who are able to secure overseas employment opportunity with an employer without the
assistance or participation of any agency.
Does the POEA Administrator or the DOLE Secretary or DOLE Regional Director have the power to issue
closure order?
Yes. If upon preliminary examination or surveillance, the DOLE Secretary, the POEA Administrator or DOLE Regional
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Director is satisfied that such danger or exploitation exists, a written order may be issued for the closure of the
establishment being used for illegal recruitment activity.
Does the DOLE Secretary have the power to issue warrant of arrest and search and seizure orders?
No. Salazar v. Achacoso,2 declared that the exercise by the DOLE Secretary of his twin powers to issue arrest warrant
and search and seizure orders provided under Article 38[c] of the Labor Code is unconstitutional. Only regular courts
can issue such orders.
B.
EMPLOYMENT OF NON-RESIDENT ALIENS
 What is an ALIEN EMPLOYMENT PERMIT (AEP)?

AEP - a document issued by the DOLE Secretary through the DOLE-Regional Director who has
jurisdiction over the intended place of work of the foreign national, authorizing the foreign national to work in the
Philippines.
 Who are required to procure AEP?
All foreign nationals who intend to engage in gainful employment in the Philippines are required to apply for
AEP.
1 G.R. No. 170139, Aug. 05, 2014. The foreign employer alleged in this case that respondent’s dismissal was due to inefficiency in her work and negligence in her duties.
2 G.R. No. 81510, March 14, 1990.
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“Gainful employment” refers to a state or condition that creates an employer-employee relationship between
the
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Philippine-based company and the foreign national where the former has the power to hire or dismiss the
foreign national from employment, pays the salaries or wages thereof and has authority to control the performance
or conduct of the tasks and duties.
 What are the categories of foreign nationals EXEMPTED from securing AEP?
a. All members of the diplomatic service and foreign government officials accredited by and with
reciprocity arrangement with the Philippine government;
b. Officers and staff of international organizations of which the Philippine government is a member, and
their legitimate spouses desiring to work in the Philippines;
c. Owners and representatives of foreign principals whose companies are accredited by the POEA, who come
to the Philippines for a limited period and solely for the purpose of interviewing Filipino
applicants for employment abroad;
d. Foreign nationals who come to the Philippines to teach, present and/or conduct research studies in
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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;
e. Permanent resident foreign nationals and probationary or temporary resident visa holders under Section 13 (a-
f) of the Philippine Immigration Act of 1940 and Section 3 of the Alien Social Integration Act of
1995 (R.A. 7917);
f. Refugees and Stateless Persons recognized by DOJ pursuant to Article 17 of the UN Convention and
Protocol Relating to status of Refugees and Stateless Persons; and
g. All foreign nationals granted exemption by law.
 What are the categories of foreign nationals EXCLUDED from securing AEP?
a. Members of the governing board with voting rights only and do not intervene in the management of
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the corporation or in the day to day operation of the enterprise.
b. President and Treasurer, who are part-owners of the company.
c. Those providing consultancy services who do not have employers in the Philippines.
d. Intra-corporate transferee who is a manager, executive or specialist as defined below in accordance
with Trade Agreements and an employee of the foreign service supplier for at least one (1) year
continuous employment prior to deployment to a branch, subsidiary, affiliate or representative office in
the Philippines.
i. an Executive: a natural person within the organisation who primarily directs the management of
the organisation and exercises wide latitude in decision-making and receives only general
supervision or direction from higher level executives, the board of directors, or stockholders of
the business; an executive would not directly perform tasks related to the actual provision of the
service or services of the organisation;
ii. a Manager: a natural person within the organisation who primarily directs the
organisation/department/subdivision and exercises supervisory and control functions over other
supervisory, managerial or professional staff; does not include first-line supervisors unless
employees supervised are professionals; does not include employees who primarily perform tasks
necessary for the provision of the service; or
iii. a Specialist: a natural person within the organisation who possesses knowledge at an advanced level
of expertise essential to the establishment/provision of the service and/or possesses proprietary
knowledge of the organisation's service, research equipment, techniques or management; may
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include, but is not limited to, members of a licensed profession.
All other intra-corporate transferees not within these categories as defined above are required to secure
an AEP prior to their employment in the Philippines.
e. Contractual service supplier who is a manager, executive or specialist and an employee of a foreign
service supplier which has no commercial presence in the Philippines:
i. who enters the Philippines temporarily to supply a service pursuant to a contract between
his/her employer and a service consumer in the Philippines;
ii. must possess the appropriate educational and professional qualifications; and
iii. must be employed by the foreign service supplier for at least one year prior to the supply of service
in the Philippines.
f. Representative of the Foreign Principal/Employer assigned in the Office of Licensed Manning
Agency (OLMA) in accordance with the POEA law, rules and regulations.
 What is the period of validity of an AEP?
One (1) year is the validity of an AEP.

Exception: When employment contract provides otherwise but not to exceed three (3)
years. The AEP may be renewed subject to the conditions imposed by law.
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SYLLABUS
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3
LABOR STANDARDS
A.
CONDITIONS OF EMPLOYMENT
1.
COVERAGE
 Who are covered by the labor standards provisions of the Labor Code?
Employees in ALL establishments, whether operated for profit or not, are covered by the law on
labor standards.
 Who are excluded?
The following are excluded from the coverage of the law on labor standards:
a. Government employees;
b. Managerial employees;
c. Other officers or members of a managerial staff;
d. Workers paid by results;
e. Non-agricultural field personnel; and
f. Members of the family of the employer.
2.
HOURS OF WORK
a.
PRINCIPLES IN DETERMINING HOURS WORKED
 What are compensable hours worked?
The following shall be considered as compensable hours worked:
a) All time during which an employee is required to be on duty or to be at the employer’s

premises or to be at a prescribed workplace; and
b) All time during which an employee is suffered or permitted to work.
“Fair day’s wage for a fair day’s labor,” remains the basic factor in determining the
employees’ wages and backwages.
b.
NORMAL HOURS OF WORK
 What is the total normal hours of work per day?
Eight (8) hours daily.

 What is overtime work?
Any work in excess of said eight (8) normal hours is considered overtime work.
 May normal working hours be reduced?
Yes, provided that no corresponding reduction is made on the employee’s wage or salary equivalent to an
8- hour work day. In instances where the number of hours required by the nature of work is less than 8 hours,
such number of hours should be regarded as the employee’s full working day.
 What are flexible working hours?
“Flexible work arrangements” refer to alternative arrangements or schedules other than the traditional or
standard work hours, workdays and workweek. The effectivity and implementation of any of the flexible work
arrangements should be temporary in nature.
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Under R.A. No. 8972, otherwise known as “The Solo Parents’ Welfare Act of 2000,” solo parents are
allowed to work on a flexible schedule. The phrase “flexible work schedule” is defined in the same law as the
right granted to a solo parent employee to vary his/her arrival and departure time without affecting the core work
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hours as defined by the employer.
i.
POWER INTERRUPTIONS/BROWNOUTS
 What are the effects of power interruptions/brownouts?
The following are the effects of work interruption due to brownouts:
a. 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.
b. Brown-outs running for more than twenty (20) minutes may not be treated as hours
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worked provided any of the following conditions are present:
1. The employees can leave their workplace or go elsewhere whether within or without the
work premises; or
2. The employees can use the time effectively for their own interest.
c. In each case, the employer may extend the working hours of his employees outside the
regular schedules to compensate for the loss of productive man-hours without being liable
for overtime pay.
c.
MEAL PERIODS
(Article 85, Labor Code)
 What is the rule on time-off for regular meal?
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Every employer is required to give his employees, regardless of sex, not less than one (1) hour (or 60
minutes) time-off for regular meals.
 Is meal break compensable?
Being time-off, it is not compensable hours worked. In this case, the employee is free to do anything he wants,
except to work. If he is required, however, to work while eating, he should be compensated therefor.
d.
NIGHT SHIFT DIFFERENTIAL
 How is it reckoned and computed?
Night shift differential is equivalent to 10% of employee's regular wage for each hour of work
performed between 10:00 p.m. and 6:00 a.m. of the following day.
 What is the distinction between night shift differential pay and overtime pay?
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When the work of an employee falls at night time, the receipt of overtime pay shall not preclude the right
to receive night differential pay. The reason is the payment of the night differential pay is for the work done
during the night; while the payment of the overtime pay is for work in excess of the regular eight (8) working
hours.
 How is Night Shift Differential Pay computed?
1. Where night shift (10 p.m. to 6 a.m.) work is regular work.

a. On an ordinary day: Plus 10% of the basic hourly rate or a total of 110% of the basic hourly rate.
b. On a rest day, special day or regular holiday: Plus 10% of the regular hourly rate on a rest
day, special day or regular holiday or a total of 110% of the regular hourly rate.
2. Where night shift (10 p.m. to 6 a.m.) work is overtime work.
a. On an ordinary day: Plus 10% of the overtime hourly rate on an ordinary day or a total of
110% of the overtime hourly rate on an ordinary day.
b. On a rest day or special day or regular holiday: Plus 10% of the overtime hourly rate on a rest
day or special day or regular holiday.
3. For overtime work in the night shift. Since overtime work is not usually eight (8) hours, the
compensation for overtime night shift work is also computed on the basis of the hourly rate.
a. On an ordinary day. Plus 10% of 125% of basic hourly rate or a total of 110% of 125% of
basic hourly rate.
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b. On a rest day or special day or regular holiday. Plus 10% of 130% of regular hourly rate on
said days or a total of 110% of 130% of the applicable regular hourly rate.
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e.

 What are some basic principles on overtime work?
1. Work rendered after normal eight (8) hours of work is called “overtime work.”
2. In computing overtime work, "regular wage" or "basic salary" means "cash" wage only without deduction for
facilities provided by the employer.
3. "Premium pay" means the additional compensation required by law for work performed within eight
(8) hours on non-working days, such as regular holidays, special holidays and rest days.
4. "Overtime pay" means the additional compensation for work performed beyond eight (8) hours.
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5. Illustrations on how overtime is computed:
a. For overtime work performed on an ORDINARY DAY, the overtime pay is plus 25% of the
basic hourly rate.
b. For overtime work performed on a REST DAY OR ON A SPECIAL DAY, the overtime
pay is plus 30% of the basic hourly rate which includes 30% additional compensation as
provided in Article 93 [a] of the Labor Code.
c. For overtime work performed on a REST DAY WHICH FALLS ON A SPECIAL DAY,
the overtime pay is plus 30% of the basic hourly rate which includes 50% additional
compensation as provided in Article 93 [c] of the Labor Code.
d. For overtime work performed on a REGULAR HOLIDAY, the overtime pay is plus 30% of
the basic hourly rate which includes 100% additional compensation as provided in Article 94
[b] of the Labor Code.
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e. For overtime work performed on a REST DAY WHICH FALLS ON A REGULAR
HOLIDAY, the overtime pay is plus 30% of the basic hourly rate which includes 160%
additional compensation.
 What is the distinction between PREMIUM PAY and OVERTIME PAY?
“Premium pay” refers to the additional compensation required by law for work performed within the eight
(8) normal hours of work on non-working days, such as rest days and regular and special holidays.
“Overtime pay” refers to the additional compensation for work performed beyond the eight (8) normal
hours of work on a given day. An employee is entitled to both premium pay and overtime pay if he works on a
non-working day and renders overtime work on the same day.
 What is 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 DOLE, the non-payment by the employer of any overtime pay for overtime work is
justified and valid.
 What is emergency overtime work? (Article 89, Labor Code).
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a. General rule.
The general rule is that no employee may be compelled to render overtime work against his will. The
reason is that this will constitute involuntary servitude.
b. Exceptions when employee may be compelled to render overtime work:
1. When the country is at war or when any other national or local emergency has been declared by
the National Assembly or the Chief Executive;
2. When overtime work is necessary to prevent loss of life or property or in case of imminent danger
to public safety due to actual or impending emergency in the locality caused by serious accident, fire,
floods, typhoons, earthquake, epidemic or other disasters or calamities;
3. When there is urgent work to be performed on machines, installations or equipment, or in order to
avoid serious loss or damage to the employer or some other causes of similar nature;
4. When the work is necessary to prevent loss or damage to perishable goods;
5. When the completion or continuation of work started before the 8th hour is necessary to prevent
serious obstruction or prejudice to the business or operations of the employer; and
6. When overtime work is necessary to avail of favorable weather or environmental conditions
where performance or quality of work is dependent thereon.
 May an employee validly refuse to render overtime work under any of the afore-said circumstances?
No. When an employee refuses to render emergency overtime work under any of the foregoing conditions,
he may be dismissed on the ground of insubordination or willful disobedience of the lawful order of the
employer.
 Can overtime pay be waived?
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No. The right to claim overtime pay is not subject to a waiver. Such right is governed by law and not
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merely by the agreement of the parties.
f.
COMPUTATION OF ADDITIONAL COMPENSATION
(RATES ONLY)
1. How is premium pay for REGULAR HOLIDAYS computed?

• If the employee did not work, he/she shall be paid 100 percent of his/her salary for that day.
Computation: (Daily rate + Cost of Living Allowance) x 100%. The COLA is included in the
computation of regular holiday pay.
• If the employee worked, he/she shall be paid 200 percent of his/her regular salary for that day for the
first eight hours. Computation: (Daily rate + COLA) x 200%. The COLA is also included in
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computation of regular holiday pay.
If the employee worked in excess of eight hours (overtime work), he/she shall be paid an additional 30 percent of
his/her hourly rate on said day. Computation: Hourly rate of the basic daily wage x 200% x 130% x number of hours
worked.
If the employee worked during a regular holiday that also falls on his/her rest day, he/she shall be paid an
additional 30 percent of his/her daily rate of 200 percent. Computation: (Daily rate + COLA) x 200%] + (30% [Daily
rate x 200%)].
If the employee worked in excess of eight hours (overtime work) during a regular holiday that also falls on
his/her rest day, he/she shall be paid an additional 30 percent of his/her hourly rate on said day. Computation: (Hourly
rate of the basic daily wage x 200% x 130% x 130% x number of hours worked);
Simplified Computation:
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If work is rendered on an employee’s regular workday -
If unworked – 100%
If worked – 1st 8 hours – 200%
Work in excess of 8 hours – plus 30% of hourly rate on said day
If it is an employee’s rest day -
If unworked – 100%
If worked – first 8 hours – plus 30% of 200%
Work in excess of 8 hours – plus 30% of hourly rate on said day
How is premium pay for SPECIAL (NON-WORKING) DAYS OR SPECIAL HOLIDAYS computed?
If the employee did not work, the “no work, no pay” principle shall apply, unless there is a favorable company policy,
practice, or CBA granting payment on a special day.
If the employee worked, he/she shall be paid an additional 30 percent of his/her daily rate on the first eight hours of
work. Computation: [(Daily rate x 130%) + COLA).
If the employee worked in excess of eight hours (overtime work), he/she shall be paid an additional 30 percent of
his/her hourly rate on said day. Computation: (Hourly rate of the basic daily wage x 130% x 130% x number of hours
worked).
If the employee worked during a special day that also falls on his/her rest day, he/she shall be paid an additional
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fifty percent of his/her daily rate on the first eight hours of work. Computation: [(Daily rate x 150%) + COLA].
If the employee worked in excess of eight hours (overtime work) during a special day that also falls on his/her
rest day, he/she shall be paid an additional 30 percent of his/her hourly rate on said day. Computation: (Hourly rate of
the basic daily wage x 150% x 130% x number of hours worked).
Simplified Computation:
a. If unworked -
 No pay, except if there is a company policy, practice, or collective bargaining agreement (CBA) which
grants payment of wages on special days even if unworked.
b. If worked -
 First 8 hours – plus 30% of the daily rate of 100%
 Work in excess of 8 hours – plus 30% of hourly rate on said day
c. If falling on the employee’s rest day and if worked -
 First 8 hours – plus 50% of the daily rate of 100%
 Work in excess of 8 hours – plus 30% of hourly rate on said day
3. What are the effects of absences on the computation of holiday pay?
1. Employees on leave of absence with pay - entitled to holiday pay when they are on leave of absence
with pay.
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2. Employees on leave of absence without pay on the day immediately preceding the regular
holiday - may not be paid the required holiday pay if they have not worked on such regular holiday.
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3. Employees on leave while on SSS or employee’s compensation benefits - Employers should grant
the same percentage of the holiday pay as the benefit granted by competent authority in the form
of employee’s compensation or social security payment, whichever is higher, if they are not
reporting for work while on such benefits.
4. When day preceding regular holiday is a non-working day or scheduled rest day - should not be
deemed to be on leave of absence on that day, in which case, employees are entitled to the regular
holiday pay if they worked on the day immediately preceding the non-working day or rest day.
FACILITIES VS. SUPPLEMENTS
 What are facilities?

“Facilities” include articles or services for the benefit of the employee or his family but does not include
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tools of the trade or articles or services primarily for the benefit of the employer or necessary to the conduct of the
employer’s business. They are items of expense necessary for the laborer’s and his family’s existence and
subsistence which form part of the wage and when furnished by the employer, are deductible therefrom, since if
they are not so furnished, the laborer would spend and pay for them just the same.
 What are supplements?
The term “supplements” means extra remuneration or special privileges or benefits given to or received
by the laborers over and above their ordinary earnings or wages.
 What are the distinctions between facilities and supplements?
The benefit or privilege given to the employee which constitutes an extra remuneration over and above
his basic or ordinary earning or wage is supplement; and when said benefit or privilege is made part of the
laborer’s basic wage, it is a facility. The criterion is not so much with the kind of the benefit or item (food,
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lodging, bonus or sick leave) given but its purpose. Thus, free meals supplied by the ship operator to crew
members, out of necessity, cannot be considered as facilities but supplements which could not be reduced having
been given not as part of wages but as a necessary matter in the maintenance of the health and efficiency of the
crew during the voyage.
 What is the rule on deductibility of facilities and supplements?
Facilities are deductible from wage but not supplements.
g.
REST PERIODS
1.
WEEKLY REST DAY
 What is the duration of weekly rest period?
It shall be the duty of every employer, whether operating for profit or not, to provide each of his
employees a rest period of not less than twenty-four (24) consecutive hours after every six (6) consecutive
normal work days.
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 Is the employer’s prerogative to determine the rest period of its employees subject to limitations?
Yes. The employer shall determine and schedule the weekly rest day of his employees subject to CBA and
to such rules and regulations as the DOLE Secretary may provide. However, the employer shall respect the
preference of employees as to their weekly rest day when such preference is based on religious grounds.
2.
EMERGENCY REST DAY WORK
 When can an employer require work on a rest day?
The employer may require any of its employees to work on their scheduled rest day for the duration of
the following emergency and exceptional conditions:
a. In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon,
earthquake, epidemic or other disaster or calamity, to prevent loss of life and property, or in case of
force majeure or imminent danger to public safety;
b. In case of urgent work to be performed on machineries, equipment, or installations, to avoid serious
loss which the employer would otherwise suffer;
c. In the event of abnormal pressure of work due to special circumstances, where the employer
cannot ordinarily be expected to resort to other measures;
d. To prevent serious loss of perishable goods;
e. Where the nature of the work is such that the employees have to work continuously for seven (7) days
in a week or more, as in the case of the crew members of a vessel to complete a voyage and in other
similar cases; and
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f. When the work is necessary to avail of favorable weather or environmental conditions where
performance or quality of work is dependent thereon.
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HOLIDAYS
1. What are the regular and special holidays?

(a) Regular Holidays
New Year's Day - January 1
Maundy Thursday - Movable
Date Good Friday - Movable
Date
Eidul Fitr - Movable Date
Eidul Adha - Movable Date
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Araw ng Kagitingan - Monday nearest April
9 Labor Day - Monday nearest May 1
Independence Day - Monday nearest June
12 National Heroes Day - Last Monday of
August
Bonifacio Day - Monday nearest November
30 Christmas Day - December 25
Rizal Day - Monday nearest December 30
(b) Nationwide Special Holidays
Ninoy Aquino Day - Monday nearest August
21 All Saints’ Day - November 1
Feast of Immaculate
Conception of Mary - December 8
Last Day of the Year - December 31
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2. How many are the guaranteed paid regular holidays?
There are twelve (12) paid regular holidays in a year. This is important for purposes of reckoning
certain divisors and computation of employee benefits. The provision on holiday pay is mandatory, regardless of
whether an employee is paid on a monthly or daily basis.1
3. What is the Holiday Pay Rule?
“Holiday pay” refers to the payment of the regular daily wage for any unworked regular holiday.2 The
Holiday Pay Rule, therefore, applies to entitlement to holiday pay during regular holidays and not during special
non-working days. Thus, every employee covered by the Holiday Pay Rule is entitled to the minimum wage rate
(Daily Basic Wage and COLA). This means that the employee is entitled to at least 100% of his minimum wage
rate even if he did not report for work, provided he is present or is on leave of absence with pay on the workday
immediately preceding the holiday. Should the worker work on that day, such work performed on that day
would merit at least twice or two hundred percent (200%) of the wage rate of the employee.3
4. What is the coverage of the Holiday Pay Rule? Who are exempted employees?
As a general rule, the holiday pay benefit is applicable to all employees. The following, however, are
not covered by this benefit as they are considered exempted employees:
1. Government employees, whether employed by the National Government or any of its political
subdivisions, including those employed in government-owned and/or controlled corporations with
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original charters or created under special laws;
2. Those of retail and service establishments regularly employing less than ten (10) workers;
3. Kasambahay and persons in the personal service of another;
4. Managerial employees, if they meet all of the following conditions:
4.1. Their primary duty is to manage the establishment in which they are employed or of a department
or subdivision thereof;
4.2. They customarily and regularly direct the work of two or more employees therein; and
4.3. They have the authority to hire or fire other employees of lower rank; or their suggestions
and recommendations as to hiring, firing, and promotion, or any other change of status of other
employees are given particular weight.
5. Officers or members of a managerial staff, if they perform the following duties and responsibilities:
5.1. Primarily perform work directly related to management policies of their employer;
5.2. Customarily and regularly exercise discretion and independent judgment;
5.3. (a) Regularly and directly assist a proprietor or managerial employee in the management of the
establishment or subdivision thereof in which he or she is employed; or (b) execute, under
general supervision, work along specialized or technical lines requiring special training,
experience, or knowledge; or (c) execute, under general supervision, special assignments and tasks;
and
5.4. Do not devote more than twenty percent (20%) of their hours worked in a workweek to activities
which are not directly and closely related to the performance of the work described in paragraphs
5.1, 5.2, and
5.3 above.
1 Insular Bank of Asia and America Employees’ Union (IBAAEU) v. Inciong, G.R. No. L-52415, Oct. 23, 1984, 132 SCRA 663; Chartered Bank Employees Association v. Ople, G.R.
No. L-44717, Aug. 28, 1985, 138 SCRA 273; Mantrade/FMMC Division Employees and Workers Union v. Bacungan, G.R. No. L-48437, Sept. 30, 1986, 144 SCRA 510.
2 No. 2 [A], Id.; Section 3, Rule IV, Book III, Rules to Implement the Labor Code; DOLE Memorandum Circular No. 01, March 8, 2004.
3 No. 2 [C], Id.; Section 4, Rule IV, Book III, Rules to Implement the Labor Code.
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6. Field personnel and other employees whose time and performance are unsupervised by the
employer, including those who are engaged on task or contract basis, purely commission basis or those
who are paid a fixed amount for performing work irrespective of the time consumed in the performance
thereof.1
i.
SERVICE INCENTIVE LEAVE
1. What is service incentive
leave?
Every covered employee who has rendered at least one (1) year of service is entitled to a yearly service
incentive leave of five (5) days with pay.
The term “at least one year of service” should mean service within twelve (12) months, whether
continuous or broken, reckoned from the date the employee started working, including authorized absences
and paid regular holidays, unless the number of working days in the establishment as a matter of practice or
policy, or that provided in the employment contract, is less than twelve (12) months, in which case, said period
should be considered as one (1) year for the purpose of determining entitlement to the service incentive leave
benefit.
Who are excluded from its coverage?
All employees are covered by the rule on service incentive leave except:
Government employees, whether employed by the National Government or any of its political subdivisions, including
those employed in government-owned and/or controlled corporations with original charters or created under special
laws;
Persons in the personal service of another;
Managerial employees, if they meet all of the following conditions:
Their primary duty is to manage the establishment in which they are employed or of a department or subdivision thereof;
They customarily and regularly direct the work of two or more employees therein; and
They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to
hiring, firing, and promotion, or any other change of status of other employees are given particular weight.
Officers or members of a managerial staff, if they perform the following duties and responsibilities:
Primarily perform work directly related to management policies of their employer;
Customarily and regularly exercise discretion and independent judgment;
(a) Regularly and directly assist a proprietor or managerial employee in the management of the establishment or
subdivision thereof in which he or she is employed; or (b) execute, under general supervision, work along specialized or
technical lines requiring special training, experience, or knowledge; or (c) execute, under general supervision, special
assignments and tasks; and
Do not devote more than twenty percent (20%) of their hours worked in a workweek to activities which are not directly
and closely related to the performance of the work described in paragraphs 4.1, 4.2, and 4.3 above;
Field personnel and those whose time and performance are unsupervised by the employer,2 including those who are
engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work
irrespective of the time consumed in the performance thereof; 3
Those already enjoying this benefit;
Those enjoying vacation leave with pay of at least five (5) days; and
Those employed in establishments regularly employing less than ten (10) employees. 4
Are KASAMBAHAYS entitled to SIL?
Yes, but the grant of 5-day SIL to domestic workers or kasambahays is not based on Article 95 of the Labor Code but on
the following provision of R.A. 10361:5
“SEC. 29. Leave Benefits. – A domestic worker who has rendered at least one (1) year of service shall be entitled to an annual
service incentive leave of five (5) days with pay: Provided, That any unused portion of said annual leave shall not be cumulative
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or carried over to the succeeding years. Unused leaves shall not be convertible to cash.”6
Are unavailed service incentive leaves commutable to cash?
Yes. The service incentive leave is commutable to its money equivalent if not used or exhausted at the end of
the
year.
j.
SERVICE CHARGE
1. What is the newest law on service charges?
1 No. 2 [B], 2019 Handbook on Workers’ Statutory Monetary Benefits, issued by the Bureau of Working Conditions, DOLE.
2 No. 7 [A], 2019 Handbook on Workers’ Statutory Monetary Benefits, issued by the Bureau of Working Conditions, DOLE; See also Article 82, Labor Code; Section 1, Rule V, Book
III, Rules to Implement the Labor Code.
3 Section 1 (d), Rule V (Service Incentive Leave), Book III, Rules to Implement the Labor Code.
4 No. 7 [A], 2019 Handbook on Workers’ Statutory Monetary Benefits, issued by the Bureau of Working Conditions, DOLE; See also Article 82, Labor Code; Section 1, Rule V, Book
III, Rules to Implement the Labor Code.
5 Otherwise known as “Domestic Workers Act” or “Batas Kasambahay” and approved by President Benigno S. Aquino III on January 18, 2013.
6 See Section 7, Rule IV, Implementing Rules and Regulations of R.A. No. 10361 which provides: “SECTION 7. Service Incentive Leave. - A Kasambahay who has rendered at least
one (1) year of service shall be entitled to an annual service incentive leave of at least five (5) days with pay.
“Any unused portion of said annual leave shall not be cumulative or carried over to the succeeding years. Unused leaves shall not be convertible to cash.”
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R.A. No. 11360 which was approved on August 07, 2019. It amended Article 96 of the Labor Code. It
thus now states:
"ART. 96. Service Charges. - All service charges collected by hotels, restaurants and
similar establishments shall be DISTRIBUTED COMPLETELY AND EQUALLY
AMONG THE COVERED WORKERS EXCEPT MANAGERIAL EMPLOYEES.
"In the event that the minimum wage is increased by law or wage order, service charges
paid to the covered employees shall not be considered in determining the employer's
compliance with the increased minimum wage.
"To facilitate resolution of any dispute between the management and the employees on the
distribution of service charges, a grievance mechanism shall be established. If no grievance
mechanism is established or if inadequate, the grievance shall be referred to the regional
office of the Department of Labor and Employment which has jurisdiction over the
workplace for conciliation.
"For purposes of this Article, managerial employees refer to any person vested with powers
or prerogatives to lay down and execute management policies or hire, transfer, suspend,
lay-off, recall, discharge, assign or discipline employees or to effectively recommend such
managerial actions."
2. What are the kinds of establishment covered by the law on service charge?
The rules on service charge apply only to establishments collecting service charges, such as hotels,
restaurants, lodging houses, night clubs, cocktail lounges, massage clinics, bars, casinos and gambling houses, and
similar enterprises, including those entities operating primarily as private subsidiaries of the government.
3. Who are the employees covered by this law?
With the latest amendatory law cited above, all service charges collected by hotels, restaurants and similar
establishments shall be distributed completely and equally among the covered workers except managerial employees.
4. Who are not covered?
Specifically excluded from coverage are managerial employees, referring to any person vested with
powers or prerogatives to lay down and execute management policies or hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees or to effectively recommend such managerial actions.
k.
13TH MONTH PAY
 Who are covered by the 13th month pay law?

Only rank-and-file employees, regardless of their designation or employment status and irrespective of
the method by which their wages are paid, are entitled to the 13th month pay benefit. Managerial employees
are not entitled to 13th month pay.
 What is the minimum period of service required in a calendar year to be entitled to 13th month pay?
To be entitled to the 13th month pay benefit, it is imposed as a minimum service requirement that
the employee should have worked for at least one (1) month during a calendar year.
 When should 13th month pay be paid?
It must be paid not later than December 24 of every year.
 Who are excluded from its coverage?
The following employers are not covered by the 13th month pay law:
1. The government and any of its political subdivisions, including government-owned and
controlled corporations, except those corporations operating essentially as private subsidiaries of
the government.
2. Employers already paying their employees 13th month pay or more in a calendar year or its equivalent
at the time of the issuance of the Revised Guidelines.
3. Employers of those who are paid on purely commission, boundary, or task basis, and those who
are paid a fixed amount for performing a specific work, irrespective of the time consumed
in the performance thereof, except where the workers are paid on piece-rate basis, in which case,
the employer shall be covered by the Revised Guidelines insofar as such workers are concerned.
Workers paid on piece- rate basis shall refer to those who are paid a standard amount for every
piece or unit of work produced that is more or less regularly replicated without regard to the time
spent in producing the same.
 Are domestic workers or Kasambahays covered?
Yes. They are now covered under the Kasambahay Law.
 Are extras, casuals and seasonal employees entitled to 13th month pay?
Yes, they are entitled thereto.
 Is 13th month pay part of wage?
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13th month pay which is in the nature of additional income, is based on wage but not part of wage.
 What is the minimum amount of the 13th month pay?
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The minimum 13th month pay should not be less than one-twelfth (1/12) of the total basic salary
earned by an employee within a calendar year.
 What is meant by “basic salary” or “basic wage”?
“Basic salary” or “basic wage” contemplates work within the normal eight (8) working hours in a day. This
means that the basic salary of an employee for purposes of computing the 13th month pay should include all
remunerations or earnings paid by the employer for services rendered during normal working hours.
For purposes of computing the 13th month pay, “basic salary” should be interpreted to mean not the amount
actually received by an employee, but 1/12 of their standard monthly wage multiplied by their length of service
within a given calendar year.
B.
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WAGE
S
PAYMENT OF WAGES
 What is the basic distinction between wage and salary?

The term “wage” is used to characterize the compensation paid for manual skilled or unskilled labor.
“Salary,” on the other hand, is used to describe the compensation for higher or superior level of employment.
 What is the distinction in respect to execution, attachment or garnishment?
In cases of execution, attachment or garnishment of the compensation of an employee received from
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work issued by the court to satisfy a judicially-determined obligation, a distinction should be made whether such
compensation is considered “wage” or “salary.” Under Article 1708 of the Civil Code, if considered a
“wage,” the employee’s compensation shall not be subject to execution or attachment or garnishment, except for
debts incurred for food, shelter, clothing and medical attendance. If deemed a “salary,” such compensation is not
exempt from execution or attachment or garnishment. Thus, the salary, commission and other remuneration
received by a managerial employee (as distinguished from an ordinary worker or laborer) cannot be considered
wages. Salary is understood to relate to a position or office, or the compensation given for official or other service;
while wage is the compensation for labor.
 What are the attributes of wage?
“Wage” has the following
attributes:
1) It is the remuneration or earnings, however designated, for work done or to be done or for services
rendered or to be rendered;
2) It is capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece
or commission basis, or other method of calculating the same;
3) It 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
4) It includes the fair and reasonable value, as determined by the DOLE Secretary, of board, lodging, or
other facilities customarily furnished by the employer to the employee. “Fair and reasonable value” shall
not include any profit to the employer or to any person affiliated with the employer.
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 What is basic wage?
“Basic wage” means all the remuneration or earnings paid by an employer to a worker for services
rendered on normal working days and hours but does not include cost-of-living allowances, profit-sharing
payments, premium payments, 13th month pay or other monetary benefits which are not considered as part of or
integrated into the regular salary of the workers.
Further, as held in Honda Phils., Inc. v. Samahan ng Malayang Manggagawa sa Honda, the following
should be excluded from the computation of “basic salary,” to wit: payments for sick, vacation and
maternity leaves, night differentials, regular holiday pay and premiums for work done on rest days and
special holidays.
 What is minimum wage?
The minimum wage rates prescribed by law shall be the basic cash wages without deduction therefrom of
whatever benefits, supplements or allowances which the employees enjoy free of charge aside from the basic pay.
 What is statutory minimum wage?
The term “statutory minimum wage” refers simply to the lowest basic wage rate fixed by law that an
employer can pay his workers.
 What is regional minimum wage rate?
The term “regional minimum wage rates” refers to the lowest basic wage rates that an employer can pay
his workers, as fixed by the Regional Tripartite Wages and Productivity Boards (RTWPBs), and which shall
not be lower than the applicable statutory minimum wage rates.
 What are included/excluded in the term “wage rate”?
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The term "wage rate" includes cost-of-living allowances as fixed by the RTWPB, but excludes other
wage-related benefits such as overtime pay, bonuses, night shift differential pay, holiday pay, premium pay, 13th
month pay, premium pay, leave benefits, among others.
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 Can COLA be integrated into the minimum wage?
Yes. The cost-of-living allowance (COLA) may be ordered integrated into the minimum wage by the
Regional Tripartite Wages and Productivity Board (“RTWPB” or “Regional Board”).
 What is COLA?
COLA is not in the nature of an allowance intended to reimburse expenses incurred by employees in
the performance of their official functions. It is not payment in consideration of the fulfillment of official duty. As
defined, “cost of living” refers to “the level of prices relating to a range of everyday items” or “the cost of
purchasing the goods and services which are included in an accepted standard level of consumption.” Based on
this premise, COLA is a benefit intended to cover increases in the cost of living.
 What is the “NO WORK, NO PAY” principle?
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The “no work, no pay” or “fair day’s wage for fair day’s labor” means that if the worker does not work,
he is generally not entitled to any wage or pay. The exception is when it was the employer who unduly prevented
him from working despite his ableness, willingness and readiness to work; or in cases where he is illegally locked
out or illegally suspended or illegally dismissed, or otherwise illegally prevented from working, in which event, he
should be entitled to his wage.
2.
PROHIBITIONS REGARDING WAGES
(See Articles 112 to 119 of the Labor Code)
(1) NON-INTERFERENCE BY EMPLOYER IN THE DISPOSAL BY EMPLOYEES OF THEIR WAGES.

No employer is allowed to limit or otherwise interfere with the freedom of any employee to dispose of
his wages and no employer shall in any manner oblige any of his employees to patronize any store or avail of the
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services offered by any person.
(2) WAGES NOT SUBJECT TO EXECUTION OR ATTACHMENT; EXCEPTION.
The general rule is that laborer’s wages are not subject to execution or attachment. The exception is when
such execution or attachment is made for debts incurred for food, shelter, clothing and medical attendance.
(3) PROHIBITION ON DEDUCTIONS FROM WAGES.
 May employer deduct from wage of employees?

The general rule is that an employer, by himself or through his representative, is PROHIBITED
from making any deductions from the wages of his employees. The employer is not allowed to make
unnecessary deductions without the knowledge or authorization of the employees.
 Are there EXCEPTIONS to this rule?
Yes.
(a) In cases where the worker is insured with his consent by the employer, and the deduction is
to recompense the employer for the amount paid by him as premium on the insurance;
(b) For union dues, in cases where the right of the worker or his union to check-off has been recognized
by the employer or authorized in writing by the individual worker concerned; and
(c) In cases where the employer is authorized by law or regulations issued by the DOLE Secretary.
(d) Deductions for loss or damage under Article 114 of the Labor Code;
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(e) Deductions made for agency fees from non-union members who accept the benefits under the CBA
negotiated by the bargaining union. This form of deduction does not require the written authorization
of the non-bargaining union member concerned;
(f) Deductions for value of meal and other facilities;
(g) Deductions for premiums for SSS, PhilHealth, employees’ compensation and Pag-IBIG;
(h) Withholding tax mandated under the National Internal Revenue Code (NIRC);
(i) Withholding of wages because of the employee’s debt to the employer which is already due;
(j) Deductions made pursuant to a court judgment against the worker under circumstances where the
wages may be the subject of attachment or execution but only for debts incurred for food, clothing,
shelter and medical attendance;
(k) When deductions from wages are ordered by the court;
(4) PROHIBITION AGAINST DEPOSIT REQUIREMENT.
Article 114 of the Labor Code prohibits the employer to require that workers should make a deposit
from which deductions shall be made for the reimbursement of loss of tools, materials or equipment supplied by
him, or any damages thereto.
PERMISSIBLE DEDUCTIONS FOR LOSS OR DAMAGES.
If the employer is engaged in a trade, occupation or business where there is such practice of making
deductions or requiring deposits to answer for the reimbursement of loss of or damage to tools, materials or
equipment supplied by the employer to the employee.
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(5) PROHIBITION ON WITHHOLDING OF WAGES.
Article 116 of the Labor Code prohibits any person, whether employer or not, directly or indirectly,
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to withhold any amount from the wages of a worker.
Under Article 1706 of the Civil Code, withholding of the wages, except for a debt due, is not allowed to
be made by the employer.
Moreover, under Article 1709 of the same Code, the employer is not allowed to seize or retain any tool
or other articles belonging to the laborer.
(6) KICKBACKS.
Article 116 of the Labor Code also prohibits “kickback” which consists in the act of any person,
whether employer or not, directly or indirectly, to induce a worker to give up any part of his wages by force, stealth,
intimidation, threat or by any other means whatsoever, without the worker’s consent.
(7) PROHIBITION AGAINST DEDUCTION TO ENSURE EMPLOYMENT.
Article 117 of the Labor Code prohibits any person, whether the employer himself or his representative or
an intermediary, to require that a deduction be made or to actually make any deduction from the wages of any
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employee or worker, for the benefit of such employer or his representative or an intermediary, as consideration
of a promise of employment or, when already employed, for the continuation of such employment or retention
therein.
(8) RETALIATORY ACTIONS BY EMPLOYER.
Article 118 of the Labor Code prohibits the employer:
(a) to refuse to pay the wages and benefits of an employee; or
(b) to reduce his wages and benefits; or
(c) to discharge him from employment; or
(d) to discriminate against him in any
manner; on account and by reason of said
employee’s:
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(1) act of filing any complaint or institution of any proceeding under Title II [Wages], Book III of the
Labor Code; or
(2) act of testifying in said proceedings or when he is about to testify therein.
(9) FALSE STATEMENT, REPORT OR RECORD.
Article 119 of the Labor Code prohibits any person, whether employer or not, to make any false
statement, report or record required to be filed or kept in accordance with and pursuant to the provisions of the
Labor Code, knowing such statement, report or record to be false in any material respect.
Examples: Payrolls, time records, employment records and production records, among others.
3.
WAGE DISTORTION; CONCEPT
a.
WAGE ORDER
 What is a Wage
Order?
The term “Wage Order” refers to the order promulgated by the Regional Tripartite Wages and
Productivity Board (Regional Board) pursuant to its wage fixing authority.
 When is it proper to issue a Wage Order?
Whenever conditions in the region so warrant, the Regional Board shall investigate and study all pertinent
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facts and based on the prescribed standards and criteria, shall proceed to determine whether a Wage Order should be
issued. Any such Wage Order shall take effect after fifteen (15) days from its complete publication in at least one
(1) newspaper of general circulation in the region.
 What are the standards/criteria for minimum wage fixing?
In the determination of regional minimum wages, the Regional Board shall, among other relevant
factors, consider the following:
(1) Needs of workers and their families
1) Demand for living wages;
2) Wage adjustment vis-à-vis the consumer price index;
3) Cost of living and changes therein;
4) Needs of workers and their families;
5) Improvements in standards of living.
(2) Capacity to pay
1) Fair return on capital invested and capacity to pay of employers;
2) Productivity.
(3) Comparable wages and incomes
1) Prevailing wage levels.
(4) Requirements of economic and social development
1) Need to induce industries to invest in the countryside;
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2) Effects on employment generation and family income;

3) Equitable distribution of income and wealth along the imperatives of economic and
social development.
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 What are the methods of fixing the minimum wage rates?
There are two (2) methods, to wit:
1. “Floor-Wage” method which involves the fixing of a determinate amount to be added to the
prevailing statutory minimum wage rates. This was applied in earlier wage orders; and
2. “Salary-Cap” or “Salary-Ceiling” method where the wage adjustment is to be applied to
employees receiving a certain denominated salary ceiling. In other words, workers already being paid
more than the existing minimum wage (up to a certain amount stated in the Wage Order) are also to
be given a wage increase.
The “Salary-Cap” or “Salary-Ceiling” method is the preferred mode.
The distinction between the two (2) methods is best shown by way of an illustration. Under the “Floor
Wage Method,” it would be sufficient if the Wage Order simply set P15.00 as the amount to be added to the
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prevailing statutory minimum wage rates; while in the “Salary-Ceiling Method,” it would be sufficient if the Wage
Order states a specific salary, such as P250.00, and only those earning below it shall be entitled to the wage
increase.
b.
WAGE DISTORTION
 What is wage distortion?

“Wage distortion” contemplates a situation where an increase in prescribed wage rates results in either
of the following:
1. Elimination of the quantitative differences in the rates of wages or salaries; or
2. Severe contraction of intentional quantitative differences in wage or salary rates between and among
employee groups in an establishment as to effectively obliterate the distinctions embodied in such
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wage structure based on the following criteria:
a. Skills;
b. Length of service; or
c. Other logical bases of differentiation.
Wage distortion presupposes a classification of positions and ranking of these positions at various levels.
One visualizes a hierarchy of positions with corresponding ranks basically in terms of wages and other emoluments.
Where a significant change occurs at the lowest level of positions in terms of basic wage without a corresponding
change in the other level in the hierarchy of positions, negating as a result thereof the distinction between one level
of position from the next higher level, and resulting in a parity between the lowest level and the next higher level
or rank, between new entrants and old hires, there exists a wage distortion. xxx. The concept of wage distortion
assumes an existing grouping or classification of employees which establishes distinctions among such
employees on some relevant or legitimate basis. This classification is reflected in a differing wage rate for each of
the existing classes of employees.
 What are the elements of wage distortion?
The four (4) elements of wage distortion are as follows:
(1) An existing hierarchy of positions with corresponding salary rates;
(2) A significant change in the salary rate of a lower pay class without a concomitant increase in the
salary rate of a higher one;
(3) The elimination of the distinction between the two levels; and
(4) The existence of the distortion in the same region of the country.
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Normally, a company has a wage structure or method of determining the wages of its employees. In a
problem dealing with “wage distortion,” the basic assumption is that there exists a grouping or classification of
employees that establishes distinctions among them on some relevant or legitimate bases.
Involved in the classification of employees are various factors such as the degrees of responsibility, the
skills and knowledge required, the complexity of the job, or other logical basis of differentiation. The differing
wage rate for each of the existing classes of employees reflects this classification.
 What is the formula for rectifying or resolving wage distortion?
Following is the formula for the correction of wage distortion in the pay scale structures:
Minimum Wage = % x Prescribed Increase = Distortion Adjustment
Actual Salary
The above formula was held to be just and equitable.
4.
NON-DIMINUTION OF BENEFITS
 What is the applicability of the non-diminution rule in Article 100 of the Labor Code?
Albeit Article 100 is clear that the principle of non-elimination and non-diminution of benefits apply only
to the benefits being enjoyed “at the time of the promulgation” of the Labor Code, the Supreme Court has
consistently cited Article 100 as being applicable even to benefits granted after said promulgation. It has, in fact,
been treated as the
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legal anchor for the declaration of the invalidity of so many acts of employers deemed to have eliminated or
diminished the benefits of employees.
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The 2014 case of Wesleyan University-Philippines v. Wesleyan University-Philippines Faculty and
Staff Association,1 succinctly pointed out that the Non-Diminution Rule found in Article 100 of the Labor Code
explicitly prohibits employers from eliminating or reducing the benefits received by their employees. This rule,
however, applies only if the benefit is based on any of the following:
(1) An express policy;
(2) A written contract; or
(3) A company practice.
There is not much controversy if the benefit involved is provided for under Nos. 1 and 2 above. Thus, if it
is expressly laid down in a written policy unilaterally promulgated by the employer, the employer is duty-bound to
adhere and comply by its own policy. It cannot be allowed to renege from its commitment as expressed in the
policy.
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If the benefit is granted under a written contract such as an employment contract or a collective
bargaining agreement (CBA), the employer is likewise under legal compulsion to so comply therewith.
On No. 3 above, please see discussion below.
4.1.
COMPANY PRACTICE
 What is company practice?
Company practice is a custom or habit shown by an employer’s repeated, habitual customary or succession
of acts of similar kind by reason of which, it gains the status of a company policy that can no longer be
disturbed or withdrawn.
To ripen into a company practice that is demandable as a matter of right, the giving of the benefit should
not be by reason of a strict legal or contractual obligation but by reason of an act of liberality on the part
of the employer.
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What are the criteria that may be used to determine existence of company practice?
Since there is no hard and fast rule which may be used and applied in determining whether a certain act of
the employer may be considered as having ripened into a practice, the following criteria may be used to determine
whether an act has ripened into a company practice:
(1) The act of the employer has been done for a considerable period of time;
(2) The act should be done consistently and intentionally; and
(3) The act should not be a product of erroneous interpretation or construction of a doubtful or difficult
question of law or provision in the CBA.
(See the 2013 case of Vergara, Jr. v. Coca-Cola Bottlers Philippines, Inc.2)
1. THE ACT OF THE EMPLOYER HAS BEEN DONE FOR A CONSIDERABLE PERIOD OF
TIME.
If done only once as in the case of Philippine Appliance Corporation (Philacor) v. CA,3 where the
CBA signing bonus was granted only once during the 1997 CBA negotiation, the same cannot be considered as
having ripened into a company practice.
In the following cases, the act of the employer was declared company practice because of the
considerable period of time it has been practiced:
(a) Davao Fruits Corporation v. Associated Labor Unions.4 - The act of the company of freely and
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continuously including in the computation of the 13th month pay, items that were expressly excluded
by law has lasted for six (6) years, hence, was considered indicative of company practice.
(b) Sevilla Trading Company v. A. V. A. Semana.5 - The act of including non-basic benefits such as
paid leaves for unused sick leave and vacation leave in the computation of the employees’ 13th month
pay for at least two (2) years was considered a company practice.
(c) The 2010 case of Central Azucarera de Tarlac v. Central Azucarera de Tarlac Labor Union-
NLU,6 also ruled as company practice the act of petitioner of granting for thirty (30) years, its
workers the mandatory 13th month pay computed in accordance with the following formula: Total
Basic Annual Salary divided by twelve (12) and Including in the computation of the Total Basic
Annual Salary the following: basic monthly salary; first eight (8) hours overtime pay on Sunday
and legal/special holiday; night premium pay; and vacation and sick leaves for each year.
1 G.R. No. 181806, March 12, 2014.

2 G.R. No. 176985, April 1, 2013; See also Supreme Steel Corporation v. Nagkakaisang Manggagawa ng Supreme Independent Union (NMS-IND-APL), G.R. No.
185556, March 28, 2011, 646 SCRA 501, 527; TSPIC Corporation v. TSPIC Employees Union (FFW), G.R. No. 163419, Feb. 13, 2008, 545 SCRA 215, 226.
3 G.R. No. 149434, June 3, 2004.
4 G.R. No. 85073, Aug. 24, 1993, 225 SCRA 562.
5 G.R. No. 152456, April 28, 2004, 438 SCRA 239.
6 G.R. No. 188949, July 26, 2010.
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2. THE ACT SHOULD BE DONE CONSISTENTLY AND INTENTIONALLY.

The following cases may be cited to illustrate this principle:
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(a) Tiangco v. Leogardo, Jr.,1 where the employer has consistently been granting fixed monthly
emergency allowance to the employees from November, 1976 but discontinued this practice effective
February, 1980 insofar as non-working days are concerned based on the principle of “no work, no
pay.” The Supreme Court ruled that the discontinuance of said benefit contravened Article 100 of the
Labor Code which prohibits the diminution of existing benefits.
3. THE ACT SHOULD NOT BE A PRODUCT OF ERRONEOUS INTERPRETATION OR
CONSTRUCTION OF A DOUBTFUL OR DIFFICULT QUESTION OF LAW OR PROVISION
IN THE CBA.
The general rule is that if it is a past error that is being corrected, no vested right may be said to have
arisen therefrom nor any diminution of benefit may have resulted by virtue of the correction thereof. The error,
however, must be corrected immediately after its discovery; otherwise, the rule on non-diminution of benefits
would still apply.
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The following cases would illuminate this principle:
Globe Mackay Cable and Radio Corporation v. NLRC, 2 where the Supreme Court ruled on the proper
computation of the cost-of-living allowance (COLA) for monthly-paid employees. Petitioner corporation, pursuant to
Wage Order No. 6 (effective October 30, 1984), increased the COLA of its monthly-paid employees by multiplying the
P3.00 daily COLA by 22 days which is the number of working days in the company. The union disagreed with the
computation, claiming that the daily COLA rate of P3.00 should be multiplied by 30 days which has been the practice of
the company for several years. The Supreme Court, however, upheld the contention of the petitioner corporation. It held
that the grant by the employer of benefits through an erroneous application of the law due to absence of clear
administrative guidelines is not considered a voluntary act which cannot be unilaterally discontinued.
TSPIC Corp. v. TSPIC Employees Union [FFW],3 where the Supreme Court reiterated the rule enunciated in Globe-
Mackay, that an erroneously granted benefit may be withdrawn without violating the prohibition against non-diminution
of benefits. No vested right accrued to individual respondents when TSPIC corrected its error by crediting the salary
increase for the year 2001 against the salary increase granted under Wage Order No. 8, all in accordance with the CBA.
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Hence, any amount given to the employees in excess of what they were entitled to, as computed above, may be legally
deducted by TSPIC from the employees’ salaries.
But if the error does not proceed from the interpretation or construction of a law or a provision in the CBA, the same
may ripen into a company practice.
Example:
(a) Hinatuan Mining Corporation and/or the Manager v. NLRC, 4 where the act of the employer in granting
separation pay to resigning employees, despite the fact that the Labor Code does not grant it, was considered an
established employer practice.
C. LEAVES
1.
SERVICE INCENTIVE LEAVE
(See discussion above under the topic of CONDITIONS OF EMPLOYMENT)
2.
MATERNITY LEAVE
What is the new 105-DAY EXPANDED MATERNITY LEAVE LAW (R.A. NO. 11210)?
On February 20, 2019, President Rodrigo Duterte approved R.A. No. 11210, otherwise known as the “105-Day
Expanded Maternity Leave Law.”5 This is the prevailing law on maternity leave benefit.
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 Who are the women entitled to maternity leave?
All covered females, regardless of civil status, employment status, and the legitimacy of her child, are
entitled to maternity leave.
 What is the period of leave?
Under the old law: 60 days – for normal delivery; and 78 days – for caesarian delivery
Under the new law:
1 G.R. No. L-57636, May 16, 1983, 122 SCRA 267; 207 Phil. 2235.
2 G.R. No. 74156, June 29, 1988, 163 SCRA 71.
3 G.R. No. 163419, Feb. 13, 2008.
4 G.R. No. 117394, Feb. 21, 1997.
5 This law is entitled “An Act Increasing the Maternity Leave Period to One Hundred Five (105) Days for Female Workers with an Option to Extend for an Additional Thirty (30) Days
without Pay, and Granting an Additional Fifteen (15) Days for Solo Mothers and For Other Purposes.”
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1. Paid leave benefit granted to a qualified female worker in both the PUBLIC SECTOR and the
PRIVATE SECTOR (which is covered by the SSS, including those in the informal economy), for
the duration of:
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the mode of delivery
MISCARRIAGE AND
EMERGENCY TERMINATION OF
PREGNANCY
Period of maternity leave 105 days of paid leave 60 days of paid leave
For female worker qualified as a Additional fifteen (15) days of None

solo parent under R.A. No. 8972, or paid leave
the "Solo Parents' Welfare Act of
2000"
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EXTENDED MATERNITY LEAVE: Available only in case of live None
An option to extend for an additional childbirth
thirty (30) days without pay
FREQUENCY OF THE GRANT In every instance of live childbirth, In every instance of pregnancy,
regardless of frequency miscarriage or emergency
termination of pregnancy,
regardless of frequency
ALLOCATION OF MATERNITY A female worker entitled to Not available

LEAVE CREDITS to the child's maternity leave benefits may, at her
father or alternate caregiver option, allocate up to seven (7)
days of said benefits to the child's
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father or alternate caregiver
NOTE: This discussion on the 2019 new maternity benefits law is being made here only for
academic purposes. It is highly unlikely that a question will be asked on this in the 2019 bar
exam because this law was passed way beyond the cut-off date of June 30, 2018.
 What is the amount granted under the old law?

Daily maternity benefit equivalent to 100% of her average daily salary credit for sixty (60) days or
seventy- eight (78) days in case of caesarian delivery/
 What is the number of delivery or miscarriage covered under the old law?
The maternity benefits shall be paid only for the first four (4) deliveries or miscarriages.
 Is an unmarried woman entitled to maternity leave benefit under both old and new law?
Yes. For as long as a woman is pregnant, she is entitled to maternity leave benefit regardless of whether she
is married or unmarried.
3.
PATERNITY LEAVE
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 What is paternity leave
benefit?
“Paternity leave” covers a married male employee allowing him not to report for work for seven
(7) CALENDAR days but continues to earn the compensation therefor, on the condition that his spouse has
delivered a child or suffered miscarriage for purposes of enabling him to effectively lend support to his wife in
her period of recovery and/or in the nursing of the newly-born child.
“Delivery” includes childbirth or any miscarriage.
“Spouse” refers to the lawful wife. For this purpose, “lawful wife” refers to a woman who is legally
married to the male employee concerned.
“Cohabiting” refers to the obligation of the husband and wife to live together.
 What is the covered total number of deliveries?
Every married employee in the private and public sectors is entitled to a paternity leave of seven (7)
calendar days with full pay for the first four (4) deliveries of the legitimate spouse with whom he is cohabiting.
Paternity leave benefits are granted to the qualified employee after the delivery by his wife, without
prejudice to an employer allowing an employee to avail of the benefit before or during the delivery, provided that
the total number of days should not exceed seven (7) calendar days for each delivery.
 Is an unavailed paternity leave benefit convertible to cash?
No. In the event that the paternity leave benefit is not availed of, said leave shall not be convertible to cash.
4.
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SOLO PARENT LEAVE

(R.A. No. 8972)
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 What is the solo parent
leave?
This is the leave benefit granted to a male or female solo parent to enable him/her to perform parental
duties and responsibilities where his/her physical presence is required.
 How many days may be availed of as solo parent leave?
The solo parent leave shall not be more than seven (7) WORKING days every year to a solo parent who
has rendered service of at least one (1) year, to enable him/her to perform parental duties and responsibilities
where his/her physical presence is required. This leave shall be non-cumulative.
It bears noting that this leave privilege is an additional leave benefit which is separate and distinct from
any other leave benefits provided under existing laws or agreements.
 Who is a solo parent?
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The term "solo parent" refers to 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;
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(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.
 What is the effect of change of status of the solo parent?
A change in the status or circumstance of the parent claiming benefits under the law, such that he/she is
no longer left alone with the responsibility of parenthood, shall terminate his/her eligibility for these benefits.
 Who are considered children under this law?
"Children" refer to those living with and dependent upon the solo parent for support who are
unmarried, unemployed and not more than eighteen (18) years of age, or even over eighteen (18) years but are
incapable of self- support because of mental and/or physical defect/disability.
 Is an unavailed parental leave convertible to cash?
unless specifically agreed upon previously.

5.
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No. In the event that the parental leave is not availed of, said leave shall not be convertible to cash
LEAVE BENEFITS FOR WOMEN WORKERS

UNDER R.A. 9710 AND R.A. 9262
a.
SPECIAL LEAVES FOR WOMEN WORKERS
(R.A. No. 9710)
 What is this special leave benefit?
A special leave benefit for women was granted under R.A. No. 9710, otherwise known as “The Magna
Carta of Women” [August 14, 2009]. Thus, any female employee in the public and private sector regardless of age
and civil status shall be entitled to a special leave of two (2) months with full pay based on her gross monthly
compensation subject to existing laws, rules and regulations due to surgery caused by gynecological disorders
under the following terms and conditions:
1. She has rendered at least six (6) months continuous aggregate employment service for the last twelve
(12) months prior to surgery;
2. In the event that an extended leave is necessary, the female employee may use her earned leave credits; and
3. This special leave shall be non-cumulative and non-convertible to cash.
“Gynecological disorders” refer to disorders that would require surgical procedures such as, but not
limited to, dilatation and curettage and those involving female reproductive organs such as the vagina, cervix,
uterus, fallopian
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tubes, ovaries, breast, adnexa and pelvic floor, as certified by a competent physician. Gynecological surgeries shall
also include hysterectomy, ovariectomy, and mastectomy.
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 Is this leave similar to maternity leave?
No. This leave should be distinguished from maternity leave benefit, a separate and distinct benefit, which
may be availed of in case of childbirth, miscarriage, complete abortion or emergency termination of
pregnancy.
A woman, therefore, may avail of this special leave benefit in case she undergoes surgery caused
by gynecological disorder and at the same time maternity benefit as these two leaves are not mutually exclusive.
b.
LEAVE FOR VICTIMS OF
VIOLENCE AGAINST WOMEN AND
CHILDREN (R.A. No. 9262)
 What is this kind of
leave?
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This special leave is granted to a woman employee who is a victim under this law. It is for a total of ten (10)
days of paid leave of absence, in addition to other paid leaves under the law. It is extendible when the necessity arises
as specified in the protection order. Its purpose is to enable the woman employee to attend to the medical and legal
concerns relative to said law. This leave is not convertible to cash.
What is the requirement for its entitlement?
At any time during the application of any protection order, investigation, prosecution and/or trial of the criminal case, a
victim of Violence Against Women and their Children (VAWC) who is employed shall be entitled to said paid leave of
up to ten (10) days. The Punong Barangay/kagawad or prosecutor or the Clerk of Court, as the case may be, shall issue a
certification at no cost to the woman that such an action is pending, and this is all that is required for the employer to
comply with the 10-day paid leave.
D.
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SPECIAL GROUPS OF EMPLOYEES
1.
WOMEN
a.
DISCRIMINATION
What are acts of discrimination under the Labor Code?

Payment of a lesser compensation, including wage, salary or other form of remuneration and fringe benefits, to a female
employee as against a male employee, for work of equal value; and
Favoring a male employee over a female employee with respect to promotion, training opportunities, study and
scholarship grants solely on account of their sexes.
What are acts of discrimination under the Magna Carta of Women?
R.A. No. 9710, otherwise known as “The Magna Carta of Women,” is a comprehensive women’s human rights law that
seeks to eliminate discrimination against women by recognizing, protecting, fulfilling and promoting the rights of
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Filipino women, especially those in marginalized sector.
Based on the definition of the term “Discrimination Against Women” in R.A. No. 9710, the following are considered
discriminatory acts:
1. Any gender-based distinction, exclusion, or restriction which has the effect or purpose of impairing or nullifying the
recognition, enjoyment, or exercise by women, irrespective of their marital status, on a basis of equality of men and
women, of human rights and fundamental freedoms in the political, economic, social, cultural, civil or any other field;
2. Any act or omission, including by law, policy, administrative measure, or practice, that directly or
indirectly excludes or restricts women in the recognition and promotion of their rights and their
access to and enjoyment of opportunities, benefits or privileges;
3. A measure or practice of general application that fails to provide for mechanisms to offset or address
sex or gender-based disadvantages or limitations of women, as a result of which women are denied or
restricted in the recognition and protection of their rights and in their access to and enjoyment of
opportunities, benefits, or privileges; or women, more than men, are shown to have suffered the greater
adverse effects of those measures or practices; and
4. Discrimination compounded by or intersecting with other grounds, status, or condition, such as
ethnicity, age, poverty or religion.
Additionally, women are guaranteed their right to decent work. The State shall progressively realize and
ensure decent work standards for women that involve the creation of jobs of acceptable quality in conditions of
freedom, equity, security and human dignity.
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b.
STIPULATION AGAINST MARRIAGE
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 Is the prohibition against marriage valid?
Article 136 of the Labor Code considers as an unlawful act of the employer to require as a condition for
or continuation of employment that a woman employee shall not get married or to stipulate expressly or tacitly that
upon getting married, a woman employee shall be deemed resigned or separated. It is likewise an unlawful act of
the employer, to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by
reason of her marriage.
 What are the relevant jurisprudence on prohibition against marriage?
1. Philippine Telegraph and Telephone Company (PT&T) v. NLRC.1 - It was declared here that the
company policy of not accepting or considering as disqualified from work any woman worker
who contracts marriage runs afoul of the test of, and the right against, discrimination afforded all
women workers by our labor laws and by no less than the Constitution.
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2. Star Paper Corp. v. Simbol.2 - The following policies were struck down as invalid for violating
the standard of reasonableness which is being followed in our jurisdiction, otherwise called the
“Reasonable Business Necessity Rule”:
“1. New applicants will not be allowed to be hired if in case he/she has [a] relative, up to [the] 3rd degree
of relationship, already employed by the company.
“2. In case of two of our employees (both singles [sic], one male and another female) developed a
friendly relationship during the course of their employment and then decided to get married, one of
them should resign to preserve the policy stated above.”
3. Duncan Association of Detailman-PTGWO v. Glaxo Welcome Philippines, Inc.3 In this case, the
prohibition against marriage embodied in the following stipulation in the employment contract was held
as valid:
“10. You agree to disclose to management any existing or future relationship you may have, either
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by consanguinity or affinity with co-employees or employees of competing drug companies. Should it
pose a possible conflict of interest in management discretion, you agree to resign voluntarily from the
Company as a matter of Company policy.”
The Supreme Court ruled that the dismissal based on this stipulation in the employment contract is a
valid exercise of management prerogative. The prohibition against personal or marital relationships with
employees of competitor companies upon its employees was held reasonable under the circumstances because
relationships of that nature might compromise the interests of the company. In laying down the assailed company
policy, the employer only aims to protect its interests against the possibility that a competitor company will
gain access to its secrets and procedures. Simply put, the reason behind the validity of such a policy is the
avoidance of CONFLICT OF INTEREST.
c.
PROHIBITED ACTS
 What are the prohibited acts against women under the Labor Code?
Article 137 of the Labor Code and its implementing rule consider unlawful the followings acts of the employer:
1. To discharge any woman employed by him for the purpose of preventing such woman from
enjoying maternity leave, facilities and other benefits provided under the Labor Code;
2. To discharge such woman on account of her pregnancy, or while on leave or in confinement due to her
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pregnancy;
3. To discharge or refuse the admission of such woman upon returning to her work for fear that she
may again be pregnant;
4. To discharge any woman or any other employee for having filed a complaint or having testified
or being about to testify under the Labor Code; or
5. To require as a condition for or continuation of employment that a woman employee shall not get
married or to stipulate expressly or tacitly that upon getting married, a woman employee shall
be deemed resigned or separated, or to actually dismiss, discharge, discriminate or otherwise
prejudice a woman employee merely by reason of marriage.
d.
SEXUAL HARASSMENT
(ANTI-SEXUAL HARASSMENT ACT)
(R.A. No. 7877)
 What are the 3 situations contemplated under this law?

R.A. No. 7877 declares sexual harassment unlawful only in three (3) situations, namely:
(1) employment;
1 G.R. No. 118978, May 23, 1997, 272 SCRA 596, 605.
2 G.R. No. 164774, April 12, 2006.
3 G.R. No. 162994, Sept. 17, 2004.
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(2) education; and

(3) training environment.
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 Can sexual harassment be committed also against a man?
Yes. Sexual harassment is not the sole domain of women as men may also be subjected to the same
despicable act. Said law does not limit the victim of sexual harassment to women.
 Who are the persons who may be held liable for sexual harassment?
Work, education or training-related sexual harassment is committed by any employer, employee,
manager, supervisor, agent of the employer, teacher, instructor, professor, coach, trainor, or any other person
who, having authority, influence or moral ascendancy over another in a work or training or education
environment, demands, requests or otherwise requires any sexual favor from another, regardless of whether the
demand, request or requirement for submission is accepted by the object of said act.
Further, any person who directs or induces another to commit any act of sexual harassment as defined in
the law, or who cooperates in the commission thereof by another without which it would not have been
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committed, shall also be held liable under the law.
How is sexual harassment committed in a work-related or employment environment?
In a work-related or employment environment, sexual harassment is committed when:
The sexual favor is made a condition in the hiring or in the employment, re-employment or continued employment of
said individual or in granting said individual favorable compensation, terms, conditions, promotions, or privileges; or the
refusal to grant the sexual favor results in limiting, segregating or classifying the employee which in any way would
discriminate, deprive or diminish employment opportunities or otherwise adversely affect said employee;
The above acts would impair the employee’s rights or privileges under existing labor laws; or
The above acts would result in an intimidating, hostile, or offensive environment for the employee.
What are the duties of the employer in regard to sexual harassment complaints?
It is the duty of the employer to prevent or deter the commission of acts of sexual harassment and to provide the
The employer or head of office is required to: ChanRobles Bar

procedures for the resolution or prosecution of acts of sexual harassment.
Promulgate appropriate rules and regulations, in consultation with and jointly approved by the employees or students or
trainees, through their duly designated representatives, prescribing the procedure for the investigation of sexual
harassment cases and the administrative sanctions therefor. The said rules and regulations issued shall include, among
others, guidelines on proper decorum in the workplace and educational or training institutions.
Create a committee on decorum and investigation of cases on sexual harassment. The committee shall conduct meetings,
as the case may be, with officers and employees, teachers, instructors, professors, coaches, trainors and students or
trainees to increase understanding and prevent incidents of sexual harassment. It shall also conduct the investigation of
alleged cases constituting sexual harassment.
2.
MINORS
(R.A. 7610, as amended by R.A. 9231)
Who is a “child” or “working child”?
For legal purposes, the term “child” refers to any person less than eighteen (18) years of age. A “working child”
refers to any child engaged as follows:
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when the child is below eighteen (18) years of age, in work or economic activity that is not “child labor;” and
when the child below fifteen (15) years of age:
in work where he/she is directly under the responsibility of his/her parents or legal guardian and where only members of
the child’s family are employed; or
(b) in “public entertainment or information” which refers to artistic, literary, and cultural
performances for television show, radio program, cinema or film, theater, commercial
advertisement, public relations activities or campaigns, print materials, internet, and other media.
 What are the working hours of a child?
The term “hours of work” includes (1) all time during which a child is required to be at a prescribed
workplace, and (2) all time during which a child is suffered or permitted to work. Rest periods of short duration
during working hours shall be counted as hours worked.
The following hours of work shall be observed for any child allowed to work under R.A. No. 9231 and
its Implementing Rules:
(a) For a child below 15 years of age, the hours of work shall not be more than twenty (20) hours per
week, provided that the work shall not be more than four (4) hours at any given day;
(b) For a child 15 years of age but below 18, the hours of work shall not be more than eight (8) hours a
day, and in no case beyond forty (40) hours a week; and
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(c) No child below 15 years of age shall be allowed to work between eight (8) o’clock in the evening and six
(6) o’clock in the morning of the following day and no child 15 years of age but below 18 shall
be allowed to work between ten (10) o’clock in the evening and six (6) o’clock in the morning
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 What is the prohibition of employing minors in certain undertakings and advertisements?
No child below 18 years of age is allowed to be employed as a model in any advertisement directly
or indirectly promoting alcoholic beverages, intoxicating drinks, tobacco and its by-products, gambling or any
form of violence or pornography.
3.
KASAMBAHAY
(R.A. No. 10361, otherwise known as
“Domestic Workers Act” or “Batas Kasambahay” )
 What is the coverage of the Kasambahay Law?
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R.A. No. 10361 applies to all domestic workers employed and working within the country. It shall cover
all parties to an employment contract for the services of the following Kasambahay, whether on a live-in or
live-out arrangement, such as, but not limited to:
(a) General househelp;
(b) Yaya;
(c) Cook;
(d) Gardener;
(e) Laundry person; or
(f) Any person who regularly performs domestic work in one household on an occupational basis.
 Who are EXCLUDED from its coverage?
The following are not covered:
(a)
(b)
(c)
(d)
Service providers;
Family drivers;
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Children under foster family arrangement; and
Any other person who performs work occasionally or sporadically and not on an occupational basis.
 Who is a domestic worker or kasambahay?
“Domestic worker” or “kasambahay” refers to any person engaged in domestic work within an
employment relationship, whether on a live-in or live-out arrangement, such as, but not limited to, general
househelp, "yaya", cook, gardener, or laundry person, but shall exclude service providers, family drivers, children
who are under foster family arrangement, or any person who performs domestic work only occasionally or
sporadically and not on an occupational basis.
This term shall not include children who are under foster family arrangement which refers to children
who are living with a family or household of relative/s and are provided access to education and given an
allowance incidental to education, I.e., "baon", transportation, school projects, and school activities.
Because of these new terminologies prescribed in the law, the use of the term “househelper” may no longer
be legally correct.
 Is the employment contract required to be in writing?
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Yes. The employment contract must be in writing and should contain the conditions set by law.
 What are the rights and privileges of a kasambahay?
The rights and privileges of the Kasambahay are as follows:
(a) Minimum wage;
(b) Other mandatory benefits, such as the daily and weekly rest periods, service incentive leave, and
13th month pay;
(c) Freedom from employers' interference in the disposal of wages;
(d) Coverage under the SSS, PhilHealth and Pag-IBIG laws;
(e) Standard of treatment;
(f) Board, lodging and medical attendance;
(g) Right to privacy;
(h) Access to outside communication;
(i) Access to education and training;
(j) Right to form, join, or assist labor organization;
(k) Right to be provided a copy of the employment contract;
(I) Right to certificate of employment;
(m) Right to terminate the employment; and
(n) Right to exercise their own religious beliefs and cultural
practices. The foregoing rights and privileges are discussed below.
 What is the minimum wage of kasambahay?
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The minimum wage1 of the kasambahay as of December 2017 shall not be less than the following:
(a) ₱3,500 a month for those employed in the NCR;
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(b) ₱2,500 to ₱4,000 a month for those employed in chartered cities and first class municipalities; and
(c) ₱1,800 to ₱3,000 a month for those employed in other municipalities.2
 Are the minimum wages subject to review by the RTWPBs or Regional Boards?
Yes. After one (1) year from the effectivity of the Kasambahay Law, and periodically thereafter,
the Regional Tripartite and Productivity Wage Boards (RTPWBs) shall review, and if proper, determine and
adjust the minimum wage rates of domestic workers.”
 What are some important principles on wage of kasambahay?
 Frequency of payment of wages. - The wages of the Kasambahay shall be paid at least once a
month. This is so because the minimum wage rates are on a monthly basis.
 The equivalent minimum daily wage rate of the Kasambahay shall be determined by dividing
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the applicable minimum monthly rate by thirty (30) days.
 The amount of the minimum wage depends on the geographical area where the Kasambahay works.
 Payment of wages:
1. To whom paid. - It should be made on time directly to the Kasambahay to whom they are due in cash at
least once a month.
2. Deductions, prohibition; when allowed. - The employer, unless allowed by the Kasambahay through
a written consent, shall make no deductions from the wages other than that which is mandated by law such
as for SSS, PhilHealth or Pag-IBIG contributions.
3. Mode of payment. - It should be paid in cash and not by means of promissory notes, vouchers,
coupons, tokens, tickets, chits, or any object other than the cash wage as provided for under this Act.
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4. Pay slip. – The employer shall at all times provide the Kasambahay with a copy of the pay slip containing
the amount paid in cash every pay day, and indicating all deductions made, if any. The copies of the pay
slip shall be kept by the employer for a period of three (3) years.
5. Prohibition on interference in the disposal of wages. – It shall be unlawful for the employer to interfere
with the freedom of the Kasambahay in the disposition of his/her wages, such as:
(a) Forcing, compelling, or obliging the Kasambahay to purchase merchandise, commodities
or other properties from the employer or from any other person; or
(b) Making use of any store or services of such employer or any other person.
6. Prohibition against withholding of wages. – It shall be unlawful for an employer, directly or indirectly,
to withhold the wages of the Kasambahay. If the Kasambahay leaves without any justifiable reason, any
unpaid salary for a period not exceeding fifteen (15) days shall be forfeited. Likewise, the employer shall
not induce the Kasambahay to give up any part of the wages by force, stealth, intimidation, threat or by
any other means whatsoever.
 What are important terms and conditions of employment of kasambahay?
The following is a rundown of the basic terms and conditions that should be observed in the employment
of a Kasambahay:
a. Employable age. - Children whose age is below 15 years are absolutely prohibited to work as
Kasambahay.
b. Normal daily hours of work. – Because R.A. No. 10361 does not contain any provision on the number
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of normal hours of work that a Kasambahay should render in a day but merely prescribes said daily rest
period of eight (8) hours per day, it may be concluded that the Kasambahay should work for at least
a total of sixteen (16) hours per day as normal hours of work. However, it must be noted that the
Labor Code does not contain any provision on the normal hours of work of househelpers. Article 1695
of the Civil Code, however, specifically provides that househelpers shall not be required to work
for more than ten (10) hours a day. Since R.A. No. 10361, a special law, is the most recent piece
of legislation, it should prevail over the general provision of the Civil Code.
c. Normal daily hours of work for working child-kasambahay is eight (8) hours per day.
d. 13th month pay. - The Kasambahay who has rendered at least one (1) month of service is entitled to
a 13th month pay which shall not be less than one-twelfth (1/12) of his/her total basic salary earned
in a calendar year. The 13th month pay shall be paid not later than December 24 of every year or
upon separation from employment.
e. Daily rest period. – The Kasambahay shall be entitled to an aggregate daily rest period of eight
(8) hours.
1 Current Minimum Wage for Kasambahay as of December 2017.

2 No. 1 [E], 2019 Handbook on Workers’ Statutory Monetary Benefits, issued by the Bureau of Working Conditions, DOLE.
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f. Weekly rest period. - The Kasambahay shall be entitled to at least twenty-four (24) consecutive
hours of rest in a week. The employer and the Kasambahay shall agree in writing on the schedule of
the weekly rest day but the preference of the Kasambahay, when based on religious grounds, shall be
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g. Service incentive leave. - A Kasambahay who has rendered at least one (1) year of service shall be
entitled to an annual service incentive leave of at least five (5) days with pay. Any unused portion of
said annual leave shall not be cumulative or carried over to the succeeding years. Unused leaves shall
not be convertible to cash.
h. Social security benefits. - A Kasambahay who has rendered at least one (1) month of service shall
be covered by the Social Security System (SSS), Employees Compensation Commission (ECC),
Philippine Health Insurance Corporation (PhilHealth), and Home Development Mutual Fund or Pag-
IBIG, and shall be entitled to all the benefits in accordance with their respective policies, laws, rules
and regulations.
i. Obligation of employer to register and enroll with SSS, PhilHealth, and Pag-IBIG. - As employer
of the Kasambahay, he/she shall register himself/herself with, and enroll the latter as his/her employee
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to the SSS, PhilHealth, and Pag-IBIG.
j. Deposits for loss or damage. - It shall be unlawful for the employer or any other person to require
a Kasambahay to make deposits from which deductions shall be made for the reimbursement of
loss or damage to tools, materials, furniture and equipment in the household.
k. Standard of treatment. - The Kasambahay shall be treated with respect by the employer or any
member of the household. He/she shall not be subjected to any kind of abuse, including repeated
verbal or psychological, nor be inflicted with any form of physical violence or harassment or any
act tending to degrade his/her dignity, as defined under the Revised Penal Code, Violence Against
Women and their Children Law (R.A. No. 9262), Special Protection of Children Against Child
Abuse, Exploitation and Discrimination Act (R.A. No. 7610) as amended by R.A. No. 9231, Anti-
Trafficking in Persons Act of 2003 (R.A. No. 9208), and other applicable laws.
l. Board, lodging and medical attendance. - The employer shall provide for the basic necessities of
the Kasambahay, to include the following:
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(1) At least three (3) adequate meals a day, taking into consideration the Kasambahay's religious
beliefs and cultural practices;
(2) Humane sleeping condition that respects the person's privacy for live-in arrangement; and
(3) Appropriate rest and medical assistance in the form of first-aid medicines, in case of illnesses
and injuries sustained during service without loss of benefits.
m. Opportunities for education and training. - The Kasambahay shall be afforded the opportunity to
finish basic education, which shall consist of elementary and secondary education. He/she may be allowed access to
alternative learning systems and, as far as practicable, higher education or technical vocational education and
training.
n. Membership in labor organization. - The Kasambahay shall have the right to join a labor organization
of his/her own choosing for purposes of mutual aid and collective negotiation.
r. Health and safety. - The employer shall safeguard the safety and health of the Kasambahay in
accordance with the standards which the DOLE shall develop through the Bureau of Working Conditions
(BWC) and the Occupational Safety and Health Center (OSHC) within six (6) months from the promulgation of
this IRR. The said standards shall take into account the peculiar nature of domestic work.
s. Prohibition on debt bondage. - It shall be unlawful for the employer or any person acting on his/her
behalf to place the Kasambahay under debt bondage. “Debt bondage” refers to the rendering of service by
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the Kasambahay as security or payment for a debt where the length and nature of service is not clearly defined or
when the value of the service is not reasonably applied in the payment of the debt.
t. Assignment to non-household work. - The employer shall not assign the Kasambahay to work, whether
in full or part-time, in a commercial, industrial or agricultural enterprise at a wage rate lower than that
provided for agricultural or non-agricultural workers.
If so assigned, the Kasambahay will no longer be treated as such but as a regular employee of the
establishment.
 What are the rules on termination of Kasambahay?
a. Pre-termination of employment. – The following rules shall be observed:
(1) In case the duration of employment is specified in the contract, the Kasambahay and the employer
may mutually agree upon notice to terminate the contract of employment before the expiration of its
term.
(2) In case the duration is not determined by stipulation or by nature of service, the employer or
the Kasambahay may give notice to end the employment relationship five (5) days before the
intended termination of employment.
b. Termination of employment initiated by the Kasambahay. - The Kasambahay may terminate
the employment relationship at any time before the expiration of the contract for any of the following causes:
(1) Verbal or emotional abuse of the Kasambahay by the employer or any member of the household;
(2) Inhuman treatment including physical abuse of the Kasambahay by the employer or any member of
the household;
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(3) Commission of a crime or offense against the Kasambahay by the employer or any member of
the household;
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(4) Violation by the employer of the terms and conditions of the employment contract and other standards
set forth in the law;
(5) Any disease prejudicial to the health of the Kasambahay, the employer, or members of the household; and
(6) Other causes analogous to the foregoing.
If the Kasambahay leaves without cause, any unpaid salary due, not exceeding the equivalent of 15 days’
work, shall be forfeited. In addition, the employer may recover from the Kasambahay deployment expenses, if
any, if the services have been terminated within six (6) months from employment.
c. Termination of employment initiated by the employer. - An employer may terminate the
employment of the Kasambahay at any time before the expiration of the contract for any of the following causes:
(1) Misconduct or willful disobedience by the Kasambahay of the lawful order of the employer in
connection with the former's work;
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(2) Gross or habitual neglect or inefficiency by the Kasambahay in the performance of duties;
(3) Fraud or willful breach of the trust reposed by the employer on the Kasambahay;
(4) Commission of a crime or offense by the Kasambahay against the person of the employer or any
immediate member of the employer's family;
(5) Violation by the Kasambahay of the terms and conditions of the employment contract and other
standards set forth under the law;
(6) Any disease prejudicial to the health of the Kasambahay, the employer, or members of the household; and
(7) Other causes analogous to the foregoing.
If the employer dismissed the Kasambahay for reasons other than the above, he/she shall pay the
Kasambahay the earned compensation plus indemnity in the amount equivalent to fifteen (15) days’ work.
d. Invalid ground for termination. - Pregnancy and marriage of the Kasambahay are not valid grounds
for termination of employment.
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e. Employment Certification. - Upon the termination of employment, the employer shall issue the
Kasambahay, within five (5) days from request, a certificate of employment indicating the nature, duration of the
service and work description.
4.
HOMEWORKERS
 What are important terms that should be noted in employment of homeworkers?

a. “Industrial homeworker” – It refers to a worker who is engaged in industrial homework.
b. “Industrial homework” – It refers to a system of production under which work for an employer
or contractor is carried out by a homeworker at his/her home. Materials may or may not be furnished by the
employer or contractor. It differs from regular factory production principally in that, it is a decentralized form of
production where there is ordinarily very little supervision or regulation of methods of work.
c. “Home” - It means any nook, house, apartment or other premises used regularly, in whole or in part, as
a dwelling place, except those situated within the premises or compound of an employer, contractor/subcontractor
and the work performed therein is under the active or personal supervision by or for the latter.
d. “Field personnel” – It refers to a non-agricultural employee who regularly performs his duties away
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from the principal place of business or branch office of the employer and whose actual hours of work in the field
cannot be determined with reasonable certainty.
e. “Employer.” – It refers to any natural or artificial person who, for his own account or benefit, or on
behalf of any person residing outside the Philippines, directly or indirectly, or through any employee, agent,
contractor, subcontractor or any other person:
1. delivers or causes to be delivered any goods, articles or materials to be processed or fabricated in or
about a home and thereafter to be returned or to be disposed of or distributed in accordance with his
direction; or
2. sells any goods, articles or materials for the purpose of having such goods or articles processed in or
about a home and then repurchases them himself or through another after such processing.
f. “Contractor” or “subcontractor” - It refers to any person who, for the account or benefit of an
employer, delivers or causes to be delivered to a homeworker, goods or articles to be processed in or about his
home and thereafter to be returned, disposed of or distributed in accordance with the direction of the employer.
g. “Processing” - It refers to manufacturing, fabricating, finishing, repairing, altering, packing, wrapping
or handling in any way connected with the production or preparation of an article or material.
 How is homework paid?
Immediately upon receipt of the finished goods or articles, the employer is required to pay the homeworker
or the contractor or subcontractor, as the case may be, for the work performed less the corresponding
homeworker’s share of SSS, PhilHealth and ECC premium contributions which should be remitted by the
contractor or subcontractor or employer to the SSS with the employer’s share. However, where payment is made to
a contractor or subcontractor, the homeworker should likewise be paid immediately after the goods or articles have
been collected from the workers.
 What are prohibited homeworks?
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No homework shall be performed on the following:
1. Explosives, fireworks and articles of like character;
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2. Drugs and poisons; and
3. Other articles, the processing of which requires exposure to toxic substances.
5
NIGHT WORKERS
(R.A. No. 10151)
 What is the new law on night
work?
R.A. No. 10151 [June 21,

2011].
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a. Significance of the law.
R.A. No. 10151 has repealed Article 130 [Nightwork Prohibition] and Article 131 [Exceptions] of the
Labor Code and accordingly renumbered the same articles. Additionally, it has inserted a new Chapter V of Title
III of Book III of the Labor Code entitled “Employment of Night Workers” which addresses the issue on
nightwork of all employees, including women workers. Chapter V covers newly renumbered Articles 154 up to
161 of the Labor Code.
b. Coverage of the law.
The law on nightwork applies not only to women but to all persons, who shall be employed or permitted
or suffered to work at night, except those employed in agriculture, stock raising, fishing, maritime transport and
inland navigation, during a period of not less than seven (7) consecutive hours, including the interval from
midnight to five o'clock in the morning, to be determined by the DOLE Secretary, after consulting the
workers’ representatives/labor organizations and employers.
c. Night worker, meaning.
"Night worker" means any employed person whose work covers the period from 10 o'clock in the evening
to 6 o'clock the following morning provided that the worker performs no less than seven (7) consecutive hours
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of work.
d. Mandatory facilities.
(1) Suitable first-aid and emergency facilities as provided for under Rule 1960 (Occupational Health
Services) of the Occupational Safety and Health Standards (OSHS);
(2) Lactation station in required companies pursuant to R.A. No. 10028 (The Expanded
Breastfeeding Promotion Act of 2009);
(3) Separate toilet facilities for men and women;
(4) Facility for eating with potable drinking water; and
(5) Facilities for transportation and/or properly ventilated temporary sleeping or resting quarters,
separate for male and female workers, shall be provided except where any of the following
circumstances is present:
i. Where there is an existing company guideline, practice or policy, CBA or any similar
agreement between management and workers providing for an equivalent or superior benefit; or
ii. Where the start or end of the night work does not fall within 12 midnight to 5 o'clock in
the morning; or
iii. Where the workplace is located in an area that is accessible 24 hours to public transportation;
iv. Where the number of employees does not exceed a specified number as may be provided for by
the DOLE Secretary in subsequent issuances.
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e. Maternity leave benefits under existing laws cannot be diminished.
6.
APPRENTICES AND LEARNERS
 What are important apprenticeship-related terms?
“Apprenticeship” means practical training on the job supplemented by related theoretical
instructions involving apprenticeable occupations and trades as may be approved by the DOLE Secretary. It is a
training within employment with compulsory related theoretical instructions involving a contract between an
apprentice and an employer or an enterprise on an approved apprenticeable occupation.
An “apprentice” is a worker who is covered by a written apprenticeship agreement with an
individual employer or any of the entities recognized under the law. He is a person undergoing training for
an approved apprenticeable occupation during an established period and covered by an apprenticeship agreement.
An “apprenticeable occupation” means any trade, form of employment or occupation approved for
apprenticeship by the DOLE Secretary, which requires for proficiency, more than three (3) months of practical
training on the job supplemented by related theoretical instructions. It is an occupation officially endorsed by
a tripartite body and approved for apprenticeship by TESDA.
An “apprenticeship agreement” is an employment contract wherein the employer binds himself to train the
apprentice and the apprentice in turn accepts the terms of the training and agrees to work for the employer for
a recognized apprenticeable occupation, emphasizing the rights, duties and responsibilities of each party.
 What are important learnership-related terms?
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“Learnership” refers to any practical training on learnable occupation which may or may not be
supplemented by related theoretical instructions.
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“Learner” refers to a person hired as a trainee in semi-skilled and other industrial occupations which are
non- apprenticeable and which may be learned through practical training on the job for a period not exceeding
three (3) months, whether or not such practical training is supplemented by theoretical instructions.
“Learnership agreement” refers to the employment and training contract entered into between the employer
and the learner.
 What are the distinctions between learnership and apprenticeship?
The following are the distinctions:
Criteria Learnership Apprenticeship
Practical training Practical training on-the-job Practical training on-the-job
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Training agreement Learnership Agreement Apprenticeship Agreement
Learnable occupations consisting Apprenticeable occupations or any

of semi-skilled and other industrial trade, form of employment or
Occupation. occupations which are non- occupation approved for
apprenticeable apprenticeship by the DOLE Secretary
Theoretical May or may not be Should always be supplemented

instructions supplemented by related by related theoretical
theoretical instructions instructions
Ratio of theoretical Normal ratio is 100 hours of Normal ratio is 100 hours of
instructions and on- theoretical instructions for every theoretical instructions for every
the-job training 2,000 hours of practical or on- 2,000 hours of practical or on-the-job
the- job training training
Duration of training Practical training on the job for Practical training on the job of more
a period not exceeding three than three (3) months but not over
(3) months six (6) months
Circumstances
justifying hiring of
trainees
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Article 74 of the Labor Code,
expressly prescribes the pre-
requisites before learners may
No similar provision in the Labor Code
be validly employed, to wit:
(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
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impair or lower working
standards.
Limitation on the A participating enterprise is No similar cap
number of trainees allowed to take in learners only up
to a maximum of twenty percent
(20%) of its total regular workforce
Option to employ The enterprise is obliged to hire The enterprise is given only an
the learner after the lapse of “option” to hire the apprentice as an
the learnership period employee.
Wage rate Seventy-five percent (75%) of Seventy-five percent (75%) of

the statutory minimum the statutory minimum
wage. wage.
Qualifications No qualifications
Article 59 of the Labor Code
expressly mentioned in requires the apprentice:
the law
(a) Be at least fourteen (14) years
of age;
(b) Possess vocational aptitude

and capacity for appropriate
tests; and
(c) Possess the ability to

comprehend and follow oral
and
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written instructions.
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 How is the conflict in the age requirement for apprentices resolved?
The age prescribed for apprentices under Article 59 is 14 years of age.
However, the Implementing Rules set the age requirement at fifteen (15) years of age.
Notably, there is a difference in the age requirement between the 14-year old prescribed in the law and the
15- year old enunciated in the Implementing Rules. Generally, the well-settled rule of legal hermeneutics dictates
that if there is a conflict between the law and its implementing rule or regulation, the provision of the former
should prevail over the latter. The implementing rule cannot certainly operate to amend the law. Consequently, the
minimum age requirement should have been fourteen (14) years of age except for the fact that the age requirement
in the said Implementing Rules is based on and more congruent with latest legislation, more particularly, the
2003 law, R.A. No. 9231,1 where it is provided that:
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(1) All persons under eighteen (18) years of age shall be considered as a “child”; and
(2) Children below fifteen (15) years of age shall not be employed except if he/she falls under any of the
exceptions2 mentioned and enumerated in the law.3
Apprenticeship is not one of the exceptions, therefore, this prohibition on employing an apprentice below
the age of fifteen (15) years applies to apprentices. Consequently, the proper age qualification is fifteen (15) years
but not because of the Implementing Rules’ provision as mentioned above but by reason of R.A. No. 9231.
7.
PERSONS WITH DISABILITIES
 What is the applicable law to PWDs?
R.A. No. 7277,4 otherwise known as the “Magna Carta for Disabled Persons.” The provisions on
handicapped workers found in the Labor Code (Articles 78 to 81) are no longer applicable.
 What are important definitions related to PWDs? ChanRobles Bar
1. “Persons with Disability” or “PWD” are those suffering from restriction or different abilities, as a
result of a mental, physical or sensory impairment, to perform an activity in the manner or within
the range considered normal for a human being.
2. “Impairment” refers to any loss, diminution or aberration of psychological, physiological, or
anatomical structure or function.
3. “Disability” means (1) a physical or mental impairment that substantially limits one or more
psychological, physiological or anatomical functions of an individual or activities of such individual; (2)
a record of such an impairment; or (3) being regarded as having such an impairment.
4. “Handicap” refers to a disadvantage for a given individual, resulting from an impairment or a disability
that limits or prevents the function or activity that is considered normal given the age and sex of the
individual.
5. “Marginalized Persons with Disability” refer to persons with disability who lack access to
rehabilitative services and opportunities to be able to participate fully in socio-economic activities and
who have no means of livelihood and whose incomes fall below the poverty threshold.
 What is meant by EQUAL OPPORTUNITY FOR EMPLOYMENT?
Under the law,5 PWDs are entitled to equal opportunity for employment. Consequently, no PWD shall
be denied access to opportunities for suitable employment. A qualified employee with disability shall be subject to
the same terms and conditions of employment and the same compensation, privileges, benefits, fringe benefits,
incentives or allowances as a qualified able-bodied person.
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1Entitled “AN ACT PROVIDING FOR THE ELIMINATION OF THE WORST FORMS OF CHILD LABOR AND AFFORDING STRONGER PROTECTION FOR THE WORKING
CHILD, AMENDING FOR THIS PURPOSE REPUBLIC ACT NO. 7610, AS AMENDED, OTHERWISE KNOWN AS THE ‘SPECIAL PROTECTION OF CHILDREN AGAINST
CHILD ABUSE, EXPLOITATION AND DISCRIMINATION ACT’ approved on December 19, 2003.
2 The exceptions, as enumerated in Section 12 of R.A. No. 7610, as amended by Section 2 of R.A. No. 9231 are as follows:
(1) When a child works directly under the sole responsibility of his/her parents or legal guardian and where only members of his/her family are employed: Provided, however, That
his/her employment neither endangers his/her life, safety, health, and morals, nor impairs his/her normal development: Provided, further, That the parent or legal guardian shall
provide the said child with the prescribed primary and/or secondary education; or
(2) Where a child's employment or participation in public entertainment or information through cinema, theater, radio, television or other forms of media is essential: Provided, That
the employment contract is concluded by the child's parents or legal guardian, with the express agreement of the child concerned, if possible, and the approval of the
Department of Labor and Employment: Provided, further, That the following requirements in all instances are strictly complied with:
(a) The employer shall ensure the protection, health, safety, morals and normal development of the child;cralaw
(b) The employer shall institute measures to prevent the child's exploitation or discrimination taking into account the system and level of remuneration, and the duration and
arrangement of working time; and
(c) The employer shall formulate and implement, subject to the approval and supervision of competent authorities, a continuing program for training and skills acquisition of the child.
In the above exceptional cases where any such child may be employed, the employer shall first secure, before engaging such child, a work permit from the Department of Labor and
Employment which shall ensure observance of the above requirements.
3 Article 59, Labor Code; Section 11, Rule VI, Book II, Rules to Implement the Labor Code.
4 Approved on March 24, 1992.
5 Under R.A. No. 7277, otherwise known as the “Magna Carta for Disabled Persons” [now known as “Magna Carta for Persons with Disability”.
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Five percent (5%) of all casual emergency and contractual positions in the Departments of Social Welfare
and Development, Health, Education and other government agencies, offices or corporations engaged in social
development shall be reserved for PWDs.1
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 Are PWDs eligible for apprenticeship and learnership?
Yes. Under R.A. No. 7277, it is provided that subject to the provisions of the Labor Code, as amended,
PWDs shall be eligible as apprentices or learners; provided that their handicap is not as much as to effectively
impede the performance of job operations in the particular occupation for which they are hired and provided
further that after the lapse of the period of apprenticeship, if found satisfactory in the job performance, they shall
be eligible for employment.
 What is the applicable wage rate to PWDs?
Under R.A. No. 7277, the wage rate of PWDs is 100% of the applicable minimum wage.
a.
DISCRIMINATION
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 What are the forms of prohibited discriminatory acts against PWDs in terms of employment?
No entity, whether public or private, shall discriminate against a qualified PWD 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 constitute acts of
discrimination:
(a) Limiting, segregating or classifying a job applicant with disability in such a manner that adversely
affects his work opportunities;
(b) Using qualification standards, employment tests or other selection criteria that screen out or tend to
screen out a PWD unless such standards, tests or other 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
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(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, and study and scholarship grants solely on account of the latter’s
disability;
(f) Re-assigning or transferring an employee with a disability to a job or position he cannot perform by
reason of his disability;
(g) Dismissing or terminating the services 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 accommodations for persons with disability;
(h) Failing to select or administer in the most effective manner employment tests which accurately reflect
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 PWD from membership in labor unions or similar organizations.
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b.
INCENTIVES FOR EMPLOYERS
 What are the incentives for employers who employ PWDs?

To encourage the active participation of the private sector in promoting the welfare of PWDs and to
ensure gainful employment for qualified persons with disability, adequate incentives shall be provided to private
entities which employ PWDs.
Private entities that employ PWDs who meet the required skills or qualifications, either as a regular
employee, apprentice or learner, shall be entitled to an additional deduction from their gross income equivalent
to twenty-five percent (25%) of the total amount paid as salaries and wages to persons with disability; provided,
however, that such entities could present proof as certified by the Department of Labor and Employment (DOLE)
that PWDs are under their employ and provided further that the employee with disability is accredited with the
DOLE and the Department of Health as to his disability, skills and qualifications.
Private entities that improve or modify their physical facilities in order to provide reasonable
accommodation for PWDs shall also be entitled to an additional deduction from their net taxable income
equivalent to fifty percent (50%) of the direct costs of the improvements or modifications.
------------oOo------------
1 Section 5, Chapter 1, Title II, R.A. No. 7277.

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a SYLLABUS

4
SOCIAL WELFARE LEGISLATION

A.
SSS
LAW
(R.A. No. 8282)
R.A. 8282, REPEALED BY R.A. 11199.

The 2019 Labor Law Syllabus still prescribed R.A. No. 8282 as the reference for the discussion of the SSS
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Law. However, on February 07, 2019, President Duterte approved R.A. No. 11199,1 otherwise known as the
“Social Security Act of 2018,” which expressly repealed2 R.A. No. 8282.
This topic therefore will be discussed in accordance with R.A. No. 8282 since the RA No 11199 was
passed way beyond the cut-off date of June 30, 2019 by the Supreme Court Bar Examinations Committee.
 Who are covered employers?
a. An employer or any person who uses the services of another person in business, trade, industry or
any undertaking.
b. A social, civic, professional, charitable and other non-profit organizations which hire the services
of employees are considered “employers.”
c. A foreign government, international organization or its wholly-owned instrumentality such as an
embassy in the Philippines, may enter into an administrative agreement with the SSS for the
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coverage of its Filipino employees.
 Who are compulsorily covered employees?
a. A private employee, whether permanent, temporary or provisional, who is not over 60 years old.
b. A domestic worker or kasambahay who has rendered at least one (1) month of service.
c. A Filipino seafarer upon the signing of the standard contract of employment between the seafarer and
the manning agency which, together with the foreign ship owner, act as employers.
d. An employee of a foreign government, international organization or their wholly-owned
instrumentality based in the Philippines, which entered into an administrative agreement with the SSS
for the coverage of its Filipino workers.
e. The parent, spouse or child below 21 years old of the owner of a single proprietorship business.
 Are self-employed persons covered?
Yes. A self-employed person, regardless of trade, business or occupation, with an income of at least
P1,000 a month and not over 60 years old, should register with the SSS. Included, but not limited to, are the
following self- employed persons:
a. Self-employed professionals;
b. Business partners, single proprietors and board directors;
c. Actors, actresses, directors, scriptwriters and news reporters who are not under an employer-
employee relationship;
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d. Professional athletes, coaches, trainers and jockeys;
e. Farmers and fisherfolks; and
f. Workers in the informal sector such as cigarette vendors, watch-your-car boys, hospitality girls,
among others.
Unless otherwise specified, all provisions of the law, R.A. No. 8282, applicable to covered employees shall
also be applicable to the covered self-employed persons.
A self-employed person shall be both employee and employer at the same time.
 Who may be covered voluntarily?
1. Separated Members
A member who is separated from employment or ceased to be self-employed/OFW/non-working
spouse and would like to continue contributing.
2. Overseas Filipino Workers (OFWs)
A Filipino recruited in the Philippines by a foreign-based employer for employment abroad or one
who legitimately entered a foreign country (i.e., tourist, student) and is eventually employed.
3. Non-working spouses of SSS members
1 R.A. No. 11199 is entitled “AN ACT RATIONALIZING AND EXPANDING THE POWERS AND DUTIES OF THE SOCIAL SECURITY COMMISSION TO ENSURE THE LONG-
TERM VIABlLITY OF THE SOCIAL SECURITY SYSTEM, REPEALING FOR THE PURPOSE REPUBLfC ACT NO. 1161, AS AMENDED BY REPUBLIC ACT NO. 8282,
OTHERWISE KNOWN AS THE ‘SOCIAL SECURITY ACT OF 1997.’”
2 R.A. No. 11199 embodies the following provision: “SEC. 33. Repealing Clause. - Republic Act No. 1161 and Republic Act No. 8282 and all other laws, proclamations, executive
orders, rules and regulations or parts thereof inconsistent with this Act are hereby repealed, modified or amended accordingly: Provided, That no person shall be deemed to be
vested with any property or other right by virtue of the enactment or operation of this Act.”
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A person legally married to a currently employed and actively paying SSS member who devotes full
time in the management of household and family affairs may be covered on a voluntary basis, provided
there is the approval of the working spouse. The person should never have been a member of the SSS.
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
The contributions will be based on 50 percent (50%) of the working spouse’s last posted monthly
salary credit but in no case shall it be lower than P1,000.
What is the effective date of coverage?
For compulsory coverage:
1. For employer - Compulsory coverage of the employer shall take effect on the first day of his operation
or on the first day he hires employee/s. The employer is given only 30 days from the date of
employment of employee to report the person for coverage to the SSS.
2. For employee - Compulsory coverage of the employee shall take effect on the first day of his employment.
3. For self-employed - The compulsory coverage of the self-employed person shall take effect upon
his registration with the SSS or upon payment of the first valid contribution, in case of initial coverage.
For voluntary coverage:
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1. For an OFW – upon first payment of contribution, in case of initial coverage.
2. For a non-working spouse – upon first payment of contribution.
3. For a separated member – on the month he/she resumed payment of contribution.
 Who are excluded employers?
Government and any of its political subdivisions, branches or instrumentalities, including corporations
owned or controlled by the Government with original charters.
 Who are excluded employees?
Workers whose employment or service falls under any of the following circumstances are not covered:
(1) Employment purely casual and not for the purpose of occupation or business of the employer;
(2) Service performed on or in connection with an alien vessel by an employee if he is employed when
such vessel is outside the Philippines;
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(3) Service performed in the employ of the Philippine Government or instrumentality or agency thereof;
(4) Service performed in the employ of a foreign government or international organization, or their
wholly- owned instrumentality: Provided, however, That this exemption notwithstanding, any
foreign government, international organization or their wholly-owned instrumentality employing
workers in the Philippines or employing Filipinos outside of the Philippines, may enter into an
agreement with the Philippine Government for the inclusion of such employees in the SSS except
those already covered by their respective civil service retirement systems: Provided, further, That the
terms of such agreement shall conform with the provisions of R.A. No. 8282 on coverage and amount
of payment of contributions and benefits:
Provided, finally, That the provisions of this Act shall be supplementary to any such agreement; and
(5) Such other services performed by temporary and other employees which may be excluded by regulation
of the Social Security Commission. Employees of bona-fide independent contractors shall not be
deemed employees of the employer engaging the service of said contractors.
 What are the classifications of benefits?
The SSS benefits may be classified into two (2) as follows:
(a) Social security benefits:
1) Sickness
2) Maternity
3) Retirement
4) Disability
5) Death and funeral.
(b) Employees’ compensation benefits.
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 Who are primary beneficiaries?
The following are primary beneficiaries:
1. The dependent spouse until he or she remarries;
2. The dependent legitimate, legitimated or legally adopted, and illegitimate children who are not yet
21 years of age.
The dependent illegitimate children shall be entitled to 50% of the share of the legitimate, legitimated
or legally adopted children. However, in the absence of the dependent legitimate, legitimated
children of the member, his/her dependent illegitimate children shall be entitled to 100% of the
benefits
 Who are secondary beneficiaries?
The following are secondary beneficiaries:
1. The dependent parents, in the absence of the primary beneficiaries.
2. Any other person designated by the member as his/her secondary beneficiary, in the absence of all
the foregoing primary beneficiaries and dependent parents.
B.
GSIS
LAW
(R.A. No. 8291)
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 Who are compulsorily required to become members of the GSIS?

1. All government personnel, whether elective or appointive, irrespective of status of appointment,
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provided they are receiving fixed monthly compensation and have not reached the mandatory retirement age of
65 years, are compulsorily covered as members of the GSIS and shall be required to pay contributions.
2. However, employees who have reached the retirement age of 65 or more shall also be covered, subject
to the following rules:
An employee who is already beyond the mandatory retirement age of 65 shall be compulsorily covered and
be required to pay both the life and retirement premiums under the following situations:
a. An elective official who at the time of election to public office is below 65 years of age and will be 65
years or more at the end of his term of office, including the period/s of his re-election to public office
thereafter without interruption.
b. Appointive officials who, before reaching the mandatory age of 65, are appointed to government
position by the President of the Republic of the Philippines and shall remain in government service at
age beyond 65.
c. Contractual employees including casuals and other employees with an employee-government
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agency relationship are also compulsorily covered, provided they are receiving fixed monthly
compensation and rendering the required number of working hours for the month.
 What are the classes of membership in the GSIS?
Membership in the GSIS is classified either by type or status of membership.
 As to type of members, there are regular and special members:
(a) Regular Members – are those employed by the government of the Republic of the Philippines,
national or local, legislative bodies, government-owned and controlled corporations (GOCC) with
original charters, government financial institutions (GFIs), except uniformed personnel of the
Armed Forces of the Philippines, the Philippine National Police, Bureau of Jail Management and
Penology (BJMP) and Bureau of Fire Protection (BFP), who are required by law to remit regular
monthly contributions to the GSIS.
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(b) Special Members – are constitutional commissioners, members of the judiciary, including those
with equivalent ranks, who are required by law to remit regular monthly contributions for life
insurance policies to the GSIS in order to answer for their life insurance benefits defined under RA
8291.
 As to status of membership, there are active and inactive members.
(a) Active member – refers to a member of the GSIS, whether regular or special, who is still in
the government service and together with the government agency to which he belongs, is required
to pay the monthly contribution.
(b) Inactive member – a member who is separated from the service either by resignation,
retirement, disability, dismissal from the service, retrenchment or, who is deemed retired from the
service under this Act.
 When does membership become effective?
The effective date of membership shall be the date of the member’s assumption to duty on his
original appointment or election to public office.
 What is the effect of separation from the service?
A member separated from the service shall continue to be a member, and shall be entitled to whatever
benefits he has qualified to in the event of any contingency compensable under the GSIS Law.
 Who are excluded from the compulsory coverage of the GSIS Law?
The following employees are excluded from compulsory coverage: ChanRobles
(a) Uniformed personnel of the Armed Forces of the Philippines (AFP), Philippine National Police
(PNP), Bureau of Fire Protection (BFP) and Bureau of Jail Management and Penology (BJMP);
(b) Barangay and Sanggunian Officials who are not receiving fixed monthly compensation;
(c) Contractual Employees who are not receiving fixed monthly compensation; and
(d) Employees who do not have monthly regular hours of work and are not receiving fixed
monthly compensation.
 What are the kinds of benefits under the GSIS Law?

The following are the benefits under the GSIS Law:
(a) Compulsory Life Insurance Benefits under the Life Endowment Policy (LEP)
(b) Compulsory Life Insurance Benefits under the Enhanced Life Policy (ELP)
(c) Retirement Benefits
(d) Separation Benefit
(e) Unemployment Benefit
(f) Disability Benefits
(g) Survivorship Benefits
(h) Funeral Benefits
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 Who are beneficiaries under the GSIS Law?

There are two (2) kinds of beneficiaries under the GSIS Law as follows:
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1. Primary beneficiaries — The legal dependent spouse until he/she remarries and the dependent children.
2. Secondary beneficiaries — The dependent parents and, subject to the restrictions on dependent
children, the legitimate descendants.
 Who are dependents under the GSIS Law?
Dependents shall be the following:
(a) the legitimate spouse dependent for support upon the member or pensioner;
(b) the legitimate, legitimated, legally adopted child, including the illegitimate child, who is unmarried,
not gainfully employed, not over the age of majority, or is over the age of majority but incapacitated
and incapable of self-support due to a mental or physical defect acquired prior to age of majority; and
(c) the parents who are dependent upon the member for support.
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Gainful Occupation — Any productive activity that provided the member with income at least equal
to the minimum compensation of government employees.
C.
DISABILITY AND DEATH BENEFITS
1.
LABOR CODE1
 What is the State Insurance Fund
[SIF]?
The State Insurance Fund (SIF) is built up by the contributions of employers based on the salaries of
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their employees as provided under the Labor Code.
There are two (2) separate and distinct State Insurance Funds: one established under the SSS for private
sector employees; and the other, under the GSIS for public sector employees. The management and investment of
the Funds are done separately and distinctly by the SSS and the GSIS. It is used exclusively for payment of
the employees’ compensation benefits and no amount thereof is authorized to be used for any other purpose.
 What are the agencies involved in the implementation of the Employees Compensation Program (ECP)?
There are three (3) agencies involved in the implementation of the Employees’ Compensation
Program (ECP). These are: (1) The Employees’ Compensation Commission (ECC) which is mandated to
initiate, rationalize and coordinate policies of the ECP and to review appealed cases from (2) the Government
Service Insurance System (GSIS) and (3) the Social Security System (SSS), the administering agencies of the
ECP.
 Who are covered by the ECP?
a. General coverage. – The following shall be covered by the Employees’ Compensation Program (ECP):
1. All employers;
2. Every employee not over sixty (60) years of age;
3. An employee over 60 years of age who had been paying contributions to the System (GSIS/SSS) prior
to age sixty (60) and has not been compulsorily retired; and
4. Any employee who is coverable by both the GSIS and SSS and should be compulsorily covered by
both Systems.
b. Sectors of employees covered by the ECP. - The following sectors are covered under the ECP:
1. ChanRobles
All public sector employees including those of government-owned and/or controlled corporations
and local government units covered by the GSIS;
2. All private sector employees covered by the SSS; and
3. Overseas Filipino workers (OFWs), namely:
a. Filipino seafarers compulsorily covered under the SSS.
b. Land-based contract workers provided that their employer, natural or juridical, is engaged in any
trade, industry or business undertaking in the Philippines; otherwise, they shall not be covered by
the ECP.
 When is the start of coverage of employees under the ECP?
The coverage under the ECP of employees in the private and public sectors starts on the first day of
their employment.
 What are the benefits under the ECP?
The following are the benefits provided under the Labor Code:
a. Medical Benefits
b. Disability Benefits
1. Temporary total disability
2. Permanent total disability
3. Permanent partial disability
c. Death Benefit
d. Funeral Benefit
1 Relevant provisions: Articles 172 [166] to 215 [208-A], Title II, Book IV of the Labor Code.
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2.
POEA-STANDARD EMPLOYMENT CONTRACT
(POEA-SEC)
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MONETARY CLAIMS OF SEAFARERS
FOR SICKNESS AND DISABILITY BENEFITS
1. APPLICABLE LAW IN CASES INVOLVING THE POEA-SEC.

By express provision of Section 31 of the 2010 POEA-SEC, “[a]ny unresolved dispute, claim or
grievance arising out of or in connection therewith, including the annexes thereof, shall be governed by the laws of
the Republic of the Philippines, international conventions, treaties and covenants to which the Philippines is a
signatory.” This provision signifies that the terms agreed upon by the parties pursuant to the POEA-SEC are to
be read and understood in accordance with Philippine laws, particularly, Articles 197 [191],1 198 [192]2 and 199
[193]3 of the Labor Code and the applicable implementing rules and regulations in case of any dispute, claim or
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grievance.
2. OFW’S BENEFIT CLAIMS VIS-À-VIS BENEFITS IN THE LABOR CODE.
It must be underscored that the claims for disability, death and burial benefits involving OFWs over
which the Labor Arbiters of the NLRC have jurisdiction, are not the same as the claims against the State
Insurance Fund under Title II, Book IV of the Labor Code for the same benefits, over which the Employees’
Compensation Commission (ECC) has jurisdiction.
3. THE LABOR CODE’S CONCEPT OF PTD APPLIES TO CLAIMS OF SEAFARERS.
Permanent total disability (PTD) means the inability to do substantially all material acts necessary to
the prosecution of a gainful occupation without serious discomfort or pain and without material injury or danger to
life. In disability compensation, it is not the injury per se which is compensated but the incapacity to work. The
concept of this kind of disability under Article 198 [192] of the Labor Code is applicable to the permanent total
disability of seafarers.
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Consequently, was ruled in Kestrel Shipping,4 that it is now well-settled that the provisions of the Labor
Code and Amended Rules on Employees’ Compensation (AREC) implementing Title II, Book IV of the Labor
Code on disabilities are applicable to the case of seafarers such that the POEA-SEC is not the sole issuance that
governs their rights in the event of work-related death, injury or illness.
4. REQUISITES FOR COMPENSABILITY OF INJURY OR ILLNESS.
For disability to be compensable under Section 20 (A) of the 2010 POEA-SEC, two elements must concur:
(1) The injury or illness must be work-related; and
(2) The work-related injury or illness must have existed during the term of the seafarer's
employment contract.
The same provision defines a work-related illness as "any sickness as a result of an occupational disease
listed under Section 32-A of [the POEA-SEC] with the conditions set therein satisfied." There should be a
"reasonable linkage between the disease suffered by the employee and his work." Meanwhile, illnesses not
mentioned under Section 32 of the 2010 POEA-SEC are disputably presumed as work-related. Notwithstanding the
presumption of work-relatedness of an illness under Section 20 (A) (4), the seafarer must still prove by substantial
evidence that his work conditions caused or, at least, increased the risk of contracting the disease. This is because
awards of compensation cannot rest entirely on bare assertions and presumptions. In order to establish
compensability of a non-occupational disease, reasonable proof of work-connection is sufficient - direct causal
relation is not required. It is thus this probability of connection, and not the ultimate degree of certainty, that is the
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test of proof of compensation proceedings.
5. REQUISITES FOR COMPENSABILITY OF OCCUPATIONAL DISEASE.
In order for an occupational disease and the resulting disability or death to be compensable, Section 32-A
of the 2010 POEA-SEC requires that all of the following conditions, as supported by substantial evidence,
must be established:
1. The seafarer's work must involve the risks described in the POEA-SEC;
2. The disease was contracted as a result of the seafarer's exposure to the described risks;
3. The disease was contracted within a period of exposure and under such other factors necessary to
contract it; and
4. There was no notorious negligence on the part of the seafarer.
6. SEAFARER HAS BURDEN OF PROOF IN DISABILITY CLAIMS.
The seafarer must still prove his entitlement to disability benefits by substantial evidence of his
illness' work-relatedness and that the ailment was acquired during the term of his contract. He must show that
he experienced health problems while at sea, the circumstances under which he developed the illness, as well as
the symptoms associated with it.
7. PRINCIPLE OF WORK-RELATEDNESS.
1 Temporary total disability.

2 Permanent total disability.
3 Permanent partial disability.
4 Kestrel Shipping Co., Inc. v. Munar, G.R. No. 198501, Jan. 30, 2013.
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The principle of work-relatedness of an injury or illness means that the seafarer's injury or illness has
a possible connection to one's work, and thus, allows the seafarer to claim disability benefits therefor.
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The 2010 POEA-SEC defines a work-related injury as an "injury resulting in disability or death arising
out of and in the course of employment," and a work-related illness as "any sickness resulting to disability or
death as a result of an occupational disease listed under Section 32-A of this Contract with the conditions set
therein satisfied.”
For illnesses not mentioned under Section 32, the 2010 POEA-SEC creates a disputable presumption in
favor of the seafarer that these illnesses are work-related. However, the presumption does not necessarily
result in an automatic grant of disability compensation. The claimant, on due process grounds, still has the
burden to present substantial evidence that his work conditions caused or at least increased the risk of
contracting the illness. This is because awards of compensation cannot rest entirely on bare assertions and
presumptions. In order to establish compensability of a non-occupational disease, reasonable proof of work-
connection is sufficient – direct causal relation is not required. Thus, probability, not the ultimate degree of
certainty, is the test of proof in compensation proceedings.
8. INJURY OR ILLNESS MUST OCCUR DURING TERM OF CONTRACT.
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As earlier quoted, Section 20 (A) of the 2010 POEA-SEC categorically reads:
“The liabilities of the employer when the seafarer suffers work-related injury or illness during the
term of his contract are as follows: xxx”
Based on this provision, an injury or illness is compensable when, first, it is work-related and, second, the injury or
illness existed during the term of the seafarer’s employment contract. The correct approach in adjudging claims of
seafarers for death and disability benefits is to determine whether the claimants have proven the requisites of
compensability under Section 32-A of the 2010 POEA-SEC. This provision states that for an occupational disease and the
resulting disability or death to be compensable, all of the following conditions need to be satisfied:
The seafarer's work must involve the risks described therein;
The disease was contracted as a result of the seafarer's exposure to the described risks;
The disease was contracted within a period of exposure and under such other factors necessary to contract it; and
There was no notorious negligence on the part of the seafarer.
DISABILITY ARISING FROM ACCIDENT.
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Raised as issue in NFD International,1 is whether or not the incident where respondent figured should be classified as
accident or an injury. On May 16, 2003, when respondent had been on board the vessel M/V Shinrei for seven months as
Third Officer, the Captain and Chief Officer ordered him to carry 25 fire hydrant caps from the deck to the engine
workshop, then back to the deck to refit the caps. The next day, while carrying a heavy basketful of fire hydrant caps,
respondent felt a sudden snap on his back, with pain that radiated down to the left side of his hips. He immediately
informed the ship captain about his condition, and he was advised to take pain relievers. As the pain was initially tolerable,
he continued with his work. After a few days, the pain became severe, and respondent had difficulty walking. The Court
held that the snap on the back of respondent was not an accident, but an injury sustained by respondent from carrying the
heavy basketful of fire hydrant caps, which injury resulted in his disability. The injury cannot be said to be the result of an
accident, that is, an unlooked for mishap, occurrence, or fortuitous event, because the injury resulted from the performance
of a duty. Although respondent may not have expected the injury, yet, it is common knowledge that carrying heavy objects
can cause back injury, as what happened in this case. Hence, the injury cannot be viewed as unusual under the
circumstances, and is not synonymous with the term “accident” as defined above.
NON-COMPENSABILITY OF SELF-INFLICTED INJURY.
Section 20 (D) of the 2010 POEA-SEC is clear, viz.:
“SECTION 20. COMPENSATION AND BENEFITS
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xxx
“D. No compensation and benefits shall be payable in respect of any injury, incapacity, disability or death of the seafarer resulting
from his willful or criminal act or intentional breach of his duties; Provided, however, that the employer can prove that such
injury, incapacity, disability or death is directly attributable to the seafarer.”
From the above provision, the onus probandi falls on the employer to establish or substantiate its claim that the seafarer's
injury was caused by his willful or intentional act with the requisite quantum of evidence.
II.
EXISTENCE AND EXTENT OF SEAFARER’S DISABILITY,
HOW DETERMINED AND DECLARED
1. PRE-EMPLOYMENT MEDICAL EXAMINATION (PEME); NON-COMPENSABILITY OF

DISABILITY FROM PRE-EXISTING ILLNESS.
Pursuant to Section 20 (A) of the 2010 POEA-SEC, the employer is liable for disability benefits when
the seafarer suffers from a work-related injury or illness during the term of his contract. In this regard, Section
20 (E) thereof mandates the seafarer to disclose all his pre-existing illnesses or conditions in his PEME; failing
which shall disqualify him from receiving disability compensation,2 viz.:
“SECTION 20. COMPENSATION AND BENEFITS
xxx
1 NFD International Manning Agents, Inc. v. Illescas, G.R. No. 183054, Sept. 29, 2010.
2 Ventura, Jr. v. Crewtech Shipmanagement Philippines, Inc., G.R. No. 225995, Nov. 20, 2017.
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“E. A seafarer who knowingly 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
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imposition of appropriate administrative sanctions.”
At the outset, it bears to point out that Section 20 (E) of the 2010 POEA-SEC speaks of an instance where
an employer is absolved from liability when a seafarer suffers a work-related injury or illness on account of the
latter's willful concealment or misrepresentation of a pre-existing condition or illness. Thus, the burden is on the
employer to prove such concealment of a pre-existing illness or condition on the part of the seafarer to be
discharged from any liability. In this regard, an illness shall be considered as pre-existing if prior to the processing
of the POEA contract, any of the following conditions is present, namely:
(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.
2. THE 120-DAY/240-DAY TREATMENT PERIOD RULE.
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a. Significance of the period.
Pursuant to Section 20 (A) of the 2010 POEA-SEC, when a seafarer suffers a work-related injury or illness
in the course of employment, the company-designated physician is obligated to arrive at a definite assessment
of the former's fitness or degree of disability within a period of 120 days from repatriation. During the said
period, the seafarer shall be deemed on TEMPORARY TOTAL DISABILITY and shall receive his basic
wage until he is declared fit to work or his temporary disability is acknowledged by the company to be
permanent, either partially or totally, as his condition is defined under the POEA-SEC and by applicable
Philippine laws. However, if the 120-day period is exceeded and no definitive declaration is made because the
seafarer requires further medical attention, then the temporary total disability period may be extended up to
a maximum of 240 days, subject to the right of the employer to declare within this period that a permanent
partial or total disability already exists.
But before the company-designated physician may avail of the allowable 240-day extended treatment
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period, he must perform some significant act to justify the extension of the original 120-day period. Otherwise, the
law grants the seafarer the relief of permanent total disability benefits due to such non-compliance.
Case law thus states that without a valid final and definitive assessment from the company-
designated physician within the 120-day/240-day period, the law already steps in to consider petitioner's
disability as total and permanent. Thus, a temporary total disability becomes total and permanent by operation
of law. Consequently, in a case where it was only after the lapse of more than six (6) months that the company-
designated physician issued a certification declaring the seafarer to be entitled to a disability rating of Grade 10,
going beyond the period of 120 days, without justifiable reason, the Court held that his disability was correctly
adjudged to be permanent and total.
b. Summary of Rules on the periods to assess the seafarer.
The 2015 case of Elburg,1 and later reiterated in a number of cases,2 summarized the rules on the periods
when the company-designated physician must, as a duty, assess the seafarer and issue a final medical assessment,
as follows:
1. The company-designated physician must issue a final medical assessment on the seafarer’s disability
grading within a period of 120 days from the time the seafarer reported to him;
2. If the company-designated physician fails to give his assessment within the period of 120 days without
any justifiable reason, then the seafarer’s disability becomes permanent and total;
3. If the company-designated physician fails to give his assessment within the period of 120 days
with a sufficient justification (e.g., seafarer required further medical treatment or seafarer was
uncooperative3), then the period of diagnosis and treatment shall be extended to 240 days. The
employer has the burden to prove that the company-designated physician has sufficient justification to
extend the period; and
4. If the company-designated physician still fails to give his assessment within the extended period of
240 days, then the seafarer’s disability becomes permanent and total, regardless of any
justification.
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The above rule was further refined in the 2015 case of Marlow Navigation Philippines, Inc. v. Osias,4
where the Court declared – and this is the current rule - as follows:
(1) that mere inability to work for a period of 120 days does not entitle a seafarer to permanent and
total disability benefits;
(2) that the determination of the fitness of a seafarer for sea duty is within the province of the
company- designated physician, subject to the periods prescribed by law;
(3) that the company-designated physician has an initial 120 days to determine the fitness or disability of
the seafarer; and
(4) that the period of treatment may only be extended to 240 days if a sufficient justification
exists such as when further medical treatment is required or when the seafarer is uncooperative.
For as long as the 120-day period under the Labor Code and the POEA-SEC and the 240-day period
under the IRR co-exist, the Court must bend over backwards to harmoniously interpret and give life to both of
the stated periods. Ultimately, the intent of our labor laws and regulations is to strive for social justice over the
diverging interests of the employer and the employee.
1 Elburg Shipmanagement Phils., Inc. v. Quiogue, Jr., G.R. No. 211882, July 29, 2015, 764 SCRA 431.
2 Such as Gere v. Anglo-Eastern Crew Management Phils., Inc., G.R. Nos. 226656 & 226713, April 23, 2018; Magsaysay Mitsui OSK Marine, Inc. v. Buenaventura, G.R. No. 195878,
Jan. 10, 2018.
3 An example of uncooperativeness is the case of Marlow Navigation Philippines, Inc. v. Osias, supra, where Osias, based on the evidence presented, did not fully comply with the
prescribed medical therapy.
4 G.R. No. 215471, Nov. 23, 2015.
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c. Conditions required for the claim for total and permanent disability benefits to prosper.
In sum, according to the 2019 case of Torillos,1 in order for a seafarer’s claim for total and
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permanent disability benefits to prosper, any of the following conditions should be present:
(a) The company-designated physician failed to issue a declaration as to his fitness to engage in sea duty
or disability even after the lapse of the 120-day period and there is no indication that further
medical treatment would address his temporary total disability, hence, justify an extension of the
period to 240 days;
(b) 240 days had lapsed without any certification issued by the company designated physician;
(c) The company-designated physician declared that he is fit for sea duty within the 120-day or 240-
day period, as the case may be, but his physician of choice and the doctor chosen under Section 20
(B) (3) of the POEA-SEC are of a contrary opinion;
(d) The company-designated physician acknowledged that he is partially permanently disabled but
other doctors who he consulted, on his own and jointly with his employer, believed that his disability
is not only permanent but total as well;
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(e) The company-designated physician recognized that he is totally and permanently disabled but there
is a dispute on the disability grading;
(f) The company-designated physician determined that his medical condition is not compensable or
work- related under the POEA-SEC but his doctor-of-choice and the third doctor selected under
Section 20 (B) (3)2 of the POEA-SEC found otherwise and declared him unfit to work;
(g) The company-designated physician declared him totally and permanently disabled but the employer
refuses to pay him the corresponding benefits; and
(h) The company-designated physician declared him partially and permanently disabled within the 120-
day or 240-day period but he remains incapacitated to perform his usual sea duties after the lapse of
said periods.
3. POST-EMPLOYMENT MEDICAL EXAMINATION.
a. Mandatory submission for post-employment medical examination by a company-designated
physician.
Section 20 (A) (3) of the 2010 POEA-SEC, reads:
“COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS
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term of his contract are as follows:
xxx
“For this purpose, the seafarer shall submit himself to a post-employment medical examination by
a company-designated physician within three working days upon his return except when he is
physically incapacitated to do so, in which case, a written notice to the agency within the same period
is deemed as compliance. In the course of the treatment, the seafarer shall also report regularly to the
company-designated physician specifically on the dates as prescribed by the company-designated physician and
agreed to by the seafarer. Failure of the seafarer to comply with the mandatory reporting requirement shall
result in his forfeiture of the right to claim the above benefits.”
It is clear from the foregoing that for a seafarer’s claim for disability to prosper, it is mandatory and must
be strictly observed that within three (3) working days from his repatriation, he is examined by a
company- designated physician. Non-compliance with this mandatory requirement results in the forfeiture of the
right to claim for compensation and disability benefits. Consequently, the complaint filed by a non-compliant
seafarer should be dismissed outright.
b. Exceptions.
to the employer upon his repatriation; and (2) when the employer inadvertently or deliberately refused to
submit the seafarer to a post-employment medical examination by a company-designated physician.
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This rule is not absolute, however. It admits of exception as (1) when the seafarer is incapacitated to report
4. RIGHT OF SEAFARER TO SEEK A SECOND OPINION.

a. When right to seek second opinion accrues.
The seafarer has the right to seek a second opinion once the company-designated physician makes a
definitive and final assessment within the 120-day period; otherwise, no such obligation devolves on the seafarer
to consult his own doctor.
5. THE THIRD DOCTOR RULE - MANDATORY PROCEDURE IN JOINTLY ENGAGING A THIRD
DOCTOR.
a. Referral to a third-party doctor, when required.
The conflicting findings of the company's doctor and the seafarer's physician often stir suits for
disability compensation. As an extrajudicial measure of settling their differences, the POEA-SEC gives the parties
the option of agreeing jointly on a third doctor whose assessment shall break the impasse and shall be the final and
binding diagnosis.3
While it is the company-designated doctor who is given the responsibility to make a conclusive assessment
on the degree of the seafarer's disability and his capacity to resume work within 120/240 days, the parties, however,
are free
1 Torillos v. Eastgate Maritime Corporation, G.R. Nos. 215904 & 216165, Jan. 10, 2019.
2 Id.
3 C.F. Sharp Crew Management, Inc. v. Castillo, G.R. No. 208215, April 19, 2017.
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to disregard the findings of the company doctor as well as the chosen doctor of the seafarer, in case they cannot
agree on the disability gradings issued and jointly seek the opinion of a third-party doctor pursuant to Section 20
(A) (3) of the 2010 POEA-SEC which states:
nRobles Bar “SECTION 20. COMPENSATION AND BENEFITS

“COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS
term of his contract are as follows:
3. xxx
“If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may
be agreed jointly between the Employer and the seafarer. The third doctor's decision shall be final
and binding on both parties.”
In other words, the referral to a third doctor is mandatory when:
(1) there is a valid and timely assessment by the company-designated physician; and
(2) the appointed doctor of the seafarer refuted such assessment.
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6. MEDICAL ABANDONMENT AND PREMATURE FILING OF COMPLAINT FOR DISABILITY
CLAIM.
The act of a seafarer in refusing to undergo medical treatment or in refusing to continue his medical
treatment with the company-designated physician is called “medical abandonment” which would result in the
denial of his disability claim. Moreover, the filing of a complaint for disability claim before the lapse of the 120-
day/240-day treatment period will result in its dismissal on the ground of prematurity as at that point, the cause of
action may be said to have not yet accrued as a matter of right.
7. RULE IN CASE OF CONFLICT OF OPINIONS.
In any case, the Supreme Court underscored in Nazareno1 that “the bottomline is this: In a situation where
the certification of the company-designated physician would defeat the OFW’s claim while the opinion of the
independent physicians would uphold such claim, the Court adopts the findings favorable to the OFW. The law
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looks tenderly on the laborer. Where the evidence may be reasonably interpreted in two divergent ways, one
prejudicial and the other favorable to him, the balance must be tilted in his favor consistent with the principle of
social justice.”
8. EFFECT OF MISREPRESENTATION ON DISABILITY CLAIMS.
Misrepresentation on the part of the claimant would defeat the claim for total permanent disability. In
Ayungo,2 petitioner did not disclose that he had been suffering from hypertension and/or had been actually taking
medications therefor (i.e., Lifezar) during his PEME. As the records would show, the existence of Ayungo’s
hypertension was only revealed after his repatriation, as reflected in the Medical Report dated March 26, 2008
and reinforced by subsequent medical reports issued by Metropolitan Medical Center. To the Court’s mind,
Ayungo’s non-disclosure constitutes fraudulent misrepresentation which, pursuant to Section 20 (E) of the 2000
POEA-SEC, disqualifies him from claiming any disability benefits from his employer.
III.
MONETARY CLAIMS OF SEAFARERS
FOR DEATH BENEFITS
1. REQUISITES.
To be entitled to death compensation benefits from the employer, the death of the seafarer:
(1) must be work-related; and
(2) must happen during the term of the employment contract.
1.1. 1ST REQUISITE: DEATH MUST BE WORK-RELATED.
a. Meaning of work-related death.
While the 2010 and the earlier 2000 POEA-SEC do not expressly define what a “work-related death”
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means, it is evident from Part B (4) as above-quoted that the said term refers to the seafarer’s death resulting
from a work- related injury or illness. This denotation complements the definitions accorded to the terms
“work-related injury” and “work-related illness” under the 2010 POEA-SEC as follows:
“Definition of Terms:
“For purposes of this contract, the following terms are defined as follows:
xxx
“16. Work-Related Illness - any sickness as a result of an occupational disease listed under Section 32~A of this
Contract with the conditions set therein satisfied.
“17. Work-Related Injury - injury arising out of and in the course of employment.
What is clear from the foregoing is that work-related injury is one resulting in disability or death arising
out of and in the course of employment. Thus, there is a need to show that the injury resulting to disability or
death must arise (1) out of employment; and (2) in the course of employment.
1.2. 2ND REQUISITE: DEATH MUST OCCUR DURING TERM OF EMPLOYMENT.
a. The death should happen during employment.
1 G.R. No. 209201, Nov. 19, 2014.

2 Ayungo v. Beamko Shipmanagement Corporation, G.R. No. 203161, Feb. 26, 2014.
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b. If death happens after termination of employment, no death benefits should, as a general rule,
be paid.
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c. Exception when death after termination of employment is compensable.
Section 32-A of the POEA-SEC considers the possibility of compensation for the death of the
seafarer occurring after the termination of the employment contract on account of a work-related illness. But for
death under this provision to be compensable, the claimant must satisfy all of the following conditions:
(1) The seafarer's work must involve the risks described in the POEA-SEC;
(2) The disease was contracted as a result of the seafarer's exposure to the described risks;
(3) The disease was contracted within a period of exposure and under such other factors necessary to
contract it; and
(4) There was no notorious negligence on the part of the seafarer.
In fulfilling these requisites, substantial evidence must be presented which is more than a mere scintilla; it
must reach the level of relevant evidence as a reasonable mind might accept as sufficient to support a conclusion.
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d. Medical repatriation as an exception.
The Supreme Court clarified in Canuel,1 that while the general rule is that the seafarer’s death should occur
during the term of his employment, the seafarer’s death occurring after the termination of his employment due to his
medical repatriation on account of a work-related injury or illness constitutes an exception thereto. This is based on
a liberal construction of the 2000 POEA-SEC2 as impelled by the plight of the bereaved heirs who stand to be deprived
of a just and reasonable compensation for the seafarer’s death, notwithstanding its evident work-connection.
e. Non-medical repatriation cases where death occurred after repatriation, hence, death benefits denied.
DEATH CAUSED BY THE SEAFARER HIMSELF, NOT COMPENSABLE.
Death by suicide.
In the following cases, the death by suicide was likewise held not compensable:
TSM Shipping (Phils.), Inc. v. De Chavez,3 where the seafarer was found dead inside his cabin bathroom hanging by the
shower cord and covered with blood.
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Wallem Maritime Services, Inc. v. Pedrajas,4 where the seafarer hanged himself on the Upper Deck B of the vessel with
a rope tied to his neck.
Great Southern Maritime Services Corp. v. Surigao,5 where the seafarer was found dead inside the bathroom of his
hospital room with a belt tied around his neck.
Maritime Factors, Inc. v. Hindang,6 where the seafarer’s body was found hanging by a strap on his neck in a kneeling
position inside the locker (wardrobe) of his cabin.
------------oOo------------
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1 Anita Canuel v. Magsaysay Maritime Corporation, G.R. No. 190161, Oct. 13, 2014.
2 Now 2010 POEA-SEC.
3 G.R. No. 198225, Sept. 27, 2017.
4 G.R. No. 192993, Aug. 11, 2014.
5 G.R. No. 183646, Sept. 18, 2009, 616 Phil. 758.
6 G.R. No. 151993, Oct. 19. 2011.
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SYLLABUS
nRobles Bar MAJOR TOPIC 5
LABOR RELATIONS
A.
RIGHT TO SELF-ORGANIZATION
1.
COVERAGE
a.

ChanRobles Bar PERSONS WHO CAN EXERCISE
Who are eligible to join, form or assist a labor organization for purposes of collective bargaining?
 In the private sector:
1. All persons employed in commercial, industrial and agricultural enterprises;
2. Employees of government-owned and/or controlled corporations without original charters
established under the Corporation Code;
3. Employees of religious, charitable, medical or educational institutions, whether operating for profit
or not;
4. Front-line managers, commonly known as supervisory employees [See discussion below];
5. Alien employees [See discussion below];
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6. Working children [See discussion below];
7. Homeworkers [See discussion below];
8. Employees of cooperatives [See discussion below]; and
9. Employees of legitimate contractors not with the principals but with the contractors
 In the public sector:
All rank-and-file employees of all branches, subdivisions, instrumentalities, and agencies of
government, including government-owned and/or controlled corporations with original charters, can
form, join or assist employees’ organizations of their own choosing.
 Are front-line managers or supervisors eligible to join, form or assist a labor organization?
Yes, but only among themselves. They cannot join a rank-and-file union.
 Do alien employees have the right to join a labor organization?
No, except if the following requisites are complied with:
(1) He should have a valid working permit issued by the DOLE; and
(2) He is a national of a country which grants the same or similar rights to Filipino workers OR which
has ratified either ILO Convention No. 87 or ILO Convention No. 98 (ON THE RIGHT TO
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SELF- ORGANIZATION OF WORKERS) as certified by the Philippine Department of Foreign
Affairs (DFA).
 Do members of cooperatives have the right to join, form or assist a labor organization?
No, because they are co-owners of the cooperative.
 What about employees of a cooperative?
Yes, because they have employer-employee relationship with the cooperative.
 What about members who are at the same time employees of the cooperative?
No, because the prohibition covers employees of the cooperative who are at the same time members thereof.
 Can employees of job contractors join, form or assist a labor organization?
Yes, but not for the purpose of collective bargaining with the principal but with their direct employer – the
job contractor.
 Are self-employed persons allowed to join, form or assist a labor organization?
Yes, for their mutual aid and protection but not for collective bargaining purposes since they have
no employers but themselves. BUT AS AND BY WAY OF DISTINCTION, THEIR LABOR
ORGANIZATION IS CALLED “WORKERS’ ASSOCIATION.”
This rule applies as well to ambulant, intermittent and other workers, rural workers and those without any definite employers.
The reason for this rule is that these persons have no employers with whom they can collectively bargain.
b.
PERSONS WHO CANNOT EXERCISE
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 Who are the persons that are not allowed to form, join or assist labor organizations?
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a. In the private sector.
1. Top and middle level managerial employees; and
2. Confidential employees.
b. In the public sector.
The following are not eligible to form employees’ organizations:
1. High-level employees whose functions are normally considered as policy-making or managerial or
whose duties are of a highly confidential nature;
2. Members of the Armed Forces of the Philippines;
3. Police officers;
4. Policemen;
5. Firemen; and
6. Jail guards.

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Who are confidential employees?
CONFIDENTIAL EMPLOYEE RULE
Within the context of labor relations, “confidential employees” are those who meet the following criteria:
(1) They assist or act in a confidential capacity;
(2) To persons or officers who formulate, determine, and effectuate management policies specifically in
the field of labor relations.
The two (2) criteria above are cumulative and both must be met if an employee is to be considered a
“confidential employee” that would deprive him of his right to form, join or assist a labor organization.
 What is the doctrine of necessary implication?
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Under the confidential employee rule, a rank-and-file employee or a supervisory employee, is elevated to
the position of a managerial employee, under another doctrine called the DOCTRINE OF NECESSARY
IMPLICATION, hence, he is treated as if he is a managerial employee because of his access to
confidential information related to labor relations. THE DOCTRINE OF NECESSARY IMPLICATION IS
THEREFORE THE LEGAL BASIS FOR INELIGIBILITY OF CONFIDENTIAL EMPLOYEE TO JOIN
A UNION.
For example, not all secretaries to top officials of the company may be considered as confidential
employees, unless they have access to confidential information related to labor relations, such as when they
transcribe or type/encode the counter-proposals of management on the proposals of the SEBA in a CBA
negotiation. That access to such counter-proposals is the type of access contemplated under this rule.
2.
INELIGIBILITY OF MANAGERIAL
EMPLOYEES; RIGHT OF SUPERVISORY
EMPLOYEES
 Are managerial employees allowed unionize?
There are 3 types of managerial employees:
1. Top Management
2. Middle Management
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3. First-Line Management (also called supervisory level)
The first two above are absolutely prohibited; but the third, being supervisors, are allowed but only
among themselves.
 Are confidential employees allowed to join, form or assist a labor organization?
No, under the confidential employee rule.
“Confidential employees” are those who meet the following criteria:
(1) They assist or act in a confidential capacity;
(2) To persons or officers who formulate, determine, and effectuate management policies specifically in
the field of labor relations. If not related to labor relations, an employee can never be
considered as confidential employee as would deprive him of his right to self-organization.
The two (2) criteria are cumulative and both must be met if an employee is to be considered a
“confidential employee” that would deprive him of his right to form, join or assist a labor organization.
3.
EFFECT OF INCLUSION AS MEMBERS OF
EMPLOYEES OUTSIDE OF THE BARGAINING
UNIT
COMMINGLING or MIXED MEMBERSHIP

 Is COMMINGLING or MIXED MEMBERSHIP of supervisors and rank-and-file union in one union
allowed? Is it a ground to cancel its registration?
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No. It is not allowed. However, it bears noting that in case there is commingling or mixed membership of
supervisors and rank-and-file employees in one union, the new rule enunciated in Article 256 [245-A] of the Labor
Code, unlike in the old law, is that it cannot be invoked as a ground for the cancellation of the registration of the
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union. The employees so improperly included are automatically deemed removed from the list of members of said
union. In other words, their removal from the said list is by operation of law.
4.
NON-ABRIDGEMENT1
(OF RIGHT TO SELF-ORGANIZATION)
1. LEGAL
BASIS.
Article 257 [246] speaks of the principle of non-abridgment of the right to self-organization as follows:
“Article 257 [246]. Non-Abridgment of Right to Self-Organization. – It shall be unlawful for any
person to restrain, coerce, discriminate against or unduly interfere with employees and workers in their
exercise of the right to self-organization. Such right shall include the right to form, join, or assist labor
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organizations for the purpose of collective bargaining through representatives of their own choosing
and to engage in lawful concerted activities for the same purpose or for their mutual aid and protection,
subject to the provisions of Article 279 [264] of this Code.”
More aptly, Article 257 [246] describes the legal concept of the “right to self-organization,” which,
as a legal proposition, includes two (2) basic rights, namely:
(1) “To form, join, or assist labor organizations for the purpose of collective bargaining through
representatives of their own choosing;” and
(2) “To engage in lawful concerted activities for the same purpose or for their mutual aid
and protection, subject to the provisions of Article 279 [264] of [the Labor] Code.”
5.
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AFFILIATION AND DISAFFILIATION
1. UNIONVIS-À-VIS ITS MEMBERS.

The relationship between the union and its members is that of principal and agent, the former being the
agent while the latter, the principal.
2. MOTHER UNION VIS-À-VIS AFFILIATE OR LOCAL CHAPTER/CHARTERED LOCAL
The federation or national union (also called “Mother Union”), acting for and in behalf of its affiliate, has
the status of an agent while the affiliate or local chapter/chartered local remains the principal – the basic unit
of the association.
3. PURPOSE OF AFFILIATION
The purpose of affiliation is to further strengthen the collective bargaining leverage of the affiliate. No
doubt, the purpose of affiliation by a local union with a mother union is to increase by collective action its
bargaining power in respect of the terms and conditions of labor.
4. RIGHT TO DISAFFILIATE.
The right of the affiliate union to disaffiliate from its mother federation or national union is a
constitutionally- guaranteed right which may be invoked by the former at any time. It is axiomatic that an affiliate
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union is a separate and voluntary association free to serve the interest of all its members - consistent with the
freedom of association guaranteed in the Constitution.
5. DISTINCTIONS AS TO AFFILIATION & DISAFFILIATION.
The following are the distinctions between independently registered union and local chapter/chartered
local, insofar as their relationship with the federation or national union is concerned:
1 This is how this word “Abridgement” is spelled in the 2019 Syllabus. Note that in Article 257 [246] of the Labor Code, this word is spelled as “Non-Abridgment.”
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Independently Local Chapter or

Criteria
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Registered Chartered
Union Local
Proper term to
describe the
Affiliation Chartering
relationship with
federation or national
Proper denomination Affiliate1 Local Chapter or Chartered Local2
of the union
Nature of Principal-Agent Principal-Agent

contractual
relationship with Principal – Affiliate Union Principal - Local Chapter/Chartered Local
federation or Agent – Federation or National Union Agent – Federation or National Union
national union
Proof of relationship Contract of Affiliation Charter Certificate
Since it is a creation of the federation or

Effect of Does not affect in any way national union, its legal personality is
affiliation/chartering its independent legal dependent upon and coterminous with
personality its association with its creator – the
federation or national union
Does not affect legal Ceases to have any legal personality

Effect of Disaffiliation personality since it has its own Exception: If prior to disaffiliation, it has
independent registration secured independent registration
SOME PRINCIPLES ON AFFILIATION.

Independent legal personality of an affiliate union is not affected by affiliation. ChanRobles Bar
The affiliate union is a separate and distinct voluntary association owing its creation to the will of its members. It does
not give the mother union the license to act independently of the affiliate union.
The fact that the affiliate union is not a legitimate labor organization does not affect the principal-agent relationship.
Affiliate union becomes subject of the rules of the federation or national union.
The appendage of the acronym of the federation or national union after the name of the affiliate union in the registration
with the DOLE does not change the principal-agent relationship between them. Such inclusion of the acronym is merely
to indicate that the local union is affiliated with the federation or national union at the time of the registration. It does not
mean that the affiliate union cannot independently stand on its own.
SOME PRINCIPLES ON DISAFFILIATION.
Disaffiliation does not divest an affiliate union of its legal personality.
Disaffiliation of an affiliate union is not an act of disloyalty.
Disaffiliation for purposes of forming a new union does not terminate the status of the members thereof as employees of
the company. By said act of disaffiliation, the employees who are members of the local union did not form a new union
but merely exercised their right to register their local union. The local union is free to disaffiliate from its mother union.
Disaffiliation should be approved by the majority of the union members.
Disaffiliation terminates the right to check-off federation dues.
B. BARGAINING UNIT
What is a bargaining unit?
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A “bargaining unit” refers to a group of employees sharing mutual interests within a given employer unit, comprised of
all or less than all of the entire body of employees in the employer unit or any specific occupational or geographical
grouping within such employer unit. It may also refer to the group or cluster of jobs or positions within the employer’s
establishment that supports the labor organization which is applying for registration.
(a)
TEST TO DETERMINE
AN APPROPRIATE BARGAINING UNIT
 What are the four tests to determine appropriate bargaining unit?
Based on jurisprudence, there are certain tests which may be used in determining the appropriate
collective bargaining unit, to wit:
(1) Community or mutuality of interest doctrine;
(2) Globe doctrine or will of the members;
(3) Collective bargaining history doctrine; and
1 An “affiliate” refers to:

(1) An independent union affiliated with a federation or a national union; or
(2) A local chapter or chartered local which has been subsequently granted independent registration but did not disaffiliate from the federation or national union which created it.
(Section 1 [a], Rule I, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]).
2 Technically, a local chapter created through the mode of chartering by a mother union under Article 241 [234-A] of the Labor Code, cannot be properly called an “affiliate” if it has not
acquired any independent registration of its own.
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(4) Employment status doctrine.

1. COMMUNITY OR MUTUALITY OF INTEREST DOCTRINE.
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have community or mutuality of interest in terms of employment and working conditions as evinced by the type of
work they perform. It is characterized by similarity of employment status, same duties and responsibilities and
substantially similar compensation and working conditions.
St. James School of Quezon City v. Samahang Manggagawa sa St. James School of Quezon City.1 -
Respondent union sought to represent the rank-and-file employees (consisting of the motor pool, construction
and transportation employees) of petitioner-school’s Tandang Sora campus. Petitioner-school opposed it by
contending that the bargaining unit should not only be composed of said employees but must include
administrative, teaching and office personnel in its five (5) campuses. The Supreme Court disagreed with said
contention. The motor pool, construction and transportation employees of the Tandang Sora campus had 149
qualified voters at the time of the certification election, hence, it was ruled that the 149 qualified voters should be
used to determine the existence of a quorum during the election. Since a majority or 84 out of the 149
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qualified voters cast their votes, a quorum existed during the certification election. The computation of the
quorum should be based on the rank-and-file motor pool, construction and transportation employees of the
Tandang Sora campus and not on all the employees in petitioner’s five (5) campuses. Moreover, the
administrative, teaching and office personnel are not members of the union. They do not belong to the
bargaining unit that the union seeks to represent.
Other cases:
(1) San Miguel Corporation v. Laguesma,2 involving a petition of the union which seeks to represent
the sales personnel in the various Magnolia sales offices in Northern Luzon. Petitioner company, however,
opposed it by taking the position that each sales office should constitute one bargaining unit. In disagreeing with
this proposition of petitioner, the High Court said: “What greatly militates against this position (of the company) is
the meager number of sales personnel in each of the Magnolia sales office in Northern Luzon. Even the
bargaining unit sought to be represented by respondent union in the entire Northern Luzon sales area consists
only of approximately fifty-five (55) employees. Surely, it would not be for the best interest of these employees if
they would further be fractionalized. The adage ‘there is strength in number’ is the very rationale underlying the
formation of a labor union.”
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(2) San Miguel Corporation Supervisors and Exempt Employees Union v. Laguesma,3 involving the
issue of validity of constituting as one CBU of employees working in San Miguel’s three (3) plants located in three
(3) different places, namely: (1) in Cabuyao, Laguna, (2) in Otis, Pandacan, Metro Manila, and (3) in San Fernando,
Pampanga. It was declared that geographical location is immaterial and therefore can be completely disregarded if
the communal or mutual interest of the employees are not sacrificed. The distance among the 3 plants is not
productive of insurmountable difficulties in the administration of union affairs. Neither are there regional differences
that are likely to impede the operations of a single bargaining representative.
(3) Similar to this case is University of the Philippines v. Ferrer-Calleja,4 where all non-academic rank-
and- file employees of the University of the Philippines in its various campuses, to wit: (1) Diliman, Quezon City;
(2) Padre Faura, Manila; (3) Los Baños, Laguna; and (4) the Visayas, were allowed to participate in a certification
election as one bargaining unit.
2. GLOBE DOCTRINE.
This principle is based on the will of the employees. It is called Globe doctrine because this principle was
first enunciated in the United States case of Globe Machine and Stamping Co.,5 where it was ruled, in
defining the appropriate bargaining unit, that in a case where the company’s production workers can be considered
either as a single bargaining unit appropriate for purposes of collective bargaining or as three (3) separate and
distinct bargaining units, the determining factor is the desire of the workers themselves. Consequently, a
certification election should be held separately to choose which representative union will be chosen by the
workers.
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International School Alliance of Educators [ISAE] v. Quisumbing.6 - The Supreme Court ruled here
that foreign-hired teachers do not belong to the bargaining unit of the local-hires because the former have not
indicated their intention to be grouped with the latter for purposes of collective bargaining. Moreover, the
collective bargaining history of the school also shows that these groups were always treated separately.
3. COLLECTIVE BARGAINING HISTORY DOCTRINE.
This principle puts premium to the prior collective bargaining history and affinity of the employees
in determining the appropriate bargaining unit. However, the existence of a prior collective bargaining history has
been held as neither decisive nor conclusive in the determination of what constitutes an appropriate bargaining
unit.
National Association of Free Trade Unions v. Mainit Lumber Development Company Workers
Union.7 - It was ruled here that there is mutuality of interest among the workers in the sawmill division and
logging division as to justify their formation of a single bargaining unit. This holds true despite the history of said
two divisions being treated as separate units and notwithstanding their geographical distance from each other.
4. EMPLOYMENT STATUS DOCTRINE.
The determination of the appropriate bargaining unit based on the employment status of the employees
is considered an acceptable mode. For instance, casual employees and those employed on a day-to-day basis,
according to
1 G.R. No. 151326, Nov. 23, 2005.

2 G.R. No. 100485, Sept. 21, 1994.
3 G.R. No. 110399, Aug. 15, 1997, 277 SCRA 370, 380-381.
4 G.R. No. 96189, July 14, 1992, 211 SCRA 451.
5 3 NLRB 294 (1937).
6 G.R. No. 128845, June 1, 2000.
7 G.R. No. 79526, Dec. 21, 1990.
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the Supreme Court in Philippine Land-Air-Sea Labor Union v. CIR, 1 do not have the mutuality or community
of interest with regular and permanent employees. Hence, their inclusion in the bargaining unit composed of the
latter is not justified. Confidential employees, by the very nature of their functions, assist and act in a confidential
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capacity to, or have access to confidential matters of, persons who exercise managerial functions in the field of
labor relations. As such, the rationale behind the ineligibility of managerial employees to form, assist or join a labor
union equally applies to them. Hence, they cannot be allowed to be included in the rank-and-file employees’
bargaining unit. The rationale for this inhibition is that if these managerial employees would belong to or be
affiliated with a union, the latter might not be assured of their loyalty to the union in view of evident conflict
of interest. The union can also become company- dominated with the presence of managerial employees in its
membership.
C.
BARGAINING REPRESENTATIVE
(A.K.A. SEBA OR BARGAINING AGENT)
 What is a SEBA?
A Sole and Exclusive Bargaining Agent (SEBA) or commonly referred to as “exclusive bargaining
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representative” or “exclusive bargaining agent” refers to a legitimate labor organization duly certified as the
sole and exclusive bargaining representative or agent of all the employees in a bargaining unit.
 What are the modes of determining the sole and exclusive bargaining agent?
The following are the modes:

1. Request for SEBA Certification;
2. Certification election;
3. Consent election;
4. Run-off election;
5. Re-run election.
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(a)
REQUEST FOR SEBA CERTIFICATION
(Repealed and Replaced “VOLUNTARY RECOGNITION”)
 Is voluntary recognition still a proper mode of selecting a SEBA?

No more, because of its repeal and being replaced by the new mode called “REQUEST FOR
SEBA CERTIFICATION” per Department Order No. 40-I-15, Series of 2015, (Sept. 7, 2015).
 What should the employer do if a request for recognition or a demand for CBA negotiation is made by a
union which has not been certified as the SEBA?
The employer so requested cannot now extend voluntary recognition but may still validly file a petition
for certification election (PCE) under Article 270 [258] of the Labor Code, in order to determine if the requesting
union has the majority support of the employees in the bargaining unit which it seeks to represent or where it
intends to operate.
 What are the situations involved in this new mode of “REQUEST FOR SEBA CERTIFICATION”?
THREE SCENARIOS INVOLVING A REQUEST FOR CERTIFICATION.
There are three (3) scenarios conceived under the Rules on this mode, namely:
(1) Request for certification in unorganized establishment with only one (1) legitimate union;
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(2) Request for certification in unorganized establishment with more than one (1) legitimate
labor organization; and
(3) Request for certification in organized
establishment. The foregoing scenarios are discussed
below.
FIRST SCENARIO: Request for certification in an UNORGANIZED establishment with only one (1)
legitimate union.
a. Validation process.
If the DOLE Regional Director finds the establishment unorganized with only one (1) legitimate labor
organization in existence, he/she should call a conference within five (5) working days for the submission of
the following:
1. The names of employees in the covered bargaining unit who signify their support for the SEBA
certification, provided that said employees comprise at least majority of the number of employees
in the covered bargaining unit; and
2. Certification under oath by the president of the requesting union or local that all documents submitted
are true and correct based on his/her personal knowledge.
The submission shall be presumed to be true and correct unless contested under oath by any member of
the bargaining unit during the validation conference. For this purpose, the employer or any representative
of the employer shall not be deemed a party-in-interest but only as a bystander to the process of
certification.
1 G.R. No. L-14656, Nov. 29, 1960.
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If the requesting union or local fails to complete the requirements for SEBA certification during
the conference, the Request should be referred to the Election Officer for the conduct of certification election.1
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b. Action on the submission – when SEBA Certification should be issued.
If the DOLE Regional Director finds the requirements complete, he/she should issue, during the
conference, a Certification as SEBA enjoying the rights and privileges of an exclusive bargaining agent of all
the employees in the covered bargaining unit.2
The DOLE Regional Director should cause the posting of the SEBA Certification for 15 consecutive days
in at least 2 conspicuous places in the establishment or covered bargaining unit.
c. Effect of certification.
Upon the issuance of the Certification as SEBA, the certified union or local shall enjoy all the rights
and privileges of an exclusive bargaining agent of all the employees in the covered CBU.
SECOND SCENARIO: Request for certification in unorganized establishment with more than one (1)
legitimate labor organization.
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If the DOLE Regional Director finds the establishment unorganized with more than one (1) legitimate labor
organization, he/she should refer the same to the Election Officer for the conduct of certification election. 3 The
certification election shall be conducted in accordance with the Rules.
THIRD SCENARIO: Request for certification in organized establishment.
If the Regional Director finds the establishment organized, he/she should refer the same to the Mediator- Arbiter for the
determination of the propriety of conducting a certification election.
(b) CERTIFICATION ELECTION

What is certification election?
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“Certification election” refers to the process of determining through secret ballot the sole and exclusive bargaining
agent of the employees in an appropriate bargaining unit for purposes of collective bargaining or negotiations.
Who may file a petition for certification election?
The petition may be filed by:
A legitimate labor organization which may be:
an independent union; or
a national union or federation which has already issued a charter certificate to its local chapter participating in the
certification election; or
a local chapter which has been issued a charter certificate by the national union or federation.
An employer, when requested by a labor organization to bargain collectively and its majority status is in doubt.
What are the rules prohibiting the filing of petition for certification election (bar rules)?
General rule.
The general rule is that in the absence of a CBA duly registered in accordance with Article 231 of the Labor Code, a
petition for certification election may be filed at any time.
Bar rules.
No certification election may be held under the following rules:
Statutory bar rule;
Certification year bar rule;
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Negotiations bar rule;
Bargaining deadlock bar rule; or
5. Contract bar rule.

1. STATUTORY BAR RULE.
The Labor Code does not contain any provision on this rule but the Rules to Implement the Labor Code
embody a rule that bars the filing of a PCE within a period of one (1) year from the date of a valid conduct of a
certification, consent, run-off or re-run election where no appeal on the results thereof was made. If there was such
an appeal from the order of the Med-Arbiter, the running of the one-year period is deemed suspended until the
decision on the appeal has become final and executory.
This is called the statutory bar rule which finds its roots from a similar rule in the United States. Thus,
an election cannot be held in any bargaining unit in which a final and valid election was concluded within the
preceding 12- month period.
2. CERTIFICATION YEAR BAR RULE.
1 Id., pursuant to Rule IX of the Rules.

2 Section 4.1., Rule VII, Ibid.
3 Section 5, Rule VII, Ibid.
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Under this rule, a petition for certification election (PCE) may not be filed within one (1) year:
1. From the date a union is certified as SEBA by virtue of a REQUEST FOR SEBA CERTIFICATION; or
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2. From the date a valid certification, consent, run-off or re-run election has been conducted within
the bargaining unit.
If after this one year period, the SEBA did not commence collective bargaining with the employer, a
PCE may be filed by a rival union to challenge the majority status of the certified SEBA.
3. NEGOTIATIONS BAR RULE.
Under this rule, no PCE should be entertained while the sole and exclusive bargaining agent (SEBA) and
the employer have commenced and sustained negotiations in good faith within the period of one (1) year from the
date of a valid certification, consent, run-off or re-run election or from the date of voluntary recognition.
Once the CBA negotiations have commenced and while the parties are in the process of negotiating the
terms and conditions of the CBA, no challenging union is allowed to file a PCE that would disturb the process
and unduly forestall the early conclusion of the agreement.
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4. BARGAINING DEADLOCK BAR RULE.
Under this rule, a PCE may not be entertained when a bargaining deadlock to which an incumbent or
certified bargaining agent is a party has been submitted to conciliation or arbitration or has become the subject of a
valid notice of strike or lockout.
Kaisahan ng Manggagawang Pilipino [KAMPIL-KATIPUNAN] v. Trajano. - The bargaining
deadlock- bar rule was not applied here because for more than four (4) years after it was certified as the exclusive
bargaining agent of all the rank-and-file employees, it did not take any action to legally compel the employer to
comply with its duty to bargain collectively, hence, no CBA was executed. Neither did it file any unfair labor
practice suit against the employer nor did it initiate a strike against the latter. Under the circumstances, a
certification election may be validly ordered and held.
5. CONTRACT BAR RULE.
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Under this rule, a PCE cannot be filed when a CBA between the employer and a duly recognized or
certified bargaining agent has been registered with the Bureau of Labor Relations (BLR) in accordance with the
Labor Code. Where the CBA is duly registered, a petition for certification election may be filed only within the 60-
day freedom period prior to its expiry. The purpose of this rule is to ensure stability in the relationship of the
workers and the employer by preventing frequent modifications of any CBA earlier entered into by them in good
faith and for the stipulated original period.
When contract bar rule does not apply.
The contract-bar rule does not apply in the following cases:
1. Where there is an automatic renewal provision in the CBA but prior to the date when such
automatic renewal became effective, the employer seasonably filed a manifestation with the Bureau of
Labor Relations of its intention to terminate the said agreement if and when it is established that the
bargaining agent does not represent anymore the majority of the workers in the bargaining unit.
2. Where the CBA, despite its due registration, is found in appropriate proceedings that: (a) it
contains provisions lower than the standards fixed by law; or (b) the documents supporting its
registration are falsified, fraudulent or tainted with misrepresentation.
3. Where the CBA does not foster industrial stability, such as contracts where the identity of the
representative is in doubt since the employer extended direct recognition to the union and concluded
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a CBA therewith less than one (1) year from the time a certification election was conducted where the
“no union” vote won. This situation obtains in a case where the company entered into a CBA with
the union when its status as exclusive bargaining agent of the employees has not been established yet.
4. Where the CBA was registered before or during the last sixty (60) days of a subsisting agreement or
during the pendency of a representation case. It is well-settled that the 60-day freedom period
based on the original CBA should not be affected by any amendment, extension or renewal of the
CBA for purposes of certification election.
 What are the requisites for the validity of the petition for certification election?
The following requisites should concur:
1. The union should be legitimate which means that it is duly registered and listed in the registry of
legitimate labor unions of the BLR or that its legal personality has not been revoked or cancelled with
finality.
2. In case of organized establishments, the petition for certification election is filed during (and not
before or after) the 60-day freedom period of a duly registered CBA.
3. In case of organized establishments, the petition complied with the 25% written support of the
members of the bargaining unit.
4. The petition is filed not in violation of any of the four (4) bar rules [See above discussion thereof].
 What are the two (2) kinds of majorities (DOUBLE MAJORITY RULE)?
The process of certification election requires two (2) kinds of majority votes, viz.:
1. Number of votes required for the validity of the process of certification election itself. In order to
have a valid certification election, at least a majority of all eligible voters in the appropriate
bargaining unit must have cast their votes.
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2. Number of votes required to be certified as the collective bargaining agent. To be certified as the
sole and exclusive bargaining agent, the union should obtain a majority of the valid votes cast.
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 What are some pertinent principles on certification election?
 The pendency of a petition to cancel the certificate of registration of a union participating in a certification
election does not stay the conduct thereof.
 The pendency of an unfair labor practice case filed against a labor organization participating in the
certification election does not stay the holding thereof.
 Direct certification as a method of selecting the exclusive bargaining agent of the employees is not allowed.
This is because the conduct of a certification election is still necessary in order to arrive in a manner definitive
and certain concerning the choice of the labor organization to represent the workers in a collective bargaining
unit.
 The “No Union” vote is always one of the choices in a certification election. Where majority of the valid votes
cast results in “No Union” obtaining the majority, the Med-Arbiter shall declare such fact in the order.
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 Only persons who have direct employment relationship with the employer may vote in the certification
election, regardless of their period of employment.
b.1.
CERTIFICATION ELECTION
IN AN UNORGANIZED ESTABLISHMENT
 What is meant by “unorganized establishment”?
As distinguished from “organized establishment,” an “unorganized establishment” is an employer entity
where there is no recognized or certified collective bargaining union or agent.
A company or an employer-entity, however, may still be considered an unorganized establishment even if
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there are unions in existence therein for as long as not one of them is duly certified as the sole and exclusive
bargaining representative of the employees in the particular bargaining unit it seeks to operate and represent.
Further, a company remains unorganized even if there is a duly recognized or certified bargaining agent
for rank-and-file employees, for purposes of the petition for certification election filed by supervisors. The reason is
that the bargaining unit composed of supervisors is separate and distinct from the unionized bargaining unit of
rank-and-file employees. Hence, being unorganized, the 25% required minimum support of employees within the
bargaining unit of the supervisors need not be complied with.
 How should certification election be conducted in an unorganized establishment?
In case of a petition filed by a legitimate organization involving an unorganized establishment, the
Med- Arbiter is required to immediately order the conduct of a certification election upon filing of a petition for
certification election by a legitimate labor organization.
b.2.
CERTIFICATION ELECTION
IN AN ORGANIZED ESTABLISHMENT
 What are the requisites for the conduct of a certification election in an organized establishment?
The Med-Arbiter is required to automatically order the conduct of a certification election by secret ballot
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in an organized establishment as soon as the following requisites are fully met:
1. That a petition questioning the majority status of the incumbent bargaining agent is filed before the
DOLE within the 60-day freedom period;
2. That such petition is verified; and
3. That the petition is supported by the written consent of at least twenty-five percent (25%) of all
the employees in the bargaining unit.
c.
RUN-OFF ELECTION
 What is a run-off
election?
A “run-off election” refers to an election between the labor unions receiving the two (2) highest
number of votes in a certification election or consent election with three (3) or more unions in contention,
where such certification election or consent election results in none of the contending unions receiving
the majority of the valid votes cast; provided, that the total number of votes for all contending unions,
if added, is at least fifty percent (50%) of the number of valid votes cast.
 When is it conducted?
If the above conditions that justify the conduct of a run-off election are present and there are
no objections or challenges which, if sustained, can materially alter the election results, the Election
Officer should motu proprio conduct a run-off election within ten (10) days from the close of the
election proceeding between the labor unions receiving the two highest number of votes.
ILLUSTRATION.
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To illustrate, in a certification election involving four (4) unions, namely: Union A, Union B,
Union C, and Union D, where there are 100 eligible voters who validly cast their votes, and the votes
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they each garnered are as follows: Union A – 35; Union B – 25; Union C – 10; Union D - 15; and No
Union - 15, a run-off election may be conducted between Union A and Union B because:
(1) Not one of the unions mustered the majority vote of 51 votes but Union A and Union B
got the first two highest number of votes;
(2) If all the votes for the contending unions are added up, it will result in at least 50% of the
valid votes cast (Union A – 35; Union B – 25; Union C – 10; Union D - 15 for a total
of 85 or 85%); and
(3) There are no objections or challenges which, if sustained, can materially alter the results of
the election.
THE “NO UNION” CHOICE SHOULD NO LONGER BE INCLUDED.
For obvious reason, the choice of “No Union” should no longer be included in the run-off election.
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d.
RE-RUN ELECTION
1. MEANINF OF RE-RUN ELECTION.
“‘Re-run election’ refers to an election conducted to break a tie between contending
unions, including between ‘no union’ and one of the unions. It shall likewise refer to
an election conducted after a failure of election has been declared by the Election
Officer and/or affirmed by the Mediator-Arbiter.”
2. GROUNDS CITED IN THE RULES FOR RE-RUN ELECTION.
Based on the above-quoted rule, there are 2 situations contemplated thereunder that justify
the conduct of a re-run election, to wit:
(1) To break a tie; or
(2) To cure a failure of election.
3. RULE IN CASE OF FAILURE OF ELECTION. ChanRobles Bar
In failure of election, the number of votes cast in the certification or consent election is less
than the majority of the number of eligible voters and there are no challenged votes that could materially
change the results of the election. For example, in a CBU composed of 100 employees, the majority of
100, which is 51, should validly cast their votes in the election; otherwise, if less than 51 employees
have validly cast their votes, there is here a failure of election.
e.
CONSENT ELECTION
 What is consent election?
A “consent election” refers to the process of determining through secret ballot the sole and
exclusive bargaining agent (SEBA) of the employees in an appropriate bargaining unit for purposes of collective
bargaining and negotiation. It is voluntarily agreed upon by the parties, with or without the intervention of the
DOLE.
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 What are the distinctions between consent election and certification election?
Consent election is but a form of certification election. They may be distinguished from each other in the
following manner:
(1) The former is held upon the mutual agreement of the contending unions; while the latter does not require
the mutual consent of the parties as it is conducted upon the order of the Med-Arbiter (Mediator-Arbiter).
(2) The former may be conducted with or without the control and supervision of the DOLE; while the
latter is always conducted under the control and supervision of the DOLE.
(3) The former is being conducted as a voluntary mode of resolving labor dispute; while the latter, although
non- adversarial, is a compulsory method of adjudicating a labor dispute.
(4) The former is given the highest priority; while the latter is resorted to only when the contending unions
fail or refuse to submit their representation dispute through the former. This is so because under the
Implementing Rules, as amended, even in cases where a PCE is filed, the Med-Arbiter (Mediator-
Arbiter), during the preliminary conference and hearing thereon, is tasked to determine the “possibility
of a consent election.” It is only when the contending unions fail to agree to the conduct of a consent
election during the preliminary conference that the Med-Arbiter (Mediator-Arbiter) will proceed with the
process of certification election by conducting as many hearings as he may deem necessary up to its actual
holding. But in no case shall the conduct of the certification election exceed 15 days from the date of the
scheduled preliminary conference/hearing after which time, the PCE is considered submitted for decision.
(5) The former necessarily involves at least two (2) or more contending unions; while the latter may only involve one
(1) petitioner union.
(6) The former may be conducted in the course of the proceeding in the latter or during its pendency.
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D.
RIGHTS OF LABOR ORGANIZATION
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CHECK-OFF, ASSESSMENT, AGENCY FEES
1. REQUISITES FOR VALIDITY OF UNION DUES AND SPECIAL ASSESSMENTS.

The following requisites must concur in order for union dues and special assessments for the union’s
incidental expenses, attorney’s fees and representation expenses to be valid, namely:
(a) Authorization by a written resolution of the majority of all the members at a general
membership meeting duly called for the purpose;
(b) Secretary’s record of the minutes of said meeting; and
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(c) Individual written authorizations for check-off duly signed by the employees concerned.
ASSESSMENT FOR ATTORNEY’S FEES, NEGOTIATION FEES AND SIMILAR CHARGES.
The rule is that no such attorney’s fees, negotiation fees or similar charges of any kind arising from the negotiation or
conclusion of the CBA shall be imposed on any individual member of the contracting union. Such fees may be charged
only against the UNION FUNDS in an amount to be agreed upon by the parties. Any contract, agreement or
arrangement of any sort to the contrary is deemed null and void. Clearly, what is prohibited is the payment of
attorney’s fees when it is effected through forced contributions from the workers from their own funds as
distinguished from the union funds.
CHECK-OFF OF UNION DUES AND ASSESSMENTS.
“Check-off” means a method of deducting from the employee’s pay at prescribed periods, any amount due for fees,
fines or assessments. It is a process or device whereby the employer, on agreement with the union recognized as the
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proper bargaining representative, or on prior authorization from its employees, deducts union dues and assessments from
the latter’s wages and remits them directly to the union.
INDIVIDUAL WRITTEN AUTHORIZATION, WHEN REQUIRED.
The law strictly prohibits the check-off from any amount due an employee who is a member of the union, of any union
dues, special assessment, attorney’s fees, negotiation fees or any other extraordinary fees other than for mandatory
activities under the Labor Code, without the individual written authorization duly signed by the employee. Such
authorization must specifically state the amount, purpose and beneficiary of the deduction. The purpose of the individual
written authorization is to protect the employees from unwarranted practices that diminish their compensation without
their knowledge or consent.
INDIVIDUAL WRITTEN AUTHORIZATION, WHEN NOT REQUIRED.
In the following cases, individual written authorization is not required:
Assessment from non-members of the bargaining agent of “agency fees” which should be equivalent to the dues and
other fees paid by members of the recognized bargaining agent, if such non-members accept the benefits under the CBA.
Deductions for fees for mandatory activities such as labor relations seminars and labor education activities.
Deductions for withholding tax mandated under the National Internal Revenue Code.
Deductions for withholding of wages because of employee’s debt to the employer which is already due.
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Deductions made pursuant to a judgment against the worker under circumstances where the wages may be the subject
of attachment or execution but only for debts incurred for food, clothing, shelter and medical attendance.
Deductions from wages ordered by the court.
Deductions authorized by law such as for premiums for PhilHealth, SSS, Pag-IBIG, employees’ compensation and
the like.
AGENCY FEES
1. A NON-BARGAINING UNION MEMBER HAS THE RIGHT TO ACCEPT OR NOT THE BENEFITS
OF THE CBA.
There is no law that compels a non-bargaining union member to accept the benefits provided in the CBA.
He has the freedom to choose between accepting and rejecting the CBA itself by not accepting any of the benefits
flowing therefrom. Consequently, if a non-bargaining union member does not accept or refuses to avail of the
CBA-based benefits, he is not under any obligation to pay the “agency fees” since, in effect, he does not give
recognition to the status of the bargaining union as his agent.
2. LIMITATION ON THE AMOUNT OF AGENCY FEE.
The bargaining union cannot capriciously fix the amount of agency fees it may collect from its non-members.
Article 248(e) of the Labor Code expressly sets forth the limitation in fixing the amount of the agency fees, thus:
(1) It should be reasonable in amount; and
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(2) It should be equivalent to the dues and other fees paid by members of the recognized collective
bargaining agent.
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Thus, any agency fee collected in excess of this limitation is a nullity.
3. NON-MEMBERS OF THE SEBA NEED NOT BECOME MEMBERS THEREOF.
The employees who are not members of the certified bargaining agent which successfully concluded the
CBA are not required to become members of the latter. Their acceptance of the benefits flowing from the CBA and
their act of paying the agency fees do not make them members thereof.
4. CHECK-OFF OF AGENCY FEES.
“Check-off” of agency fees is a process or device whereby the employer, upon agreement with the
bargaining union, deducts agency fees from the wages of non-bargaining union members who avail of the benefits
from the CBA and remits them directly to the bargaining union.
5. ACCRUAL OF RIGHT OF BARGAINING UNION TO DEMAND CHECK-OFF OF AGENCY FEES.
The right of the bargaining union to demand check-off of agency fees accrues from the moment the
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non- bargaining union member accepts and receives the benefits from the CBA. This is the operative fact that
would trigger such liability.
6. NO INDIVIDUAL WRITTEN AUTHORIZATION BY NON-BARGAINING UNION MEMBERS
REQUIRED.
To effect the check-off of agency fees, no individual written authorization from the non-bargaining
union members who accept the benefits resulting from the CBA is necessary.
7. EMPLOYER’S DUTY TO CHECK-OFF AGENCY FEES.
It is the duty of the employer to deduct or “check-off” the sum equivalent to the amount of agency fees
from the non-bargaining union members' wages for direct remittance to the bargaining union.”
8. MINORITY UNION CANNOT DEMAND FROM THE EMPLOYER TO GRANT IT THE RIGHT
TO CHECK-OFF OF UNION DUES AND ASSESSMENTS FROM THEIR MEMBERS.
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The obligation on the part of the employer to undertake the duty to check-off union dues and
special assessments holds and applies only to the bargaining agent and not to any other union/s (called “Minority
Union/s”).
2.
COLLECTIVE BARGAINING
a.
DUTY TO BARGAIN COLLECTIVELY
1. MEANING OF DUTY TO BARGAIN COLLECTIVELY.

The “duty to bargain collectively” means the performance of a mutual obligation to meet and convene
promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages,
hours of work and all other terms and conditions of employment, including proposals for adjusting any
grievances or questions arising under such agreement and executing a contract incorporating such agreements if
requested by either party but such duty does not compel any party to agree to a proposal or to make any concession.
The duty does not compel any party to agree blindly to a proposal nor to make concession. While the
law imposes on both the employer and the bargaining union the mutual duty to bargain collectively, the employer is
not under any legal obligation to initiate collective bargaining negotiations.
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2. TWO (2) SITUATIONS CONTEMPLATED.
The duty to bargain collectively involves two (2) situations, namely:
1. Duty to bargain collectively in the absence of a CBA under Article 251 of the Labor Code.
2. Duty to bargain collectively when there is an existing CBA under Article 253 of the Labor Code.

WHEN THERE IS ABSENCE OF A CBA
1. HOW DUTY SHOULD BE DISCHARGED WHEN THERE IS NO CBA YET.
The duty to bargain collectively when there has yet been no CBA in the bargaining unit where the
bargaining agent seeks to operate should be complied with in the following order:
First, in accordance with any agreement or voluntary arrangement between the employer and the
bargaining agent providing for a more expeditious manner of collective bargaining; and
Secondly, in its absence, in accordance with the provisions of the Labor Code, referring to Article 250
thereof which lays down the procedure in collective bargaining.
WHEN THERE IS A CBA
1. CONCEPT.
When there is a CBA, the duty to bargain collectively shall mean that neither party shall terminate nor
modify such agreement during its lifetime. However, either party can serve a written notice to terminate or
modify the
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agreement at least sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the status
quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day
period and/or until a new agreement is reached by the parties.
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2. FREEDOM PERIOD.
The last sixty (60) days of the 5-year lifetime of a CBA immediately prior to its expiration is called the
“freedom period.” It is denominated as such because it is the only time when the law allows the parties to freely
serve a notice to terminate, alter or modify the existing CBA. It is also the time when the majority status of the
bargaining agent may be challenged by another union by filing the appropriate petition for certification election.
3. AUTOMATIC RENEWAL CLAUSE.
a. Automatic renewal clause deemed incorporated in all CBAs.
Pending the renewal of the CBA, the parties are bound to keep the status quo and to treat the terms
and conditions embodied therein still in full force and effect during the 60-day freedom period and/or until a new
agreement is negotiated and ultimately concluded and reached by the parties. This principle is otherwise known
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as the “automatic renewal clause” which is mandated by law and therefore deemed incorporated in all CBAs.
For its part, the employer cannot discontinue the grant of the benefits embodied in the CBA which just expired as it is
duty-bound to maintain the status quo by continuing to give the same benefits until a renewal thereof is reached by the
parties. On the part of the union, it has to observe and continue to abide by its undertakings and commitments under the
expired CBA until the same is renewed.
KIOK LOY DOCTRINE.
This doctrine is based on the ruling In Kiok Loy v. NLRC, 1 where the petitioner, Sweden Ice Cream Plant, refused to
submit any counter-proposal to the CBA proposed by its employees’ certified bargaining agent. The High Court ruled
that the employer had thereby lost its right to bargain the terms and conditions of the CBA. Thus, the CBA proposed by
the union was imposed lock, stock and barrel on the erring company.
The Kiok Loy case epitomizes the classic case of negotiating a CBA in bad faith consisting of the employer’s refusal to
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bargain with the collective bargaining agent by ignoring all notices for negotiations and requests for counter- proposals.
Such refusal to send a counter-proposal to the union and to bargain on the economic terms of the CBA constitutes an
unfair labor practice under Article 248(g) of the Labor Code.
OTHER CASES AFTER KIOK LOY.
Divine Word University of Tacloban v. Secretary of Labor and Employment, Sept. 11, 1992.
General Milling Corporation v. CA, Feb. 11, 2004.
b.
COLLECTIVE BARGAINING AGREEMENT (CBA)
CBA.
A “Collective Bargaining Agreement” or “CBA” for short, refers to the negotiated contract between a duly recognized
or certified exclusive bargaining agent of workers and their employer, concerning wages, hours of work and all other
terms and conditions of employment in the appropriate bargaining unit, including mandatory provisions for grievances
and arbitration machineries. It is executed not only upon the request of the exclusive bargaining representative but also
by the employer.
ESSENTIAL REQUISITES OF COLLECTIVE BARGAINING.
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Prior to any collective bargaining negotiations between the employer and the bargaining union, the following requisites
must first be satisfied:
Employer-employee relationship must exist between the employer and the members of the bargaining unit being
represented by the bargaining agent;
The bargaining agent must have the majority support of the members of the bargaining unit
established through the modes sanctioned by law; and
A lawful demand to bargain is made in accordance with law.
3. SOME PRINCIPLES ON CBA.
 CBA is the law between the parties during its lifetime and thus must be complied with in good faith.
 Being the law between the parties, any violation thereof can be subject of redress in court.
 CBA is not an ordinary contract as it is impressed with public interest.
 Automatic Incorporation Clause – law is presumed part of the CBA.
 The benefits derived from the CBA and the law are separate and distinct from each other.
 Workers are allowed to negotiate wage increases separately and distinctly from legislated wage increases.
The parties may validly agree in the CBA to reduce wages and benefits of employees provided such
reduction does not go below the minimum standards.
1 G.R.No. L-54334, Jan. 22, 1986, 141 SCRA 179, 188.

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 Ratification of the CBA by majority of all the workers in the bargaining unit makes the same binding on all
employees therein.
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 Employees entitled to CBA benefits. The following are entitled to the benefits of the CBA:
(1) Members of the bargaining union;
(2) Non-members of the bargaining union but are members of the bargaining unit;
(3) Members of the minority union/s who paid agency fees to the bargaining union; and
(4) Employees hired after the expiration of the CBA.
 Pendency of a petition for cancellation of union registration is not a prejudicial question before CBA
negotiation may proceed.
 CBA should be construed liberally. If the terms of a CBA are clear and there is no doubt as to the intention
of the contracting parties, the literal meaning of its stipulation shall prevail.
1.
MANDATORY PROVISIONS OF CBA
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1. MANDATORY STIPULATIONS OF THE CBA.
The Syllabus mentions 4 provisions that are mandatorily required to be stated in the CBA, to wit:
1. Grievance Procedure;
2. Voluntary Arbitration;
3. No Strike-No Lockout Clause; and
4. Labor-Management Council (LMC).
If these provisions are not reflected in the CBA, its registration will be denied by the BLR.
E.
UNFAIR LABOR PRACTICE
(ULP)
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1.
NATURE, ASPECTS
1. WHEN AN ACT CONSTITUTES ULP.
At the outset, it must be clarified that not all unfair acts constitute ULPs. While an act or decision of
an employer or a union may be unfair, certainly not every unfair act or decision thereof may constitute ULP as
defined and enumerated under the law.
The act complained of as ULP must have a proximate and causal connection with any of the following 3
rights
:
1. Exercise of the right to self-organization;
2. Exercise of the right to collective bargaining; or
3. Compliance with CBA.
Sans this connection, the unfair acts do not fall within the technical signification of the term “unfair labor
practice.”
2. THE ONLY ULP WHICH MAY OR MAY NOT BE RELATED TO THE EXERCISE OF THE RIGHT
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TO SELF-ORGANIZATION AND COLLECTIVE BARGAINING.
The only ULP which is the exception as it may or may not relate to the exercise of the right to self-
organization and collective bargaining is the act described under Article 248 [f], i.e., to dismiss, discharge or
otherwise prejudice or discriminate against an employee for having given or being about to give testimony
under the Labor Code.
3. LABOR CODE PROVISIONS ON ULP.
Under the Labor Code, there are only five (5) provisions related to ULP, to wit:
1. Article 258 [247] which describes the concept of ULPs and prescribes the procedure for their prosecution;
2. Article 259 [248] which enumerates the ULPs that may be committed by employers;
3. Article 260 [249] which enumerates the ULPs that may be committed by labor organizations;
4. Article 274 [261] which considers violations of the CBA as no longer ULPs unless the same are gross
in character which means flagrant and/or malicious refusal to comply with the economic provisions
thereof.
5. Article 278(c) [263(c)] which refers to union-busting, a form of ULP, involving the dismissal
from employment of union officers duly elected in accordance with the union constitution and by-
laws, where the existence of the union is threatened thereby.
4. PARTIES WHO/WHICH MAY COMMIT ULP.
A ULP may be committed by an employer or by a labor organization. Article 259 [248] describes the
ULPs that may be committed by an employer; while Article 260 [249] enumerates those which may be committed
by a labor organization.
On the part of the employer, only the officers and agents of corporations, associations or partnerships
who have actually participated in or authorized or ratified ULPs are criminally liable.
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On the part of the union, only the officers, members of governing boards, representatives or agents
or members of labor associations or organizations who have actually participated in or authorized or ratified the
ULPs are criminally liable.
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5. ELEMENTS OF ULP.
1. There should exist an employer-employee relationship between the offended party and the offender; and
2. The act complained of must be expressly mentioned and defined in the Labor Code as an unfair
labor practice.
Absent one of the elements aforementioned will not make the act an unfair labor practice.
6. ASPECTS OF ULP.
Under Article 258 [247], a ULP has two (2) aspects, namely:
1. Civil aspect; and
2. Criminal aspect.
The civil aspect of an unfair labor practice includes claims for actual, moral and exemplary damages,
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attorney’s fees and other affirmative reliefs. Generally, these civil claims should be asserted in the labor case
before the Labor Arbiters who have original and exclusive jurisdiction over unfair labor practices. The
criminal aspect, on the other hand, can only be asserted before the regular court.
2.
ULP BY EMPLOYERS
I.
INTERFERENCE WITH, RESTRAINT OR COERCION OF EMPLOYEES
IN THE EXERCISE OF THEIR RIGHT TO SELF-ORGANIZATION
1. TEST OF INTERFERENCE, RESTRAINT OR COERCION.
The terms “interfere,” “restrain” and “coerce” are very broad that any act of management that may
reasonably tend to have an influence or effect on the exercise by the employees of their right to self-organize
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may fall within their meaning and coverage. According to the Supreme Court in Insular Life Assurance Co.,
Ltd., Employees Association-NATU v. Insular Life Assurance Co., Ltd.,1 the test of whether an employer has
interfered with or restrained or coerced employees within the meaning of the law is whether the employer has
engaged in conduct which may reasonably tend to interfere with the free exercise of the employees’ rights. It is
not necessary that there be direct evidence that any employee was in fact intimidated or coerced by the
statements or threats of the employer if there is a reasonable inference that the anti-union conduct of the employer
does have an adverse effect on the exercise of the right to self- organization and collective bargaining.
2. TOTALITY OF CONDUCT DOCTRINE.
In ascertaining whether the act of the employer constitutes interference with, restraint or coercion of
the employees’ exercise of their right to self-organization and collective bargaining, the “totality of conduct
doctrine” may be applied.
The totality of conduct doctrine means that expressions of opinion by an employer, though innocent in
themselves, may be held to constitute an unfair labor practice because of the circumstances under which they
were uttered, the history of the particular employer’s labor relations or anti-union bias or because of their
connection with an established collateral plan of coercion or interference. An expression which may be permissibly
uttered by one employer, might, in the mouth of a more hostile employer, be deemed improper and consequently
actionable as an unfair labor practice. The past conduct of the employer and like considerations, coupled with an
intimate connection between the employer’s action and the union affiliation or activities of the particular
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employee or employees taken as a whole, may raise a suspicion as to the motivation for the employer’s conduct.
The failure of the employer to ascribe a valid reason therefor may justify an inference that his unexplained conduct
in respect of the particular employee or employees was inspired by the latter’s union membership and activities.
In General Milling,2 the Supreme Court considered the act of the employer in presenting the letters
from February to June 1993, by 13 union members signifying their resignation from the union clearly
indicative of the employer’s pressure on its employees. The records show that the employer presented these
letters to prove that the union no longer enjoyed the support of the workers. The fact that the resignations of the
union members occurred during the pendency of the case before the Labor Arbiter shows the employer’s desperate
attempt to cast doubt on the legitimate status of the union. The ill-timed letters of resignation from the union
members indicate that the employer had interfered with the right of its employees to self-organization. Because of
such act, the employer was declared guilty of ULP.
3. INTERFERENCE IN THE EMPLOYEE’S RIGHT TO SELF-ORGANIZATION.
a. Interference is always ULP.
The judicial dictum is that any act of interference by the employer in the exercise by employees of their
right to self-organization constitutes an unfair labor practice. This is the very core of ULP.
In Hacienda Fatima v. National Federation of Sugarcane Workers – Food and General Trade,3 the
Supreme Court upheld the factual findings of the NLRC and the Court of Appeals that from the employer’s refusal
to bargain to its acts of economic inducements resulting in the promotion of those who withdrew from the union,
the use
1 G.R. No. L-25291, Jan. 30, 1971, 37 SCRA 244.

2 General Milling Corporation v. CA, G.R. No. 146728, Feb. 11, 2004.
3 G.R. No. 149440, Jan. 28, 2003.
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of armed guards to prevent the organizers to come in, and the dismissal of union officials and members, one cannot
but conclude that the employer did not want a union in its hacienda - a clear interference in the right of the workers
to self- organization. Hence, the employer was held guilty of unfair labor practice.
nRobles Bar It was likewise held in Insular Life1 that it is an act of interference for the employer to send individual
letters to all employees notifying them to return to work at a time specified therein, otherwise new employees
would be engaged to perform their jobs. Individual solicitation of the employees or visiting their homes, with the
employer or his representative urging the employees to cease their union activities or cease striking, constitutes
ULP. All the above- detailed activities are ULPs because they tend to undermine the concerted activity of the
employees, an activity to which they are entitled free from the employer's molestation.
b. Formation of a union is never a valid ground to dismiss.
c. It is ULP to dismiss a union officer or an employee for his union activities.
II.
YELLOW DOG CONTRACT
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1. WHAT IS A YELLOW DOG CONTRACT?
It is one which exacts from workers as a condition of employment that they shall not join or belong to
a labor organization, or attempt to organize one during their period of employment or that they shall
withdraw therefrom in case they are already members of a labor organization.
2. COMMON STIPULATIONS IN A YELLOW DOG CONTRACT.
A typical yellow dog contract embodies the following stipulations:
(1) A representation by the employee that he is not a member of a labor organization;
(2) A promise by the employee that he will not join a union; and
(3) A promise by the employee that upon joining a labor organization, he will quit his employment.
The act of the employer in imposing such a condition constitutes unfair labor practice under Article 248(b)
of the Labor Code. Such stipulation in the contract is null and void.
3. ORIGIN OF THE TERM “YELLOW DOG.”
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The term “yellow dog” traces its roots to certain commentaries made by the labor press in the United
States sometime in 1921. An example is the following editor’s comment of the United Mine Workers' Journal:
“This agreement has been well named. It is yellow dog for sure. It reduces to the level of a yellow dog any man
that signs it, for he signs away every right he possesses under the Constitution and laws of the land and makes
himself the truckling, helpless slave of the employer.”2 Simply put, it is so-called “yellow dog” because the
employees were deemed to have to cower before their "masters" to get a job.3
III.
CONTRACTING OUT OF SERVICES AND FUNCTIONS
1. GENERAL RULE.
As a general rule, the act of an employer in having work or certain services or functions being performed
by union members contracted out is not per se an unfair labor practice. This is so because contracting-out of a job,
work or service is clearly an exercise by the employer of its business judgment and its inherent management
rights and prerogatives. Hiring of workers is within the employer’s inherent freedom to regulate its business and is
a valid exercise of its management prerogative subject only to special laws and agreements on the matter and
the fair standards of justice. The employer cannot be denied the faculty of promoting efficiency and attaining
economy by a study of what units are essential for its operation. It has the ultimate right to determine whether
services should be performed by its personnel or contracted to outside agencies.
2. WHEN CONTRACTING-OUT BECOMES ULP.
It is only when the contracting out of a job, work or service being performed by union members will ChanRobles
interfere with, restrain or coerce employees in the exercise of their right to self-organization that it shall constitute
an unfair labor practice. Thus, it is not unfair labor practice to contract out work for reasons of business decline,
inadequacy of facilities and equipment, reduction of cost and similar reasonable grounds.
IV.
COMPANY UNION
1. COMPANY INITIATED, DOMINATED OR ASSISTED UNION.
Paragraph [d] of Article 259 [248] considers it an unfair labor practice to initiate, dominate, assist or
otherwise interfere with the formation or administration of any labor organization, including the giving of
financial or other support to it or its organizers or supporters. Such union is called “company union” as its
formation, function or administration has been assisted by any act defined as unfair labor practice under the Labor
Code.
V.
DISCRIMINATION
1. COVERAGE OF PROHIBITION.
3 USLegal.com at http://definitions.uslegal.com/y/yellow-dog-contract/; Last accessed: February 14, 2017.

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1 Insular Life Assurance Co., Ltd., Employees Association-NATU v. Insular Life Assurance Co., Ltd., G.R. No. L-25291, Jan. 30, 1971, 37 SCRA 244.
2 Joel I. Seidman, The Yellow Dog Contract, The Johns Hopkins Press, 1932, Ch. 1, pp.11-38.
3 USLegal.com at http://definitions.uslegal.com/y/yellow-dog-contract/; Last accessed: February 14, 2017.

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What is prohibited as unfair labor practice under the law is to discriminate in regard to wages, hours of
work, and other terms and conditions of employment in order to encourage or discourage membership in
any labor organization.
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4. MATERIALITY OF PURPOSE OF ALLEGED DISCRIMINATORY ACT.
In Manila Pencil Co., Inc. v. CIR,1 it was ruled that even assuming that business conditions justify
the dismissal of employees, it is a ULP of employer to dismiss permanently only union members and not
non- unionists.
In Manila Railroad Co. v. Kapisanan ng mga Manggagawa sa Manila Railroad Co.,2 the non-
regularization of long-time employees because of their affiliation with the union while new employees
were immediately regularized was declared an act of discrimination.
VI.
FILING OF CHARGES OR GIVING OF TESTIMONY
1. CONCEPT.
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Under paragraph [f] of Article 259 [248] of the Labor Code, it is an unfair labor practice for an employer
to dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or being about
to give testimony under the Labor Code.
2. THE ONLY ULP NOT REQUIRED TO BE RELATED TO EMPLOYEE’S EXERCISE OF THE
RIGHT TO SELF-ORGANIZATION AND COLLECTIVE BARGAINING.
It must be underscored that Article 259(f) [248 (f)] is the only unfair labor practice that need not be related
to the exercise by the employees of their right to self-organization and collective bargaining.
In Itogon-Suyoc Mines, Inc. v. Baldo,3 it was declared that an unfair labor practice was committed by
the employer when it dismissed the worker who had testified in the hearing of a certification election case despite
its prior request for the employee not to testify in the said proceeding accompanied with a promise of being
reinstated if he followed said request.
VII.
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CBA-RELATED ULPs
1. THREE (3) CBA-RELATED ULPs.
Article 259 [248] enunciates three (3) CBA-related unfair labor practices, to wit:
1. To violate the duty to bargain collectively as prescribed in the Labor Code.
2. To pay negotiation or attorney’s fees to the union or its officers or agents as part of the settlement
of any issue in collective bargaining or any other dispute.
3. To violate a collective bargaining agreement.
VII-A.
PAYMENT OF NEGOTIATION AND ATTORNEY’S FEES
1. WHEN PAYMENT CONSIDERED ULP.
Article 259 (h) [248(h)] of the Labor Code considers as an unfair labor practice the act of the employer
in paying negotiation fees or attorney’s fees to the union or its officers or agents as part of the settlement of any
issue in collective bargaining or any other dispute.
VII-B.
VIOLATION OF THE CBA
1. CORRELATION.
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Article 259 (i) [248(i)] of the Labor Code should be read in relation to Article 261 thereof. Under Article
261, as amended, violations of a CBA, except those which are gross in character, shall no longer be treated as an
unfair labor practice and shall be resolved as grievances under the CBA. Gross violations of CBA shall mean
flagrant and/or malicious refusal to comply with the economic provisions of such agreement.
2. CASE LAW.
The act of the employer in refusing to implement the negotiated wage increase stipulated in the CBA,
which increase is intended to be distinct and separate from any other benefits or privileges that may be
forthcoming to the employees, is an unfair labor practice.
Refusal for a considerable number of years to give salary adjustments according to the improved salary
scales in the CBA is an unfair labor practice.
3.
ULP OF LABOR ORGANIZATIONS
I.
RESTRAINT AND COERCION OF EMPLOYEES
IN THE EXERCISE OF THEIR RIGHT TO SELF-ORGANIZATION
3 G.R. No. L-17739, Dec. 24,

1964. 64
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1 G.R. No. L-16903, Aug. 31, 1965, 14 SCRA 955.
2 G.R. No. L-19728, July 30, 1964.
3 G.R. No. L-17739, Dec. 24,

1964. 64
1. UNION MAY INTERFERE WITH BUT NOT RESTRAIN OR COERCE EMPLOYEES IN THE
EXERCISE OF THEIR RIGHT TO SELF-ORGANIZE.
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Under Article 260(a) [249 (a)], it is ULP for a labor organization, its officers, agents or representatives
to restrain or coerce employees in the exercise of their right to self-organization. Compared to similar provision of
Article 248(a) of the Labor Code, notably lacking is the use of the word “interfere” in the exercise of the
employees’ right to self- organize. The significance in the omission of this term lies in the grant of unrestricted
license to the labor organization, its officers, agents or representatives to interfere with the exercise by the
employees of their right to self-organization. Such interference is not unlawful since without it, no labor
organization can be formed as the act of recruiting and convincing the employees is definitely an act of
interference.
II.
DISCRIMINATION
Under Article 260(b) [249 (b)], it is ULP for a labor organization, its officers, agents or representatives:
(1) To cause or attempt to cause an employer to discriminate against an employee, including
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discrimination against an employee with respect to whom membership in such organization has been denied.
(2) To terminate an employee’s union membership on any ground other than the usual terms and conditions under which
membership or continuation of membership is made available to other members.
III.
DUTY OF UNION TO BARGAIN COLLECTIVELY
CONCEPT.
Under Article 260(c) [249 (c)], it is ULP for a duly certified sole and exclusive bargaining union, its officers, agents or
representatives to refuse or violate the duty to bargain collectively with the employer. This is the counterpart provision
of Article 259(g) [248 (g)] respecting the violation by the employer of its duty to bargain collectively.
PURPOSE.
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The obvious purpose of the law is to ensure that the union will negotiate with management in good faith and for the
purpose of concluding a mutually beneficial agreement regarding the terms and conditions of their employment
relationship.
IV. FEATHERBEDDING DOCTRINE
CONCEPT.
Article 260(d) [249 (d)] is the “featherbedding” provision in the Labor Code. Patterned after a similar provision in the
Taft-Hartley Act,1 “featherbedding” or “make-work” refers to the practice, caused and induced by a union, of hiring
more workers than are needed to perform a given work, job or task or to adopt work procedures which is evidently
senseless, wasteful, inefficient and without legitimate justifications since it is meant purely for the purpose of employing
additional workers than are necessary.
This is resorted to by the union as a response to the laying-off of workers occasioned by their obsolescence because of
the introduction of machines, robots or new and innovative technological changes and improvements in the workplace or
as required by minimum health and safety standards, among other reasons. Its purpose is to unduly secure the jobs of the
workers.
Because of these lay-offs, the unions are constrained to resort to some featherbedding practices. Accordingly, they
usually request that the technological changes be introduced gradually, or not at all, or that a minimum number of
personnel be retained despite such changes. They resort to some ways and methods of retaining workers even though
there may be little work left for them to do and perform. It therefore unnecessarily maintains or increases the number of
employees used or the amount of time consumed to work on a specific job, work or undertaking. By so increasing the
demand for workers, featherbedding obviously keeps wages higher.
REQUISITES.
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The requisites for featherbedding are as follows:
(1) The labor organization, its officers, agents or representatives have caused or attempted to cause
an employer either:
(a) to pay or agree to pay any money, including the demand for fee for union negotiations; or
(b) to deliver or agree to deliver any things of value;
(2) Such demand for payment of money or delivery of things of value is in the nature of an exaction; and
(3) The services contemplated in exchange for the exaction are not actually performed or will not
be performed.
V.
DEMAND OR ACCEPTANCE
OF NEGOTIATION FEES OR ATTORNEY’S FEES
1. CONCEPT.
1 It is the Labor Management Relations Act of 1947, better known as the “Taft–Hartley Act,” which was enacted on June 23, 1947. It amended the National Labor Relations Act, 29
U.S. Code § 158 - Unfair labor practices, Sec. 8[b] [6] thereof, which states: “to cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any money or
other thing of value, in the nature of an exaction, for services which are not performed or not to be performed[.]”
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Under Article 260(e) [249 (e)], it is ULP for a labor organization, its officers, agents or representatives to
ask for or accept negotiation fees or attorney’s fees from employers as part of the settlement of any issue in
collective bargaining or any other dispute.
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1. CONCEPT.
VI.
VIOLATION OF THE
CBA
Under Article 260(f) [249 (f)], it is ULP for a labor organization, its officers, agents or representatives to violate
a
CBA.
2. COUNTERPART PROVISION.
This is the counterpart provision of Article 259(i) [248 (i)] regarding the employer’s act of violating a
CBA. But it must be noted that under Article 261 of the Labor Code, violation of the CBA is generally
considered merely a grievable issue. It becomes an unfair labor practice only if the violation is gross in character
which means that there is flagrant and/or malicious refusal to comply with the economic (as distinguished from
non-economic) stipulations in the CBA. This principle applies not only to the employer but to the labor
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organization as well.
VII.
CRIMINAL LIABILITY FOR ULPs OF LABOR ORGANIZATION
1. PERSONS LIABLE.
Article 260 [249] is explicit in its provision on who should be held liable for ULPs committed by
labor organizations. It states that only the officers, members of governing boards, representatives or agents or
members of labor associations or organizations who have actually participated in, authorized or ratified unfair labor
practices shall be held criminally liable.
F.
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PEACEFUL CONCERTED ACTIVITIES
FORMS OF CONCERTED ACTIVITIES

1. FORMS OF CONCERTED ACTIVITIES.
There are three (3) forms of concerted activities, namely:
1. Strike;
2. Picketing; and
3. Lockout.
1.
BY LABOR ORGANIZATION
1. Strike; and
2. Picketing.
1. STRIKE.
“Strike” means any temporary stoppage of work by the concerted action of the employees as a result of an
industrial or labor dispute.
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2. PICKETING.
“Picketing” is the act of workers in peacefully marching to and fro before an establishment involved in
a labor dispute generally accompanied by the carrying and display of signs, placards and banners intended to
inform the public about the dispute.
2.
BY EMPLOYER
1.
LOCKOUT.
“Lockout” means the temporary refusal by an employer to furnish work as a result of an industrial or labor
dispute.
It consists of the following:
1. Shutdowns;
2. Mass retrenchment and dismissals initiated by the employer.
3. The employer’s act of excluding employees who are union members.
a.
REQUISITES FOR A VALID STRIKE
1. PROCEDURAL BUT MANDATORY REQUISITES FOR A VALID STRIKE.
A strike, in order to be valid and legal, must conform to the following procedural requisites:
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1st requisite - It must be based on a valid and factual ground;

2nd requisite - A notice of strike must be filed with the NCMB-DOLE;
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3rd requisite - A notice must be served to the NCMB-DOLE at least twenty-four (24) hours prior to the
taking of the strike vote by secret balloting, informing said office of the decision to conduct
a strike vote, and the date, place, and time thereof;
4th requisite - A strike vote must be taken where a majority of the members of the union obtained by
secret ballot in a meeting called for the purpose, must approve it;
5th requisite - A strike vote report should be submitted to the NCMB-DOLE at least seven (7) days
before the intended date of the strike;
6th requisite - Except in cases of union-busting, the cooling-off period of 15 days, in case of unfair
labor practices of the employer, or 30 days, in case of collective bargaining deadlock,
should be fully observed; and
7th requisite - The 7-day waiting period/strike ban reckoned after the submission of the strike vote report
to the NCMB-DOLE should also be fully observed in all cases.
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All the foregoing requisites, although procedural in nature, are mandatory and failure of the union to
comply with any of them would render the strike illegal.
I.
FIRST REQUISITE:
EXISTENCE OF VALID AND FACTUAL GROUND/S
1. VALID GROUNDS.
The law recognizes only 2 grounds in support of a valid strike, viz.:
1. Collective bargaining deadlock (Economic Strike); and/or

2. Unfair labor practice (Political Strike).
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A strike not based on any of these two grounds is illegal.
2. SOME PRINCIPLES ON THE FIRST REQUISITE.
 Violation of CBA, except when gross, is not an unfair labor practice, hence, may not be cited as
ground for a valid strike. Ordinary violation of a CBA is no longer treated as an unfair labor practice
but as a mere grievance which should be processed through the grievance machinery and voluntary
arbitration.
 Inter-union or intra-union dispute is not a valid ground.
 Violation of labor standards is not a valid ground.
 Wage distortion is not a valid ground.
II.
SECOND REQUISITE:
FILING OF A NOTICE OF STRIKE
1. NOTICE OF
STRIKE.
No labor organization shall declare a strike without first having filed a notice of strike.
III.
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THIRD REQUISITE:
SERVICE OF A 24-HOUR PRIOR NOTICE
In Capitol Medical Center, Inc. v. NLRC, it was imposed as additional requisite that a 24-hour notice
must be served to the NCMB-DOLE prior to the taking of the strike vote by secret balloting, informing it of the
union’s decision to conduct a strike vote as well as the date, place, and time thereof.
IV.
FOURTH REQUISITE:
CONDUCT OF A STRIKE VOTE
1. MAJORITY APPROVAL OF THE STRIKE.
No labor organization shall declare a strike without the necessary strike vote first having been obtained
and reported to the NCMB-DOLE. A decision to declare a strike must be approved by a majority of the total
union membership in the bargaining unit concerned, obtained by secret ballot in meetings or referenda
called for that purpose. This process is called “strike vote balloting.”
A STRIKE WITHOUT THE MAJORITY SUPPORT OF THE UNION MEMBERS IS CALLED A
“WILDCAT STRIKE.”
2. PURPOSE.
The purpose of a strike vote is to ensure that the decision to strike broadly rests with the majority of the
union members in general and not with a mere minority.
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3. DURATION OF THE VALIDITY OF THE MAJORITY APPROVAL OF A STRIKE.

The majority decision to stage a strike is valid for the duration of the dispute based on substantially the
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same grounds considered when the strike vote was taken.
V.
FIFTH REQUISITE:
SUBMISSION OF THE STRIKE VOTE TO NCMB-DOLE
1. PURPOSE FOR REQUIRING A STRIKE VOTE REPORT.

The evident intention of the law in mandatorily requiring the submission of the strike vote report is to
afford the NCMB of opportunity to verify the truth and veracity of the majority vote by the union members in
support of the intended strike.
2. WHEN TO SUBMIT THE STRIKE VOTE REPORT.
The strike vote report should be submitted to the NCMB-DOLE at least seven (7) days before the actual
staging of the intended strike, subject to the observance of the cooling-off periods provided under the law.
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SIXTH REQUISITE:
OBSERVANCE OF THE COOLING-OFF PERIOD
GENERAL RULE.
The cooling-off periods provided under the law before the intended date of the actual mounting of the strike are as
follows:
In case of bargaining deadlock, the cooling-off period is thirty (30) days from the filing of the notice of strike; or
In case of unfair labor practice, the cooling-off period is fifteen (15) days from the filing of the notice of strike.
EXCEPTION: IN CASE OF UNION-BUSTING.
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In case of dismissal from employment of union officers (not ordinary members) duly elected in accordance with the
union constitution and by-laws which may constitute union-busting because the existence of the union is threatened by
reason of such dismissal, the 15-day cooling-off period does not apply and the union may take action immediately
after the strike vote is conducted and the results thereof duly submitted to the regional branch of the NCMB.
In cases of union-busting, only the 15-day cooling-off period need not be observed; all the other requisites must be
fully complied with.
RECKONING OF THE COOLING-OFF PERIODS.
The start of the cooling-off periods should be reckoned from the time the notice of strike is filed with the NCMB-DOLE,
a copy thereof having been served on the other party concerned.
PURPOSE OF THE COOLING-OFF PERIODS.
The purpose of the cooling-off periods is to provide an opportunity for mediation and conciliation of the dispute by the
NCMB-DOLE with the end in view of amicably settling it.
VII.
SEVENTH REQUISITE:
7-DAY WAITING PERIOD OR STRIKE BAN
PURPOSE OF THE 7-DAY WAITING PERIOD OR STRIKE BAN.
strike really carries the approval of the majority of the union members.
WAITING PERIOD/STRIKE BAN VS. COOLING-OFF PERIOD.
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The seven (7) day waiting period is intended to give the NCMB-DOLE an opportunity to verify whether the projected
The 7-day waiting period or strike ban is a distinct and separate requirement from the cooling-off
period prescribed by law. The latter cannot be substituted for the former and vice-versa.
The cooling-off period is counted from the time of the filing of the notice of strike. The 7-day
waiting period/strike ban, on the other hand, is reckoned from the time the strike vote report is submitted to the
NCMB- DOLE.
Consequently, a strike is illegal for failure to comply with the prescribed mandatory cooling-off period and
the 7-day waiting period/strike ban after the submission of the report on the strike vote.
3. BOTH MUST BE COMPLIED WITH SEPARATELY AND DISTINCTLY FROM EACH OTHER.
The requirements of cooling-off period and 7-day waiting period/strike ban must both be complied with.
The labor union may take the strike vote and report the same to the NCMB-DOLE within the statutory cooling-off
period. In this case, the 7-day waiting period/strike ban should be counted from the day following the expiration of
the cooling- off period. A contrary view would certainly defeat and render nugatory the salutary purposes
behind the distinct requirements of cooling-off period and the waiting period/strike ban.
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The NCMB Primer on Strike, Picketing and Lockout,1 issued by the NCMB, the agency of government
directly tasked with the implementation and enforcement of this particular legal provision and requirement, is very
clear on this point, thus:
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period, the 7-day requirement shall be counted from the day following the expiration of the
cooling-off period.”2
In other words, the seven (7) days should be added to the cooling-off period of fifteen (15) days, in case
of unfair labor practice, or thirty (30) days, in case of collective bargaining deadlock and it is only after the lapse of
the total number of days after adding the two (2) periods that the strike/lockout may be lawfully and validly staged.
Example: In a case where the notice of strike grounded on ULP is filed on March 1, 2018, and the strike
vote is taken within the cooling-off period, say, on March 5, 2018 and the strike vote report showing majority
support for the intended strike is submitted to the NCMB-DOLE the following day, March 6, 2018, the question is
when can the union legally stage the strike?
Following the above principle, the answer obviously is on March 24, 2018 or any day thereafter. This is
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so because the 15-day cooling-off period for ULP expires on March 16 and adding the 7-day strike ban which
“should be counted from the day following the expiration of the cooling-off period,” the 7th day would be on
March 23, 2018. Obviously, the strike cannot be conducted on the 7th day but rather after the lapse of the 7-day
period; hence, it is only on MARCH 24, 2018 onwards that the union may lawfully conduct the strike.
4. SOME PRINCIPLES ON COOLING-OFF PERIOD AND 7-DAY WAITING PERIOD.

 Deficiency of even one (1) day of the cooling-off period and 7-day strike ban is fatal.
 One-day strike without complying with the 7-day strike ban is illegal.
b.
REQUISITES FOR A VALID LOCKOUT
1. SUBSTANTIALLY SIMILAR REQUISITES AS IN STRIKE.
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With a slight, insignificant variation, the procedural but mandatory requisites for a valid strike discussed
above are substantially similar to those applicable for valid lockout. For purposes of ease and clarity, the same are
presented as follows:
 1st requisite - It must be based on a valid and factual ground;
 2nd requisite - A notice of lockout must be filed with the NCMB-DOLE;
 3rd requisite - A notice must be served to the NCMB-DOLE at least twenty-four (24) hours prior to
the taking of the lockout vote by secret balloting, informing said office of the decision to conduct a
lockout vote, and the date, place, and time thereof;
 4th requisite - A lockout vote must be taken where a majority of the members of the Board of Directors
of the corporation or association or of the partners in a partnership obtained by secret ballot in a meeting
called for the purpose, must approve it;
 5th requisite - A lockout vote report should be submitted to the NCMB-DOLE at least seven (7)
days before the intended date of the lockout;
 6th requisite - The cooling-off period of 15 days, in case of unfair labor practices of the labor
organization, or 30 days, in case of collective bargaining deadlock, should be fully observed; and
 7th requisite - The 7-day waiting period/lockout ban reckoned after the submission of the lockout
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vote report to the NCMB-DOLE should also be fully observed in all cases.
c.
REQUISITES FOR LAWFUL PICKETING
1. THE REQUISITES FOR A VALID STRIKE ARE NOT APPLICABLE TO PICKETING.
The seven (7) requisites for a valid strike discussed above do not apply to picketing.
2. REQUISITES FOR LAWFUL PICKETING.

The most singular requirement to make picketing valid and legal is that it should be peacefully conducted.
Based on the foregoing provision, the requisites may be summed up as follows:
1. The picket should be peacefully carried out;
2. There should be no act of violence, coercion or intimidation attendant thereto;
3. The ingress to (entrance) or egress from (exit) the company premises should not be obstructed; and
4. Public thoroughfares should not be impeded.
3. RIGHT TO PICKET IS PROTECTED BY THE CONSTITUTION AND THE LAW.

Unlike a strike which is guaranteed under the Constitutional provision on the right of workers to
conduct peaceful concerted activities under Section 3, Article XIII thereof, the right to picket is guaranteed
under the freedom of speech and of expression and to peaceably assemble to air grievances under Section 4,
Article III (Bill of Rights) thereof.
1 2nd Edition, December 1995.

2 No. 6 thereof.
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4. EFFECT OF THE USE OF FOUL LANGUAGE DURING THE CONDUCT OF THE PICKET.
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In the event the picketers employ discourteous and impolite language in their picket, such may not result in,
or give rise to, libel or action for damages.
5. PICKETING VS. STRIKE.
(a) To strike is to withhold or to stop work by the concerted action of employees as a result of an industrial
or labor dispute. The work stoppage may be accompanied by picketing by the striking employees outside of the
company compound.
(b) While a strike focuses on stoppage of work, picketing focuses on publicizing the labor dispute and
its incidents to inform the public of what is happening in the company being picketed.
(c) A picket simply means to march to and fro in front of the employer’s premises, usually accompanied by
the display of placards and other signs making known the facts involved in a labor dispute. It is but one strike
activity separate and different from the actual stoppage of work.
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Phimco Industries, Inc. v. Phimco Industries Labor Association (PILA).1 - While the right of
employees to publicize their dispute falls within the protection of freedom of expression and the right to peaceably
assemble to air grievances, these rights are by no means absolute. Protected picketing does not extend to
blocking ingress to and egress from the company premises. That the picket was moving, was peaceful and
was not attended by actual violence may not free it from taints of illegality if the picket effectively blocked
entry to and exit from the company premises.
6. WHEN PICKET CONSIDERED A STRIKE.
In distinguishing between a picket and a strike, the totality of the circumstances obtaining in a case should
be taken into account.
Santa Rosa Coca-Cola Plant Employees Union v. Coca-Cola Bottlers Phils., Inc.2 - Petitioners contend
that what they conducted was a mere picketing and not a strike. In disagreeing to this contention, the High
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Court emphasized that it is not an issue in this case that there was a labor dispute between the parties as
petitioners had notified the respondent of their intention to stage a strike, and not merely to picket. Petitioners’
insistence to stage a strike is evident in the fact that an amended notice of strike was filed even as respondent
moved to dismiss the first notice. The basic elements of a strike are present in this case: 106 members of
petitioner Union, whose respective applications for leave of absence on September 21, 1999 were disapproved,
opted not to report for work on said date, and gathered in front of the company premises to hold a mass
protest action. Petitioners deliberately absented themselves and instead wore red ribbons and carried placards
with slogans such as: “YES KAMI SA STRIKE,” “PROTESTA KAMI,” “SAHOD, KARAPATAN NG
MANGGAGAWA IPAGLABAN,” “CBA-’WAG BABOYIN,”
“STOP UNION BUSTING.” They marched to and fro in front of the company’s premises during working
hours. Thus, petitioners engaged in a concerted activity which already affected the company’s operations. The
mass concerted activity obviously constitutes a strike. Moreover, the bare fact that petitioners were given a
Mayor’s permit is not conclusive evidence that their action/activity did not amount to a strike. The Mayor’s
description of what activities petitioners were allowed to conduct is inconsequential. To repeat, what is definitive
of whether the action staged by petitioners is a strike and not merely a picket is the totality of the circumstances
surrounding the situation.
Petitioner union in the 2011 case of Leyte Geothermal Power Progressive Employees Union-ALU-TUCP
v. Philippine National Oil Company – Energy Development Corporation,3 contends that there was no stoppage
of work; hence, they did not strike. Euphemistically, petitioner union avers that it “only engaged in
picketing,” and maintains that “without any work stoppage, [its officers and members] only engaged in xxx
protest activity.” The Supreme Court, however, ruled that it was a strike and not picketing or protest activity that
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petitioner union staged. It found the following circumstances in support of such finding:
(1) Petitioner union filed a Notice of Strike on December 28, 1998 with the DOLE grounded on
respondent’s purported unfair labor practices, i.e., “refusal to bargain collectively, union busting and mass
termination.” On even date, petitioner Union declared and staged a strike.
(2) The DOLE Secretary intervened and issued a Return-to-Work Order dated January 4, 1999, certifying
the labor dispute to the NLRC for compulsory arbitration. The Order indicated the following facts: (1) filing of the
notice of strike; (2) staging of the strike and taking control over respondent’s facilities of its Leyte Geothermal
Project on the same day petitioner union filed the notice of strike; (3) attempts by the NCMB to forge a mutually
acceptable solution proved futile; (4) in the meantime, the strike continued with no settlement in sight placing in
jeopardy the supply of much needed power supply in the Luzon and Visayas grids.
(3) Petitioner union itself, in its pleadings, used the word “strike.”
(4) Petitioner union’s asseverations are belied by the factual findings of the NLRC, as affirmed by the CA
thus: “The failure to comply with the mandatory requisites for the conduct of strike is both admitted and clearly
shown on record. Hence, it is undisputed that no strike vote was conducted; likewise, the cooling-off period was
not observed and that the 7-day strike ban after the submission of the strike vote was not complied with since
there was no strike vote taken.”
1 G.R. No. 170830, Aug. 11, 2010.

2 G.R. Nos. 164302-03, Jan. 24, 2007.
3 G.R. No. 170351, March 30, 2011.
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In fine, petitioner union’s bare contention that it did not hold a strike cannot trump the factual findings of
the NLRC that petitioner union indeed struck against respondent. In fact, and more importantly, petitioner union
failed to comply with the requirements set by law prior to holding a strike.
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WHEN IS A STRIKE CONSIDERED ILLEGAL?
A strike is illegal if it is declared and staged:
1) Without complying with the procedural but mandatory requisites (See 7 requisites above).
2) For unlawful purpose such as to compel the dismissal of an employee or to force recognition of the
union or for trivial and puerile purpose or to circumvent contracts and judicial orders.
3) Based on non-strikeable or invalid grounds such as:
a) Inter-union or intra-union disputes.
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Simple violation of CBA in contrast to gross violation thereof which is deemed ULP.
Violation of labor standards.
Legislated wage orders (wage distortion).
Without first having bargained collectively.
In violation of the “no strike, no lockout” clause in the CBA.
Without submitting the issues to the grievance machinery or voluntary arbitration or failing to exhaust the steps
provided therein.
While conciliation and mediation proceeding is on-going at the NCMB.
Based on issues already brought to voluntary or compulsory arbitration.
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During the pendency of a case involving the same ground/s cited in the notice of strike.
In defiance of an assumption or certification or return-to-work order.
In violation of a temporary restraining order or an injunction order.
After the conversion of the notice of strike into a preventive mediation case.
Against the prohibition by law.
By a minority union.
By an illegitimate union.
By dismissed employees.
In violation of the company code of conduct which prohibits “inciting or participating in riots, disorders, alleged strikes
or concerted actions detrimental to [Toyota’s] interest,” The penalty for which is dismissal.
As protest rallies in front of government offices such as in the following cases:
Toyota Motor Phils. Corp. Workers Association [TMPCWA] v. NLRC, 1 where the Supreme Court ruled that the
protest rallies staged by the employees from February 21 to 23, 2001 in front of the offices of the Bureau of Labor
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Relations (BLR) and the DOLE Secretary constitute illegal strike and not legitimate exercise of their right to peaceably
assemble and petition the government for redress of grievances. It was illegal for having been undertaken without
satisfying the mandatory pre-requisites for a valid strike under Article 263 of the Labor Code.
The ruling in Toyota was cited in Solidbank Corporation v. Gamier, 2 as basis in declaring the protest action of the
employees of petitioner Solidbank which was staged in front of the Office of the DOLE Secretary in Intramuros,
Manila, as constitutive of illegal strike since it paralyzed the operations of the bank. The protest action in this case was
conducted because of the CBA deadlock.
19) As welga ng bayan which is in the nature of a general strike as well as an extended sympathy strike.
3.
ASSUMPTION OF JURISDICTION
(BY THE DOLE SECRETARY OR ALTERNATIVELY, AT HIS DISCRETION, CERTIFICATION OF THE LABOR
DISPUTE TO THE NLRC FOR COMPULSORY ARBITRATION)
1. WHEN DOLE SECRETARY MAY ASSUME OR CERTIFY A LABOR DISPUTE.
Article 278(g) [263(g)] of the Labor Code provides that when in the opinion of the DOLE Secretary,
the labor dispute causes or will likely to cause a strike or lockout in an industry indispensable to the
national interest, he is empowered to do either of 2 things:
1. He may assume jurisdiction over the labor dispute and decide it himself; or
1 G.R. Nos. 158786 &158789, Oct. 19, 2007.

2 G.R. No. 159460, Nov. 15, 2010.
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2. He may certify it to the NLRC for compulsory arbitration, in which case, it will be the NLRC which
shall hear and decide it.
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This power may be exercised by the DOLE Secretary even before the actual staging of a strike or
lockout since Article 278(g) [263(g)] does not require the existence of a strike or lockout but only of a labor
dispute involving national interest.
2. WHAT CONSTITUTES A NATIONAL INTEREST CASE?
The Labor Code vests in the DOLE Secretary the discretion to determine what industries are indispensable
to the national interest. Accordingly, upon the determination by the DOLE Secretary that such industry is
indispensable to the national interest, he has authority to assume jurisdiction over the labor dispute in the said
industry or certify it to the NLRC for compulsory arbitration.
Past issuances of the DOLE Secretary have not made nor attempted to mention specifically what the
industries indispensable to the national interest are. It was only in Department Order No. 40-H-13, Series of
2013, that certain industries were specifically named, thus:
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“Section 16. Industries Indispensable to the National Interest. – For the guidance of the workers
and employers in the filing of petition for assumption of jurisdiction, the following industries/services are
hereby recognized as deemed indispensable to the national interest:
a. Hospital sector;
b. Electric power industry;
c. Water supply services, to exclude small water supply services such as bottling and
refilling stations;
d. Air traffic control; and
e. Such other industries as may be recommended by the National Tripartite Industrial
Peace Council (TIPC).”
Obviously, the above enumerated industries are not exclusive as other industries may be considered
indispensable to the national interest based on the appreciation and discretion of the DOLE Secretary or as may
be recommended by TIPC.
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3. DIFFERENT RULE ON STRIKES AND LOCKOUTS IN HOSPITALS, CLINICS AND
MEDICAL INSTITUTIONS.
As a general rule, strikes and lockouts in hospitals, clinics and similar medical institutions should be avoided.
In case a strike or lockout is staged, it shall be the duty of the striking union or locking-out employer to
provide and maintain an effective skeletal workforce of medical and other health personnel whose movement and
services shall be unhampered and unrestricted as are necessary to insure the proper and adequate protection of the
life and health of its patients, most especially emergency cases, for the duration of the strike or lockout.
The DOLE Secretary may immediately assume, within twenty four (24) hours from knowledge of
the occurrence of such a strike or lockout, jurisdiction over the same or certify it to the NLRC for compulsory
arbitration.
4. SOME PRINCIPLES ON ASSUMPTION/CERTIFICATION POWER OF THE DOLE SECRETARY.
 Prior notice and hearing are not required in the issuance of the assumption or certification order.
 The DOLE Secretary may seek the assistance of law enforcement agencies like the Philippine National Police
to ensure compliance with the provision thereof as well as with such orders as he may issue to enforce the
same.
5. RETURN-TO-WORK ORDER.
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a. It is a STATUTORY PART AND PARCEL of assumption/certification order even if not
expressly stated therein.
The moment the DOLE Secretary assumes jurisdiction over a labor dispute involving national interest
or certifies it to the NLRC for compulsory arbitration, such assumption or certification has the effect of
automatically enjoining the intended or impending strike or, if one has already been commenced, of
automatically prohibiting its continuation. The mere issuance of an assumption or certification order automatically
carries with it a return-to-work order, even if the directive to return to work is not expressly stated therein. It is
thus not necessary for the DOLE Secretary to issue another order directing the strikers to return to work.
It is error therefore for striking workers to continue with their strike alleging absence of a return-to-work
order since Article 263(g) is clear that once an assumption/certification order is issued, strikes are enjoined or,
if one has already taken place, all strikers should immediately return to work.
b. Nature of return-to-work order.
Return-to-work order is compulsory and immediately executory in character. It should be strictly
complied with by the parties even during the pendency of any petition questioning its validity in order to
maintain the status quo while the determination is being made. Filing of a motion for reconsideration does not
affect the enforcement of a return-to-work order which is immediately executory.
c. Some principles on return-to-work order.
 The issue of legality of strike is immaterial in enforcing the return-to-work order.
 Upon assumption or certification, the parties should revert to the status quo ante litem which refers to
the state of things as it was before the labor dispute or the state of affairs existing at the time of the filing
of the case. It is the last actual, peaceful and uncontested status that preceded the actual controversy.
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 To implement the return-to-work order, the norm is actual reinstatement. However, payroll
reinstatement in lieu of actual reinstatement may properly be resorted to when special
circumstances exist that render actual reinstatement impracticable or otherwise not conducive to
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Example:
University of Sto. Tomas v. NLRC, where the teachers ordered to return to work could not be given
back their academic assignments since the return-to-work order of the DOLE Secretary was issued in the
middle of the first semester of the academic year. The Supreme Court affirmed the validity of
the payroll reinstatement order of the NLRC and ruled that the NLRC did not commit grave abuse of
discretion in providing for the alternative remedy of payroll reinstatement. It observed that the NLRC
was only trying its best to work out a satisfactory ad hoc solution to a festering and serious problem.
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3.1.
NATURE OF ASSUMPTION ORDER
OR CERTIFICATION ORDER
1. A POLICE POWER MEASURE.
The power to issue assumption or certification orders is an extraordinary authority granted to the
President and to his alter ego, the DOLE Secretary, the exercise of which should be strictly limited to national
interest cases. It is in the nature of a police power measure. This is done for the promotion of the common
good considering that a prolonged strike or lockout can be inimical to the national economy. It is to protect the
NATIONAL INTEREST and not for the protection of labor nor of capital.
3.2.
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EFFECT OF DEFIANCE OF
ASSUMPTION OR CERTIFICATION ORDERS
ON EMPLOYMENT OF DEFIANT WORKERS
1. DEFIANCE OF THE ORDER, A VALID GROUND TO DISMISS.

The defiance by the union, its officers and members of the Labor Secretary's assumption of jurisdiction
or certification order constitutes a valid ground for dismissal.
The following are the justifications:
1. A strike that is undertaken after the issuance by the DOLE Secretary of an assumption or
certification order becomes a prohibited activity and thus illegal. The defiant striking union officers
and members, as a result, are deemed to have lost their employment status for having knowingly
participated in an illegal strike.
2. From the moment a worker defies a return-to-work order, he is deemed to have abandoned his job.
3. By so defying, the workers have forfeited their right to be readmitted to work.
2. ALL DEFIANT STRIKERS, REGARDLESS OF WHETHER THEY ARE OFFICERS OR

ORDINARY MEMBERS, ARE DEEMED DISMISSED.
Once the DOLE Secretary assumes jurisdiction over a labor dispute or certifies it to the NLRC for
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compulsory arbitration, such jurisdiction should not be interfered with by the application of the coercive
processes of a strike or lockout. Any defiance thereof is a valid ground for the loss of employment status.
3. PERIOD OF DEFIANCE OF THE RETURN-TO-WORK ORDER, NOT MATERIAL.
The length of time within which the return-to-work order was defied by the strikers is not significant
in determining their liability for the legal consequences thereof. The following cases are illustrative of this rule:
a. University of San Agustin Employees’ Union-FFW v. The CA.1 - The period of defiance was less than
nine (9) hours from 8:45 a.m. to 5:25 p.m. on September 19, 2003.
b. Federation of Free Workers v. Inciong. 2 - The period of defiance was only nine (9) days.
4. SOME PRINCIPLES ON DEFIANCE OF THE ASSUMPTION/CERTIFICATION ORDER.
 The assumption/certification order may be served at any time of the day or night.
 No practice of giving 24 hours to strikers within which to return to work. There is no law or
jurisprudence recognizing this practice.
 The defiant strikers could be validly replaced.
 The refusal to acknowledge receipt of the assumption/certification orders and other processes is an apparent
attempt to frustrate the ends of justice, hence, invalid. The union cannot be allowed to thwart the efficacy of
the said orders issued in the national interest through the simple expediency of refusing to acknowledge receipt
thereof.
1 G.R. No. 169632, March 28, 2006.

2 G.R. No. L-49983, April 20, 1992.
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3.3.
LIABILITY OF UNION OFFICERS
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FOR DECLARATION OF ILLEGALITY OF STRIKE
3.4.
LIABILITY OF ORDINARY WORKERS
FOR COMMISSION OF ILLEGAL ACTS IN THE COURSE OF STRIKE
1. PARTICIPATION IN LAWFUL STRIKE.

An employee who participates in a lawful strike is not deemed to have abandoned his employment.
Such participation should not constitute sufficient ground for the termination of his employment even if a
replacement has already been hired by the employer during such lawful strike.
2. PARTICIPATION IN ILLEGAL STRIKE.
a. Distinction in the liability between union officers and ordinary union members.
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1. Union officers.
The mere declaration of illegality of the strike will result in the termination of all union officers who knowingly
participated in the illegal strike. Unlike ordinary members, it is not required, for purposes of termination, that the
officers should commit an illegal act during the strike.
However, absent any showing that the employees are union officers, they cannot be dismissed based solely on the
illegality of the strike.
To illustrate how the “knowing participation” of union officers may be ascertained and established, the following
factors were taken into account in another 2011 case, Abaria v. NLRC,1 which led to the declaration that they
knowingly participated in the illegal strike:
Their persistence in holding picketing activities despite the declaration by the NCMB that their union was not duly
registered as a legitimate labor organization and notwithstanding the letter from the federation’s legal counsel informing
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them that their acts constituted disloyalty to the national federation; and
Their filing of the notice of strike and conducting a strike vote despite the fact that their union has no legal personality to
negotiate with their employer for collective bargaining purposes.
2. Ordinary union members.

The mere finding or declaration of illegality of a strike will not result in termination of ordinary union members. For an
ordinary union member to suffer termination, it must be shown by clear evidence that he has committed illegal acts
during the strike.
Reason for the distinction.

The reason for this distinction is that the union officers have the duty to guide their members to respect the law. If
instead of doing so, the officers urged the members to violate the law and defy the duly constituted authorities, their
dismissal from the service is a just penalty or sanction for their unlawful act. Their responsibility as main players in an
illegal strike is greater than that of the ordinary union members and, therefore, limiting the penalty of dismissal only to
the former for their participation in an illegal strike is in order.
Some principles on illegality of a strike.

The fact that the employees are signatories to the CBA does not in itself sufficiently establish their status as union
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officers during the illegal strike. Neither were their active roles during the bargaining negotiations be considered as
evidence of their being union officers.
Only the union officers during the period of illegal strike are liable. If the employees acted as union officers after
the strike, they may not be held liable and, therefore, could not be terminated in their capacity as such.
Shop stewards are union officers, hence, they should be terminated upon the declaration of the illegality of the strike.
 Union officers may be dismissed despite the fact that the illegal strike was staged only for 1 day
or even for less than 10 hours. This holds true in cases of defiance of the assumption/ certification
order issued in national interest cases.
 If the dispositive portion of the decision failed to mention the names of union officers, resort
should be made to the text of the decision.
 No wholesale dismissal of strikers allowed. The employer cannot just unceremoniously dismiss
a hundred of its employees in the absence of clear and convincing proof that these people were indeed
guilty of the acts charged and then, afterwards, go to court to seek validation of the dismissal it
whimsically executed. That certainly cannot be allowed.
3. PARTICIPATION IN THE COMMISSION OF ILLEGAL ACTS DURING A STRIKE.
1 G.R. Nos. 154113, 187778, 187861 & 196156, Dec. 7, 2011, 661 SCRA 686.
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a. Legality or illegality of strike, immaterial.

As far as liability for commission of illegal acts during the strike is concerned, the issue of legality or
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illegality of the strike is irrelevant. As long as the union officer or member commits an illegal act in the course
of the strike, be it legal or illegal, his employment can be validly terminated.
b. Meaning of “illegal acts.”
The term “illegal acts” under Article 264(a) may encompass a number of acts that violate existing labor
or criminal laws, such as the following:
(1) Violation of Article 264(e) of the Labor Code which provides that “[n]o person engaged in picketing
shall commit any act of violence, coercion or intimidation or obstruct the free ingress to or egress
from the employer’s premises for lawful purposes, or obstruct public thoroughfares.”
(2) Commission of crimes and other unlawful acts in carrying out the strike.
(3) Violation of any order, prohibition, or injunction issued by the DOLE Secretary or NLRC in
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connection with the assumption of jurisdiction or certification order under Article 263(g) of the Labor
Code.
This enumeration is not exclusive as jurisprudence abounds where the term “illegal acts” has been interpreted
and construed to cover other breaches of existing laws.
Liability for illegal acts should be determined on an individual basis. For this purpose, the individual identity of the
union members who participated in the commission of illegal acts may be proved thru affidavits and photographs.
Simply referring to them as “strikers,” or “complainants in this case” is not enough to justify their dismissal.
Some principles on commission of illegal acts in the course of the strike.
Only members who are identified as having participated in the commission of illegal acts are liable. Those who did
not participate should not be blamed therefor.
To effectively hold ordinary union members liable, those who participated in the commission of illegal acts must not
only be identified but the specific illegal acts they each committed should be described with particularity.
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If violence was committed by both employer and employees, the same cannot be cited as a ground to declare the strike
illegal.
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SYLLABUS

6
POST EMPLOYMENT
A. EMPLOYER-
EMPLOYEE RELATIONSHIP
1.
TESTS TO DETERMINE EXISTENCE OF
EMPLOYER-EMPLOYEE RELATIONSHIP
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Four-Fold Test
 What is the 4-fold test of existence of employer-employee relationship?
1. Selection and engagement of the employee;
2. Payment of wages or salaries;
3. Exercise of the power of dismissal; or
4. Exercise of the power to control the employee’s conduct.
These tests, however, are not fool-proof as they admit of exceptions.
 What is the control test or also known as the MEANS AND METHOD CONTROL TEST?
The 4th test above, the control test, is the controlling test which means that the employer controls or has
reserved the right to control the employee not only as to the result of the work to be done but also as to the
means and methods by which the same is to be accomplished.
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The three (3) terms: (1) means, (2) methods and (3) results are the critical elements of the control test,
Situation 1: If the employer controls the means and methods of performing the job, work or service,
including the results thereof, then the arrangement is one of employer-employee relationship.
Situation 3: If the so-called employer does not control such means and methods but is only interested in
the results thereof, then the arrangement is called “independent job contracting” or “contractualization”, the party
controlling the means and methods is called the independent contractor and the party interested only in the results
is called the principal/client/indirect employer/statutory employer.
Two-Tiered Test
 What is the 2-tiered test of employment relationship?
The two-tiered test enunciated in Francisco v. NLRC,1 is composed of:
(1) The putative employer’s power to control the employee with respect to the means and methods by which
the work is to be accomplished [control test]; and
(2) The underlying economic realities of the activity or relationship [broader economic reality test].2
Employment relationship under the control test is determined under the same concept as discussed above, that
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is, by asking whether “the person for whom the services are performed reserves the right to control not only the end to
be achieved but also the manner and means to be used in reaching such end.”3
Under the economic reality test, 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.4
These 2-tiered test applies to cases where there are several parties alleged to be employers of one individual.
The determinant factor is economic dependency of such individual. In other words, under the economic reality test, the
question to ask is - among the parties alleged to be the employer, to whom is the individual economically dependent?
Following the broader economic reality test, the Supreme Court found petitioner in Orozco v. The Fifth
Division of the Hon. CA,5 who is a columnist in the Philippine Daily Inquirer (PDI), not an employee of PDI but
an independent contractor. Thus:
“Petitioner’s main occupation is not as a columnist for respondent but as a women’s rights advocate
working in various women’s organizations. Likewise, she herself admits that she also contributes articles to other
publications. Thus, it cannot be said that petitioner was dependent on respondent PDI for her continued
employment in respondent’s line of business.
“The inevitable conclusion is that petitioner was not respondent PDI’s employee but an
independent contractor, engaged to do independent work.”
1 G.R. No. 170087, Aug. 31, 2006.

2 Id.
3 Id.
4 Id.
5 G.R. No. 155207, Aug. 13, 2008.
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 Is it necessary to have a written contract of employment in order to establish employer-employee

relationship?
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No. It may be an oral or written contract. A written contract is not necessary for the creation and validity of
the relationship.
The only exception is in the case of Kasambahay where, under the Kasambahay Law, it is required that
the contract of employment should be in writing.
2.
KINDS OF EMPLOYMENT
 What is the general classification of employment?

There are five (5) classifications of employment:
(a) Regular employees referring to those who have been “engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer”;
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(b) Project employees referring to those “whose employment has been fixed for a specific project
or undertaking, the completion or termination of which has been determined at the time of the
engagement of the employee”;
(c) Seasonal employees referring to those who work or perform services which are seasonal in nature, and
the employment is for the duration of the season;
(d) Casual employees referring to those who are not regular, project, or seasonal employees;
(e) Fixed-term employees whose term is freely and voluntarily determined by the employer and the
employee. NOTE: This is not provided in the Labor Code.
But in the 2019 Syllabus, the following were added to the enumeration of the Kinds of Employment:
1. Probationary
2. Security guards
3. Floating status
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We shall therefore include a discussion on these three below.
 What is the default employment?

The default employment is regular employment. This means that generally, in the absence of any
specific agreement to the contrary, the employer-employee relationship is deemed to be regular in nature.
Therefore, in order to make the employment some other kind of employment, such as project, seasonal, casual,
fixed-term or probationary, there must be a written contract of employment stipulating the specific kind of
employment.
So, therefore, if there is no written employment contract, the employment should be deemed
REGULAR. However, even if there is a written employment contract, if it is not clear that the parties have
stipulated such other kinds of employment (such as project, seasonal, casual, fixed-term or probationary), the
employment relationship will still be considered REGULAR employment which, as earlier stated, is the default
employment.
a.
PROBATIONARY EMPLOYMENT
 Is the period of 6 months in the law on probationary employment (Article 296 [281], LC) the minimum or
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maximum period?
The answer is it is neither the minimum nor the maximum period of probationary employment. The 6-
month period is mentioned in the law for purposes of setting the standard period. Proof that it is not the
maximum is the case of Buiser v. Leogardo where the probationary period of 18 months was considered
reasonable. In other words, probationary period may be for a day, a week, a month or several months,
depending on the reasonable discretion of management.
 How is probationary period, say, of 6 months computed?
The 6-month probationary period should be reckoned “from the date of appointment up to the same
calendar date of the 6th month following.”
 May probationary period be extended?
Yes, but only upon the mutual agreement in writing by the employer and the probationary employee.
 What is the effect of allowing a probationary employee to work beyond the probationary period?
He is considered a regular employee.
 What is the effect if there is no written contract providing for probationary employment?
If there is no written contract, the employee is considered a regular employee from day one of his employment.
And even if there is one, he is deemed regular if there is no stipulation on probationary period.
 What is the distinction between probationary employment and fixed-term employment?
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The distinction lies in the intention of the parties. If the parties intend to make their relationship regular
after the lapse of the period, say of 6 months, then what is contemplated is probationary employment; if there is
no such intention of the parties, then, what they have entered into is simply a fixed-term contract.
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 What are the grounds to terminate probationary employment?
Under Article 281, a probationary employee may be terminated only on three (3) grounds, to wit:
1. For a just cause; or
2. For authorized cause; or
3. When the probationary employee fails to qualify as a regular employee in accordance with
reasonable standards made known by the employer to the employee at the start of the
employment.
 Is procedural due process required in termination of probationary employment?
Yes, but only in the case of Numbers 1 and 2 above.
Due process for Number 3 is different and unique in the sense that it requires simply the service of a
written notice of termination, not verbal, informing the probationary employee of the termination of his
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probationary employment and attaching thereto the result of the performance evaluation conducted on him. As
clearly pointed out above, it is a fundamental requirement that the reasonable standards expected of the employee
during his probationary employment was made known to him at the time of his engagement. Necessarily, at
the termination thereof, the supposed performance evaluation should be presented to him. As a matter of due
process, an employee has the right to know whether he has met the standards for which his performance was
evaluated. Should he fail, he also has the right to know the reasons therefor.
 When should termination of probationary employment be made?
Termination to be valid must be done prior to lapse of probationary period. Termination a day or a few
days after the lapse of the probationary period cannot be done without just or authorized cause as he has already
become a regular employee by that time.
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b.
REGULAR EMPLOYMENT
 How does one become a regular employee?

Under the Labor Code, regular employment may be attained in either of three (3) ways, namely:
1. By nature of work. - The employment is deemed regular when the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or trade of the
employer.
2. By period of service. - The employment is reckoned as regular when the employee has rendered at
least one (1) year of service, whether such service is continuous or broken, with respect to the activity
in which he is employed and his employment shall continue while such activity exists.
3. By probationary employment. - The employment is considered regular when the employee is allowed
to work after a probationary period.
 Is the manner or method of paying wage material in determining regularity of employment?
No. The manner and method of payment of wage or salary is immaterial to the issue of whether the
employee is regular or not. So, the fact that an employee is paid on a daily basis or monthly basis is
inconsequential on the regularity issue.
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c.
PROJECT EMPLOYMENT
 What is the litmus test of project employment?

The litmus test of project employment, as distinguished from regular employment, is whether or not
the project employees were assigned to carry out a specific project or undertaking, the duration and scope of
which were specified at the time the employees were engaged for that project.
A true project employee should be assigned to a project which begins and ends at determined or
determinable times and be informed thereof at the time of hiring.
 What are the 6 indicators of project employment?
Either one or more of the following circumstances, among others, may be considered as indicator/s that an
employee is a project employee:
1. The duration of the specific/identified undertaking for which the worker is engaged is reasonably
determinable.
2. Such duration, as well as the specific work/service to be performed, are defined in an
employment agreement and is made clear to the employee at the time of hiring.
3. The work/service performed by the employee is in connection with the particular project
or undertaking for which he is engaged.
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4. The employee, while not employed and awaiting engagement, is free to offer his services to any
other employer.
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5. A report of the termination of employment in the particular project/undertaking is submitted to
the DOLE Regional Office having jurisdiction over the workplace, within thirty (30) days following
the date of his separation from work.
6. An undertaking in the employment contract by the employer to pay completion bonus to the
project employee as practiced by most construction companies.
 Is length of service material in determining validity of project employment?
No. Length of service is not a controlling determinant of employment tenure.
 What are some principles on project employment?
1. Project employees should be informed of their status as such at inception of the employment relationship.
2. There must be a written contract of project employment stating the duration of the project employment
as well as the particular work or service to be performed. A written project employment contract
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is an indispensable requirement.
3. Intervals in employment contracts indicate project employment.
4. Continuous, as opposed to intermittent, rehiring shows that employee is regular.
5. “Project-to-project” basis of employment is valid.
On termination of project employment.
1. Project employees enjoy security of tenure only during the term of their project employment.
2. Project employees have presumably become regular employees if they are allowed to work beyond
the completion of the project or any phase thereof to which they were assigned or after the “day
certain” which they and their employer have mutually agreed for its completion. Having become
regular employees, they can no longer be terminated on the basis of the completion of the project or
any phase thereof to which they were deployed.
d.
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SEASONAL EMPLOYMENT
Can a seasonal employee become a regular seasonal employee?
Yes, provided the following requisites are complied with:
1. The seasonal employee should perform work or services that are seasonal in nature; and
2. They must have also been employed for more than one (1) season.
 Can a regular seasonal worker file an illegal dismissal case in the event he is not hired for the next season?
Yes. The reason is, being a regular seasonal employee, the employer should re-hire him in the next
season. During off-season, his employment is deemed suspended and he is considered as being on leave of absence
without pay.
e.
CASUAL EMPLOYMENT
 What is the most important distinguishing feature of casual employment?
The most important distinction is that the work or job for which he was hired is merely incidental to
the principal business of the employer and such work or job is for a definite period made known to the employee
at the time of engagement.
Capule v. NLRC, Yakult Philippines, Inc., G.R. No. 90653, Nov. 12, 1990.
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Private respondent company is engaged in the manufacture of cultured milk which is sold under the
brand name “Yakult.” Petitioners were hired to cut cogon grass and weeds at the back of the factory
building used by private respondents. They were not required to work on fixed schedule and they
worked on any day of the week on their own discretion and convenience. They were held to be casual
employees because cutting cogon grass and weeds is but incidental to the principal business of the
company.
 When does a casual employee become regular?
Casual employee becomes regular after one year of service by operation of law. The one (1) year period should
be reckoned from the hiring date. Repeated rehiring of a casual employee makes him a regular employee.
f.
FIXED-TERM EMPLOYMENT
 What are the requisites in order for fixed-term employment to be valid?
The two (2) requisites or criteria for the validity of a fixed-term contract of employment are as follows:
1. The fixed period of employment was knowingly and voluntarily agreed upon by the parties,
without any force, duress or improper pressure being brought to bear upon the employee and
absent any other circumstances vitiating his consent; or
2. It satisfactorily appears that the employer and employee dealt with each other on more or less equal
terms with no moral dominance whatever being exercised by the former on the latter.
 Is fixed-term employment valid if the job is directly related to the principal business of the employer?
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Yes. Fixed-term employment is the only exception to the rule that one becomes regular if he is made to
perform activities directly related to the principal business of the employer (Regularity by virtue of nature of
work)
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Thus, it was ruled in Philippine Village Hotel v. NLRC,1 that the fact that private respondents were required to
render services necessary or desirable in the operation of petitioner’s business for the duration of the one-
month dry-run operation period, did not in any way impair the validity of their contracts of employment which
specifically stipulated that their employment was only for one (1) month.
 When does a fixed-term employee become regular?
1. When he is allowed to work beyond the agreed fixed term.

2. When there are successive renewals of fixed-period contracts.
 What is the 555 Doctrine?
The 555 Doctrine is a scheme of the employer in hiring workers on a uniformly fixed 5-month basis and
replacing them upon the expiration of their contracts with other workers with the same employment status
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circumvents their right to security of tenure.
g.
FLOATING STATUS
1. A NEW
TOPIC.
The “Floating Status” Doctrine is a new topic prescribed in the 2019 Syllabus. This topic is included
in the enumeration therein as one of the kinds of employment. This may bring about confusion since this doctrine,
in no way, has anything to do with the main topic of “Kinds of Employment.”
2. LACK OF APPLICABLE PROVISION IN THE LABOR CODE.
At the outset, it bears reiterating that although placing an employee like a security guard on “floating”
status (or sometimes called temporary “off-detail” status) is considered a temporary retrenchment measure, the
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Supreme Court, in Exocet v. Serrano,2 recognized the fact that there is similarly no provision in the Labor
Code which treats of a temporary retrenchment or lay-off. Neither is there any provision which provides for
its requisites or its duration. Nevertheless, since an employee cannot be laid-off indefinitely, the Court has
applied Article 301 [286] of the Labor Code by analogy to set the specific period of temporary lay-off to a
maximum of six (6) months. This provision states:
“Article 301 [286]. When Employment Not Deemed Terminated. – The bona-fide suspension of the
operation of a business or undertaking for a period not exceeding six (6) months, or the fulfillment by the
employee of a military or civic duty shall not terminate employment. In all such cases, the employer shall
reinstate the employee to his former position without loss of seniority rights if he indicates his desire to
resume his work not later than one (1) month from the resumption of operations of his employer or from
his relief from the military or civic duty.”
Clearly from the foregoing article, the concept of “floating status” does not find any direct connection or
relation, except for the six (6)-month period provided therein which has been held as the defining cut-off period
that can be used as a consonant basis in determining the reasonableness of the length of time when an employee
could be deprived of work under this doctrine.
3. “FLOATING” STATUS DOCTRINE AS APPLIED TO SECURITY GUARDS.
Applying Article 301 [286] by analogy, the Supreme Court has consistently recognized that security guards
may be temporarily sidelined by their security agency as their assignments primarily depend on the contracts
entered into by the latter with third parties. This is called the “floating status” doctrine which is based on and
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justified under the said article. This status, as applied to security guards, is the period of time when security
guards are in between assignments or when they are made to wait after being relieved from a previous post until
they are transferred to a new one. In security agency parlance, being placed “off-detail” or on “floating” status
means “waiting to be posted.”
4. INSTANCES WHICH JUSTIFY APPLICATION OF DOCTRINE.
“Floating status” takes place under any of the following circumstances:
(1) When the security agency’s clients decide not to renew their contracts with the agency, resulting
in a situation where the available posts under its existing contracts are less than the number of
guards in its roster; or
(2) When contracts for security services stipulate that the client may request the agency for the
replacement of the guards assigned to it even for want of cause and there are no available posts under
the agency’s existing contracts to which the replaced security guards may be placed.
As far as No. 2 above is concerned, the Supreme Court has recognized the fact that clients of the
security agency have the right to request for the removal of any of the security guards supplied by the latter to
the former without need to justify the same. The reason for this is the lack of any employment relationship
between the security guards and the client.
Also, under No. 2 above, a relief and transfer order may be issued by the security agency to the security
guard concerned in order to effect it. This order in itself does not sever employment relationship between a security
guard and
1 G.R. No. 105033, Feb. 28, 1994.
2 Exocet Security and Allied Services Corporation v. Armando D. Serrano, G.R. No. 198538, Sept. 29, 2014.
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his agency. And the mere fact that the transfer would be inconvenient for the former does not by itself make the
transfer illegal.
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5. APPLICABILITY TO OTHER EMPLOYEES.
While the “floating status” rule is traditionally applicable to security guards who are temporarily
sidelined from duty while waiting to be transferred or assigned to a new post or client,1 Article 301 [286] has been
applied as well to other industries when, as a consequence of the bona-fide suspension of the operation of a
business or undertaking, an employer is constrained to put employees on “floating status” for a period not
exceeding six (6) months.2
Thus, it may also be applied to employees of legitimate contractors or subcontractors under a valid
independent contracting or subcontracting arrangement under Article 106 of the Labor Code. The same form
of dislocation and displacement also affects their employees every time contracts of services are terminated by
their clients or principals. In the meantime that the dislocated employees are waiting for their next assignment,
they may be placed on “off detail” or “floating” status following the same concept applicable to security guards.
For example, in JPL Marketing Promotions v. CA,3 this principle was applied to merchandisers hired by
petitioner company which is engaged in the business of recruitment and placement of workers. After they were
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notified of the cancellation of the contract of petitioner with a client where they were assigned and pending their
reassignment to other clients, the merchandisers are deemed to have been placed under “floating status” for a
period of not exceeding six (6) months under Article 301 [286]. Such notice, according to the Court, should not
be treated as a notice of termination but a mere note informing them of the termination of the client’s service
contract with petitioner company and their reassignment to other clients. The 30-day notice rule under Article 298
[283] does not therefore apply to this case.
This was likewise applied to the case of:
(1) A bus driver in Valdez v. NLRC4 who was placed on floating status after the air-conditioning unit of
the bus he was driving suffered a mechanical breakdown; and
(2) A Property Manager in Nippon Housing Phil., Inc. v. Leynes,5 pending her assignment to another
project for the same position.
6. SOME PRINCIPLES ON “FLOATING STATUS” DOCTRINE.
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(1) When an employee like a security guard is placed on a “floating” status, he is not entitled to any salary,
financial benefit or financial assistance provided by law during the 6-month period thereof.
(2) As a general rule, “floating status” beyond 6 months amounts to illegal/constructive dismissal. This is so
because “floating status” is not equivalent to dismissal so long as such status does not continue beyond a
reasonable time which means six (6) months. After 6 months, the employee should be recalled for work, or
for a new assignment; otherwise, he is deemed terminated.
(3) The security guard who refused to be re-assigned may be dismissed for insubordination.
(4) Multiple “floating status” amount to constructive dismissal.
(5) “Floating status” is distinct from preventive suspension. In the case of “floating status,” the employee is out
of work because his employer has no available work or job to assign him to. He is thus left with no choice
but to wait for at least six (6) months before he could claim having been constructively dismissed, should
his employer fail to assign him to any work or job within said period. In the case of preventive
suspension, the employee is out of work because he has committed a wrongful act and his continued
presence in the company premises poses a serious and imminent threat to the life or property of the
employer or of his co-workers. Without this kind of threat, preventive suspension is not proper. Further,
the period of preventive suspension under the said provisions of the Implementing Rules should not
exceed thirty (30) days.
(6) A complaint filed before the lapse of the 6-month period of floating status is premature, the employee not
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having been deemed constructively dismissed at that point. Thus, a complaint filed twenty-nine (29)
days after the security guard was placed on floating status was declared as having been prematurely filed.
(7) However, the filing of a complaint for constructive dismissal prior to the lapse of the 6-month period of
“floating status” will not be held premature in cases where the intent to terminate the employee is evident
even prior to the lapse of said period.
(8) No procedural due process is required before an employee is placed under “floating status.” The reason is
that there is no termination of employment to speak of at that point.
h.
SECURITY GUARDS
1. NEW TOPIC.
The topic of Security Guards is newly introduced in the 2019 Syllabus. There is no single provision in the
Labor Code on security guards; hence, it is a source of wonder for the Syllabus to consider this topic under
“Kinds of Employment” alongside such topics as regular, casual, probationary, project, seasonal and fixed-
term employments. Perhaps, the reason for its inclusion therein is for the bar candidate to be able to address the
issue of the employment status of security guards and other private security personnel in relation to their employer,
the security agency, and to the principal/client, to whom they have been assigned or farmed out.
2. DEPARTMENT ORDER NO. 150, SERIES OF 2016.
1 Nippon Housing Phil., Inc. v. Leynes, G.R. No. 177816, Aug. 3, 2011.
2 JPL Marketing Promotions v. CA, G.R. No. 151966, July 8, 2005.
3 G.R. No. 151966, July 8, 2005.
4 G.R. No. 125028, Feb. 9, 1998, 286 SCRA 87.
5 G.R. No. 177816, Aug. 3, 2011, 655 SCRA 77.
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In any case, there is one issuance on security guards which may be relevant for purposes of preparing for
the bar exams and that is, Department Order No. 150, Series of 2016, entitled “Revised Guidelines Governing
the Employment and Working Conditions of Security Guards and other Private Security Personnel in the Private
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Security Industry” issued by the DOLE Secretary on February 09, 2016.
More specifically, this Department Order was issued for the purpose of ensuring compliance with
mandated employment benefits and working conditions for security guards and other private security personnel
in the private security industry. It applies to all private security, detective, investigative agencies or operators, their
principals or clients, and all companies employing security guards and other private security personnel.
3. EMPLOYMENT OF SECURITY GUARDS – PERFECT EXAMPLE OF JOB CONTRACTING.
The employment of security guards is the perfect example of job contracting or commonly known
as “contractualization” where the following trilateral relationship between the following parties exists:
(1) “Principal” refers to any individual, company, cooperative, or establishment, including
government agencies and government-owned and controlled-corporations, who or which puts out
or farms out a security and/or detective job, service, or work to a private Security Service Contractor
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(SSC).
Contractor called “Security Service Contractor (SSC)” or “Private Security Agency (PSA)” which
refers to any person, association, partnership, firm, or private corporation engaged in contracting, recruitment, training,
furnishing, or posting of security guard and other private security personnel to individuals, corporations, offices and
organizations, whether private or public, for their security needs as the Philippine National Police (PNP) may approve.
Contractor’s employees supplied or farmed out to the Principal called:
"Security Guard" which refers to any person who offers or renders personal service to watch or secure a residence,
business establishment, building, compound, any other area or property; or inspects, monitors, or performs body checks
or searches of individuals or baggage and other forms of security inspection.
“Private Security Personnel” which refers to natural persons, including private detectives, security consultants and
security officers, employed by private security agency or firm, to render security and/or detective services.
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Consequently, the following terms of job contracting equally apply to the employment of security guards:
"Trilateral Relationship" which refers to the relationship in contracting or subcontracting arrangement where there is
a contract for a specific security job, work, or service between the principal and the SSC/PSA, and a contract of
employment between the latter and its security guards. There are three (3) parties involved in these arrangements: the
principal who decides to farm out a security job, work, or service to a security service contractor; the SSC/PSA who has
the capacity to independently undertake the performance of the security job, work, or service; and the security guards
and other private security personnel engaged by the SSC/PSA to accomplish the security job, work, or service.
“Service Agreement” which refers to the contract between the principal and the SSC/PSA containing the terms and
conditions governing the performance or completion of security service, job, or work being farmed out for a definite or
predetermined period.
CONTRACTUAL RELATIONSHIPS OF THE TRIPARTITE PARTIES.

The contractual relationships between and among the three (3) parties in the trilateral relationship are as
follows:
Between principal/client and SSC/PSA – governed by the Security Agreement;
Between SSC/PSA and security guards and other private security personnel – governed by the
Employment Contract;
Between principal/client and security guards and other private security personnel – NO
CONTRACTUAL RELATIONSHIP
DISCUSSION OF JOB CONTRACTING BELOW EQUALLY APPLIES TO EMPLOYMENT OF SECURITY
GUARDS.
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To avoid duplication and for simplicity in the discussion of this topic, the more comprehensive discussion
of job contracting below shall apply to and cover the employment of security guards. Consequently, we shall no
longer belabor the readers of this material with a separate disquisition of this topic.
3.
LEGITIMATE SUBCONTRACTING VS. LABOR-ONLY CONTRACTING
 What is meant by trilateral relationship?

As distinguished from employment relationship which is “bilateral” in nature, involving as it does only two
(2) parties, namely: (1) the employer, and (2) the employee, in legitimate job contracting, it is “trilateral” in
character, there being three (3) parties involved, to wit:
1. The principal who farms out a job, work or service to a contractor;
2. The contractor who has the capacity to independently undertake the performance of the job, work
or service; and
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3. The contractor’s workers engaged by the contractor and farmed out to the principal to accomplish
the job, work or service.
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 What are the contracts involved in this trilateral relationship?
Only two (2) contracts are involved, namely:
1) Service Agreement between the principal and the contractor wherein the obligation arising therefrom is
civil in nature and thus cognizable by the regular courts.
2) Employment contract between the contractor and its workers supplied to the principal.
 Is there any employment relationship and/or contractual relationship between the principal and the
contractor’s workers farmed out to the principal?
None. There is no employment relationship nor any form of contractual relationship of whatsoever
nature between the principal and the workers supplied by the contractor. Hence, the principal can ask the
contractor to remove any of the latter’s employees assigned or farmed out to it anytime without need
to observe due process.

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LEGITIMATE JOB CONTRACTING
What are the elements of legitimate job contracting?

(NOTE: The following THREE (3) words are very important: MANNER & METHOD and
RESULT in determining the elements of legitimate job contracting arrangement).
(a) The contractor is engaged in a distinct and independent business and undertakes to perform the job
or work on its own responsibility, according to its own manner and method;
(b) The contractor has substantial capital to carry out the job farmed out by the principal on his
own account, manner and method, investment in the form of tools, equipment,
machinery and supervision;
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(c) In performing the work farmed out, the contractor is free from the
principal in all matters connected with the performance of
control and/or direction of the
the work EXCEPT as to the
result thereto; and
(d) The Service Agreement ensures compliance with all the rights and benefits for all the employees
of the contractor under labor laws.
Absence of any of the foregoing requisites makes it a labor-only contracting arrangement.

Therefore:
 If the first party has control over the manner and method of performing the job or work, including
its result, and the second party who supplied the workers to the first party to perform the job or
work has no such control over such manner and method, then the first party is the direct
employer of the workers supplied by the second party to perform the job or work and the second
party shall not be considered as a legitimate “contractor” but a “labor-only contractor.”
 Contrarily, if the first party has NO control over the manner and method of performing the job
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or work as such control thereover is reposed on the second party, and the first party’s interest
pertains only to the result of the performance of the job or work, then there exists here a legitimate
job contracting arrangement where the first party is considered the principal and the second
party, the contractor.
Example:
Principal – ABC University

Contractor – XYZ Security Agency
Contractor’s Employees – Security Guards assigned by Contractor to Principal
Scenario 1: If it is ABC University that controls the manner and method of performing the job or
work of XYZ Security Agency’s security guards (such as when it is ABC University, that (1) sets the
schedule of the Security Guards; (2) makes the assignments to their respective posts; (3)
monitors their attendance/absences; (3) supervises their every action and performance of their duties,
and the like), then, ABC University is the direct employer of the guards and the XYZ Security
Agency is but a labor-only contractor.
Scenario 2: If it is XYZ Security Agency which controls such manner and method of performing
the job or work of the Security Guards it assigned to ABC University, and ABC University is
interested only in the result of the arrangement (such as the safety of the students, teachers and
employees, safeguard of school property and premises, peace and tranquility inside its campus, etc.),
then, there is here legitimate job contracting arrangement where ABC University is the principal,
XYZ Security Agency is the
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contractor, and the Security Guards, the contractor’s employees.

 What is the amount of SUBSTANTIAL CAPITAL required under the new Rules?
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following consists of substantial capital:
1. In the case of corporations, partnerships or cooperatives – paid-up capital stocks/shares of at least
P5 Million; or
2. In the case of single proprietorship - a net worth of at least P5 Million.
 NOTE: “Substantial capital” and “investment in tools, etc.” are two separate requirements.
“Substantial capital” and “investment in tools, equipment, implements, machineries and work premises”
should be treated as two (2) distinct and separate requirements in determining whether there is
legitimate job contracting arrangement. It is enough that only one of these two requisites is complied
with to make the job contracting arrangement legitimate and valid.
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 May individuals engage in legitimate job contracting?
Yes. Legitimate job contracting may not only be engaged by corporations, partnerships or single
proprietorships. Individuals may become legitimate job contractors themselves for as long as they have
SPECIAL SKILLS, TALENTS or EXPERTISE which are considered equivalent of the requirement regarding
“INVESTMENT IN TOOLS.”
 Are individuals engaged as legitimate job contractors required to fulfill the requisites of legitimate job
contracting as afore-described?
NO. They need not be registered as independent contractors with DOLE; they need not have substantial
capital (such as the P5 Million stated above). All that they are required is to have their tools consisting of
SPECIAL SKILLS, TALENT or EXPERTISE.
 What are examples of individuals as independent contractors?
1.
2.
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Sonza v. ABS-CBN Broadcasting Corporation1 - TV and radio talents and others with special talents
and skills may not be employees but legitimate independent contractors.
Orozco v. The Fifth Division of the Honorable Court of Appeals2 - A newspaper columnist is not an
employee but an independent contractor of the newspaper publishing the column.
3. Jose Mel Bernarte v. Philippine Basketball Association3 - Basketball referee is an independent contractor.
4. Semblante and Pilar v. CA, Gallera de Mandaue, et al.4 - Cockpit masiador and sentenciador
are independent contractors.
5. Escasinas v. Shangri-la’s Mactan Island Resort5 - A doctor may be engaged as an independent contractor.
b.
LABOR-ONLY CONTRACTING
 Is labor-only contracting allowed under the law?

NO, it is absolutely prohibited.
 What are the elements of labor-only contracting?
(a) The contractor does not have either (i) SUBSTANTIAL CAPITAL or (ii)
INVESTMENTS in the form of tools, equipment, machineries, supervision, work premises,
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among others, AND the contractor's employees recruited and placed are performing activities which
are directly related to the main business operation of the principal;
or
(b) The contractor does not exercise the right to control over the performance of the work of
the employee.
NOTE: There is labor-only contracting even if only one of the two (2) elements above is present. Further,
an unregistered contractor is presumed to be a labor-only contractor. Registration as independent contractor
should be made with the DOLE.
 What are the EFFECTS of labor-only contracting?
1 G.R. No. 138051, June 10, 2004.

2 G.R. No. 155207, Aug. 13, 2008.
3 G.R. No. 192084, Sept. 14, 2011.
4 G.R. No. 196426, Aug. 15, 2011.
5 G.R. No. 178827, March 4, 2009.
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1. The labor-only contractor will be treated as the agent or intermediary of the principal. Since the act of
an agent is the act of the principal, representations made by the labor-only contractor to the
employees will bind the principal.
nRobles Bar 2. The principal will become the direct employer as if it directly employed the workers supplied by the
labor- only contractor to undertake the contracted job or service. The principal will be responsible to
them for all their entitlements and benefits under labor laws.
3. The principal and the labor-only contractor will be solidarily treated as the direct employer.
 What are the distinctions between legitimate job contracting and labor-only contracting?
The chief distinctions between legitimate job contracting, on the one hand, and the prohibited labor-only
contracting, on the other, may be summed up as follows:
1. In the former, no employer-employee relationship exists between the contractual employees of the
job contractor and the principal; while in the latter, an employer-employee relationship is created by
law between the principal and the employees supplied by the labor-only contractor.
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2. In the former, the principal is considered only an “indirect employer”; while in the latter, the
principal is considered the “direct employer” of the employees supplied by the labor-only contractor.
3. In the former, the solidary obligation of the principal and the legitimate job contractor is only for
a limited purpose, that is, to pay the wages of the contractor’s employees supplied to the principal..
Other than this obligation of paying the wages, the principal is not responsible for any claim
made by the contractor’s employees; while in the latter, the principal becomes solidarily liable
with the labor-only contractor to the latter’s employees in the same manner and extent that the
principal is liable to employees directly hired by him/her.
 What are OTHER ILLICIT FORMS OF EMPLOYMENT IN D.O. 174, Series of 2017, (IN ADDITION
TO LABOR-ONLY CONTRACTING)?
The following are considered as such (formerly called “PROHIBITIONS” under previous
Department Orders):
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a) When the principal farms out work to a “Cabo” which term refers to a person or group of persons or to
a labor group which, under the guise of a labor organization, cooperative or any entity, supplies
workers to an employer, with or without any monetary or other consideration, whether in the capacity
of an agent of the employer or as an ostensible independent contractor.
b) Contracting out of job or work through an “In-house Agency” which term refers to a contractor which
is owned, managed, or controlled, directly or indirectly, by the principal or one where the principal
owns/represents any share of stock, and which operates solely or mainly for the principal.
c) Contracting out of job or work through an “In-house Cooperative” which merely supplies workers to
the principal. An “In-house Cooperative” refers to a cooperative which is managed, or controlled
directly or indirectly by the principal or one where the principal or any of its officers owns/represents
any equity or interest, and which operates solely or mainly for the principal.
d) Contracting out of a job or work by reason of a strike or lockout, whether actual or imminent.
e) Contracting out of a job or work being performed by union members and such will interfere with,
restrain or coerce employees in the exercise of their rights to self-organization as provided in
Article 259 [248] of the Labor Code, as amended.
f) Requiring the contractor's/subcontractor's employees to perform functions which are currently being
performed by the regular employees of the principal.
g) Requiring the contractor's/subcontractor's employees to sign, as a precondition to employment or
continued employment, an antedated resignation letter; a blank payroll; a waiver of labor
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standards including minimum wages and social or welfare benefits; or a quitclaim releasing the
principal or contractor from liability as to payment of future claims; or require the
employee to become member of a cooperative.
h) Repeated hiring by the contractor/subcontractor of employees under an employment contract of short
duration.
i) Requiring employees under a contracting/subcontracting arrangement to sign a contract fixing
the period of employment to a term shorter than the term of the Service Agreement, unless the
contract is divisible into phases for which substantially different skills are required and this is made
known to the employee at the time of engagement.
j) Such other practices, schemes or employment arrangements designed to circumvent the right of
workers to security of tenure.
 SAME EFFECT AS LABOR-ONLY CONTRACTING.
The foregoing illicit acts do not constitute labor-only contracting but the effect is similar to labor-
only contracting in that the principal is deemed the direct employer of the contractor's employees.
B.
TERMINATION BY EMPLOYER
 What is meant by TWO-FOLD DUE PROCESS requirement?

Dismissal of employees requires the observance of the two-fold due process requisites, namely:
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1. Substantive aspect which means that the dismissal must be for any of the (1) just causes provided
under the Labor Code or the company rules and regulations promulgated by the employer; or (2)
authorized causes under the Labor Code; and
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
2. Procedural aspect which means that the employee must be accorded both STATUTORY DUE
PROCESS AND CONTRACTUAL DUE PROCESS.
What is the distinction between JUST CAUSES and AUTHORIZED CAUSES?
A dismissal based on a just cause means that the employee has committed a wrongful act or omission;
while a dismissal based on an authorized cause means that there exists a ground which the law itself allows or
authorizes to be invoked to justify the termination of an employee even if he has not committed any wrongful act
or omission, such as installation of labor-saving devices, redundancy, retrenchment, closure or cessation of
business operations or disease.
a.
JUST CAUSES

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What are the just causes under the Labor Code?
The just causes in the Labor Code are found in the following provisions thereof:
(1) Article 297 [282] - (Termination by the Employer) which provides for the following grounds:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer
or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any
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immediate member of his family or his duly authorized representatives; and
(e) Other causes analogous to the foregoing.
(2) Article 279(a) [264(a)] - (Prohibited Activities) which provides for the termination of the following:
(a) Union officers who knowingly participate in an illegal strike and therefore deemed to have lost
their employment status.
(b) Any employee, union officer or ordinary member who knowingly participates in the commission
of illegal acts during a strike (irrespective of whether the strike is legal or illegal), is also deemed to
have lost his employment status.
(3) Article 278(g) [263(g)] - (National Interest Cases) where strikers who violate orders, prohibitions
and/or injunctions as are issued by the DOLE Secretary or the NLRC, may be imposed immediate
disciplinary action, including dismissal or loss of employment status.
(4) Article 259(e) [248(e)] - (Union Security Clause) where violation of the union security agreement in
the CBA may result in termination of employment. Under this clause, the bargaining union can
demand from the employer the dismissal of an employee who commits a breach of union security
arrangement, such as failure to join the union or to maintain his membership in good standing therein.
The same union can also demand the dismissal of a member who commits an act of disloyalty against
it, such as when the member organizes a rival union.

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Is dismissal based on Company Code of Discipline or Company Rules and Regulations illegal?
No.
In Sampaguita Auto Transport Corporation v. NLRC, the Supreme Court pronounced that the Court
of Appeals erred in ruling that the dismissal of private respondent, a bus driver of petitioner, was illegal
because the “grounds upon which petitioners based respondent’s termination from employment, viz.: ‘hindi lahat
ng schedule nailalabas,’ [‘]mababa ang revenue ng bus, laging kasama an[g] asawa sa byahe’ and ‘maraming
naririnig na kwento tungkol sa kanya, nag-uutos ng conductor para kumita sa hindi magandang paraan[,]’ xxx
are not among those enumerated under Article 297 [282] of the Labor Code as just causes for termination of
employment.” The irregularities or infractions committed by private respondent in connection with his work as
a bus driver constitute serious misconduct or, at the very least, conduct analogous to serious misconduct, under
the above-cited Article 297 [282] of the Labor Code. The requirement in the company rules that: ‘3. to obey
traffic rules and regulations as well as the company policies. 4. to ensure the safety of the riding public as
well as the other vehicles and motorist (sic)’ is so fundamental and so universal that any bus driver is expected to
satisfy the requirement whether or not he has been so informed.
I.
SERIOUS MISCONDUCT
1. REQUISITES.
For misconduct or improper behavior to be a just cause for dismissal, the following requisites must concur:
1. It must be serious; and
2. It must relate to the performance of the employee’s duties; and
3. It must show that he has become unfit to continue working for the employer.
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All the above three (3) requisites must concur.

2. SOME PRINCIPLES ON SERIOUS MISCONDUCT.
nRobles Bar • Serious misconduct implies that it must be of such grave and aggravated character and not merely trivial
or unimportant.
• Simple or minor misconduct would not justify the termination of the services of an employee.
• Possession or use of shabu or other drugs is a valid ground to terminate employment.
• Immorality, as a general rule, is not a just ground to terminate employment. The exception is when
such immoral conduct is prejudicial or detrimental to the interest of the employer.
• Immoral act committed beyond office hours is a valid ground to terminate employment.
• Sexual intercourse inside company premises constitutes serious misconduct.
• The act of a 30-year old lady teacher in falling in love with a 16-year old student is not immoral.
• Fighting is a ground for termination but only the instigator or aggressor and not the victim who
was constrained to defend himself should be dismissed.
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• Challenging superiors to a fight is a just cause for termination.
• Assaulting another employee is a just cause for termination.
• Utterance of obscene, insulting or offensive words constitutes serious misconduct.
• Gambling within company premises is a serious misconduct.
• Rendering service to business rival is a just cause to terminate employment.
• Selling products of a competitor is a just cause for termination.
• Organizing a credit union by employees in a bank is a serious misconduct.
• Deceiving a customer for personal gain is a just cause for termination.
• Contracting work in competition with employer constitutes serious misconduct.
• Intoxication which interferes with the employee’s work constitutes serious misconduct.
• The act of a teacher in pressuring a colleague to change the failing grade of a student is serious misconduct.
• Sexual harassment is a just ground to dismiss.
• Sleeping while on duty is a ground for termination.
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• Dismissal is too harsh a penalty for eating while at work.
• Pilferage or theft of company-owned property is a just cause to terminate.
• Theft of funds or property not owned by employer is not a ground to terminate.
• Act of falsification is a valid ground to terminate employment.
• Punching-in of time cards of other employees is a just cause for termination.
II.
INSUBORDINATION
OR WILLFUL DISOBEDIENCE OF LAWFUL ORDERS
1. REQUISITES.
One of the fundamental duties of an employee is to obey all reasonable rules, orders and instructions of
the employer. In order to validly invoke this ground, the following requisites must be complied with, to wit:
1. The employee’s assailed conduct must have been willful or intentional, the willfulness being
characterized by a wrongful and perverse attitude; and
2. The order violated must be based on a reasonable and lawful company rule, regulation or policy and
made known to the employee and must pertain to the duties for which he has been engaged to
discharge.
2. SOME PRINCIPLES ON INSUBORDINATION.

 Making false allegations in complaint does not constitute insubordination.
 Failure to answer memo to explain constitutes willful disobedience.
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 Another notice is required in case of termination on the ground of failure to answer memo to explain.
 Refusal to undergo random drug testing constitutes both serious misconduct and insubordination.
 Refusal to render overtime to meet production deadline constitutes insubordination.
 Refusal to comply with a lawful transfer constitutes insubordination.
III.
GROSS AND HABITUAL NEGLECT OF DUTIES
1. REQUISITES.
The following are the requisites:
(1) There must be negligence which is gross and/or habitual in character; and
(2) It must be work-related as would make him unfit to work for his employer.
2. SOME PRINCIPLES ON GROSS AND HABITUAL NEGLECT OF DUTIES.
 Simple negligence is not sufficient to terminate employment.
 The negligence must be gross in character which means absence of that diligence that an ordinarily prudent
man would use in his own affairs.
 As a general rule, negligence must be both gross and habitual to be a valid ground to dismiss.
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 Habituality may be disregarded if negligence is gross or the damage or loss is substantial. “Habitual
negligence” implies repeated failure to perform one’s duties for a period of time, depending upon the
circumstances.
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 Actual damage, loss or injury is not an essential requisite.
 Gross negligence may result to loss of trust and confidence.
 Absences, if authorized, cannot be cited as a ground to terminate employment.
 Tardiness or absenteeism, if not habitual, cannot be cited as a ground to terminate employment.
 Tardiness or absenteeism, if habitual, may be cited as a ground to terminate employment.
 Tardiness or absenteeism, if habitual, may be tantamount to serious misconduct.
 Absences or tardiness due to emergency, ailment or fortuitous event are justified and may not be cited as just
cause to terminate employment.
 Unsatisfactory or poor performance, inefficiency and incompetence are considered just causes for
dismissal only if they amount to gross and habitual neglect of duties.
IV.
ABANDONMENT OF WORK
1. CONCEPT.
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Abandonment is not provided for in the Labor Code but it is jurisprudentially considered a form of neglect
of duty; hence, a just cause for termination of employment under Article 297(b) [282(b)] of the Labor Code.
2. REQUISITES.
To constitute abandonment, two (2) elements must concur, namely:
1) The employee must have failed to report for work or must have been absent without valid or
justifiable reason; and
2) There must have been a clear intention on the part of the employee to sever the employer-
employee relationship manifested by some overt act.
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3. SOME PRINCIPLES ON ABANDONMENT.
 Mere absence is not enough to constitute abandonment.
 Clear intention to sever employment relationship is necessary.
 Due process in abandonment cases consists only of the service of 2 notices to the employee, viz.:
a. First notice directing the employee to explain why he should not be declared as having abandoned his job; and
b. Second notice to inform him of the employer’s decision to dismiss him on the ground of abandonment.
 No hearing is required to validly dismiss an employee for abandonment.
 Notices in abandonment cases must be sent to employee’s last known address per record of the company.
The employer need not look for the employee’s current whereabouts.
 Immediate filing of a complaint for illegal dismissal praying for reinstatement negates abandonment.
 Lapse of time between dismissal and filing of a case is not a material indication of abandonment. Hence, lapse
of 2 years and 5 months or 20 months or 9 months or 8 months before filing the complaint for illegal
dismissal is not an indication of abandonment. Under the law, the employee has a 4-year prescriptive
period within which to institute his action for illegal dismissal.
 Filing of a case to pre-empt investigation of the administrative case is tantamount to abandonment.
 When what is prayed for in the complaint is separation pay and not reinstatement, the filing of complaint
does not negate abandonment.
 It is abandonment when what is prayed for in the complaint is separation pay and it was only in the position
paper that reinstatement was prayed for.
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 Employment in another firm coinciding with the filing of complaint does not indicate abandonment.
 Offer of reinstatement by employer during proceedings before Labor Arbiter and refusal by employee does
not indicate abandonment but more of a symptom of strained relations between the parties.
 An employee may be absolved from the charge of abandonment of work but adjudged guilty of AWOL. These
two grounds are separate and distinct from each other.
 An employee who failed to report for work after the expiration of the duly approved leave of absence is
considered to have abandoned his job.
 An employee who failed to comply with the order for his reinstatement is deemed to have abandoned his work.
 An employee who, after being transferred to a new assignment, did not report for work anymore is deemed to
have abandoned his job.
 An employee who deliberately absented from work without leave or permission from his employer for the
purpose of looking for a job elsewhere is deemed to have abandoned his work.
 Imprisonment or detention by military does not constitute abandonment.
 Absence to evade arrest is not a valid justification. To do so would be to place an imprimatur on the
employee’s attempt to derail the normal course of the administration of justice.
V.
FRAUD
1. REQUISITES.
The following are the requisites of this ground:
1. There must be an act, omission, or concealment;
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2. The act, omission or concealment involves a breach of legal duty, trust, or confidence justly reposed;
3. It must be committed against the employer or his/her representative; and
It must be in connection with the employees' work.1
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4.
2. SOME PRINCIPLES ON FRAUD.

 Failure to deposit collection constitutes fraud.
 Lack of damage or losses is not necessary in fraud cases. The fact that the employer did not suffer losses from
the dishonesty of the dismissed employee because of its timely discovery does not excuse the latter from any
culpability.
 Lack of misappropriation or shortage is immaterial in case of unauthorized encashment of personal checks by
teller and cashier.
 Restitution does not have absolutory effect.
VI.
WILLFUL BREACH OF TRUST AND CONFIDENCE
1. REQUISITES.
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For the doctrine of loss of trust and confidence to apply, the following requisites must be satisfied:
(1) The employee holds a position of trust and confidence;
(2) There exists an act justifying the loss of trust and confidence, which means that the act that betrays
the employer’s trust must be real, i.e., founded on clearly established facts;
(3) The employee’s breach of the trust must be willful, i.e., it was done intentionally, knowingly and
purposely, without justifiable excuse; and
(4) The act must be in relation to his work which would render him unfit to perform it.
2. GUIDELINES.
As a safeguard against employers who indiscriminately use “loss of trust and confidence” to justify
arbitrary dismissal of employees, the Supreme Court, in addition to the above elements, came up with the following
guidelines for the application of the doctrine:
(1) The loss of confidence must not be simulated;
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(2) It should not be used as a subterfuge for causes which are illegal, improper or unjustified;
(3) It may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and
(4) It must be genuine, not a mere afterthought, to justify earlier action taken in bad faith.
The foregoing guidelines have been prescribed by the Supreme Court due to the subjective nature of
this ground which makes termination based on loss of trust and confidence prone to abuse.
3. SOME PRINCIPLES ON THE DOCTRINE OF LOSS OF TRUST AND CONFIDENCE.

 Employee’s position must be reposed with trust and confidence.
 “Position of trust and confidence” is one where a person is entrusted with confidence on delicate matters, or
with the custody, handling, or care and protection of the employer’s property.
 Two (2) classes of positions of trust. The first class consists of managerial employees or those who, by the
nature of their position, are entrusted with confidential and delicate matters and from whom greater fidelity to
duty is correspondingly expected. They refer to those 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 or to effectively recommend such managerial actions. Their primary duty consists of the
management of the establishment in which they are employed or of a department or a subdivision thereof.
The second class consists of fiduciary rank-and-file employees who, though rank-and-file, are routinely
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charged with the custody, handling or care and protection of the employer's money or property, or
entrusted with confidence on delicate matters, and are thus classified as occupying positions of trust and
confidence. Included under this class are “cashiers, auditors, property custodians, or those who, in the
normal and routine exercise of their functions, regularly handle significant amounts of [the employer’s]
money or property.”
 Rules on termination of managerial and supervisory employees different from those applicable to rank-
and-file employees. Thus, with respect to rank-and-file personnel, loss of trust and confidence as a ground
for valid dismissal requires proof of involvement in the alleged events in question and that mere
uncorroborated assertions and accusations by the employer will not be sufficient. But as regards a
managerial employee, the mere existence of a basis for believing that he has breached the trust of his
employer would suffice for his dismissal.
 There must be “some basis” for the loss of trust and confidence which means that there is reasonable ground
to believe, if not to entertain the moral conviction, that the concerned employee is responsible for the
misconduct and that the nature of his participation therein rendered him absolutely unworthy of trust
and confidence demanded by his position.
 Dismissal due to feng shui mismatch is not a valid ground to lose trust and confidence.
 Command responsibility of managerial employees is a ground to dismiss.
 Confidential employee may be dismissed for loss of trust and confidence.
 Grant of promotions and bonuses negates loss of trust and confidence.
 Long years of service, absence of derogatory record and small amount involved are deemed
inconsequential insofar as loss of trust and confidence is concerned.
 Dropping of criminal charges or acquittal in a criminal case arising from the same act does not affect the
validity of dismissal based on loss of trust and confidence.
1 Per latest DOLE Department Order No. 147-15, series of 2015, September 07, 2015.
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 Full restitution does not absolve employee of offense which resulted in the loss of trust and confidence.
VII.
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1. REQUISITES.
COMMISSION OF CRIME OR OFFENSE
The following are the requisites for the valid invocation of this ground:
1. A crime or offense was committed by the employee;
2. It was committed against any of the following persons:
(a) His employer;
(b) Any immediate member of his employer’s family; or
(c) His employer’s duly authorized representative.
2. SOME PRINCIPLES ON THE COMMISSION OF CRIME OR OFFENSE.
 Because of its gravity, work-relation is not necessary. Neither is it necessary to show that the commission of
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the criminal act would render the employee unfit to perform his work for the employer.
VIII.
OTHER ANALOGOUS CAUSES
1. ANALOGOUS CAUSES UNDER ESTABLISHED JURISPRUDENCE.
The following may be cited as analogous causes:
1) Violation of company rules and regulations.
2) Theft of property owned by a co-employee, as distinguished from theft of property owned by the employer.
3) Incompetence, inefficiency or ineptitude.
4) Failure to attain work quota.
5) Failure to comply with weight standards of employer.
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6) “Attitude problem” is analogous to loss of trust and confidence.
IX.
TERMINATION DUE TO ENFORCEMENT OF
UNION SECURITY CLAUSE
 What is a union security clause?

The “union security clause” is a stipulation in a CBA which allows the parties thereto to enter into an
agreement requiring compulsory membership in the sole and exclusive bargaining agent (SEBA) which
successfully negotiated said CBA as a condition for continued employment with the exception of employees who
are already members of other union/s at the time of the signing of the CBA. Hence, they cannot be compelled to
resign from their minority union/s to join the SEBA.
 What are the effects of application of this clause?
The following are the effects:
a. On members of the SEBA. They are not allowed to resign or terminate their membership therefrom.
Any member of the SEBA who resigns or is expelled therefrom may be recommended to the
employer by the SEBA for termination of his employment.
b. On non-members of the SEBA but members of the minority union/s. They are not bound by the
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union security clause if they are members of the minority or other unions at the time of the signing of
the CBA. Hence, they cannot be compelled to resign from their union/s in order to join the SEBA.
c. On non-members of the SEBA or of any minority union/s. If not a member of the SEBA or any other
unions in the bargaining unit at the time of the signing of the CBA by reason of the fact that he
is excepted from the coverage of the bargaining unit, the employee cannot be compelled to
join the SEBA. (E.g., Religious objectors and confidential employees under the Confidential Employee
Rule).
d. On new employees hired after the signing of the CBA containing the union security clause. They
can be compelled to join the SEBA. If they refuse, they can be recommended for termination by the
SEBA to the employer as such refusal is deemed a violation of this clause.
 Is there an exception to this rule?
Yes. An employee cannot be compelled to join any union based on religious ground (Religious Objectors).
For example: members of the Iglesia ni Kristo (INK) cannot be compelled to join a union; hence, they are not bound
by the union security doctrine.
 Can religious objectors be denied membership in a union or be disallowed from participating in a
certification election?
No. Religious objectors, if they choose to, cannot be denied membership in a union or prevented
from participating in a certification election.
 What are the requisites in order to validly terminate employees based on this clause?
(1) The union security clause is applicable;
(2) The bargaining union is requesting for the termination of employment due to enforcement of the
union security provision in the CBA; and
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(3) There is sufficient evidence to support the union’s decision to expel the employee from the
union. (Alabang Country Club, Inc. v. NLRC,1).
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All the foregoing requisites should be complied with to justify the termination of employment.
 Is the employer required to observe due process before terminating an employee who is recommended by
the SEBA for termination due to violation of the union security clause?
Yes, the employer should afford both substantive and procedural due process to the employee. It
cannot terminate his employment merely on the basis of the recommendation of the union.
 Can the employer adopt the due process afforded by the SEBA to the employee in expelling him from his
membership in the SEBA?
No. The employer cannot adopt the due process afforded by the SEBA as its own due process for the
simple reason that such due process concerns the termination of membership of the employee from the SEBA.
The due process in above-cited Alabang Country Club, Inc. v. NLRC,2 is required for a different purpose - to
terminate his employment.
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Per Department Order No. 147-15, Series Of
2015 (07 September 2015)
3
 An employee found positive for use of dangerous drugs shall be dealt with administratively which shall be
a ground for suspension or termination.4
 An employee shall not be terminated from work based on actual, perceived or suspected HIV status.5
 An employee shall not be terminated on basis of actual, perceived or suspected Hepatitis B status.6
 An employee who has or had tuberculosis shall not be discriminated against. He/she shall be entitled to work for
as long as they are certified by the company's accredited health provider as medically fit and shall be restored to
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work as soon as his/her illness is controlled.7
 An employee may also be terminated based on the grounds provided for under the CBA.
b.
AUTHORIZED CAUSES
 What are the 2 classes of authorized cause termination?

Under the Labor Code, authorized causes are classified into two (2) classes, namely:
(1) Business-related causes. – Referring to the grounds specifically mentioned in Article 298 [283], to wit:
a. Installation of labor-saving device;
b. Redundancy;
c. Retrenchment;
d. Closure or cessation of business operations NOT due to serious business losses or financial
reverses; and
e. Closure or cessation of business operations due to serious business losses and financial reverses.
(2) Health-related causes. – Referring to disease covered by Article 299 [284] of the Labor Code.
 What are the two (2) kinds of requisites in the case of business-related causes? ChanRobles
1. COMMON requisites applicable to all the authorized causes; and
2. UNIQUE requisites applicable to each of the authorized causes.
 What are the COMMON REQUISITES applicable to the BUSINESS-RELATED causes under Article
298 [283]?
The following are the five (5) common requisites applicable to the ALL the business-related causes:
1. There is good faith in effecting the termination;

2. The termination is a matter of last resort, there being no other option available to the employer
after resorting to cost-cutting measures;
1 G.R. No. 170287, Feb. 14, 2008.

2 G.R. No. 170287, Feb. 14, 2008.
3 See Section 6 thereof. (Other Causes of Termination.) xxx
4 DOLE Department Order No. 53, Series of 2003 in relation to the IRR of R.A. 9165.
5 DOLE Department Order No. 102, Series of 2010.
6 DOLE Department Advisory No.5, Series of 2010 Part III C1. par. c.
7 DOLE Department Order No. 75, Series of 2005.
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3. Two (2) separate written notices are served on both the affected employees and the DOLE at least one
(1) month prior to the intended date of termination;
4. Separation pay is paid to the affected employees, to wit:
nRobles Bar (a) If based on (1) installation of labor-saving device, or (2) redundancy. - One (1) month pay or
at least one (1) month pay for every year of service, whichever is higher, a fraction of at least
six (6) months shall be considered as one (1) whole year.
(b) If based on (1) retrenchment, or (2) closure NOT due serious business losses or financial
reverses. - One (1) month pay or at least one-half (½) month pay for every year of service,
whichever is higher, a fraction of at least six (6) months shall be considered as one (1) whole year.
(c) If closure is due to serious business losses or financial reverses, NO separation pay is required to
be paid.
(d) In case the CBA or company policy provides for a higher separation pay, the same must be
followed instead of the one provided in Article 298 [283].
5. Fair and reasonable criteria in ascertaining what positions are to be affected by the termination, such
as, but not limited to: nature of work; status of employment (whether casual, temporary or regular);
experience; efficiency; seniority; dependability; adaptability; flexibility; trainability; job
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performance; discipline; and attitude towards work. Failure to follow fair and reasonable criteria in
selecting who to terminate would render the termination invalid.
NOTE: SENIORITY is not the principal nor the only criterion. The other criteria mentioned above which
are lifted from jurisprudence, are of equal importance.
 What are the UNIQUE REQUISITES applicable to each of the BUSINESS-RELATED causes under
Article 298 [283]?
In addition to the COMMON REQUISITES above, the following are the UNIQUE REQUISITES of each
of the authorized causes:
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I.
INSTALLATION OF LABOR-SAVING DEVICE
 What are the additional requisites unique to this ground?

In addition to the five (5) common requisites above, the unique requisites are as follows:
1. There must be introduction of machinery, equipment or other devices; and

2. The purpose for such introduction must be valid such as to save on cost, enhance efficiency and
other justifiable economic reasons.1
II.
REDUNDANCY
The additional requisites are as follows:
1. There must be superfluous positions or services of employees;

2. The positions or services are in excess of what is reasonably demanded by the actual requirements of
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the enterprise to operate in an economical and efficient manner; and
3. There must be an adequate proof of redundancy such as but not limited to the new staffing
pattern, feasibility studies/proposal, on the viability of the newly created positions, job description and
the approval by the management of the restructuring.
III.
RETRENCHMENT
Per latest issuance of the DOLE, the following are the additional requisites:
1. The retrenchment must be reasonably necessary and likely to prevent business losses;
2. The losses, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if
only expected, are reasonably imminent;
3. The expected or actual losses must be proved by sufficient and convincing evidence; and
4. The retrenchment must be in good faith for the advancement of its interest and not to defeat or
circumvent the employees' right to security of tenure.
This is the only business-related cause under Article 298 [283] which requires proof of losses or
imminent losses. The other grounds of closure or cessation of business operations may be resorted to with or
without losses.
 What are some relevant principles on retrenchment?
1 Per latest DOLE Department Order No. 147-15, series of 2015, September 07, 2015.
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 The fact that there has been economic or other crisis besetting a particular sector or the country as a whole
is not sufficient justification for retrenchment.
 The phrase “retrenchment to prevent losses” means that retrenchment may be undertaken by the
nRobles Bar employer before the losses anticipated are actually sustained or realized. The employer need not keep all
his employees until after his losses shall have materialized. Otherwise, the law could be vulnerable to
attack as undue taking of property for the benefit of another.
 Best evidence of losses - financial statements audited by independent auditors (not by internal
auditors).
 Best evidence of losses in a government-controlled corporation - financial statements audited by COA.
 Income tax returns, not valid since they are self-serving documents.
 Mere affidavit on alleged losses is not sufficient.
 Retrenchment effected long after the business losses is not valid.
 Profitable operations in the past do not affect the validity of retrenchment.
 Retrenchment due to liquidity problem is not valid.
 Sharp drop in income is not a ground to justify retrenchment. A mere decline in gross income cannot in
any manner be considered as serious business losses. It should be substantial, sustained and real.
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 Litany of woes, in the absence of any solid evidence that they translated into specific and substantial losses
that would necessitate retrenchment, will not suffice to justify retrenchment.
 Rehiring of retrenched employees does not necessarily indicate illegality of retrenchment.
 In an enterprise which has several branches nationwide, profitable operations in some of them will
not affect the validity of the retrenchment if overall, the financial condition thereof reflects losses.
IV.
CLOSURE OR CESSATION OF BUSINESS OPERATIONS
 Can an employer close its business even if it is not suffering from business losses?
Yes. In fact, closure involves two (2) situations:
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(a) When NOT due to serious business losses or financial reverses; or
(b) When due to serious business losses or financial reverses
It is only in the first that payment of separation pay is required. No such requirement is imposed in the
second.
 What are some relevant principles on closure?

 Principle of closure under Article 283 applies in cases of both total and partial closure or cessation of
business operations. Management may choose to close only a branch, a department, a plant, or a shop.
 Closure of department or section and hiring of workers supplied by independent contractor as replacements
is valid.
 Relocation of business may amount to cessation of operations.
 Closure of business to merge or consolidate with another or to sell or dispose all of its assets, held valid.
 Audited financial statements necessary only in closure due to losses.
V.
DISEASE
 What are the newest doctrines on termination due to disease?
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The newest doctrines are the ones enunciated in Deoferio and Fuji on the matter of due process as
discussed below. The due process applicable to disease, although an authorized cause, is similar to the one
applicable to just cause termination and not to authorized cause termination.
1. THE DEOFERIO DOCTRINE ON THE REQUISITES.

Disease is one of the authorized causes to terminate employment. In the 2014 case of Deoferio v.
Intel Technology Philippines, Inc.,1 the Supreme Court divided into two, the requisites that must be complied with
before termination of employment due to disease may be justified, namely:
(1) Substantive requisites; and
(2) Procedural requisites.
1.1. THE DEOFERIO RULE ON SUBSTANTIVE REQUISITES.
The following are the three (3) substantive requisites:
(1) An employee has been found to be suffering from any disease;

(2) His continued employment is prohibited by law or prejudicial to his health, as well as to the health of
his co-employees; and
(3) A competent public health authority issues a medical certificate that the disease is of such nature or at
such a stage that it cannot be cured within a period of six (6) months even with proper medical
treatment.2
1.2. THE DEOFERIO RULE ON PROCEDURAL REQUISITES.
1 G.R. No. 202996, June 18, 2014.

2 Per Deoferio v. Intel Technology Philippines, Inc., supra.
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Deoferio, finally pronounced the rule that the employer must furnish the employee two (2) written
notices in terminations due to disease, namely:
nRobles Bar (1) The notice to apprise the employee of the ground for which his dismissal is sought; and
(2) The notice informing the employee of his dismissal, to be issued after the employee has been
given reasonable opportunity to answer and to be heard on his defense.
 In other words, due process in termination due to disease is similar to due process for just cause
termination but different from authorized cause termination under Article 298 [283].
2. THE FUJI RULE – THE EMPLOYEE SHOULD BE GIVEN THE CHANCE TO PRESENT
COUNTERVAILING MEDICAL CERTIFICATES.
Subsequent to Deoferio, another 2014 case, Fuji Television Network, Inc. v. Arlene S. Espiritu,1 has
further expounded on the due process requirement in termination due to disease, this time by categorically
specifying the right of the ailing employee to present countervailing evidence in the form of medical certificates to
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prove that his dismissal due to disease is not proper and therefore illegal.
Respondent Arlene was petitioner’s news correspondent/producer “tasked to report Philippine news to
Fuji through its Manila Bureau field office.” She was successively given yearly fixed-term employment contracts
until she was diagnosed with lung cancer sometime in January 2009 when the Chief of News Agency of Fuji
informed her “that the company will have a problem renewing her contract” since it would be difficult for her
to perform her job. She, however, “insisted that she was still fit to work as certified by her attending physician.”
Subsequently, Arlene and Fuji signed a non-renewal contract where it was stipulated that her contract would no
longer be renewed after its expiration on May 31, 2009 and that the parties release each other from liabilities
and responsibilities under the employment contract. Arlene received her unpaid salaries and bonuses but she
affixed her signature on the non-renewal contract with the initials “U.P.” for “under protest.” The day after Arlene
signed the non-renewal contract, she filed a complaint for illegal dismissal and attorney’s fees with the Labor
Arbiter, alleging that she was forced to sign the non-renewal contract when Fuji came to know of her illness and
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that Fuji withheld her salaries and other benefits for March and April 2009 when she refused to sign. Arlene
claimed that she was left with no other recourse but to sign the non-renewal contract, and it was only upon signing
that she was given her salaries and bonuses, in addition to separation pay equivalent to 4 years.
The Supreme Court declared respondent Arlene as having been constructively dismissed. It was likewise
held here that respondent was not afforded due process, thus:
“There is no evidence showing that Arlene was accorded due process. After informing her
employer of her lung cancer, she was not given the chance to present medical certificates.
Fuji immediately concluded that Arlene could no longer perform her duties because of
chemotherapy. It did not ask her how her condition would affect her work. Neither did it suggest
for her to take a leave, even though she was entitled to sick leaves. Worse, it did not present any
certificate from a competent public health authority. What Fuji did was to inform her that her
contract would no longer be renewed, and when she did not agree, her salary was withheld. Thus,
the Court of Appeals correctly upheld the finding of the National Labor Relations Commission
that for failure of Fuji to comply with due process, Arlene was illegally dismissed.”
 What are some salient points to consider under this ground of disease?
 If the disease or ailment can be cured within the period of six (6) months with proper medical treatment,
the employer should not terminate the employee but merely ask him to take a leave of absence. The employer
should reinstate him to his former position immediately upon the restoration of his normal health.
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 In case the employee unreasonably refuses to submit to medical examination or treatment upon being
requested to do so, the employer may terminate his services on the ground of insubordination or willful
disobedience of lawful order.
 A medical certificate issued by a company’s own physician is not an acceptable certificate for purposes of
terminating an employment based on Article 284, it having been issued not by a “competent public
health authority,” the person referred to in the law.
 A “competent public health authority” refers to a government doctor whose medical specialization
pertains to the disease being suffered by the employee. For instance, if the employee suffers from
tuberculosis, the medical certificate should be issued by a government-employed pulmonologist who is
competent to make an opinion thereon. If the employee has cardiac symptoms, the competent physician in
this case would be a cardiologist.
 The medical certificate should be procured by the employer and not by the employee.
3.
DUE PROCESS
(a) Twin-Notice Requirement
(b) Hearing
PRELIMINARY CLARIFICATORY STATEMENT ON DUE PROCESS
1 Fuji Television Network, Inc. v. Arlene S. Espiritu, G.R. Nos. 204944-45, Dec. 03, 2014.
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At the outset, there is a need to point out the following distinction:

(1) Due process required to be complied with by the employer in terminating the employee’s
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employment (COMPANY-LEVEL DUE PROCESS); and
(2) Due process required to be observed by the labor authorities/tribunals/courts (Labor Arbiter/NLRC/CA) in
hearing and deciding labor cases brought before them for adjudication and decision (COURT-LEVEL
DUE PROCESS).
No. 1 above requires compliance with both the statutory and contractual due process as discussed below; while
No. 2 above requires observance of the constitutional due process.
It is No. 1 above that is prescribed in the Syllabus, hence, discussion herein will focus thereon.
 What is the latest rule on due process?
Due process means compliance with BOTH STATUTORY DUE PROCESS and CONTRACTUAL
DUE PROCESS.
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CONSTITUTIONAL DUE PROCESS is not applicable (Per Agabon doctrine).
Statutory due process refers to the one prescribed in the Labor Code (Article 292[b] 277[b]); while
contractual due process refers to the one prescribed in the Company Rules and Regulations (Per Abbott
Laboratories doctrine).
Contractual due process was enunciated in the 2013 en banc ruling in Abbott Laboratories, Philippines
v. Pearlie Ann F. Alcaraz.1 Thus, it is now required that in addition to compliance with the statutory due
process, the employer should still comply with the due process procedure prescribed in its own company rules.
The employer’s failure to observe its own company-prescribed due process will make it liable to pay an
indemnity in the form of nominal damages, the amount of which is equivalent to the P30,000.00 awarded under
the Agabon doctrine.
 Are the twin-notice requirement and hearing required in all cases of termination?
ChanRobles Bar
No. The two-notice requirement and hearing are required only in case of just cause termination BUT
NOT IN AUTHORIZED CAUSE TERMINATION (EXCEPT ON THE GROUND OF DISEASE PER
DEOFERIO
DOCTRINE as discussed above).
 What is the order in which the twin-notice requirement and hearing are implemented by the employer?
The requirement should be implemented in the following order:
1. Service of first written notice;
2. Conduct of hearing; and
3. Service of second written notice.
 What is the King of Kings Transport doctrine on just cause procedural due process?
Based on this doctrine which was enunciated in the 2007 case of King of Kings Transport, Inc. v.
Mamac,2 the following requirements should be complied with in just cause termination:
(1) First written notice.
The first written notice to be served on the employee should:
a) Contain the specific causes or grounds for termination against him;
b) Contain a directive that the employee is given the opportunity to submit his written explanation
within the reasonable period of FIVE (5) CALENDAR DAYS from receipt of the notice:
1)
2)
3)
4)
to enable him to prepare adequately for his defense;
to study the accusation against him;
to consult a union official or lawyer;
to gather data and evidence; and
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5) to decide on the defenses he will raise against the complaint.
c) Contain a detailed narration of the facts and circumstances that will serve as basis for the charge
against the employee. This is required in order to enable him to intelligently prepare his
explanation and defenses. A general description of the charge will not suffice.
d) Specifically mention which company rules, if any, are violated and/or which among the grounds
under Article 282 is being charged against the employee.
(2) Hearing required,
After serving the first notice, the employer should schedule and conduct a hearing or conference wherein
the employee will be given the opportunity to:
1) explain and clarify his defenses to the charge/s against him;
2) present evidence in support of his defenses; and
3) rebut the evidence presented against him by the management.
1 G.R. No. 192571, July 23, 2013.

2 G.R. No. 166208, June 29, 2007.
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During the hearing or conference, the employee is given the chance to defend himself personally, with
the assistance of a representative or counsel of his choice. Moreover, this conference or hearing could be used by
the parties as an opportunity to come to an amicable settlement.
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3) Second written notice.
After determining that termination of employment is justified, the employer shall serve the employees a
written notice of termination indicating that:
1) all circumstances involving the charge/s against the employee have been considered; and
2) grounds have been established to justify the severance of his employment.
 What is the LOPEZ doctrine on right to counsel?
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Per the 2011 Lopez doctrine, which is the prevailing rule, the right to counsel is neither
indispensable nor mandatory. It becomes mandatory only in two (2) situations:
(1) When the employee himself requests for counsel; or
(2) When he manifests that he wants a formal hearing on the charges against him,
in which case, he should be assisted by counsel. (See Lopez v. Alturas Group of Companies).
 What is the PEREZ doctrine on hearing?

The 2009 Perez doctrine enunciates the new guiding principle on the hearing requirement. It has
interpreted the term “ample opportunity to be heard” as follows:
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(a) “Ample opportunity to be heard” means any meaningful opportunity (verbal or written) given to
the employee to answer the charges against him and submit evidence in support of his defense,
whether in a hearing, conference or some other fair, just and reasonable way.
(b) A formal hearing or conference is no longer mandatory. It becomes mandatory only under any of
the following circumstances:
(1) When requested by the employee in writing; or
(2) When substantial evidentiary disputes exist; or
(3) When a company rule or practice requires it; or
(4) When similar circumstances justify it.
(c) the “ample opportunity to be heard” standard in the Labor Code prevails over the “hearing
or conference” requirement in its Implementing Rules and Regulations. This is how the Supreme
Court resolved the conflict in the following provisions of the Labor Code and its implementing rules:
The Perez doctrine is now the prevailing rule as shown by a catena of cases which cited it after
its promulgation.
 Are the twin-notice requirement and hearing applicable to authorized cause termination?
No. Due process in authorized cause termination is deemed complied with upon the separate and
simultaneous service of a written notice of the intended termination to both:
(1) the employee to be terminated; and

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(2) the appropriate DOLE Regional Office, at least one (1) month before the intended date of the
termination specifying the ground/s therefor and the undertaking to pay the separation pay required
under Article 283 of the Labor Code.
For obvious reason, hearing is not required.
However, as earlier discussed above, the foregoing due process is DIFFERENT from the authorized cause of
disease as held in Deoferio and Fuji which held that just cause due process is the one that should be followed.
 Are the twin-notice requirement and hearing applicable to abandonment as a just cause to terminate
employment?
No. Although considered as a just cause to terminate employment, the procedural due process requirement
for abandonment is different. Obviously, no hearing is required (since the employee has already abandoned his job)
but the following notices should be complied with:
1) First notice asking the employee to explain why he should not be declared as having abandoned his
job; and
2) Second notice informing him of the employer’s decision to dismiss him on the ground of abandonment.
 What are the seven (7) standard situations in termination cases?
The rules on termination of employment in the Labor Code and pertinent jurisprudence are applicable to seven
(7) different situations, namely:
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1. The dismissal was for a just cause under Article 282, for an authorized cause under Article 283, or for
health reasons under Article 284, and due process was observed – This termination is LEGAL.
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2. The dismissal was without a just or authorized cause but due process was observed – This termination is
ILLEGAL.
3. The dismissal was without a just or authorized cause and due process was not observed – This termination is
ILLEGAL.
4. The dismissal was for a just or authorized cause but due process was not observed – This termination is
LEGAL.
5. The dismissal was for a non-existent cause – This termination is ILLEGAL.
6. The dismissal was not supported by any evidence of termination – This termination is NEITHER
LEGAL NOR ILLEGAL as there is no dismissal to speak of. Reinstatement is ordered not as a relief
for illegal dismissal but on equitable ground.
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7. The dismissal was brought about by the implementation of a law – This termination is LEGAL.
C.
TERMINATION BY EMPLOYEE
i.
RESIGNATION
 What are the two (2) kinds of resignation under the Labor Code (Article 300 [285])?
(a) Voluntary resignation - without just cause; or
(b) Involuntary resignation - with just cause.
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 What are the distinctions between the two?
(a) On service of written notice (resignation letter).
Voluntary Resignation requires the submission of a written resignation letter at least thirty (30) days
before its effectivity date; while in Involuntary Resignation, no such written resignation letter is required
since it is being made by the employee for just cause (see just causes below).
(b) On the consequence of failure to serve a written notice.
In Voluntary Resignation, the failure to serve the written resignation letter within the said 30-day period
would make the resigning employee liable for damages; while in Involuntary Resignation, since there is no
similar requirement of service of prior written notice, hence, there is no adverse consequence for such
failure to the involuntarily resigning employee.
(c) On whether there is illegal or constructive dismissal.
There can be no constructive dismissal in the case of Voluntary Resignation, the same having been
voluntarily and freely tendered by the employee; however, it is different in the case of Involuntary
Resignation, since it always amounts to constructive dismissal. (See discussion below).
 What are the requisites for resignation WITHOUT JUST CAUSE?

(a) The resigning employee should tender a written (not verbal) notice of the termination (commonly known
as “resignation letter”);
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(b) Service of such notice to the employer at least one (1) month in advance; and
(c) Written acceptance by the employer of the resignation.
 What is involuntary resignation (WITH JUST CAUSE)?

The following are the just causes that may justify the termination by the employee of the employment
relationship without need to comply with the 30-day prior written notice requirement:
(a) Serious insult by the employer or his representative on the honor and person of the employee;
(b) Inhuman and unbearable treatment accorded the employee by the employer or his representative;
(c) 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
(d) Other causes analogous to any of the foregoing.
ii.
CONSTRUCTIVE DISMISSAL
 When is there constructive dismissal?
Constructive dismissal contemplates any of the following situations:
1) An involuntary resignation resorted to when continued employment is rendered impossible,
unreasonable or unlikely;
2) A demotion in rank and/or a diminution in pay; or
3) A clear discrimination, insensibility or disdain by an employer which becomes unbearable to
the employee that it could foreclose any choice by him except to forego his continued employment.
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 What is the test of constructive dismissal?

The test of constructive dismissal is whether a reasonable person in the employee’s position would have
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felt compelled to give up his position under the circumstances. It is an act amounting to dismissal but made to
appear as if it were not. In fact, the employee who is constructively dismissed may be allowed to keep
on coming to work. Constructive dismissal is, therefore, a DISMISSAL IN DISGUISE. The law recognizes
and resolves this situation in favor of the employees in order to protect their rights and interests from the coercive
acts of the employer.
 What are examples of constructive dismissal or forced resignation?
 Denying to the workers entry to their work area and placing them on shifts “not by weeks but almost by
month” by reducing their workweek to three days.
 Barring the employees from entering the premises whenever they would report for work in the morning
without any justifiable reason, and they were made to wait for a certain employee who would arrive in
the office at around noon, after they had waited for a long time and had left.
 Sending to an employee a notice of indefinite suspension which is tantamount to dismissal.
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 Imposing indefinite preventive suspension without actually conducting any investigation.
 Changing the employee’s status from regular to casual constitutes constructive dismissal.
 Preventing the employee from reporting for work by ordering the guards not to let her in. This is clear
notice of dismissal.
 What is the distinction between illegal dismissal and constructive dismissal?
In illegal dismissal, the employer openly shows his intention to dismiss the employee. In fact, the
employer, in compliance with due process, asks the employee to explain why he should not be dismissed for
committing a wrongful act and he is given due process prior to terminating him.
In contrast, in constructive dismissal, the employer will never indicate that he is terminating the employee.
He will even allow the employee to report to his work every day. But he will do any of the three (3) acts mentioned
above that indicates his intention to get rid of the services of the employee. This is the reason why it is called
“dismissal in disguise.”
D. ChanRobles Bar
PREVENTIVE SUSPENSION
 When is preventive suspension proper to be imposed?
Preventive suspension may be legally imposed against an errant employee only while he is undergoing
an investigation for certain serious offenses. Consequently, its purpose is to prevent him from causing harm or
injury to the company as well as to his fellow employees, hence, his actual presence in the workplace would not be
desirable for the meaningful conduct of the investigation of his case. Its imposition is thus justified only in
cases where the employee’s continued presence in the company premises during the investigation poses
a serious and imminent threat to the life or property of the employer or of the employee’s co-workers.
Without this threat, preventive suspension is not proper.
 What are some relevant principles in preventive suspension?
 Preventive suspension is not a penalty. This is different from PUNITIVE SUSPENSION which is
imposed as a penalty less harsh than dismissal.
 Preventive suspension, by itself, does not signify that the company has already adjudged the employee
guilty of the charges for which she was asked to answer and explain.
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 Preventive suspension is neither equivalent nor tantamount to dismissal.
 If the basis of the preventive suspension is the employee’s absences and tardiness, the imposition of
preventive suspension on him is not justified as his presence in the company premises does not pose any
such serious or imminent threat to the life or property of the employer or of the employee’s co-workers
simply “by incurring repeated absences and tardiness.”
 Preventive suspension does not mean that due process may be disregarded.
 Preventive suspension should only be for a maximum period of thirty (30) days. After the lapse of the 30-
day period, the employer is required to reinstate the worker to his former position or to a substantially
equivalent position.
 During the 30-day preventive suspension, the worker is not entitled to his wages and other benefits.
However, if the employer decides, for a justifiable reason, to extend the period of preventive suspension
beyond said 30- day period, he is obligated to pay the wages and other benefits due the worker during said
period of extension. In such a case, the worker is not bound to reimburse the amount paid to him
during the extension if the employer decides to dismiss him after the completion of the investigation.
 Extension of period must be justified. During the 30-day period of preventive suspension, the employer
is expected to conduct and finish the investigation of the employee’s administrative case. The period of
thirty (30) days may only be extended if the employer failed to complete the hearing or investigation
within said period due to justifiable grounds. No extension thereof can be made based on whimsical,
capricious or unreasonable grounds.
 Preventive suspension lasting longer than 30 days, without the benefit of valid extension, amounts
to constructive dismissal.
 Indefinite preventive suspension amounts to constructive dismissal.
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E.
RELIEFS FOR ILLEGAL DISMISSAL
 What are the reliefs under the Labor Code, particularly under Article 294 [279] thereof?
Under this article, an illegally dismissed employee is entitled to the following reliefs:
(1) Reinstatement without loss of seniority rights and other privileges;
(2) Full backwages, inclusive of regular allowances; and
(3) Other benefits or their monetary equivalent.
 What are the other reliefs that are not provided in the Labor Code but are granted in illegal dismissal cases?
The following reliefs that are awarded in illegal dismissal cases are missing in Article 279:
(1) Award of separation pay in lieu of reinstatement.
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(2) Award of penalty in the form of nominal damages in case of termination due to just or
authorized cause but without observance of procedural due process.
(3) Reliefs to illegally dismissed employee whose employment is for a fixed period. The proper relief is
only the payment of the employee’s salaries corresponding to the unexpired portion of the
employment contract.
(4) Award of damages and attorney’s fees.
(5) Award of financial assistance in cases where the employee’s dismissal is declared legal but because
of long years of service, and other considerations, financial assistance is awarded.
(6) Imposition of legal interest on separation pay, backwages and other monetary awards.
1.
REINSTATEMENT
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 What are the Labor Code’s provisions on reinstatement?
The Labor Code grants the remedy of reinstatement in various forms and situations. Its provisions
recognizing reinstatement as a relief are as follows:
1. Article 229 [223] which provides for reinstatement of an employee whose dismissal is declared illegal by
the Labor Arbiter. This form of reinstatement is self-executory and must be implemented even during the pendency
of the appeal that may be instituted by the employer. (NOTE: See discussion of this topic under Major Topic “VIII. Jurisdiction
and Reliefs; A. Labor Arbiter”, infra).
2. Article 278(g) [263(g)] which provides for automatic return to work of all striking or locked-out
employees, if a strike or lockout has already taken place, upon the issuance by the DOLE Secretary of an
assumption or certification order in national interest cases. The employer is required to immediately resume
operation and readmit all workers under the same terms and conditions prevailing before the strike or lockout.
3. Article 292(b) [277(b)] which empowers the DOLE Secretary to suspend the effects of
termination pending the resolution of the termination dispute in the event of a prima facie finding by the
appropriate official of the DOLE before whom such dispute is pending that the termination may cause a
serious labor dispute or is in implementation of a mass lay-off. Such suspension of the effects of
termination would necessarily results in the reinstatement of the dismissed employee while the illegal dismissal
case is being heard and litigated.
4. Article 294 [279] which grants reinstatement as a relief to an employee whose dismissal is declared
illegal in a final and executory judgment.
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5. Article 301 [286] which involves bona-fide suspension of operation for a period not exceeding six (6)
months or the rendition by an employee of military or civic duty. It is required under this provision that the
employer should reinstate its employees upon resumption of its operation which should be done before the
lapse of said six-month period of bona-fide suspension of operation or after the rendition by the employees of
military or civic duty.
b.
SEPARATION PAY IN LIEU OF REINSTATEMENT
 Is separation pay applicable only to reinstatement as an alternative remedy?

Yes. Separation pay, as a substitute remedy, is only proper for reinstatement but not for backwages.
This remedy is not found in the Labor Code but is granted in case reinstatement is no longer possible
or feasible, such as when any of the following circumstances exists:
(1) Where the continued relationship between the employer and the employee is no longer viable due to the
strained relations and antagonism between them (Doctrine of Strained Relations).
(2) When reinstatement proves impossible, impracticable, not feasible or unwarranted for varied reasons
and thus hardly in the best interest of the parties such as:
(a) Where the employee has already been replaced permanently as when his position has already been
taken over by a regular employee and there is no substantially equivalent position to which he
may be reinstated.
(b) Where the dismissed employee’s position is no longer available at the time of reinstatement for
reasons not attributable to the fault of the employer.
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(c) When there has been long lapse or passage of time that the employee was out of employer’s
employ from the date of the dismissal to the final resolution of the case or because of the
realities of the situation.
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(e) The employee has already reached retirement age under a Retirement Plan.
(f) When the illegally dismissed employees are over-age or beyond the compulsory retirement age and
their reinstatement would unjustly prejudice their employer.
(3) Where the employee decides not to be reinstated as when he does not pray for reinstatement in
his complaint or position paper but asked for separation pay instead.
(4) When reinstatement is rendered moot and academic due to supervening events, such as:
(a) Death of the illegally dismissed employee.
(b) Declaration of insolvency of the employer by the court.
(c) Fire which gutted the employer’s establishment and resulted in its total destruction.
(d) In case the establishment where the employee is to be reinstated has closed or ceased operations.
(5) To prevent further delay in the execution of the decision to the prejudice of private respondent.
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(6) Other circumstances such as (a) when reinstatement is inimical to the employer’s interest; (b)
reinstatement does not serve the best interests of the parties involved; (c) the employer is prejudiced
by the workers’ continued employment; or (d) that it will not serve any prudent purpose as when
supervening facts transpired which made execution unjust or inequitable.
 What is the amount of separation pay in lieu of reinstatement?
Per prevailing jurisprudence, the following are the components of separation pay in lieu of reinstatement>
(1) The amount equivalent to at least one (1) month salary or to one (1) month salary for every year of
service, whichever is higher, a fraction of at least six (6) months being considered as one (1) whole
year.
(2) Allowances that the employee has been receiving on a regular basis.
 What is the period covered?

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From start of employment up to the date of finality of decision except when the employer has ceased its
operation earlier, in which case, the same should be computed up to the date of closure.
What is the salary rate to be used in computing it?
The salary rate prevailing at the end of the period of putative service should be the basis for computation
which refers to the period of imputed service for which the employee is entitled to backwages.
 What are some important principles on separation pay in lieu of reinstatement?
1. Award of separation pay and backwages are not inconsistent with each other. Hence, both may
be awarded to an illegally dismissed employee. The payment of separation pay is in addition to
payment of backwages.
2. Reinstatement cannot be granted when what is prayed for by employee is separation pay in
lieu thereof.
BACKWAGES
 What is the Bustamante doctrine?
In 1996, the Supreme Court changed the rule on the reckoning of backwages. It announced a new doctrine
in the case of Bustamante v. NLRC,1 which is now known as the Bustamante doctrine. Under this rule, the term
“full backwages” should mean exactly that, i.e., without deducting from backwages the earnings derived
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elsewhere by the concerned employee during the period of his illegal dismissal.
 What are the components of backwages?
The components of backwages are as follows:
1. Salaries or wages computed on the basis of the wage rate level at the time of the illegal dismissal and not
in accordance with the latest, current wage level of the employee’s position.
2. Allowances and other benefits regularly granted to and received by the employee should be made part
of backwages.
 What are some principles on backwages?

 Salary increases during period of unemployment are not included as component in the computation of
backwages.
 Dismissed employee’s ability to earn is irrelevant in the award of backwages.
 In case reinstatement is ordered, full backwages should be reckoned from the time the compensation
was withheld (which, as a rule, is from the time of illegal dismissal) up to the time of reinstatement, whether
actual or in the payroll.
 If separation pay is ordered in lieu of reinstatement, full backwages should be computed from the time
of illegal dismissal until the finality of the decision. The justification is that along with the finality of the
Supreme Court’s decision, the issue on the illegality of the dismissal is finally laid to rest.
1 G.R. No. 111651, Nov. 28, 1996, 265 SCRA

61.
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 If the illegally dismissed employee has reached the optional retirement age of 60 years, his backwages
should only cover the time when he was illegally dismissed up to the time when he reached 60 years. Under
Article 287, 60 years is the optional retirement age.
nRobles Bar If the employee has reached 65 years of age or beyond, his full backwages should be computed only up to
said age. The contention of the employer that backwages should be reckoned only up to age 60 cannot be
sustained.
 If employer has already ceased operations, full backwages should be computed only up to the date of
the closure. To allow the computation of the backwages to be based on a period beyond that would be an
injustice to the employer.
 Any amount received during payroll reinstatement is deductible from backwages.
LIMITED BACKWAGES
 When is the award of backwages limited?
(1) When the dismissal is deemed too harsh a penalty;
(2) When the employer acted in good faith; or
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(3) Where there is no evidence that the employer dismissed the employee.
Thus, the backwages will not be granted in full but limited to 1 year, 2 years or 5 years [per jurisprudence].
F.
MONEY CLAIMS ARISING FROM
EMPLOYER-EMPLOYEE RELATIONSHIP
 What are the legal bases of employee’s money claims?

The monetary claims that may be asserted by employees may be based on any of the following:
(1) Labor Code;
(2) Other special laws;
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(3) Jurisprudence;
(4) Employment contracts;
(5) Voluntary employer policy or practice; or
(6) Collective bargaining agreements (CBAs).
Examples of No. 1 above are the labor standards benefits provided therein, such as claims for overtime,
night differential, holidays, rest days, service incentive leave, service charges, employees’ compensation benefits,
separation pay in case of termination due to authorized causes, and retirement benefits.
Examples of No. 2 are the wage increases mandated under R.A. No. 67271 and the regional wage orders
issued pursuant thereto, P.D. No. 851 [13th Month Pay Law], R.A. No. 7641 [Retirement Pay Law],2 social
security benefits from R.A. No. 11199 [Social Security Act of 2018],3 R.A. No. 11223 [Universal Health Care
Act],4 and R.A. No. 9679 [Pag-IBIG Law].5
Examples of No. 3 are the monetary reliefs accorded illegally dismissed employees that are not found in
the Labor Code nor in any other law, such as (1) separation pay in lieu of reinstatement; (2) indemnity in the
form of nominal damages in case of termination due to just or authorized cause but without affording the employee
procedural due process; (3) payment of salaries corresponding to the unexpired portion of the employment
contract in cases of fixed-term employment; (4) financial assistance in cases where the employee’s dismissal is
declared legal but there are circumstances justifying this award, such as long years of service, unblemished record
of service, compassionate justice and other considerations; (5) legal interest on separation pay, backwages and
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other monetary awards.
Nos. 4, 5 and 6 involve monetary claims arising from the benefits granted by the employer to the
employees, either voluntarily or unilaterally in employment contracts or company policies or practices, or
through collective negotiations and mutual agreements, such as those granted under CBAs. These benefits are
varied and too numerous to enumerate them here; suffice it to state that the bottomline policy of the law is that
these benefits should not be below the minimum standards and limits provided by law.
G.
RETIREMENT
 Who are covered under the retirement pay law?
The following employees are eligible to avail of retirement benefits under Article 302 [287] of the Labor Code:
1) All employees in the private sector, regardless of their position, designation or status and
irrespective of the method by which their wages are paid;
2) Part-time employees;
3) Employees of service and other job contractors;
4) Domestic workers/kasambahays or persons in the personal service of another;
5) Underground mine workers;
1 Otherwise known as the “Wage Rationalization Act.”

2 Signed into law by President Rodrigo Duterte on February 07, 2019.
3 The provisions of this law are now part of the Labor Code as its Article 302 [287].
4 Approved by President Rodrigo Duterte on February 20, 2019.
5 Otherwise known as the “Home Development Mutual Fund Law of 2009, otherwise known as Pag-IBIG (Pagtutulungan sa kinabukasan: Ikaw, Bangko, Industriya at Gobyerno)
Fund.”
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6) Employees of government-owned and/or controlled corporations organized under the Corporation Code
(without original charters).
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 Who are excluded?
Article 302 [287], as amended, does not apply to the following employees:
1. Employees of the national government and its political subdivisions, including government-owned
and/or controlled corporations, if they are covered by the Civil Service Law and its regulations.
2. Employees of retail, service and agricultural establishments or operations regularly employing not
more than ten (10) employees. These terms are defined as follows:
a) “Retail establishment” is one principally engaged in the sale of goods to end-users for personal
or household use. It shall lose its retail character qualified for exemption if it is engaged in both
retail and wholesale of goods.
b) “Service establishment” is one principally engaged in the sale of service to individuals for their
own or household use and is generally recognized as such.
c) “Agricultural establishment/operation” refers to an employer which is engaged in agriculture.
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This term refers to all farming activities in all branches and includes, among others, the
cultivation and tillage of soil, production, cultivation, growing and harvesting of any
agricultural or horticultural commodities, dairying, raising of livestock or poultry, the culture of
fish and other aquatic products in farms or ponds, and any activities performed by a farmer or
on a farm as an incident to, or in conjunction with, such farming operations, but does not
include the manufacture and/or processing of sugar, coconut, abaca, tobacco, pineapple, aquatic or
other farm products.
 What are the two (2) types of retirement under the law (Article 302 [287] of the Labor Code)?
(1) Optional retirement upon reaching the age of sixty (60) years.
(2) Compulsory retirement upon reaching the age of sixty-five (65) years.
It is the employee who exercises the option under No. 1 above. At age 65, there is no more option of
the employee to speak of. He has to retire as this age is considered compulsory retirement age.

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May a different retirement age requirement be provided in a Retirement Plan?
The optional and compulsory retirement schemes provided under Article 302 [287] come into play only
in the absence of a retirement plan or agreement setting forth other forms of optional or compulsory retirement
schemes. Thus, if there is a retirement plan or agreement in an establishment providing for an earlier or older age
of retirement (but not beyond 65 which has been declared the compulsory retirement age), the same shall be
controlling.
 What are the rules on retirement at an earlier age?
a. To be valid, retirement at an earlier age must be voluntarily consented to by the employee.
In Alpha Jaculbe v. Silliman University,1 the Supreme Court ruled that in order for retirement at an earlier
age to be valid, it must be shown that the employee’s participation in the plan is voluntary. An employer is free
to impose a retirement age of less than 65 for as long as it has the employees’ consent. Stated conversely,
employees are free to accept the employer’s offer to lower the retirement age if they feel they can get a better deal
with the retirement plan presented by the employer.
Following Jaculbe, the retirement of petitioner in Lourdes Cercado v. Uniprom, Inc.2 at the age of 47,
after having served respondent company for 22 years, pursuant to its Employees’ Non-Contributory Retirement
Plan, which provides that employees who have rendered at least 20 years of service may be retired at the option
of the company, was declared illegal because it was not shown that she has given her consent thereto. Not even an
iota of voluntary acquiescence to respondent’s early retirement age option is attributable to petitioner. The assailed
retirement plan was not embodied in a CBA or in any employment contract or agreement assented to by petitioner
and her co-employees. On the contrary, it was unilaterally and compulsorily imposed on them.
The same holding was made in the 2018 en banc case of Alfredo F. Laya, Jr. v. Philippine Veterans
Bank,3 where petitioner, who was hired by respondent bank as its Chief Legal Counsel with a rank of Vice
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President, was compulsorily retired under the following retirement policy of the bank:
“Section 2. Early Retirement. A Member may, with the approval of the Board of Directors, retire
early on the first day of any month coincident with or following his attainment of age 50 and completion of
at least 10 years of Credited Service.”
According to petitioner Laya, he was made aware of the retirement plan of respondent bank only after he
had long been employed and was shown a photocopy of the Retirement Plan Rules and Regulations. His
letter of appointment mentioned, among others, his “Membership in the Provident Fund Program/Retirement
Program” but the Court considered the mere mention thereof not sufficient to inform him of the contents or
details of the retirement program. To construe from the petitioner's acceptance of his appointment that he had
acquiesced to be retired earlier than the compulsory age of 65 years would, therefore, not be warranted. This is
because retirement should be the result of the bilateral act of both the employer and the employee based on their
voluntary agreement that the employee agrees to sever his employment upon reaching a certain age.4
That the petitioner might be well aware of the existence of the retirement program at the time of
his engagement did not suffice. His implied knowledge, regardless of duration, did not equate to the voluntary
acceptance
1 G.R. No. 156934, March 16, 2007.

2 G.R. No. 188154, Oct. 13, 2010.
3 Alfredo F. Laya, Jr. v. Philippine Veterans Bank and Ricardo A. Balbido, Jr., G.R. No. 205813, Jan. 10, 2018.
4 Id., citing Robina Farms Cebu v. Villa, G.R. No. 175869, April 18, 2016.
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a
required by law in granting an early retirement age option to the employee. The law demanded more than a
passive acquiescence on the part of the employee, considering that his early retirement age option involved
conceding the constitutional right to security of tenure.
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as Chief Legal Officer of respondent bank, the petitioner could not withdraw from the plan except upon his
termination from employment.
Further, the retirement plan, having been established for respondent bank and approved by its president
more than five years prior to petitioner's employment, was in the nature of a contract of adhesion, in respect to
which the petitioner was reduced to mere submission by accepting his employment, and automatically became a
member of the plan. With the plan being a contract of adhesion, to consider him to have voluntarily and freely given
his consent to the terms thereof as to warrant his being compulsorily retired at the age of 60 years is factually
unwarranted.
To stress, company retirement plans must not only comply with the standards set by the prevailing labor
laws but must also be accepted by the employees as commensurate to their faithful services to the employer
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within the requisite period. Although the employer could be free to impose a retirement age lower than 65 years
for as long its employees consented, the retirement of the employee whose intent to retire was not clearly
established, or whose retirement was involuntary is to be treated as a discharge.
In another 2018 case, Manila Hotel Corporation v. Rosita De Leon,1 the same ruling was made that an
employee, in this case a managerial employee, cannot be compulsorily retired at an earlier age without her express
assent thereto. In this case, respondent was retired under the retirement provision of the rank-and-file CBA
which provides that an employee's retirement is compulsory when he or she reaches the age of 60 or has rendered
20 years of service, whichever comes first. Respondent was only 57 at the time she was compulsorily retired but
had already rendered 34 years of service as Assistant Credit and Collection Manager/Acting General Cashier.
Besides holding that as managerial employee, she is not covered by the CBA, the Court noted that there was
nothing in petitioner hotel’s submissions showing that respondent had assented to be covered by the CBA's
retirement provisions. Thus, in the absence of an agreement to the contrary, managerial employees cannot be
allowed to share in the concessions obtained by the labor union through collective negotiation.
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Moreover, the rulings in Laya and Cercado were invoked in holding that respondent De Leon was in
effect, illegally dismissed. All told, an employee in the private sector who did not expressly agree to an early
retirement cannot be retired from the service before he reaches the age of 65 years. "Acceptance by the employee
of an early retirement age option must be explicit, voluntary, free and uncompelled." "The law demanded more
than a passive acquiescence on the part of the employee, considering that his early retirement age option
involved conceding the constitutional right to security of tenure."
b. Retiring at an earlier age will amount to illegal dismissal if employee did not consent thereto.
In accordance with Jaculbe, Cercado, Laya and De Leon, the employee’s retirement at an earlier age based
solely on a provision of a retirement plan which was not freely assented to by him would be tantamount to illegal
dismissal.
c. By mutual agreement, employers may be granted the sole and exclusive prerogative to retire
employees at an earlier age or after rendering a certain period of service.
Cainta Catholic School v. Cainta Catholic School Employees Union [CCSEU],2 where the Supreme
Court upheld the exercise by the school of its option to retire employees pursuant to the existing CBA where it
is provided that the school has the option to retire an employee upon reaching the age limit of sixty (60) or
after having rendered at least twenty (20) years of service to the school, the last three (3) years of which must
be continuous. Hence, the termination of employment of the employees, arising as it did from an exercise of a
management prerogative granted by the mutually-negotiated CBA between the school and the union is valid.
 What is the minimum years of service required for entitlement under the law?
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Five (5) years is the minimum years of service that must be rendered by the employee before he can avail
of the retirement benefits upon reaching optional or compulsory retirement age under Article 287.
 What is the retirement age of underground mine workers?
The rule is different. The optional retirement age of underground mine workers is 50 years of age; while the
compulsory retirement age is 60 years old.
 What is the minimum number of years of service required of underground mine workers?
Minimum years of service is also 5 years.
 Are the retirement benefits of underground mine workers similar to ordinary retirees?
Yes. In fact, other than the retirement age, all other requirements as well as benefits provided in the law
are applicable to underground mine workers.
a.
AMOUNT OF RETIREMENT PAY
 What is the amount of retirement pay under the law?

a. One-half (½) month salary.
In the absence of a retirement plan or agreement providing for retirement benefits of employees in
the establishment, an employee, upon reaching the optional or compulsory retirement age specified in Article 287,
shall be entitled to retirement pay equivalent to at least one-half (½) month salary for every year of service, a
fraction of at least six (6) months being considered as one (1) whole year.
1 G.R. No. 219774, July 23,

2018.
2 G.R. No. 151021, May 4, 2006.
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b. Components of one-half (½) month salary.

For purposes of determining the minimum retirement pay due an employee under Article 287, the term
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“one- half month salary” shall include all of the following:
(1) Fifteen (15) days salary of the employee based on his latest salary rate.
(2) The cash equivalent of five (5) days of service incentive leave;
(3) One-twelfth (1/12) of the 13th month pay due the employee; and
(4) All other benefits that the employer and employee may agree upon that should be included in
the computation of the employee’s retirement pay.
c. “One-half (½) month salary” means 22.5 days.
“One-half [½] month salary” is equivalent to “22.5 days” arrived at after adding 15 days plus 2.5
days representing one-twelfth [1/12] of the 13th month pay plus 5 days of service incentive leave.
 What are some principles on retirement benefits?
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 1/12 of 13th month pay and 5 days of service incentive leave (SIL) should not be included if the employee
was not entitled to 13th month pay and SIL during his employment.
Example: R & E Transport, Inc. v. Latag,1 where it was held that employees who are not entitled to
13th month pay and SIL pay while still working should not be paid the entire “22.5 days” but only the fifteen (15)
days salary. In other words, the additional 2.5 days representing one-twelfth [1/12] of the 13th month pay and the
five (5) days of SIL should not be included as part of the retirement benefits.
The employee in this case was a taxi driver who was being paid on the “boundary” system basis. It
was undisputed that he was entitled to retirement benefits after working for fourteen (14) years with R & E
Transport, Inc. However, he was not entitled to the 13th month pay since Section 3 of the Rules and Regulations
Implementing P.D. No. 851 exempts from its coverage employers of those who are paid on purely boundary basis.
He was also not entitled to the 5-day service incentive leave pay pursuant to the Rules to Implement the Labor
Code which expressly excepts field personnel and other employees whose performance is unsupervised by the
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employer.
But in the 2010 case of Serrano v. Severino Santos Transit,2 which involves a bus conductor (petitioner)
who worked for 14 years for respondent bus company which did not adopt any retirement scheme. It was held
herein that even if petitioner as bus conductor was paid on commission basis, he falls within the coverage of R.A.
7641 (Retirement Pay Law, now Article 287 of Labor Code). This means that his retirement pay should include the
cash equivalent of the 5-day SIL and 1/12 of the 13th month pay for a total of 22.5 days. The affirmance by the Court
of Appeals of the reliance by the NLRC on R & E Transport case was held erroneous. For purposes of applying
the law on SIL as well as on retirement, there is a difference between drivers paid under the “boundary system”
and conductors paid on commission basis. This is so because in practice, taxi drivers do not receive fixed wages.
They retain only those sums in excess of the “boundary” or fee they pay to the owners or operators of the vehicles.
Conductors, on the other hand, are paid a certain percentage of the bus’ earnings for the day. It bears emphasis that
under P.D. No. 851 and the SIL Law, the exclusion from its coverage of workers who are paid on a purely
commission basis is only with respect to field personnel.
b.
RETIREMENT BENEFITS OF
WORKERS PAID BY RESULTS
 What are the retirement benefits of workers paid by results?
For covered workers who are paid by results and do not have a fixed monthly rate, the basis for
the determination of the salary for fifteen (15) days shall be their average daily salary (ADS). The ADS is the
average salary for the last twelve (12) months reckoned from the date of their retirement, divided by the number of
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actual working days in that particular period.
RETIREMENT BENEFITS OF PART-TIME WORKERS
 How should the retirement benefits of part-time workers be computed?

Applying the principles under Article 287, as amended, the components of retirement benefits of part-
time workers may also be computed at least in proportion to the salary and related benefits due them.
c.
ENTITLEMENT OF EMPLOYEES
DISMISSED FOR JUST CAUSE TO RETIREMENT BENEFITS
General rule – Entitled because employee has acquired vested right over the retirement benefits.
�Razon, Jr. v. NLRC, May 7, 1990.
Exception - Where just cause termination is cited in the retirement plan as reason to validly deny claim
for retirement benefits.
1 G.R. No. 155214, Feb. 13, 2004.

2 G.R. No. 187698, Aug. 9,
2010.
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 San Miguel Corporation v. Lao, July 11, 2002.
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Here, the company’s retirement plan prohibits the award of retirement benefits to an
employee dismissed for just cause, a proscription that binds the parties to it.
RETIREMENT BENEFITS VS. SEPARATION PAY
a. When both retirement pay and separation pay must be paid.
�Aquino v. NLRC, Feb. 11, 1992.
In this case, the Supreme Court ordered the payment to the retrenched employees of both
the separation pay for retrenchment embodied in the CBA as well as the retirement pay
provided under a separate Retirement Plan. The reason is that these two are not mutually
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exclusive. There is nothing in the CBA nor in the Retirement Plan that states that an
employee who had received separation pay would no longer be entitled to retirement benefits
or that collection of retirement benefits was prohibited if the employee had already received
separation pay
b. When separation pay may be charged to retirement pay.
 Ford Philippines Salaried Employees Association v. NLRC, Dec. 11, 1987.
It is provided in the retirement plan that the retirement, death and disability benefits paid in the
plan are considered integrated with and in lieu of termination benefits under the Labor
Code, thus, the retirement fund may be validly used to pay such termination or separation pay
because of closure of business.
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c. When employees are entitled to only one form of benefit.
 Cipriano v. San Miguel Corporation, Aug. 21, 1968.
The retirement plan provides that the employee shall be entitled to either the retirement
benefit provided therein or the separation pay provided by law, whichever is higher, the
employee cannot be entitled to both benefits.
RETIREMENT PAY UNDER THE LABOR CODE OR RETIREMENT PLAN

IS SEPARATE AND DISTINCT FROM THE RETIREMENT PAY UNDER THE SSS,
GSIS AND PAG-IBIG.
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SYLLABUS

7
MANAGEMENT PREROGATIVE
 What are management prerogatives?

Management prerogatives are granted to the employer to regulate every aspect of their business,
generally without restraint in accordance with their own discretion and judgment. This privilege is inherent in
the right of employers to control and manage their enterprise effectively. Such aspects of employment
include hiring, work assignments, working methods, time, place and manner of work, tools to be used, processes to
be followed, supervision of workers, working regulations, transfer of employees, lay-off of workers and the
discipline, dismissal and recall of workers.
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What are the limitations to the exercise of these prerogatives?
Limitations imposed by:
law;
CBA;
employment contract;
employer policy;
employer practice; and
general principles of fair play and justice.
It is subject to police power.
Its exercise should be without abuse of discretion.
It should be done in good faith and with due regard to the rights of labor.
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For example, an employer cannot prescribe more than 8 hours as normal working hours in a day because there is a law
which limits it to 8 hours. In the same vein, the employer cannot insist that an employee should observe 8 hours as the
daily normal working hours if there is a stipulation in the CBA, employment contract, or there is an employer policy
or practice that the normal working hours is only 7 hours per day.
A. DISCIPLINE
What are the components of the right to discipline?
The right or prerogative to discipline covers the following:
Right to discipline;
Right to dismiss;
Right to determine who to punish;
Right to promulgate rules and regulations;
Right to impose penalty; proportionality rule;
Right to choose which penalty to impose; and
Right to impose heavier penalty than what the company rules prescribe.
The proportionality rule simply means that the penalty to be imposed should be commensurate to the offense
committed. For example, dismissal for committing tardiness or absence for the first time is too harsh a penalty. A
warning, a reprimand would suffice for the first offense, punitive suspension of a day or two, for the second offense, a
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longer suspension for a third offense, and finally, dismissal for a fourth offense.
For committing serious offenses, such as stealing a company-owned property, or stabbing a co-employee, because of
their nature, would certainly deserve the imposition of the supreme penalty of dismissal, and not just a warning, a
reprimand or punitive suspension.
B.
TRANSFER OF EMPLOYEES
 What are the various kinds of transfer?
a. Two (2) kinds of transfer. - A transfer means a movement:
1. From one position to another of equivalent rank, level or salary, without a break in the service; or
2. From one office to another within the same business establishment.
 What are the salient points to consider in transfer?

 The exercise of the prerogative to transfer or assign employees from one office or area of operation to
another is valid provided there is no demotion in rank or diminution of salary, benefits and other
privileges. The transfer should not be motivated by discrimination or made in bad faith or effected as a
form of punishment or demotion without sufficient cause.
 Commitment made by the employee like a salesman in the employment contract to be re-assigned
anywhere in the Philippines is binding on him.
 Even if the employee is performing well in his present assignment, management may reassign him to a
new post.
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 The transfer of an employee may constitute constructive dismissal when:

1) When the transfer is unreasonable, inconvenient or prejudicial to the employee;
2) When the transfer involves a demotion in rank or diminution of salaries, benefits and other privileges; and
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employee, which forecloses any choice by the latter except to forego his continued employment.
 The refusal of an employee to be transferred may be held justified if there is a showing that the transfer
was directed by the employer under questionable circumstances. For instance, the transfer of employees
during the height of their union’s concerted activities in the company where they were active
participants is illegal.
 An employee who refuses to be transferred, when such transfer is valid, is guilty of insubordination
or willful disobedience of a lawful order of an employer under Article 282 of the Labor Code.
 Refusal to transfer due to parental obligations, additional expenses, inconvenience, hardship and
anguish is not valid. An employee could not validly refuse lawful orders to transfer based on these
grounds.
 Refusal to transfer to overseas assignment is valid.
 Refusal to transfer consequent to promotion is valid.
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 Transfer to avoid conflict of interest is valid.
 A transfer from one position to another occasioned by the abolition of the position is valid.
C.
PRODUCTIVITY STANDARD
 How may productivity standards be imposed?
The employer has the prerogative to prescribe the standards of productivity which the employees
should comply. The productivity standards may be used by the employer as:
1. an incentive scheme; and/or
2. a disciplinary scheme.
As an incentive scheme, employees who surpass the productivity standards or quota are usually
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given additional benefits.
As a disciplinary scheme, employees may be sanctioned or dismissed for failure to meet the
productivity standards or quota.
Illustrative cases:
In International School Manila v. International School Alliance of Educators (ISAE),1 the teacher
was held guilty of gross inefficiency meriting her dismissal on the basis of the Court’s finding that she failed to
measure up to the standards set by the school in teaching Filipino classes.
In Reyes-Rayel v. Philippine Luen Thai Holdings Corp.,2 the validity of the dismissal of petitioner
who was the Corporate Human Resources (CHR) Director for Manufacturing of respondent company, on the
ground of inefficiency and ineptitude, was affirmed on the basis of the Court’s finding that petitioner, on two
occasions, gave wrong information regarding issues on leave and holiday pay which generated confusion
among employees in the computation of salaries and wages.
In Realda v. New Age Graphics, Inc.,3 petitioner, a machine operator of respondent company, was
dismissed on the ground, among others, of inefficiency. In affirming the validity of his dismissal, the Supreme
Court reasoned:
“xxx (T)he petitioner’s failure to observe Graphics, Inc.’s work standards constitutes inefficiency
that is a valid cause for dismissal. Failure to observe prescribed standards of work, or to fulfill
reasonable work assignments due to inefficiency may constitute just cause for dismissal. Such inefficiency
is understood to mean failure to attain work goals or work quotas, either by failing to complete the same
within the allotted reasonable period, or by producing unsatisfactory results.”
D.
BONUS
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 What is the rule on its demandability and enforceability?
Bonus, as a general rule, is an amount granted and paid ex gratia to the employee.
It cannot be forced upon the employer who may not be obliged to assume the onerous burden of
granting bonuses or other benefits aside from the employees’ basic salaries or wages. If there is no profit, there
should be no bonus. If profit is reduced, bonus should likewise be reduced, absent any agreement making such
bonus part of the compensation of the employees.
 When is bonus demandable and enforceable?
It becomes demandable and enforceable:
(2) If it has ripened into a company practice;
(3) If it is granted as an additional compensation which the employer agreed to give without any
condition such as success of business or more efficient or more productive operation, hence, it is
deemed part of wage or salary.
1 G.R. No. 167286, Feb. 5, 2014.

2 G.R. No. 174893, July 11,
2012.
3 G.R. No. 192190, April 25,
2012. 107
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(4) When considered as part of the compensation and therefore demandable and enforceable,
the amount is usually fixed. If the amount thereof is dependent upon the realization of profits, the
bonus is not demandable and enforceable.
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CHANGE OF WORKING HOURS
 What is the extent of the exercise of this prerogative?

Employers have the freedom and prerogative, according to their discretion and best judgment, to regulate
and control the time when workers should report for work and perform their respective functions.
Manila Jockey Club Employees Labor Union – PTGWO, v. Manila Jockey Club, Inc.1 - The validity
of the exercise of the same prerogative to change the working hours was affirmed in this case. It was found that
while Section 1, Article IV of the CBA provides for a 7-hour work schedule from 9:00 a.m. to 12:00 noon and from
1:00 p.m. to 5:00 p.m. from Mondays to Saturdays, Section 2, Article XI thereof expressly reserves to respondent
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the prerogative to change existing methods or facilities and to change the schedules of work. Consequently, the
hours of work of regular monthly-paid employees were changed from the original 9:00 a.m. to 5:00 p.m. schedule
to 1:00 p.m. to 8:00 p.m. when horse races are held, that is, every Tuesday and Thursday. The 9:00 a.m. to 5:00
p.m. schedule for non-race days was, however, retained. Respondent, as employer, cited the change in the
program of horse races as reason for the adjustment of the work schedule. It rationalized that when the CBA
was signed, the horse races started at 10:00
a.m. When the races were moved to 2:00 p.m., there was no other choice for management but to change the
work schedule as there was no work to be done in the morning. Evidently, the adjustment in the work schedule is
justified.
F.
BONA FIDE OCCUPATIONAL QUALIFICATIONS
I.
THE BFOQ RULE
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1. CONCEPT.
The employer has the prerogative to impose certain qualifications based on such criteria as race, sex,
age, national origin, civil or marital status, physical appearance (such as a requirement on “pleasing personality” or
height and weight) and the like.
2. MEIORIN TEST.
This three-step test is used to determine whether an employment policy is justified. Under this test,
an employer can justify the impugned standard by establishing on the balance of probabilities:
a. That the employer adopted the standard for a purpose rationally connected to the performance of the job;
b. That the employer adopted the particular standard in an HONEST AND GOOD FAITH BELIEF that it
was necessary to the fulfilment of that legitimate work-related purpose; and
c. That the standard was REASONABLY necessary to the accomplishment of that legitimate work-
related purpose.
3. STAR PAPER TEST.
Consequently, in Star Paper Corp. v. Simbol, April 12, 2006, the Supreme Court held that in order to justify
a BFOQ, the employer must prove two (2) factors:
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(1) The employment qualification is reasonably related to the essential operation of the job involved; and
(2) There is factual basis for believing that all or substantially all persons meeting the qualification
would be unable to properly perform the duties of the job.
In short, the test of reasonableness of the company policy is used because it is parallel to BFOQ.2 BFOQ
is valid “provided it reflects an inherent quality reasonably necessary for satisfactory job performance.”3 This is
otherwise known as the “Reasonable Business Necessity Rule.”
4. SPECIFIC TOPICS.
I. CIVIL STATUS/MARITAL STATUS QUALIFICATION
II. PHYSICAL APPEARANCE QUALIFICATION
III. AGE QUALIFICATION
I.
CIVIL STATUS/MARITAL STATUS QUALIFICATION
1. RELEVANT CASES.
As far as the qualification of civil status or marital status is concerned, the following cases are relevant:
(1) PT & T v. NLRC;4
(2) Duncan Association of Detailman-PTGWO v. Glaxo Welcome Philippines, Inc.;1 and
1 G.R. No. 167760, March 7, 2007.

2 Id. at 243.
3 Philippine Telegraph and Telephone Company v. NLRC,
supra.
4 G.R. No. 118978, May 23, 1997, 272 SCRA 596, 605.
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(3) Star Paper Corp. v. Simbol.2

2. THE PT & T CASE.
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 The employer invoked concealment of civil status as ground to terminate the private respondent employee.
 In the job application form, she indicated in the portion for civil status that she was single although she
had contracted marriage a few months earlier.
 It appears that the employee had made the same representation in the two successive reliever agreements
which she signed.
 The company has a policy of not accepting married women for employment.
2.1. APPLICATION OF THE BFOQ RULE in the PT & T CASE.
The Supreme Court ruled that the company policy violates the right against discrimination afforded all
women workers under Article 136 of the Labor Code.
“[A] requirement that a woman employee must remain unmarried could be justified as a ‘bona
fide occupational qualification,’ or BFOQ, where the particular requirements of the job would
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justify the same, but not on the ground of a general principle, such as the desirability of
spreading work in the workplace. A requirement of that nature would be valid provided it
reflects an inherent quality reasonably necessary for satisfactory job performance. Thus, in
one case, a no-marriage rule applicable to both male and female flight attendants, was regarded
as unlawful since the restriction was not related to the job performance of the flight attendants.”
3. THE DUNCAN CASE.
In Duncan, the contract of employment expressly prohibited an employee from having a relationship with
an employee of a competitor company. It provides:
“10. You agree to disclose to management any existing or future relationship you may have, either
by consanguinity or affinity with co-employees or employees of competing drug companies. Should it
pose a possible conflict of interest in management discretion, you agree to resign voluntarily from the
Company as a matter of Company policy.”
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3.1. APPLICATION OF THE BFOQ RULE in the DUNCAN CASE.
The company (Glaxo) has a right to guard its trade secrets, manufacturing formulas, marketing strategies
and other confidential programs and information from competitors. It considered the prohibition against personal or
marital relationships with employees of competitor companies upon Glaxo’s employees reasonable under the
circumstances because relationships of that nature might compromise the interests of Glaxo. In laying down the
assailed company policy, the Court recognized that Glaxo only aims to protect its interests against the
possibility that a competitor company will gain access to its secrets and procedures.
4. THE STAR PAPER CASE.
The employees in Star Paper were terminated on various occasions, on the basis of the following
company policy, viz.:
“1. New applicants will not be allowed to be hired if in case he/she has [a] relative, up to [the] 3rd degree of
relationship, already employed by the company.
“2. In case two of our employees (both singles [sic], one male and another female) developed a
friendly relationship during the course of their employment and then decided to get married, one of
them should resign to preserve the policy stated above.”
According to the employer, said rule is only intended to carry out its no-employment-for-relatives-within-
the- third-degree-policy which is within the ambit of the prerogatives of management. The Supreme Court,
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however, disagreed. It ruled that said policy failed to comply with the standard of reasonableness which is being
followed in our jurisdiction.
4.1. APPLICATION OF THE BFOQ RULE in the STAR PAPER CASE.
The Court did not find a reasonable business necessity in the policy. Respondents were hired after they
were found fit for the job, but were asked to resign when they married a co-employee. Petitioners failed to show
how the marriage could be detrimental to their business operations. The policy is premised on the mere fear that
employees married to each other will be less efficient. If the questioned rule is upheld without valid justification,
the employer can create policies based on an unproven presumption of a perceived danger at the expense of an
employee’s right to security of tenure.
II.
PHYSICAL APPEARANCE QUALIFICATION
1. THE YRASUEGUI
CASE.
This case involves the physical appearance or attribute of an employee which, in this case, is petitioner’s
weight. For several times spanning a total period of five (5) years, petitioner, an international flight steward of
respondent PAL, was given the opportunity to reduce his weight to the acceptable level in accordance with the
weight standards but he failed to measure up therewith. He was thus terminated for his continued obesity. In his
illegal dismissal case, one of the issues raised is whether petitioner’s dismissal for obesity can be predicated on the
BFOQ defense.
1.1. APPLICATION OF THE BFOQ RULE in the YRASUEGUI CASE.
1 G.R. No. 162994, Sept. 17,

2004.
2 G.R. No. 164774, April 12, 2006.
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Citing Star Paper Corp. and Duncan, the Court ruled that BFOQ is a proper defense that justified
petitioner’s dismissal grounded on his obesity.
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The business of PAL is air transportation. As such, it has committed itself to safely transport its passengers.
In order to achieve this, it must necessarily rely on its employees, most particularly the cabin flight deck crew who
are on board the aircraft. The weight standards of PAL should be viewed as imposing strict norms of
discipline upon its employees. In other words, the primary objective of PAL in the imposition of the weight
standards for cabin crew is flight safety. It cannot be gainsaid that cabin attendants must maintain agility at all
times in order to inspire passenger confidence on their ability to care for the passengers when something goes
wrong.
III.
AGE QUALIFICATION
1. ANTI-AGE DISCRIMINATION IN EMPLOYMENT ACT.
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R.A. No. 10911 [July 21, 2016], otherwise known as the “Anti-Age Discrimination in Employment Act”
prohibits discrimination against any individual in employment on account of age. This law was lately
implemented by DOLE Department Order No. 170, Series of 2017 [February 02, 2017].
a. Coverage.
The law shall apply to all employers, publishers, labor contractors or subcontractors, and labor
organizations, whether or not registered.
b. Prohibitions.
Under this law, the following are the prohibited discriminatory acts related to employment on account of age:
(a) It shall be unlawful for an employer to:
(1) Print or publish, or cause to be printed or published, in any form of media, including the internet,
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any notice of advertisement relating to employment suggesting preferences, limitations,
specifications and discrimination based on age;
(2) Require the declaration of age or birth date during the application process;
(3) Decline any employment application because of the individual’s age;
(4) Discriminate against an individual in terms of compensation, terms and conditions or privileges
of employment on account of such individual’s age;
(5) Deny any employee’s or worker’s promotion or opportunity for training because of age;
(6) Forcibly layoff an employee or worker because of old age; or
(7) Impose early retirement on the basis of such employee’s or worker’s age.1
(b) It shall be unlawful for a labor contractor or subcontractor, if any, to refuse to refer for employment
or otherwise discriminate against any individual because of such person’s age.
(c) It shall be unlawful for a labor organization to:
(1) Deny membership to any individual because of such individual’s age;
(2) Exclude from its membership any individual because of such individual’s age; or
(3) Cause or attempt to cause an employer to discriminate against an individual in violation of the Rules.
(d) It shall be unlawful for a publisher to print or publish any notice of advertisement relating to
employment suggesting preferences, limitations, specifications, and discrimination based on age.2
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c. Exceptions.
It shall be lawful for an employer to set age limitations in employment if:
(a) Age is a bona fide occupational qualification (BFOQ) reasonably necessary in the normal operation
of a particular business or where the differentiation is based on reasonable factors other than age;
(b) The intent is to observe the terms of bona fide seniority system that is not intended to evade the purpose
of the Rules.
(c) The intent is to observe the terms of a bona fide employee retirement or a voluntary early retirement
plan consistent with the purpose of the Rules; Provided, That such retirement or voluntary retirement
plan is in accordance with the Labor Code, as renumbered, and other related laws; or
(d) The action is duly certified by the DOLE Secretary after consultation with the stakeholders in
accordance with the purpose of the Rules.
For purposes of the foregoing exceptions, an employer who invokes the qualifications as provided
herein, shall submit a report prior to its implementation to the DOLE Regional Office which has
jurisdiction over the workplace. The submission of the report shall be a presumption that the age
limitation is in accordance with the Rules unless proven otherwise by the court.
Failure to submit said report shall give rise to the presumption that the employer is not allowed to set
age limitation.3
1 Section 5, Id.; Section 4,

Id.
2 Id.; Id.
3 Section 6, Id.; Section 5,
Id. 110
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d. Employment age of children.

The age requirement in the employment of children shall be governed by R.A. No. 9231 and its
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Implementing Rules and Regulations, Article 138 of the Labor Code as renumbered, and other applicable laws, rules
and regulations.
Upon hiring, the employer may require the child or the guardian to show proof of the child's age for
purposes of compliance with minimum employable age under existing laws.1
G.
POST-EMPLOYMENT RESTRICTIONS
I.
NON-COMPETE CLAUSE
 Is a non-compete clause
valid?
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Yes. The employer and the employee are free to stipulate in an employment contract prohibiting the
employee within a certain period from and after the termination of his employment, from:
(1) starting a similar business, profession or trade; or
(2) working in an entity that is engaged in a similar business that might compete with the employer.
The non-compete clause is agreed upon to prevent the possibility that upon an employee’s termination
or resignation, he might start a business or work for a competitor with the full competitive advantage of
knowing and exploiting confidential and sensitive information, trade secrets, marketing plans, customer/client lists,
business practices, upcoming products, etc., which he acquired and gained from his employment with the
former employer. Contracts which prohibit an employee from engaging in business in competition with the
employer are not necessarily void for being in restraint of trade.
 What are the requisites in order for a non-compete clause to be valid?

A non-compete clause is not necessarily void for being in restraint of trade as long as there are reasonable
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limitations as to three (3) things: time, place and trade.
Example:
The non-compete clause (called “Non-Involvement Provision”) in the 2007 case of Daisy B. Tiu v.
Platinum Plans Philippines, Inc., provides as follows:
“8. NON-INVOLVEMENT PROVISION – The EMPLOYEE further undertakes that during his/her
engagement with EMPLOYER and in case of separation from the Company, whether voluntary or for cause,
he/she shall not, for the next TWO (2) years thereafter, engage in or be involved with any corporation,
association or entity, whether directly or indirectly, engaged in the same business or belonging to the same
pre-need industry as the EMPLOYER. Any breach of the foregoing provision shall render the EMPLOYEE
liable to the EMPLOYER in the amount of One Hundred Thousand Pesos (P100,000.00) for and as liquidated
damages.”
Starting on January 1, 1993, petitioner worked for respondent as Senior Assistant Vice-President and
Territorial Operations Head in charge of its Hongkong and Asean operations under a 5-year contract of
employment containing the afore-quoted clause. On September 16, 1995, petitioner stopped reporting for work. In
November 1995, she became the Vice-President for Sales of Professional Pension Plans, Inc., a corporation
engaged also in the pre-need industry. Consequently, respondent sued petitioner for damages before the RTC of
Pasig City. Respondent alleged, among others, that petitioner’s employment with Professional Pension Plans, Inc.
violated the above-quoted non-involvement clause in her contract of employment. Respondent thus prayed for
P100,000 as compensatory damages; P200,000 as moral damages; P100,000 as exemplary damages; and 25% of
the total amount due plus P1,000 per counsel’s court appearance, as attorney’s fees.
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Petitioner countered that the non-involvement clause was unenforceable for being against public order
or public policy: First, the restraint imposed was much greater than what was necessary to afford respondent a
fair and reasonable protection. Petitioner contended that the transfer to a rival company was an accepted practice in
the pre-need industry. Since the products sold by the companies were more or less the same, there was nothing
peculiar or unique to protect. Second, respondent did not invest in petitioner’s training or improvement. At the time
petitioner was recruited, she already possessed the knowledge and expertise required in the pre-need industry
and respondent benefited tremendously from it. Third, a strict application of the non-involvement clause
would amount to a deprivation of petitioner’s right to engage in the only work she knew.
In affirming the validity of the Non-Involvement Clause, the Supreme Court ratiocinated as follows:
“xxx A non-involvement clause is not necessarily void for being in restraint of trade as long as there are
reasonable limitations as to time, trade, and place.
“In this case, the non-involvement clause has a time limit: two years from the time
petitioner’s employment with respondent ends. It is also limited as to trade, since it only prohibits
petitioner from engaging in any pre-need business akin to respondent’s. It is limited as to place since the
prohibition covers only Hongkong and Asean operations.
“More significantly, since petitioner was the Senior Assistant Vice-President and Territorial Operations Head
in charge of respondent’s Hongkong and Asean operations, she had been privy to confidential and highly
sensitive marketing strategies of respondent’s business. To allow her to engage in a rival business soon after she
leaves would
a 1 Section 6, Department Order No. 170, Series of
2017.
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make respondent’s trade secrets vulnerable especially in a highly competitive marketing environment. In sum, we
find the non-involvement clause not contrary to public welfare and not greater than is necessary to afford a
fair and reasonable protection to respondent.
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as liquidated damages. While we have equitably reduced liquidated damages in certain cases, we cannot do so
in this case, since it appears that even from the start, petitioner had not shown the least intention to fulfill the non-
involvement clause in good faith.”
II.
OTHER POST-EMPLOYMENT PROHIBITIONS
1. CONFIDENTIALITY AND NON-DISCLOSURE CLAUSE.

The confidentiality and non-disclosure clause reflects the commitment of the employee that he shall not,
either during the period of his employment with the employer or at any time thereafter, use or disclose to any
person, firm or corporation any information concerning the business or affairs of his employment, for his own
benefit or to the detriment of the employer. This clause may also cover Former Employer Information and
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Third Party Information.
2. NON-SOLICITATION CLAUSE.
To protect the legitimate business interests of the employer, including its business relationships, the employee under this
clause, may, directly or indirectly, be prohibited from soliciting or approaching, or accept any business from any person
or entity who shall, at any time within a fixed period preceding the termination of his employment, have been
(a) a client, talent, producer, designer, programmer, distributor, merchandiser, or advertiser of the Company, (b) a party
or prospective party to an agreement with the employer, or (c) a representative or agent of any client, talent, producer,
designer, programmer, distributor, merchandiser, or advertiser of the employer for the purpose of offering to that person
or entity goods or services which are of the same type as or similar to any goods or services supplied by the employer at
termination.
NON-RECRUITMENT OR ANTI-PIRACY CLAUSE.
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This clause prohibits the recruitment by the employee of personnel or employees of the employer for a certain period
after his termination of employment, either on his own account or in conjunction with or on behalf of any other person.
INVENTIONS ASSIGNMENT CLAUSE (INTELLECTUAL PROPERTY CLAUSE).
In industries engaged in research and development and related activities, this clause requires the employee, within a
certain period, to disclose in confidence to the employer and its subsidiaries and to assign all inventions, improvements,
designs, original works of authorship, formulas, processes, compositions of matter, computer software programs,
databases, mask works and trade secrets, whether or not patentable, copyrightable or protectible as trade secrets
(collectively, the “Inventions”), which the employee may solely or jointly conceive or develop or reduce to practice, or
cause to be conceived or developed or reduced to practice, during the period of his employment with the employer.
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SYLLABUS

8
JURISDICTION AND RELIEFS
PRELIMINARY CONSIDERATIONS
ON PROCEDURE AND JURISDICTION
1. EXISTENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP.
The existence of employer-employee relationship between the parties-litigants, or a reasonable causal
connection to such relationship is a jurisdictional pre-requisite for the exercise of jurisdiction over a labor dispute
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by the Labor Arbiters or any other labor tribunals.
THE CAUSE OF ACTION MUST ARISE FROM THE EMPLOYER-EMPLOYEE RELATIONSHIP.
Even if there is employer-employee relationship, if the cause of action did not arise out of or was not incurred in
connection with the employer-employee relationship, Labor Arbiters and other labor tribunals have no jurisdiction
thereover.
Actions between employers and employees where the employer-employee relationship is merely incidental are within
the exclusive original jurisdiction of the regular courts.
REASONABLE CAUSAL CONNECTION RULE – THE RULE IN CASE OF CONFLICT OF JURISDICTION
BETWEEN LABOR COURT AND REGULAR COURT.
Under this rule, if there is a reasonable causal connection between the claim asserted and the employer- employee
relations, then the case is within the jurisdiction of labor courts.
In the absence of such nexus, it is the regular courts that have jurisdiction.
THE POWER TO DETERMINE EXISTENCE OF EMPLOYMENT RELATIONSHIP.
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Under labor laws, it is not only the Labor Arbiters and the NLRC who/which are vested with the power to determine the
existence of employer-employee relationship.
The following have also the power to make similar determination:
DOLE Secretary and the DOLE Regional Directors;
Med-Arbiter;
Social Security Commission (SSC).
IN CASES FILED BY OFWs, LABOR ARBITERS MAY EXERCISE JURISDICTION EVEN ABSENT THE
EMPLOYMENT RELATIONSHIP.
In Santiago v. CF Sharp Crew Management, Inc., 1 it was held that a seafarer who has already signed a POEA-
approved employment contract but was not deployed overseas and, therefore, there is no employer-employee
relationship, may file his monetary claims case with the Labor Arbiter. This is because the jurisdiction of Labor Arbiters
is not limited to claims arising from employer-employee relationships. Under Section 10 of R. A. No. 8042 (Migrant
Workers and Overseas Filipinos Act of 1995), as amended, the Labor Arbiter may exercise jurisdiction over the claims
of OFWs arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino
workers for overseas deployment, including claims for actual, moral, exemplary and other forms of damage. (See also
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the 2012 case of Bright Maritime Corporation v. Fantonial2).
LABOR ARBITERS HAVE JURISDICTION EVEN IF THE CASE IS FILED BY THE HEIRS OF THE OFW.
This was the ruling in Medline Management, Inc. v. Roslinda.3 As heirs, the wife and son of Juliano Roslinda, the
deceased OFW, have the personality to file the claim for death compensation, reimbursement of medical expenses,
damages and attorney's fees before the Labor Arbiter of the NLRC.
7. LABOR DISPUTES, NOT SUBJECT TO BARANGAY CONCILIATION.

Labor cases are not subject to the conciliation proceedings prescribed under P.D. No. 1508 requiring
the submission of disputes before the Barangay Lupong Tagapayapa prior to their filing with the court or other
government offices. Instead of simplifying labor proceedings designed at expeditious settlement or referral to the
proper courts or offices to decide them finally, the conciliation of the issues before the Barangay Lupong
Tagapayapa would only duplicate the conciliation proceedings and unduly delay the disposition of labor cases.
1 G.R. No. 162419, July 10, 2007.

2 G.R. No. 165935, Feb. 8, 2012.
3 G.R. No. 168715, Sept. 15,
2010.
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General Table of Jurisdiction
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NLRC BLR DOLE VA NCMB
Supreme Supreme Supreme Supreme
Court Rule Court Rule Court Rule Court Rule
Court of Court of Court of Court of
Appeals Appeals Appeals Appeals
Motion for Motion for Motion for Reconsideration Motion for
Reconsideration Reconsideration Reconsideration
Appeal Appeal to Appeal to Automatic Elevation No appeal or certiorari (NCMB is not
to BLR DOLE to Voluntary a quasi-judicial body)
Med-Arbiter DOLE Director (or Grievance Machinery `NCMB Conciliator-Mediator
Labor Arbiter (or DOLE Med- Arbiter)2
Regional Director)
1
For easy interplay of jurisdiction,

the five (5) columns above represent the following:
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Second column – The BLR Column
Third Column – The DOLE Column
Fourth Column – The Voluntary Arbitration Column
Fifth Column – The NCMB Column
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A.
LABOR
ARBITER
1. THE LABOR ARBITER.

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The Labor Arbiter is an official in the Arbitration Branch of the National Labor Relations
Commission (NLRC) who hears and decides cases falling under his original and exclusive jurisdiction as provided
by law.
2. LABOR ARBITERS HAVE NO INJUNCTIVE POWER; ONLY THE COMMISSION (NLRC) HAS
THIS POWER.
Previously, Labor Arbiters are possessed of injunctive power. This grant of injunctive power, however,
was deleted in recent NLRC Rules. The Labor Arbiter thus has no more injunctive power. Only the Commission
(NLRC) has that power.
1.
JURISDICTION
1. NATURE OF JURISDICTION OF LABOR ARBITERS - ORIGINAL AND EXCLUSIVE.
The jurisdiction conferred by Article 224 [217] upon the Labor Arbiters is both original and exclusive,
meaning, no other officers or tribunals can take cognizance of, or hear and decide, any of the cases therein
enumerated.
2. EXCEPTIONS TO THE ORIGINAL AND EXCLUSIVE JURISDICTION OF LABOR ARBITERS.
The following cases are the exceptions when the Labor Arbiters may not exercise their original and
exclusive jurisdiction:
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1. In assumed cases. When the DOLE Secretary or the President exercises his power under Article
278(g) [263(g)] of the Labor Code to assume jurisdiction over national interest cases and decide them
himself.
2. In certified cases. When the NLRC exercises its power of compulsory arbitration over similar
national interest cases that are certified to it by the DOLE Secretary pursuant to the exercise by
the latter of his certification power under the same Article 278(g) [263(g)].
3. In cases arising from CBA. - When cases arise from the interpretation or implementation of
collective bargaining agreements and from the interpretation or enforcement of company personnel
policies which shall be disposed of by the Labor Arbiter by referring the same to the grievance
machinery and voluntary arbitration, as may be provided in said agreements.
4. In cases submitted for voluntary arbitration. - When the parties agree to submit the case to
voluntary arbitration before a Voluntary Arbitrator or panel of Voluntary Arbitrators who, under
Articles 274 [261] and 275 [262] of the Labor Code, are also possessed of original and exclusive
jurisdiction to hear and decide cases mutually submitted to them by the parties for arbitration and
adjudication.
3. RUNDOWN OF ALL CASES FALLING UNDER THE JURISDICTION OF THE LABOR ARBITERS.
More particularly, Labor Arbiters shall have original and exclusive jurisdiction to hear and decide the
following cases involving all workers, whether agricultural or non-agricultural:
1. Under Article 224 [217] of the Labor Code:
1
Refers to appeals from decisions of DOLE Regional Directors in certain cases which should be made to the BLR Director and not to the DOLE Secretary.
2
Refers to appeals from decisions of Med-Arbiters in certification election cases which should be made to the DOLE Secretary and not to the BLR Director.
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(a) Unfair labor practice cases;

(b) Termination disputes (Illegal dismissal cases);
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(c) Money claims exceeding P5,000.00.
(d) Claims for actual, moral, exemplary and other forms of damages arising from employer-
employee relations; and
(e) Cases involving the legality of strikes and lockouts.
NOTE: Claims for employees’ compensation, SSS, PhilHealth (Medicare) and maternity benefits do not
fall under the jurisdiction of the Labor Arbiter because these fall under the jurisdiction of other government
agencies.
2. Under Article 124 of the Labor Code, as amended by R.A. No. 6727:
Disputes involving legislated wage increases and wage distortion in unorganized establishments not
voluntarily settled by the parties pursuant to R.A. No. 6727.
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3. Under Article 128(b) of the Labor Code, as amended by R.A. No. 7730:
 Contested cases under the exception clause in Article 128(b) of the Labor Code.
4. Under Article 233 [227] of the Labor Code:

 Enforcement of compromise agreements when there is non-compliance by any of the parties
thereto, pursuant to Article 227 of the Labor Code.
5. Under Article 276 [262-A] of the Labor Code:

 Issuance of writ of execution to enforce decisions of Voluntary Arbitrators or panel of
Voluntary Arbitrators, in case of their absence or incapacity, for any reason.
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6. Under Section 10 of R.A. No. 8042, as amended by R.A. No. 10022:
 Money claims of OFWs arising out of employer-employee relationship or by virtue of any law or
contract, including claims death and disability benefits and for actual, moral, exemplary and
other forms of damages.
7. Other cases as may be provided by law.
I.
JURISDICTION OVER UNFAIR LABOR PRACTICE CASES
1. SOME PRINCIPLES ON JURISDICTION OVER ULPs.
 The Labor Arbiter has jurisdiction over all ULPs whether committed by the employers or the labor organizations.
 The Labor Arbiter has jurisdiction only over the civil aspect of ULP, the criminal aspect being lodged with
the regular courts.
II.
JURISDICTION OVER ILLEGAL DISMISSAL CASES
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1. SOME PRINCIPLES ON JURISDICTION OVER TERMINATION CASES.
 The validity of the exercise of jurisdiction by Labor Arbiters over illegal dismissal cases is not
dependent on the kind or nature of the ground cited in support of the dismissal; hence, whether
the dismissal is for just cause or authorized cause, it is of no consequence.
 In case of conflict of jurisdiction between Labor Arbiter and the Voluntary Arbitrator over
termination cases, the former’s jurisdiction shall prevail for the following reasons:
(1) Termination of employment is not a grievable issue that must be submitted to the grievance
machinery or voluntary arbitration for adjudication. The jurisdiction thereover remains within the
original and exclusive ambit of the Labor Arbiter and not of the Voluntary Arbitrator.
(2) Even if the CBA provides that termination disputes are grievable, the same is merely discretionary
on the part of the parties thereto.
(3) Once there is actual termination, jurisdiction is conferred upon Labor Arbiters by operation of law.
(4) Interpretation of CBA and enforcement of company personnel policies are merely corollary to an
illegal dismissal case.
(5) Article 217 is deemed written into the CBA being an intrinsic part thereof.
 In other words, the Voluntary Arbitrator will only have jurisdiction over illegal dismissal cases when
there is express agreement thereon by the parties to the CBA, i.e., the employer and the bargaining
agent, to submit the termination case to voluntary arbitration. Absent the mutual express agreement
of the parties, Voluntary Arbitrator cannot acquire jurisdiction over termination cases.
 The express agreement must be stated in the CBA or there must be enough evidence on record
unmistakably showing that the parties have agreed to resort to voluntary arbitration.
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III.
JURISDICTION OVER MONEY CLAIMS CASES
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1. CLASSIFICATION OF MONEY CLAIMS.
follows
:
Money claims falling within the original and exclusive jurisdiction of the Labor Arbiters may be classified as
1. Any money claim, regardless of amount, when asserted in an illegal dismissal case (where the
remedy of reinstatement is proper). Here, the money claim is but an accompanying remedy
subordinated to the principal cause of action, i.e., illegal dismissal; or
2. Any money claim exceeding the amount of ₱5,000.00 per claimant.
If the amount does not exceed ₱5,000.00, it is, under Article 129, the DOLE Regional Director who has
jurisdiction to take cognizance thereof. Therefore, the amount of ₱5,000.00 becomes important only when
the principal cause of action is MONETARY CLAIM.
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3. SOME PRINCIPLES ON JURISDICTION OVER MONEY CLAIMS.
 Award of statutory benefits even if not prayed for is valid.
 Claim for notarial fees by a lawyer employed by a company is within the jurisdiction of the Labor Arbiter.
(a)
JURISDICTION OF LABOR ARBITER VS. DOLE REGIONAL DIRECTOR
1. LABOR ARBITERS HAVE NO JURISDICTION OVER SMALL MONEY CLAIMS LODGED

UNDER ARTICLE 129.
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As earlier emphasized, under Article 129 of the Labor Code, DOLE Regional Directors have jurisdiction
over claims amounting to ₱5,000 or below, provided the following requisites concur:
1. The claim must arise from employer-employee relationship;
2. The claimant does not seek reinstatement; and
3. The aggregate money claim of each employee does not exceed ₱5,000.00.
2. IN INSPECTION OF ESTABLISHMENT CASES UNDER ARTICLE 128 (VISITORIAL AND
ENFORCEMENT POWER), THE DOLE REGIONAL DIRECTORS HAVE JURISDICTION
REGARDLESS OF WHETHER OR NOT THE TOTAL AMOUNT OF CLAIMS PER
EMPLOYEE EXCEEDS ₱5,000.00.
a. Requisites.
For the valid exercise by the DOLE Secretary or any of his duly authorized representatives (DOLE
Regional Directors) of the visitorial and enforcement powers provided under Article 128(b), the following
requisites should concur:
(1) The employer-employee relationship should still exist;
(2) The findings in question were made in the course of inspection by labor inspectors; and
(3) The employees have not yet initiated any claim or complaint with the DOLE Regional Director
under Article 129, or the Labor Arbiter under Article 217.
3. HOWEVER, JURISDICTION OVER CONTESTED CASES UNDER THE EXCEPTION CLAUSE IN
ARTICLE 128(b) OF THE LABOR CODE INVOLVING INSPECTION OF ESTABLISHMENTS
BELONGS TO THE LABOR ARBITERS AND NOT TO DOLE REGIONAL DIRECTORS.
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a. Relation of paragraph (b) of Article 128 to the jurisdiction of Labor Arbiters.
The Labor Arbiters have jurisdiction over contested cases under the exception clause in Article 128(b),
which states: “xxx. The Secretary or his duly authorized representatives shall issue writs of execution to the
appropriate authority for the enforcement of their orders, except in cases where the employer contests the
findings of the labor employment and enforcement officer and raises issues supported by documentary proofs
which were not considered in the course of inspection.”
In interpreting the afore-quoted provision of the exception clause, three (3) elements must concur to divest
the Regional Directors or their representatives of jurisdiction thereunder, to wit:
(a) That the employer contests the findings of the labor regulations officer and raises issues thereon;
(b) That in order to resolve such issues, there is a need to examine evidentiary matters; and
(c) That such matters are not verifiable in the normal course of inspection.
The 2009 case of Meteoro v. Creative Creatures, Inc.,1 best illustrates the application of the
exception clause. Here, it was held that the Court of Appeals aptly applied the “exception clause” because
at the earliest opportunity, respondent company registered its objection to the findings of the labor inspector on the
ground that there was no employer-employee relationship between petitioners and respondent company. The
labor inspector, in fact, noted in his report that “respondent alleged that petitioners were contractual workers
and/or independent and talent
1 G.R. No. 171275, July 13,

2009.
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workers without control or supervision and also supplied with tools and apparatus pertaining to their job.” In
its position paper, respondent again insisted that petitioners were not its employees. It then questioned the
Regional Director’s jurisdiction to entertain the matter before it, primarily because of the absence of an
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employer-employee relationship. Finally, it raised the same arguments before the Secretary of Labor and the
appellate court. It is, therefore, clear that respondent contested and continues to contest the findings and
conclusions of the labor inspector. To resolve the issue raised by respondent, that is, the existence of an employer-
employee relationship, there is a need to examine evidentiary matters.
IV.
JURISDICTION OVER CLAIMS FOR DAMAGES
1. LABOR ARBITERS HAVE JURISDICTION OVER CLAIMS FOR DAMAGES.

It is now a well-settled rule that claims for damages as well as attorney’s fees in labor cases are
cognizable by the Labor Arbiters, to the exclusion of all other courts. Rulings to the contrary are deemed
abandoned or modified accordingly.
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2. CLAIMS FOR DAMAGES OF OVERSEAS FILIPINO WORKERS (OFWs).
Claims for actual, moral, exemplary and other forms of damages that may be lodged by overseas
Filipino workers are cognizable by the Labor Arbiters.
V.
JURISDICTION OVER LEGALITY OF STRIKES AND LOCKOUTS
1. JURISDICTIONAL INTERPLAY IN STRIKE OR LOCKOUT CASES.

Based on the Labor Code, below is an outline of the interplay in jurisdiction among them.
1. Filing of a notice of strike or lockout with NCMB. - A union which intends to stage a strike or an
employer which desires to mount a lockout should file a notice of strike or notice of lockout, as the case may be,
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with the NCMB and not with any other office. It must be noted, however, that the NCMB, per Tabigue v.
International Copra Export Corporation,1 is not a quasi-judicial body; hence, the Conciliators-Mediators of
the NCMB do not have any decision-making power. They cannot issue decisions to resolve the issues raised in
the notice of strike or lockout. Their role is confined solely to the conciliation and mediation of the said issues,
although they can suggest to the parties that they submit their dispute to voluntary arbitration through the
Voluntary Arbitrators accredited by the NCMB.
2. Filing of a complaint to declare the illegality of the strike or lockout with the Labor Arbiter
or Voluntary Arbitrator or panel of Voluntary Arbitrator. - In case a party wants to have the strike or lockout
declared illegal, a complaint should be filed either with the Labor Arbiter under Article 224(a)(5) [217(a)(5)] of the
Labor Code or, upon mutual agreement of the parties, with the Voluntary Arbitrator or panel of Voluntary
Arbitrators under Article 275 [262] of the same Code. The issue of illegality of the strike or lockout cannot be
resolved by the Conciliators-Mediators of the NCMB as earlier pointed out and discussed.
3. Filing of an injunction petition with the Commission (NLRC). - In case illegal acts violative of
Article 279 [264] are committed in the course of the strike or lockout, a party may file a petition for injunction
directly with the Commission (NLRC) under Article 225(e) [218(e)] of the Labor Code for purposes of securing a
temporary restraining order (TRO) and injunction. The Labor Arbiters or Voluntary Arbitrators are not possessed
of any injunctive power under the Labor Code. In other words, the aggrieved party, despite the pendency of the
case for the declaration of the illegality of the strike or lockout with the Labor Arbiter or Voluntary Arbitrator, as
the case may be, may directly go to the Commission to secure the injunctive relief.
4. Assumption of jurisdiction by the DOLE Secretary. – Under Article 278(g) [263(g)] of the Labor
Code, the DOLE Secretary has the power to assume jurisdiction over labor disputes which, in his opinion, may
cause or likely to cause a strike or lockout in industries indispensable to the national interest (so-called
“national interest” cases). Once he makes the assumption, he shall decide all the issues related to the labor
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dispute himself, to the exclusion of all other labor authorities.
5. Certification of the labor dispute to the NLRC. - Under the same provision of Article 278(g) [263(g)]
of the Labor Code, the DOLE Secretary has the option of not assuming jurisdiction over the labor dispute in
national interest cases. Instead, he may certify it to the NLRC for compulsory arbitration, in which case, it will
be the NLRC which shall hear and decide all the issues subject of the certification order.
In case at the time of the said assumption or certification, there is a pending case before the Labor Arbiter
or Voluntary Arbitrator on the issue of illegality of the strike or lockout, the same shall be deemed subsumed
in the assumed or certified case. Resultantly, it is no longer the Labor Arbiter or the Voluntary Arbitrator who
should decide the said case but the DOLE Secretary, in the case of assumed cases, or the NLRC, in the case of
certified cases.
6. Assumption of jurisdiction over a national interest case by the President. - The President of the
Philippines is not precluded from intervening in a national interest case by exercising himself the powers of his alter
ego, the DOLE Secretary, granted under Article 278(g) [263(g)] by assuming jurisdiction over the same for
purposes of settling or terminating it.
7. Submission of a national interest case to voluntary arbitration. - Despite the pendency of the
assumed or certified national interest case, the parties are allowed to submit any issues raised therein to voluntary
arbitration at
1 G.R. No. 183335, Dec. 23, 2009; See also Hotel Employees Union-NFL v. Waterfront Insular Hotel Davao, G.R. Nos. 174040-41, Sept. 22, 2010.
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any stage of the proceeding, by virtue of Article 278(h) [263(h)] which provides that “(b)efore or at any stage of the
compulsory arbitration process, the parties may opt to submit their dispute to voluntary arbitration.”
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The foregoing interplay explains why Article 278(i) [263(i)] makes specific reference to the President of
the Philippines, the Secretary of Labor and Employment, the Commission (NLRC) or the Voluntary
Arbitrator in connection with the law on strike, lockout and picketing embodied in Article 278 [263]. The only
labor official not so mentioned therein but who has a significant role to play in the interaction of labor officials
and tribunals in strike or lockout cases, is the Labor Arbiter. This is understandable in the light of the separate
express grant of jurisdiction to the Labor Arbiters under Article 224(a)(5) [217(a)(5)] as above discussed.
VI.
JURISDICTION OVER CASES INVOLVING
LEGISLATED WAGE INCREASES AND WAGE DISTORTION
1. CASES IN ORGANIZED ESTABLISHMENTS.
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Jurisdiction is with the Voluntary Arbitrator.
2. CASES IN UNORGANIZED ESTABLISHMENTS.
Jurisdiction is with Labor Arbiter.
VII.
JURISDICTION OVER ENFORCEMENT OR ANNULMENT
OF COMPROMISE AGREEMENTS
1. LEGAL
BASIS.
Article 233 [227] clearly embodies the following provisions on compromise agreements:
“Article 233 [227]. Compromise Agreements. - Any compromise settlement, including those
involving labor standard laws, voluntarily agreed upon by the parties with the assistance of the Bureau or the
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regional office of the Department of Labor, shall be final and binding upon the parties. The National
Labor Relations Commission or any court shall not assume jurisdiction over issues involved therein
except in case of non-compliance thereof or if there is prima facie evidence that the settlement was
obtained through fraud, misrepresentation, or coercion.”
Clear from the foregoing provision that, although the compromise agreement may have been entered into by
the parties before the Bureau of Labor Relations (BLR) or the DOLE Regional Office, it is the Labor Arbiter
who has jurisdiction to take cognizance of the following issues related thereto, to the exclusion of the BLR and
the DOLE Regional Directors:
(1) To enforce the compromise agreement in case of non-compliance therewith by any of the parties thereto; or
(2) To nullify it if there is prima facie evidence that the settlement was obtained through fraud,
misrepresentation, or coercion.
VIII.
JURISDICTION OVER EXECUTION AND ENFORCEMENT
OF DECISIONS OF VOLUNTARY ARBITRATORS
1. DECISIONS OF VOLUNTARY ARBITRATORS.

Article 276 [262-A] of the Labor Code prescribes the procedures that Voluntary Arbitrators or panel
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of Voluntary Arbitrators should follow in adjudicating cases filed before them. Once a decision has been rendered
in a case and subsequently becomes final and executory, it may be enforced through the writ of execution issued
by the same Voluntary Arbitrator or panel of Voluntary Arbitrators who rendered it, addressed to and requiring
certain public officers to execute the final decision, order or award.
2. LABOR ARBITERS MAY ISSUE THE WRIT OF EXECUTION.
In situations, however, where the Voluntary Arbitrator or the panel of Voluntary Arbitrators who rendered
the decision is absent or incapacitated for any reason, Article 276 [262-A] grants jurisdiction to any Labor
Arbiter in the region where the winning party resides, to take cognizance of a motion for the issuance of the writ of
execution filed by such party and accordingly issue such writ addressed to and requiring the public officers
mentioned above to execute the final decision, order or award of the Voluntary Arbitrator or panel of Voluntary
Arbitrators.
IX.
JURISDICTION OVER CASES OF OFWs
1. LABOR ARBITERS HAVE JURISDICTION OVER ALL MONEY CLAIMS OF OFWs.

All claims of OFWs with a sign of peso are cognizable by the Labor Arbiters, including claims for
disability and death benefits.
2. EXCEPTION: VOLUNTARY ARBITRATORS HAVE JURISDICTION OVER MONEY CLAIMS
IF THERE EXISTS A CBA.
If there is a CBA between the foreign employer and the bargaining union of the OFWs, the jurisdiction
over monetary claims of OFWs belongs to the Voluntary Arbitrator and not to the Labor Arbiter.
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3. OFW-RELATED CASES OVER WHICH THE POEA, AND NOT THE LABOR ARBITERS,
HAS JURISDICTION.
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The Philippine Overseas Employment Administration (POEA) has original and exclusive jurisdiction to hear and
decide
: (a) All cases which are administrative in character, involving or arising out of violation of rules and
regulations relating to licensing and registration of recruitment and employment agencies or entities,
including refund of fees collected from workers and violation of the conditions for the issuance
of license to recruit workers.
(b) Disciplinary action cases and other special cases which are administrative in character, involving
employers, principals, contracting partners and Filipino migrant workers.
No. 1 above covers recruitment violations or violations of conditions of license; while No. 2 above involves (a)
disciplinary action cases against foreign principals or employers, and (a) disciplinary action cases against land-
based OFWs and seafarers.
X.
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LABOR ARBITERS HAVE JURISDICTION
1. JURISDICTION OVER CERTAIN ISSUES AS PROVIDED IN JURISPRUDENCE.
In accordance with well-entrenched jurisprudence, the issues, claims or cases of the following fall under
the jurisdiction of the Labor Arbiters:
(a) Employees in government-owned and/or controlled corporations;
(b) Alien parties;
(c) Priests and ministers;
(d) Employees of cooperatives;
(e) Counter-claims of employers against employees.
X-1.
JURISDICTION OVER CASES INVOLVING EMPLOYEES
OF GOVERNMENT-OWNED AND/OR CONTROLLED CORPORATIONS ChanRobles Bar
1. PREVAILING RULE.
The hiring and firing of employees of government owned and/or controlled corporations without original
charters are covered by the Labor Code and, therefore, the Labor Arbiters have jurisdiction over illegal dismissal
and other cases that may be filed under this law; while those with original charters are basically governed by the
Civil Service Law, rules and regulations and, therefore, jurisdiction on any of the cases that may be initiated
under this law is vested in the Civil Service Commission (CSC)1
X-2.
JURISDICTION OVER DISPUTES
INVOLVING ALIEN PARTIES
1. CHOICE OF LAW BY PARTIES.

A basic policy of contract is to protect the expectations of the parties.2 Such party expectations are
protected by giving effect to the parties’ own choice of the applicable law.3 The choice of law must,
however, bear some relationship to the parties or their transaction.4 A manning agency, for instance, cannot be
faulted for complying with the applicable foreign law. By so complying, it has discharged its monetary obligation
to the employee.5
2. WHEN PHILIPPINE LAW PREVAILS.
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Pakistan International Airlines Corporation v. Ople, Sept. 28, 1990.
 Two contracts of employment were executed in Manila between Pakistan International Airlines
Corporation and two Filipino flight attendants.
 Paragraph 10 of the contracts provides:
 The terms thereof shall be construed and governed by the laws of Pakistan; and
 Only the courts of Karachi, Pakistan shall have jurisdiction to consider any matter arising out of
or under the agreement.
 They were dismissed prior to expiration of contracts.

ISSUE: Which law should apply and which court has jurisdiction over the dispute.
1 Zamboanga City Water District v. Buat, G.R. No. 104389, May 27, 1994.
2 Reese, Choice of Law in Torts and Contracts, 16 Columbia Journal of Transnational Law, 1, 21 [1977].
3 Fricke v. Isbrandtsen Co., Inc., 151 F. Supp. 465, 467 [1957].
4 Asia International Builder Corp. v. Mondejar, G.R. No. 105029-32, Dec. 05, 1994.
5 Omanfil International Manpower Development Corporation v. NLRC, G.R. No. 130339, Dec. 22, 1998, 300 SCRA 455.
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HELD: Philippine law should apply and that the Philippine court has jurisdiction:
 Philippine labor laws and regulations apply to the subject matter of this case, i.e., the
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employer- employee relationship between petitioner PIA and private respondents. The
relationship is much affected with public interest and cannot be subject of agreement that what
should apply thereto should be some other law.
 Philippine court has jurisdiction because:
 The contract was executed and performed partially in the Philippines;
 Private respondents are Philippine citizens and residents and based in the Philippines in
between their assigned flights to the Middle East and Europe.
 Petitioner, although a foreign corporation, is licensed to do business (and is actually doing
business in the Philippines) and hence, is a resident in the Philippines.
X-3.
JURISDICTION OVER LABOR CASES
INVOLVING PRIESTS AND MINISTERS
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WHEN LABOR ARBITERS HAVE JURISDICTION.
The fact that a case involves as parties thereto the church and its religious minister does not ipso facto give the case a
religious significance. If what is involved is a labor case, say illegal dismissal, the relationship of the church, as
employer, and the priest or minister, as employee is a purely secular matter not related to the practice of faith, worship or
doctrines of the church. Hence, Labor Arbiters may validly exercise jurisdiction over said labor case.
The religious minister in Austria v. Hon. NLRC,1 was not excommunicated or expelled from the membership of the
church but was terminated from employment based on the just causes provided in Article 297 [282] of the Labor Code.
Indeed, the matter of terminating an employee which is purely secular in nature is different from the ecclesiastical act of
expelling a member from the religious congregation. As such, the State, through the Labor Arbiter and the NLRC, has
the right to take cognizance of the case to determine whether the church, as employer, rightfully exercised its
management prerogative to dismiss the religious minister as its employee.
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ECCLESIASTICAL AFFAIR, MEANING.
An “ecclesiastical affair” is one that concerns doctrine, creed, or form of worship of the church, or the adoption and
enforcement within a religious association of needful laws and regulations for the government of its membership, and
the power of excluding from such association those deemed unworthy of membership.2 Based on this definition, an
ecclesiastical affair involves the relationship between the church and its members and relates to matters of faith,
religious doctrines, worship and governance of the congregation. To be concrete, examples of these so-called
ecclesiastical affairs to which the State cannot meddle, are proceedings for excommunication, ordination of religious
ministers, administration of sacraments and other activities with attached religious significance. 3
X-4.
JURISDICTION OVER CASES OF EMPLOYEES OF COOPERATIVES
1. EMPLOYERS MAY ASSERT COUNTER-CLAIMS AGAINST EMPLOYEES FILED BY THE LATTER
BEFORE THE LABOR ARBITERS.
Almost all labor cases decided by labor courts involve claims asserted by the workers. The question that may be
propounded is whether the employers can assert counter-claims against their employees before the Labor Arbiters. The
Supreme Court answered this poser in the affirmative.
Bañez v. Hon. Valdevilla.4 - The jurisdiction of Labor Arbiters and the NLRC is comprehensive enough to include
claims for all forms of damages “arising from the employer-employee relations.” By this clause, Article 217 should
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apply with equal force to the claim of an employer for actual damages against its dismissed employee, where the basis
for the claim arises from or is necessarily connected with the fact of termination, and should be entered as a counter-
claim in the illegal dismissal case. This is in accord with paragraph 6 of Article 217(a), which covers “all other claims,
arising from employer-employee relations.”
But such counter-claim, being a factual issue, must be asserted before the Labor Arbiter; otherwise, it can no longer be
passed upon by a reviewing court.
XI.
ISSUES AND CASES OVER WHICH
LABOR ARBITERS HAVE NO JURISDICTION
1
. LABOR ARBITERS HAVE NO JURISDICTION OVER CERTAIN ISSUES AND CASES.
The following issues or cases do not fall under the jurisdiction of Labor Arbiters:
(a) Claims for damages arising from breach of a non-compete clause and other post-
employment prohibitions;
(b) Claims for payment of cash advances, car, appliance and other loans of employees;
(c) Dismissal of corporate officers and their monetary claims;
1 Austria v. Hon. NLRC, G.R. No. 124382, Aug. 16,

1999.
2 Black’s Law Dictionary, 5th Ed., [1979], p. 460.
3 Id.
4 G.R. No. 128024, May 9, 2000, 331 SCRA 584.

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(d) Cases involving entities immune from suit;

(e) Cases falling under the doctrine of forum non conveniens;
(f) Quasi-delict or tort cases;
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(h)
Criminal and civil liabilities arising from violations of certain provisions of the Labor Code;
Constitutionality of CBA provisions.
XI-A.
CLAIMS FOR DAMAGES ARISING FROM BREACH OF NON-COMPETE CLAUSE AND
OTHER POST-EMPLOYMENT PROHIBITIONS
1. JURISDICTION IS LODGED WITH THE REGULAR COURTS.

In case of violation of the non-compete clause and similar post-employment bans or prohibitions,
the employer can assert his claim for damages against the erring employee with the regular courts and not with
the labor courts.
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XI-B.
EMPLOYER’S CLAIMS FOR CASH ADVANCES, CAR,
APPLIANCE AND OTHER PERSONAL LOANS OF EMPLOYEES
1. LABOR ARBITERS HAVE NO JURISDICTION.

With respect to resolving issues involving loans availed of by employees from their employers, it has been
the consistent ruling of the Supreme Court that the Labor Arbiters have no jurisdiction thereover but the regular
courts.
Where the claim to the principal relief sought is to be resolved not by reference to the Labor Code or
other labor relations statute or a collective bargaining agreement but by the general civil law, the jurisdiction
over the dispute belongs to the regular courts of justice and not to the Labor Arbiter and the NLRC. In such
situations, resolutions of the dispute requires expertise, not in labor management relations nor in wage structures
and other terms and conditions of employment, but rather in the application of the general civil law. Clearly,
such claims fall outside the area of competence or expertise ordinarily ascribed to Labor Arbiters and the NLRC
The following loans may be cited:

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and the rationale for granting jurisdiction over such claims to these agencies disappears.”
a. Cash loans/advances are in the nature of simple collection of a sum of money brought by the
employer, as creditor, against the employee, as debtor. The fact that they were employer and employee
at the time of the transaction does not negate the civil jurisdiction of the trial court. The case
does not involve adjudication of a labor dispute but recovery of a sum of money based on our civil
laws on obligation and contract.
b. Car loans such as those granted to sales or medical representatives by reason of the nature of their
work. The employer’s demand for payment of the employees’ amortizations on their car loans,
or, in the alternative, the return of the cars to the company, is not a labor, but a civil, dispute. It
involves debtor- creditor relations, rather than employee-employer relations.
c. Appliance loans concern the enforcement of a loan agreement involving debtor-creditor relations
founded on contract and do not in any way concern employee relations. As such it should be
enforced through a separate civil action in the regular courts and not before the Labor Arbiter.
d. Loans from retirement fund also involve the same principle as above; hence, collection therefor may
only be made through the regular courts and not through the Labor Arbiter or any labor tribunal.
XI-C.
DISMISSAL OF DIRECTORS AND CORPORATE OFFICERS
1. LABOR ARBITERS HAVE NO JURISDICTION.

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The dismissal of a director or corporate officer is an intra-corporate dispute cognizable by the Regional
Trial Court and not by the Labor Arbiter.
2. DISTINCTIONS BETWEEN CORPORATE OFFICERS & EMPLOYEES:
CORPORATE OFFICERS EMPLOYEES
 Refer only to those expressly mentioned in  Refer to all other officers not
the 2019 Revised Corporation Code and mentioned in the 2019 Revised
bylaws, to wit: president, secretary and Corporation Code and bylaws.
treasurer and such other officers as may
be provided for in the bylaws. (NOTE:
Section 24 of R.A. No. 11232 [Feb. 20,
2019], otherwise known as the 2019
Revised Corporation Code added a fifth in
the list: Compliance Officer, if the
corporation is vested with public interest).
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They are elected or appointed by the directors or They are generally employed not by the action of the
stockholders, and those who are given that character directors or stockholders but by the managing officer
either by the 2019 Revised Corporation Code or by the of the corporation who also determines the
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RTC has jurisdiction in case of dismissal. Labor Arbiter has jurisdiction in case of dismissal.
Reason: INTRA-CORPORATE Reason: LABOR CASE
3. MATLING DOCTRINE.
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Matling Industrial and Commercial Corp. v. Ricardo R. Coros, G.R. No. 157802, Oct. 13, 2010
After his dismissal by Matling as its Vice President for Finance and Administration, respondent Coros filed
on August 10, 2000, a complaint for illegal dismissal against Matling and some of its corporate officers
(petitioners). The petitioners moved to dismiss the complaint, raising the ground, among others, that the
complaint pertained to the jurisdiction of the SEC due to the controversy being intra-corporate inasmuch as the
respondent was a member of Matling’s Board of Directors aside from being its Vice-President for Finance and
Administration prior to his termination. The respondent opposed petitioners’ motion to dismiss, insisting that his
status as a member of Matling’s Board of Directors was doubtful, considering that he had not been formally elected
as such; that he did not own a single share of stock in Matling, considering that he had been made to sign in blank
an undated indorsement of the certificate of stock he had been given in 1992; that Matling had taken back and
retained the certificate of stock in its custody; and that even assuming that he had been a Director of Matling, he
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had been removed as the Vice President for Finance and Administration, not as a Director, a fact that the notice of
his termination dated April 10, 2000 showed.
In ruling that Coros’ dismissal was not an intra-corporate dispute but a labor case, the Court employed
the following two-tiered test to determine whether a dispute constitutes an intra-corporate controversy or not,
namely:
(1) The status or relationship of the parties (Relationship Test); and
(2) The nature of the question that is the subject of their controversy (Nature
of Controversy Test).
This test simply dictates that before the RTC can take cognizance of a case, the controversy must pertain to
any of the following relationships:
a) between the corporation, partnership or association and the public;
b) between the corporation, partnership or association and its stockholders, partners, members or officers;
c) between the corporation, partnership or association and the State as far as its franchise, permit or license
to operate is concerned; and
d) among the stockholders, partners or associates themselves.1
The fact that in Matling, the parties involved are the corporation and Coros, its director and stockholder and
at the same time its Vice President, does not necessarily place the dispute within the ambit of the jurisdiction of the
RTC. The better policy to be followed in determining jurisdiction over a case should be to consider concurrent
factors such as the status or relationship of the parties OR the nature of the question that is the subject of
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their controversy. In the absence of any one of these factors, the RTC will not have jurisdiction. Furthermore, it
does not necessarily follow that every conflict between the corporation and its stockholders would involve such
corporate matters as only the RTC can resolve in the exercise of its judicial powers.
Matling thus prescribes that the criteria for distinguishing between corporate officers who may be ousted
from office at will, on one hand, and ordinary corporate employees who may only be terminated for just cause, on
the other hand, do not depend on the nature of the services performed, but on the manner of creation of the office.
In respondent Coros’ case, he was supposedly at once an employee, a stockholder, and a director of Matling.
The circumstances surrounding his appointment to office must be fully considered to determine whether the
dismissal constituted an intra- corporate controversy or a labor termination dispute. It must also be considered
whether his status as director and stockholder had any relation at all to his appointment and subsequent
dismissal as Vice President for Finance and Administration. Obviously enough, the respondent was not appointed
as Vice President for Finance and Administration because of his being a stockholder or director of Matling. He had
started working for Matling on September 8, 1966, and had been employed continuously for 33 years until his
termination on April 17, 2000, first as a bookkeeper, and his climb in 1987 to his last position as Vice President
for Finance and Administration had been gradual but steady.2 Even though he might have become a stockholder
of Matling in 1992, his promotion to the position of Vice President for Finance and Administration in 1987 was
by virtue of the length of quality service he had rendered as an employee of Matling. His subsequent acquisition
of the status of director/stockholder had no relation to his promotion. Besides, his status of director/stockholder
was unaffected by his dismissal from employment as Vice President for Finance and Administration.
1 See also Reyes v. Hon. RTC, Branch 142, G.R. No. 165744, Aug. 11, 2008, 583 Phil. 591.
2 The following is the sequence of respondent Coros’s rising from the ranks: 1966– Bookkeeper; 1968–Senior Accountant; 1969 –Chief Accountant; 1972–Office Supervisor; 1973–
Assistant Treasurer; 1978–Special Assistant for Finance; 1980–Assistant Comptroller; 1983–Finance and Administrative Manager; 1985–Asst. Vice President for Finance and
Administration; 1987 to April 17, 2000–Vice President for Finance and Administration.
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4. OTHER SIGNIFICANT CASES.

a. Cosare v. Broadcom Asia, Inc., G.R. No. 201298, Feb. 5, 2014.
nRobles Bar In this 2014 case, the Supreme Court ruled that the Labor Arbiter, not the regular courts, has
original jurisdiction over the illegal dismissal case filed by petitioner Cosare who was an incorporator of
respondent Broadcom and was holding the position of Assistant Vice President for Sales (AVP for Sales)
and Head of the Technical Coordination at the time of his termination. The following justifications were cited in
support of this ruling:
(1)The mere fact that a person was a stockholder and an officer of the company at the time the
subject controversy developed does not necessarily make the case an intra-corporate dispute.
(2) A person, although an officer of the company, is not necessarily a corporate officer thereof.
(3) General Information Sheet (GIS) submitted to SEC neither governs nor establishes the nature of office.
(4)The Nature of the Controversy Test: The mere fact that a person was a stockholder at the time of the
filing of the illegal dismissal case does not make the action an intra-corporate dispute.
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b. Malcaba v. Prohealth Pharma Philippines, G.R. No. 209085, June 6, 2018.


Malcaba had been employed with ProHealth since it started in 1997.
He was one of its incorporators and a member of the Board of Directors.
 He held 1,000,000 shares in the corporation.
 He was initially the Vice President for Sales then became President in 2005.
 He was President at the time of his dismissal.
Both Labor Arbiter and NLRC ruled that Malcaba was illegally dismissed.
The CA and the SC held that the Labor Arbiter and NLRC have no jurisdiction and their
judgments were void since he is a corporate officer and his termination is intra-corporate in nature;
hence, jurisdiction thereover belongs to the RTC.
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As a matter of equity, Malcaba was ordered to RETURN P4,937,420 awarded to him by the
Labor Arbiter by way of separation pay, backwages and 13th month pay.
c. Cacho v. Balagtas, G.R. No. 202974, February 7, 2018.
 Balagtas was elected as North Star's Executive Vice President and Chief Executive Officer.
 She filed an illegal dismissal case and the Labor Arbiter awarded her separation pay, full
backwages and P3 M moral damages, P2 M exemplary damages and 10% attorney’s fees.
 NLRC ruled that Balagtas was a corporate officer at the time of her dismissal and not a mere employee.
 The CA reversed it but the SC affirmed the NLRC’s ruling that what is involved here is an
intra- corporate dispute and not a labor case because:
(1) The Executive Vice President position is one of the corporate offices provided in petitioner
North Star's By-laws (one or more vice presidents).
(2) Respondent Balagtas was appointed by the Board as petitioner North Star's Executive
Vice President.
XI-D.
LABOR CASES INVOLVING ENTITIES IMMUNE FROM SUIT
1. IMMUNE ENTITIES CANNOT BE SUED FOR LABOR LAW VIOLATIONS.
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In this jurisdiction, the generally accepted principles of international law are recognized and adopted as part
of the law of the land. Immunity of a State and international organizations from suit is one of these universally
recognized principles. It is on this basis that Labor Arbiters or other labor tribunals have no jurisdiction over
immune entities.
2. ILLUSTRATIVE CASE.
In Department of Foreign Affairs v. NLRC,1 involving an illegal dismissal case filed against the
Asian Development Bank (ADB), it was ruled that said entity enjoys immunity from legal process of every form
and therefore the suit against it cannot prosper. And this immunity extends to its officers who also enjoy immunity
in respect of all acts performed by them in their official capacity. The Charter and the Headquarters
Agreement granting these immunities and privileges to the ADB are treaty covenants and commitments
voluntarily assumed by the Philippine government which must be respected.
3. EXCEPTION TO THE RULE.
There is an exception to the immunity rule as exemplified by the case of United States v. Hon.
Rodrigo,2 where it was held that when the function of the foreign entity otherwise immune from suit partakes of
the nature of a proprietary activity, such as the restaurant services offered at John Hay Air Station undertaken
by the United States Government as a commercial activity for profit and not in its governmental capacity, the case
for illegal dismissal filed by a Filipino cook working therein is well within the jurisdiction of Philippine courts. The
reason is that by entering into the
1 G.R. No. 113191, Sept. 18, 1996, 262 SCRA 39, 43- 2 G.R. No. 79470, Feb. 26, 1990, 182 SCRA 644, 660.
44.
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employment contract with the cook in the discharge of its proprietary functions, it impliedly divested itself of its
sovereign immunity from suit.
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4. ESTOPPEL DOES NOT CONFER JURISDICTION OVER AN IMMUNE ENTITY.
An entity immune from suit cannot be estopped from claiming such diplomatic immunity since estoppel
does not operate to confer jurisdiction to a tribunal that has none over a cause of action.
XI-E.
DOCTRINE OF FORUM NON CONVENIENS
1. REQUISITES.
This doctrine is an international law principle which has been applied to labor cases. The following are
the requisites for its applicability:
(1) That the Philippine court is one to which the parties may conveniently resort;
(2) That the Philippine court is in a position to make an intelligent decision as to the law and the facts; and
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(3) That the Philippine court has or is likely to have power to enforce its decision.
2. APPLICATION TO LABOR CASES.
a. Case where doctrine was rejected.
Petitioners’ invocation of this principle was rejected in Pacific Consultants International Asia, Inc.
v. Schonfeld.1 Petitioners’ insistence was based on the fact that respondent is a Canadian citizen and was a
repatriate. In so rejecting petitioners’ contention, the Supreme Court cited the following reasons that do not
warrant the application of the said principle: (1) the Labor Code does not include forum non conveniens as a
ground for the dismissal of the complaint; and (2) the propriety of dismissing a case based on this principle
requires a factual determination; hence, it is properly considered as a defense.
b. Case where doctrine was applied.
This doctrine was applied in the case of The Manila Hotel Corp. and Manila Hotel International
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Limited v. NLRC,2 where private respondent Marcelo Santos was an overseas worker employed as a printer in a
printing press in the Sultanate of Oman when he was directly hired by the Palace Hotel, Beijing, People’s Republic
of China to work in its print shop. This hotel was being managed by the Manila Hotel International Ltd., a foreign
entity registered under the laws of Hong Kong. Later, he was terminated due to retrenchment occasioned by
business reverses brought about by the political upheaval in China (referring to the Tiananmen Square
incident) which severely affected the hotel’s operations.
In holding that the NLRC was a seriously inconvenient forum, the Supreme Court noted that the main
aspects of the case transpired in two foreign jurisdictions and the case involves purely foreign elements. The only
link that the Philippines has with the case is that the private respondent employee (Marcelo Santos) is a Filipino
citizen. The Palace Hotel and MHICL are foreign corporations. Consequently, not all cases involving Filipino
citizens can be tried here. Respondent employee was hired directly by the Beijing Palace Hotel, a foreign
employer, through correspondence sent to him while he was working at the Sultanate of Oman. He was hired
without the intervention of the POEA or any authorized recruitment agency of the government. Hence, the
NLRC is an inconvenient forum given that all the incidents of the case - from the time of recruitment, to
employment to dismissal - occurred outside the Philippines. The inconvenience is compounded by the fact that the
proper defendants, the Palace Hotel and MHICL, are not nationals of the Philippines. Neither are they “doing
business in the Philippines.” Likewise, the main witnesses, Mr. Shmidt (General Manager of the Palace Hotel) and
Mr. Henk (Palace Hotel’s Manager) are non-residents of the Philippines.
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Neither can an intelligent decision be made as to the law governing the employment contract as such
was perfected in foreign soil. This calls to fore the application of the principle of lex loci contractus (the law of the
place where the contract was made). It must be noted that the employment contract was not perfected in the
Philippines. Private respondent employee signified his acceptance thereof by writing a letter while he was in the
Sultanate of Oman. This letter was sent to the Palace Hotel in the People’s Republic of China. Neither can the
NLRC determine the facts surrounding the alleged illegal dismissal as all acts complained of took place in Beijing,
People’s Republic of China. The NLRC was not in a position to determine whether the Tiananmen Square incident
truly adversely affected the operations of the Palace Hotel as to justify respondent employee’s retrenchment.
Even assuming that a proper decision could be reached by the NLRC, such would not have any binding
effect against the employer, the Palace Hotel, which is a corporation incorporated under the laws of China and was
not even served with summons. Jurisdiction over its person was not acquired. This is not to say that Philippine
courts and agencies have no power to solve controversies involving foreign employers. Neither could it be said
that the Supreme Court does not have power over an employment contract executed in a foreign country. If the
respondent employee were an “overseas contract worker”, a Philippine forum, specifically the POEA, not the
NLRC, would protect him. He is not an “overseas contract worker”, a fact which he admits with conviction.
XI-F.
CONSTITUTIONALITY OF LABOR CONTRACT STIPULATIONS
1. THE HALAGUEÑA DOCTRINE.

In Halagueńa v. Philippine Airlines, Inc.,3 it was pronounced that it is not the Labor Arbiter but the regular
court which has jurisdiction to rule on the constitutionality of labor contracts such as a CBA. Petitioners were
female
1 G.R. No. 166920, Feb. 19,

2007.
2 G.R. No. 120077, Oct. 13,
2000.
3 G.R. No. 172013, Oct. 2, 2009. 124
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flight attendants of respondent Philippine Airlines (PAL) and are members of the Flight Attendants and
Stewards Association of the Philippines (FASAP), the sole and exclusive bargaining representative of the flight
attendants, flight stewards and pursers of respondent. The July 11, 2001 CBA between PAL and FASAP provides
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that the compulsory retirement for female flight attendants is fifty-five (55) and sixty (60) for their male
counterpart.
Claiming that said CBA provision is discriminatory against them, petitioners filed against respondent a
Special Civil Action for Declaratory Relief with Prayer for the Issuance of Temporary Restraining Order and Writ
of Preliminary Injunction with the Regional Trial Court (RTC) of Makati City.
In ruling that the RTC has jurisdiction, the Supreme Court cited the following reasons:
(1) The case is an ordinary civil action, hence, beyond the jurisdiction of labor tribunals.
(2) The said issue cannot be resolved solely by applying the Labor Code. Rather, it requires the
application of the Constitution, labor statutes, law on contracts and the Convention on the Elimination
of All Forms of Discrimination Against Women (CEDAW). The power to apply and interpret the
constitution and CEDAW is within the jurisdiction of trial courts, a court of general jurisdiction.
(3) Not every controversy or money claim by an employee against the employer or vice-versa is
within the exclusive jurisdiction of the Labor Arbiter. Actions between employees and employer
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where the employer- employee relationship is merely incidental and the cause of action proceeds
from a different source of obligation are within the exclusive jurisdiction of the regular courts.
Here, the employer-employee relationship between the parties is merely incidental and the cause of
action ultimately arose from different sources of obligation, i.e., the Constitution and CEDAW.
2.
REQUIREMENTS TO PERFECT APPEAL TO NLRC
I.
APPEAL IN GENERAL
1. APPEAL, MEANING AND NATURE.
The term “appeal” refers to the elevation by an aggrieved party to an agency vested with appellate
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authority of any decision, resolution or order disposing the principal issues of a case rendered by an agency
vested with original jurisdiction, undertaken by filing a memorandum of appeal.
2. SOME PRINCIPLES ON APPEAL.
 Appeals under Article 223 apply only to appeals from the Labor Arbiter’s decisions, awards or orders to
the Commission (NLRC).
 There is no appeal from the decisions, orders or awards of the NLRC. Clearly, therefore, Article 223 of the
Labor Code is not the proper basis for elevating the case to the Court of Appeals or to the Supreme Court.
The proper remedy from the decisions, awards or orders of the NLRC to the Court of Appeals is a Rule 65
petition for certiorari and from the Court of Appeals to the Supreme Court, a Rule 45 petition for review on
certiorari.
 Appeal from the NLRC to the DOLE Secretary and to the President had long been abolished.
 Appeal is not a constitutional right but a mere statutory privilege. Hence, parties who seek to avail of it
must comply with the statutes or rules allowing it.
 A motion for reconsideration is unavailing as a remedy against a decision of the Labor Arbiter. The Labor
Arbiter should treat the said motion as an appeal to the NLRC.
 A “Petition for Relief” should be treated as appeal.
 Affirmative relief is not available to a party who failed to appeal. A party who does not appeal from a
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decision of a court cannot obtain affirmative relief other than the ones granted in the appealed decision.
3. GROUNDS FOR APPEAL TO THE COMMISSION (NLRC).

The appeal to the NLRC may be entertained only on any of the following grounds:
a. If there is a prima facie evidence of abuse of discretion on the part of the Labor Arbiter;
b. If the decision, order or award was secured through fraud or coercion, including graft and corruption;
c. If made purely on questions of law; and/or
d. If serious errors in the findings of fact are raised which, if not corrected, would cause grave or
irreparable damage or injury to the appellant.
 NLRC has certiorari power.
The first ground above regarding prima facie evidence of abuse of discretion on the part of the Labor
Arbiter is actually an exercise of certiorari power by the NLRC. The case of Triad Security & Allied Services,
Inc. v. Ortega,1 expressly recognized this certiorari power of the NLRC. Clearly, according to the 2012 case of
Auza, Jr. v. MOL Philippines, Inc.,2 the NLRC is possessed of the power to rectify any abuse of discretion
committed by the Labor Arbiter.
II.
PERFECTION OF APPEAL
1. EFFECT OF PERFECTION OF APPEAL ON EXECUTION.
1 G.R. No. 160871, Feb. 6, 2006.

2 G.R. No. 175481, Nov. 21,
2012.
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To reiterate, the perfection of an appeal shall stay the execution of the decision of the Labor Arbiter except
execution for reinstatement pending appeal.
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2. PERFECTION OF APPEAL, MANDATORY AND JURISDICTIONAL.
The perfection of appeal within the period and in the manner prescribed by law is jurisdictional and
non- compliance with the legal requirements is fatal and has the effect of rendering the judgment final and
executory, hence, unappealable.
3. REQUISITES.
The requisites for perfection of appeal to the NLRC are as follows:
(1) Observance of the reglementary period;
(2) Payment of appeal and legal research fee;
(3) Filing of a Memorandum of Appeal;
(4) Proof of service to the other party; and
(5) Posting of cash, property or surety bond, in case of monetary awards.
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The foregoing are discussed below.
III.
REGLEMENTARY PERIOD
1. THREE (3) KINDS OF REGLEMENTARY PERIOD.
The reglementary period depends on where the appeal comes from, viz.:
1. Ten (10) calendar days – in the case of appeals from decisions of the Labor Arbiters under Article 223
of the Labor Code;
2. Five (5) calendar days – in the case of appeals from decisions of the Labor Arbiters in contempt cases; and
3. Five (5) calendar days – in the case of appeals from decisions of the DOLE Regional Director
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Calendar days and not working days.
The shortened period of ten (10) days fixed by Article 223 contemplates calendar days and not working
days. The same holds true in the case of the 5-day reglementary period under Article 129 of the Labor Code.
Consequently, Saturdays, Sundays and legal holidays are included in reckoning and computing the
reglementary period.
2. EXCEPTIONS TO THE 10-CALENDAR DAY OR 5-CALENDAR DAY REGLEMENTARY
PERIOD RULE.
The following are the specific instances where the rules on the reckoning of the reglementary period have
not been strictly observed:
1) 10th day (or 5th day) falling on a Saturday, Sunday or holiday, in which case, the appeal may be filed in
the next working day.
2) When NLRC exercises its power to “correct, amend, or waive any error, defect or irregularity
whether in substance or form” in the exercise of its appellate jurisdiction, as provided under Article
218(c) of the Labor Code, in which case, the late filing of the appeal is excused.
3) When technical rules are disregarded under Article 221.
4) When there are some compelling reasons that justify the allowance of the appeal despite its late filing
such as when it is granted in the interest of substantial justice.
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3. SOME PRINCIPLES ON REGLEMENTARY PERIOD.
 The reglementary period is mandatory and not a “mere technicality.”
 The failure to appeal within the reglementary period renders the judgment appealed from final and
executory by operation of law. Consequently, the prevailing party is entitled, as a matter of right, to a writ of
execution and the issuance thereof becomes a ministerial duty which may be compelled through the remedy of
mandamus.
 The date of receipt of decisions, resolutions or orders by the parties is of no moment. For purposes of appeal,
the reglementary period shall be counted from receipt of such decisions, resolutions, or orders by the
counsel or representative of record.
 Miscomputation of the reglementary period will not forestall the finality of the judgment. It is in the interest
of everyone that the date when judgments become final and executory should remain fixed and ascertainable.
 Date of mailing by registered mail of the appeal memorandum is the date of its filing.
 Motion for extension of time to perfect an appeal is not allowed. This kind of motion is a prohibited pleading.
 Motion for extension of time to file the memorandum of appeal is not allowed.
 Motion for extension of time to file appeal bond is not allowed.
IV.
APPEAL FEE AND LEGAL RESEARCH FEE
1. PAYMENT OF APPEAL FEE AND LEGAL RESEARCH FEE, MANDATORY AND

JURISDICTIONAL.
The payment by the appellant of the prevailing appeal fee and legal research fee is both mandatory
and jurisdictional. An appeal is perfected only when there is proof of payment of the appeal fee. It is by no means
a mere technicality. If not paid, the running of the reglementary period for perfecting an appeal will not be tolled.
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V.
MEMORANDUM OF
APPEAL
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1. REQUISITES.
The requisites for a valid Memorandum of Appeal are as follows:
1. The Memorandum of Appeal should be verified by the appellant himself in accordance with the
Rules of Court, as amended;
2. It should be presented in three (3) legibly typewritten or printed copies;
3. It shall state the grounds relied upon and the arguments in support thereof, including the relief prayed for;
4. It shall contain a statement of the date the appellant received the appealed decision, award or order; and
5. It shall be accompanied by:
(i) proof of payment of the required appeal fee and legal research fee;
(ii) posting of a cash or surety bond (in case of monetary awards); and
(iii) proof of service upon the other party.
2. REQUIREMENTS NOT JURISDICTIONAL.
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The aforesaid requirements that should be complied with in a Memorandum of Appeal are merely a
rundown of the contents of the required appeal memorandum to be submitted by the appellant. They are not
jurisdictional requirements.
3. SOME PRINCIPLES ON MEMORANDUM OF APPEAL.
 Mere notice of appeal without complying with the other requisites aforestated shall not stop the running
of the period for perfecting an appeal.
 Memorandum of appeal is not similar to motion for reconsideration.
 Lack of verification in a memorandum of appeal is not a fatal defect. It may easily be corrected by
requiring an oath.
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 An appeal will be dismissed if signed only by an unauthorized representative.
 Only complainants who signed the memorandum of appeal are deemed to have appealed the Labor
Arbiter’s decision. The prevailing doctrine in labor cases is that a party who has not appealed cannot obtain
from the appellate court any affirmative relief other than those granted, if any, in the decision of the lower
tribunal.
VI.
PROOF OF SERVICE TO ADVERSE PARTY
1. FAILURE TO SERVE COPY TO ADVERSE PARTY, NOT FATAL.
While it is required that in all cases, the appellant shall furnish a copy of the Memorandum of Appeal to
the other party (appellee), non-compliance therewith, however, will not be an obstacle to the perfection of the
appeal; nor will it amount to a jurisdictional defect on the NLRC’s taking cognizance thereof.
VII.
POSTING OF BOND
1. WHEN POSTING OF BOND REQUIRED.
Only in case the decision of the Labor Arbiter or the DOLE Regional Director (under Article 129 of the
Labor Code) involves a monetary award, that an appeal by the employer may be perfected only upon the posting
of a bond, which shall either be in the form of (1) cash deposit, (2) surety bond or (3) property bond, equivalent
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in amount to the monetary award, but excluding the amount of damages (moral and exemplary) and attorney’s
fees. In other words, only monetary awards (such as unpaid wages, backwages, separation pay, 13th month
pay, etc.) are required to be covered by the bond. Moral and exemplary damages and attorney’s fees are
excluded.
2. SOME PRINCIPLES ON POSTING OF BOND.
 Posting of bond is mandatory and jurisdictional.
 The cash or surety bond required for the perfection of appeal should be posted within the reglementary
period. If a party failed to perfect his appeal by the non-payment of the appeal bond within the 10-calendar
day period provided by law, the decision of the Labor Arbiter becomes final and executory upon the expiration
of the said period.
 In case the employer failed to post a bond to perfect its appeal, the remedy of the employee is to file a
motion to dismiss the appeal and not a petition for mandamus for the issuance of a writ of execution.
 Surety bond must be issued by a reputable bonding company duly accredited by the Commission (NLRC) or
the Supreme Court.
 The bond shall be valid and effective from the date of deposit or posting, until the case is finally decided,
resolved or terminated, or the award satisfied.
 Posting of a bank guarantee or bank certification is not sufficient compliance with the bond requirement.
It is not equivalent to nor can be considered compliance with the cash, surety or property bond.
 Cooperatives are not exempted from posting bond.
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 Government is exempt from posting of bond; government-owned and/or controlled corporations, however,
are not exempt therefrom.
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 Bond is not required for the NLRC to entertain a motion for reconsideration. An appeal bond is
required only for the perfection of an appeal of a Labor Arbiter’s decision involving a monetary award.
 Bond is not required to file a Rule 65 petition for certiorari.
3. JUSTIFICATIONS FOR NON-POSTING OF BOND.
 No monetary award, no bond required. The rule is clear that when the judgment of the Labor Arbiter does
not involve any monetary award, no appeal bond is necessary.
 There is no duty to post a bond if the monetary award is not specified in the decision. The Labor Arbiter’s
decision or order should state the amount awarded. If the amount of the monetary award is not contained or
fixed in the judgment, the appeal bond is not required to be posted.
 In case of conflict between the body and the fallo of the decision, the latter should prevail.
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RULE ON REDUCTION OF APPEAL BOND
1. REQUISITES WHEN THE AMOUNT OF APPEAL BOND MAY BE REDUCED.
(1) The motion should be filed within the reglementary period;
(2) The motion to reduce bond should be based on meritorious grounds; and
(3) The motion should be accompanied by a partial bond, the amount of which should be reasonable
in relation to the monetary awards.
2. THE MCBURNIE DOCTRINE: NEW GUIDELINES FOR FILING AND ACCEPTANCE OF

MOTIONS TO REDUCE BOND.
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The 2013 en banc decision rendered in the case of Andrew James Mcburnie v. Eulalio Ganzon,1
has enunciated the following guidelines that must be observed in the matter of the filing and acceptance of
motions to reduce appeal bond, as provided in Section 6, Rule VI of the 2011 NLRC Rules of Procedure:
(a) The filing of a motion to reduce appeal bond shall be entertained by the NLRC subject to the
following conditions:
(1) there is meritorious ground; and
(2) a bond in a reasonable amount is posted;
(b) For purposes of compliance with condition no. (2) above, a motion shall be accompanied by the
posting of a provisional cash or surety bond equivalent to ten percent (10%) of the monetary award
subject of the appeal, exclusive of damages and attorney's fees;
(c) Compliance with the foregoing conditions shall suffice to suspend the running of the 10-day
reglementary period to perfect an appeal from the Labor Arbiter’s decision to the NLRC;
(d) The NLRC retains its authority and duty to resolve the motion to reduce bond and determine the
final amount of bond that shall be posted by the appellant, still in accordance with the standards of
meritorious grounds and reasonable amount; and
(e) In the event that the NLRC denies the motion to reduce bond, or requires a bond that exceeds the
amount of the provisional bond, the appellant shall be given a fresh period of ten (10) days from
notice of the NLRC order within which to perfect the appeal by posting the required appeal bond.
This Mcburnie ruling has completely overhauled the rules on motion to reduce bond. Before its advent, the
the courts. Now, the fixing of “ten percent (10%) of the monetary award subject of the appeal, exclusive of
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issue of what amount to post by way of partial or provisional bond has continued to hound the party litigants and
damages and attorney's fees” as the “reasonable amount” that should be posted has completely eradicated any and
all controversies thereon. In other words, no more motion for reduction of bond accompanied by said 10%
requirement would be denied outright on the ground of insufficiency or inadequacy of the partial or provisional
bond.
What is left for the determination by the NLRC, using its sound judgment and discretion, are only the issues of
(1) the reasonable final amount of the bond; and (2) what constitute “meritorious grounds.” This determination
is important since “in all cases, the reduction of the appeal bond shall be justified by meritorious grounds and
accompanied by the posting of the required appeal bond in a reasonable amount.”2
3.
REINSTATEMENT PENDING APPEAL
1. PIONEER TEXTURIZING DOCTRINE: REINSTATEMENT ASPECT OF LABOR ARBITER’S
DECISION, IMMEDIATELY EXECUTORY EVEN PENDING APPEAL; NO WRIT OF EXECUTION
REQUIRED.
According to the Pioneer Texturizing doctrine,3 an order of reinstatement issued by the Labor Arbiter
under Article 229 [223] of the Labor Code is self-executory or immediately executory even pending appeal. This
means that the perfection of an appeal shall stay the execution of the decision of the Labor Arbiter except
execution of the reinstatement pending appeal.
1 G.R. Nos. 178034, 178117, 186984 and 186985, Oct. 17, 2013.
2 Andrew James Mcburnie v. Eulalio Ganzon, G.R. Nos. 178034, 178117, 186984 and 186985, Oct. 17, 2013.
3 Pioneer Texturizing Corporation v. NLRC, G.R. No. 118651, Oct. 16, 1997, 280 SCRA 806.
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2. REINSTATEMENT PENDING APPEAL, APPLICABLE ONLY TO THE REINSTATEMENT ORDER

ISSUED BY THE LABOR ARBITER; WRIT OF EXECUTION REQUIRED WHEN
REINSTATEMENT IS ORDERED BY NLRC ON APPEAL, OR SUBSEQUENTLY BY THE COURT
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OF APPEALS OR SUPREME COURT, AS THE CASE MAY BE.
By way of distinction, the rule on reinstatement pending appeal applies only to the order of
reinstatement issued by the Labor Arbiter and to no other. This means that if the reinstatement order is issued
by the NLRC on appeal, or by the Court of Appeals or by the Supreme Court, there is a need to secure a writ
of execution from the Labor Arbiter of origin to enforce the reinstatement of the employee whose dismissal is
declared illegal.
3. TWO (2) OPTIONS OF EMPLOYER.
To implement the reinstatement aspect of a Labor Arbiter’s decision, there are only two (2) options
available to the employer, to wit:
1. Actual reinstatement. - The employee should be reinstated to his position which he occupies prior to
his illegal dismissal under the same terms and conditions prevailing prior to his dismissal or separation
or, if no longer available, to a substantially-equivalent position; or
2. Payroll reinstatement. – The employee should be reinstated in the payroll of the company
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without requiring him to report back to his work.
DUTY OF EMPLOYER TO NOTIFY EMPLOYEE ORDERED REINSTATED.
It is required that in case the decision of the Labor Arbiter includes an order of reinstatement, it should
contain:
A statement that the reinstatement aspect is immediately executory; and
A directive for the employer to submit a report of compliance within ten (10) calendar days from receipt of the said
decision.
Disobedience of this directive clearly denotes a refusal to reinstate. The employee need not file a motion for the issuance
of the writ of execution since the Labor Arbiter is mandated thereafter to motu proprio issue the writ. With the new rules
in place, there is hardly any difficulty in determining the employer’s intransigence in immediately complying with the
order.
INSTANCES WHEN WRIT OF EXECUTION OF LABOR ARBITER’S REINSTATEMENT ORDER STILL
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REQUIRED.
Under the 2011 NLRC Rules of Procedure, there are two (2) instances when a writ of execution should still be issued
immediately by the Labor Arbiter to implement his order of reinstatement, even pending appeal, viz.:
When the employer disobeys the prescribed directive to submit a report of compliance within ten (10) calendar days
from receipt of the decision; or
When the employer refuses to reinstate the dismissed employee.
The Labor Arbiter shall motu proprio issue a corresponding writ to satisfy the reinstatement wages as they accrue until
actual reinstatement or reversal of the order of reinstatement.
SOME PRINCIPLES ON REINSTATEMENT PENDING APPEAL.
The Labor Arbiter cannot exercise option of employer by choosing payroll reinstatement pending appeal.
If the former position is already filled up, the employee ordered reinstated under Article 223 should be admitted back to
work in a substantially equivalent position.
Reinstatement to a position lower in rank is not proper.
Reinstatement cannot be refused on the basis of the employment elsewhere of the employee ordered reinstated.
The failure of the illegally dismissed employee who was ordered reinstated to report back to work does not give the
employer the right to remove him, especially when there is a reasonable explanation for his failure.
No reinstatement pending appeal should be made when antipathy and antagonism exist.
If reinstatement is not stated in the Labor Arbiter’s decision (neither in the dispositive portion nor in the text thereof),
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reinstatement is not warranted.
Employer has no way of staying execution of immediate reinstatement. He cannot post bond to prevent its
execution.
Reinstatement pending appeal applies to all kinds of illegal dismissal cases, regardless of the grounds thereof.
Reinstatement pending appeal does not apply when the dismissal is legal but reinstatement is ordered for some
reasons like equity and compassionate justice.
 The failure of employee ordered reinstated pending appeal to report back to work as directed by the
employer does not give the employer the right to remove him, especially when there is a reasonable
explanation for his failure.
 When former position is already filled up, the employee ordered reinstated pending appeal should be
reinstated to a substantially equivalent position.
 Reinstatement to a position lower in rank is not proper.
 In case of two successive dismissals, the order of reinstatement pending appeal under Article 223 issued
in the first case shall apply only to the first case and should not affect the second dismissal.
According to Sevilla v. NLRC, the Labor Arbiter was correct in denying the third motion for
reinstatement filed by the petitioner because what she should have filed was a new complaint based
on the second dismissal. The second dismissal gave rise to a new cause of action. Inasmuch as no
new complaint was filed, the Labor Arbiter could not have ruled on the legality of the second dismissal.
 Reinstatement pending appeal is not affected by the reinstated employee’s employment elsewhere.
 Effect of grant of achievement award during reinstatement pending appeal.
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In the 2014 case of Garza v. Coca-Cola Bottlers Philippines, Inc.,1 it was pronounced that the act of
respondent CCBPI in giving an award of a Certificate of Achievement to petitioner for his exemplary
sales performance during his reinstatement ordered by the Labor Arbiter, while respondent’s appeal with the
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indicates that he is a responsible, trustworthy and hardworking employee of CCBPI. It constitutes adequate
proof weighing in his favor.
B.
NATIONAL LABOR RELATIONS COMMISSION (NLRC)
1. NATURE.
The NLRC is an administrative quasi-judicial body. It is an agency attached to the DOLE solely for
program and policy coordination only. It is in charge of deciding labor cases through compulsory arbitration.
2. COMPOSITION OF THE NLRC.
The NLRC is composed of a Chairman and twenty-three (23) members called “Commissioners.”
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The NLRC has tripartite composition. Eight (8) members thereof should be chosen only from among
the nominees of the workers sector and another eight (8) from the employers sector. The Chairman and the
seven (7) remaining members shall come from the public sector, with the latter to be chosen preferably from
among the incumbent Labor Arbiters.
3. COMMISSION EN BANC.
The Commission sits en banc only for the following purposes:
(1) To promulgate rules and regulations governing the hearing and disposition of cases before any of
its divisions and regional branches; and
(2) To formulate policies affecting its administration and operations.
The NLRC does not sit en banc to hear and decide cases. The banc has no adjudicatory power. The
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Commission exercises its adjudicatory and all other powers, functions, and duties through its eight (8)
Divisions.
4. NLRC’S EIGHT (8) DIVISIONS.
The NLRC is divided into eight (8) divisions, each one is comprised of three (3) members. Each Division
shall consist of one (1) member from the public sector who shall act as its Presiding Commissioner and one (1)
member each from the workers and employers sectors, respectively.
The various Divisions of the Commission have exclusive appellate jurisdiction over cases within their
respective territorial jurisdictions.
1.
JURISDICTION
1. TWO (2) KINDS OF JURISDICTION.
The NLRC exercises two (2) kinds of jurisdiction:
1. Exclusive original jurisdiction; and
2. Exclusive appellate jurisdiction.
2. EXCLUSIVE ORIGINAL JURISDICTION.
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The NLRC exercises exclusive and original jurisdiction over the following cases:
a. Petition for injunction in ordinary labor disputes to enjoin or restrain any actual or
threatened commission of any or all prohibited or unlawful acts or to require the performance of a
particular act in any labor dispute which, if not restrained or performed forthwith, may cause grave or
irreparable damage to any party.
b. Petition for injunction in strikes or lockouts under Article 264 of the Labor Code.
c. Certified cases which refer to labor disputes causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, certified to it by the Secretary of Labor and
Employment for compulsory arbitration by virtue of Article 263(g) of the Labor Code.
d. Petition to annul or modify the order or resolution (including those issued during execution
proceedings) of the Labor Arbiter.
3. EXCLUSIVE APPELLATE JURISDICTION.
The NLRC exercises exclusive appellate jurisdiction over the following:
a. All cases decided by the Labor Arbiters.
b. Cases decided by the DOLE Regional Directors or hearing officers involving small money claims
c. Contempt cases decided by the Labor Arbiters.
2.
EFFECT OF NLRC REVERSAL OF
1 G.R. No. 180972, Jan. 20,

2014.
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LABOR ARBITER’S ORDER OF REINSTATEMENT
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1. EFFECT OF REVERSAL OF REINSTATEMENT ORDER WHEN EMPLOYEE WAS
ACTUALLY REINSTATED.
The BERGONIO Rule:
Bergonio, Jr. v. South East Asian Airlines, April 21, 2014.
 After reversal of Labor Arbiter’s decision, the employer’s duty to reinstate the dismissed employee in
the actual service or in the payroll is effectively terminated. The employee, in turn, is not required to
return the wages that he had received prior to the reversal of the LA’s decision.
2. EFFECT OF REVERSAL OF REINSTATEMENT ORDER WHEN EMPLOYEE WAS REINSTATED

IN THE PAYROLL.
The GENUINO Doctrine:

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Marilou S. Genuino v. NLRC, Citibank, N.A., Dec. 4, 2007.
The Refund Doctrine in Genuino no longer applies, per Garcia Doctrine (See below).
The WENPHIL Rule: (The prevailing rule)

Wenphil Corporation v. Abing, April 7, 2014.
 The period for computing the backwages due to the dismissed employees during the period of appeal
should END on the date that a higher court (in this case the CA) reversed the labor arbitration ruling
of illegal dismissal.”
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3. EFFECT OF REVERSAL OF REINSTATEMENT ORDER WHEN EMPLOYEE WAS NEITHER
REINSTATED TO HIS FORMER POSITION OR IN THE PAYROLL.
3.1. ENTITLEMENT TO REINSTATEMENT WAGES.
 The employee is entitled to reinstatement salaries/wages, allowances and benefits under the
following doctrines:
(1) ROQUERO doctrine (Roquero v. Philippine Air Lines, Inc., April 22, 2003); and
(2) GARCIA doctrine (Garcia v. Philippine Airlines, Inc., Jan. 20, 2009 [En Banc]).
Based on the foregoing doctrines, from the moment an employee is ordered reinstated by the Labor Arbiter
on the basis of the finding that his dismissal is illegal, up to the time that an appellate tribunal like the NLRC,
Court of Appeals and Supreme Court, as the case may be, reverses the said finding, the employee is generally
entitled to his so- called “reinstatement wages.”
3.1.1. ROQUERO DOCTRINE.
The Roquero doctrine, enunciates the rule that in cases where an employee is ordered reinstated by the
Labor Arbiter and the employer fails or refuses to obey the reinstatement order but initiates an appeal, the
employer’s success in having the decision of the Labor Arbiter’s decision reversed on appeal will not exculpate
him from the liability to pay the reinstatement wages of the employee reckoned and computed from the time the
employee was ordered reinstated by the Labor Arbiter until the date of its reversal on appeal.
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In this case of Roquero, the dismissal of petitioners Roquero and Pabayo was held valid by the Labor
Arbiter. On appeal to the NLRC, the Labor Arbiter’s decision was reversed and consequently, petitioners
were ordered reinstated. They did not appeal from that decision of the NLRC but filed a motion for the
issuance of a writ of execution of the order of reinstatement. The Labor Arbiter granted the motion but respondent
PAL refused to comply with the said order on the ground that it has filed a Petition for Review before the Supreme
Court. Subsequently, the CA reversed the decision of the NLRC and ruled that the dismissal of petitioners was
valid. The Supreme Court later affirmed the CA’s decision but it held that the unjustified refusal by PAL to
reinstate Roquero who, unlike Pabayo, has not amicably settled his case, entitles him to the payment of his
reinstatement wages effective from the time PAL failed to reinstate him despite the issuance of the writ of
execution. Thus, it was mandatory for PAL to actually reinstate Roquero or reinstate him in the payroll. Having
failed to do so, the former must pay the latter the salaries he is entitled to, as if he was reinstated, from the time of
the decision of the NLRC until the finality of the decision of the Supreme Court.
Following Roquero, it is now the norm that even if the order of reinstatement of the Labor Arbiter is
reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed
employee during the period of appeal until its reversal by the NLRC, or the Court of Appeals or the Supreme
Court, as the case may be. If the employee has been reinstated during the appeal period and such reinstatement
order is subsequently reversed on appeal with finality, the employee is not required to reimburse whatever salaries
he has received for he is entitled to such, more so if he actually rendered services during the said period.
3.1.2. GARCIA DOCTRINE.
a. Modification of the Roquero and Genuino doctrines.
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The Roquero and Genuino doctrines have been modified by the Garcia doctrine. In this case, while
respondent Philippine Airlines (PAL) was undergoing rehabilitation receivership, an illegal dismissal case was
filed by petitioners against respondent PAL which was decided by the Labor Arbiter in their favor thus
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ordering PAL to, inter alia, immediately comply with the reinstatement aspect of the decision. On appeal, the
NLRC reversed the ruling of the Labor Arbiter and held that their dismissal was valid. The issue of whether
petitioners may collect their reinstatement wages during the period between the Labor Arbiter’s order of
reinstatement pending appeal and the NLRC decision overturning that of the Labor Arbiter, now that
respondent PAL has terminated and exited from rehabilitation proceedings, was resolved in the negative by the
Supreme Court. The following ratiocinations were cited:
(1) Re: modification of the Genuino doctrine. - The “refund doctrine” in Genuino should no longer
be observed because it easily demonstrates how a favorable decision by the Labor Arbiter could harm, more than
help, a dismissed employee. The employee, to make both ends meet, would necessarily have to use up the
salaries received during the pendency of the appeal, only to end up having to refund the sum in case of a final
unfavorable decision. It is mirage of a stop-gap leading the employee to a risky cliff of insolvency. Further, the
Genuino ruling not only disregards the social justice principles behind the rule, but also institutes a scheme unduly
favorable to management. Under such scheme, the salaries dispensed pendente lite merely serve as a bond posted in
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installment by the employer. For in the event of a reversal of the Labor Arbiter’s decision ordering reinstatement,
the employer gets back the same amount without having to spend ordinarily for bond premiums. This circumvents,
if not directly contradicts, the proscription that the “posting of a bond [even a cash bond] by the employer shall not
stay the execution for reinstatement.”
(2) Re: modification of the Roquero doctrine. – The Roquero doctrine was reaffirmed but with the
modification that “[a]fter the Labor Arbiter’s decision is reversed by a higher tribunal, the employee may be barred
from collecting the accrued wages, if it is shown that the delay in enforcing the reinstatement pending appeal was
without fault on the part of the employer.”
b. Two-fold test under the Garcia doctrine.
Under Garcia, the test to determine the liability of the employer (who did not reinstate the employee
pending appeal) to pay the wages of the dismissed employee covering the period from the time he was ordered
reinstated by the Labor Arbiter to the reversal of the Labor Arbiter’s decision either by the NLRC, the Court of
Appeals or the High Court, is two-fold, to wit:
executed prior to its reversal; and ChanRobles Bar

(1) There must be actual delay or the fact that the order of reinstatement pending appeal was not
(2) The delay must not be due to the employer’s unjustified act or omission. If the delay is due to
the employer’s unjustified refusal, the employer may still be required to pay the salaries
notwithstanding the reversal of the Labor Arbiter’s decision.
In Garcia, there was actual delay in reinstating petitioners but respondent PAL was justified in not
complying with the reinstatement order of the Labor Arbiter because during the pendency of the illegal dismissal
case, the SEC placed respondent PAL under an Interim Rehabilitation Receiver who, after the Labor Arbiter
rendered his decision, was replaced with a Permanent Rehabilitation Receiver. It is settled that upon appointment
by the SEC of a rehabilitation receiver, all actions for claims before any court, tribunal or board against the
corporation shall ipso jure be suspended. Resultantly, respondent PAL’s “failure to exercise the alternative
options of actual reinstatement and payroll reinstatement was thus justified. Such being the case, respondent’s
obligation to pay the salaries pending appeal, as the normal effect of the non-exercise of the options, did not
attach.”
2. RECKONING OF THE PERIOD COVERED BY ACCRUED REINSTATEMENT WAGES.
To clarify, employees ordered reinstated by the Labor Arbiter are entitled to accrued reinstatement wages
only from the time the employer received a copy of the Labor Arbiter’s decision declaring the employees’
termination illegal and ordering their reinstatement up to the date of the decision of the appellate tribunal
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overturning that of the Labor Arbiter. It is not accurate therefore to state that such entitlement commences
“from the moment the reinstatement order was issued up to the date when the same was reversed by a higher court
without fear of refunding what he had received.”
4. SOME PRINCIPLES ON REINSTATEMENT WAGES.
 Employer is not liable to pay any reinstatement backwages if reinstatement is ordered not by the Labor Arbiter
but by the NLRC on appeal and it was not executed by writ and its finding of illegal dismissal is later
reversed by the Court of Appeals and/or Supreme Court.
 Payroll-reinstated employee is entitled not only to reinstatement wages but also to other benefits during
the period of payroll reinstatement until the illegal dismissal case is reversed by a higher tribunal.
 Award of additional backwages and other benefits from the time the Labor Arbiter ordered reinstatement
until actual or payroll reinstatement is proper and valid.
C.
JUDICIAL REVIEW OF LABOR RULINGS
1.
COURT OF APPEALS
Rule 65, Rules of Court
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1. RULE 65 PETITION FOR CERTIORARI, THE ONLY MODE OF ELEVATING A LABOR CASE TO
THE COURT OF APPEALS.
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The only mode by which a labor case decided by any of the following labor authorities/tribunals may reach
the Court of Appeals is through a Rule 65 petition for certiorari.
(a) the DOLE Secretary;
(b) the Commission (NLRC); and
(c) the Director of the Bureau of Labor Relations (BLR) in cases decided by him in his appellate
jurisdiction (as distinguished from those he decides in his original jurisdiction which are appealable
to the DOLE Secretary).
The remedy of ordinary appeal to the Court of Appeals is not available from their decisions, orders or awards.
The reason for this rule is that their decisions, orders or awards are final and executory and therefore inappealable.
2. THE ONLY EXCEPTION.

The only exception to the foregoing rule is in the case of decisions, orders or awards issued by the
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Voluntary Arbitrator or panel of Voluntary Arbitrators which may be elevated to the Court of Appeals by
way of an ordinary appeal under a Rule 43 petition for review.
3. FILING OF MOTION FOR RECONSIDERATION OF THE DECISION OF THE DOLE SECRETARY,

THE COMMISSION (NLRC) OR THE BLR DIRECTOR, A PRE-REQUISITE TO FILING OF RULE
65 PETITION FOR CERTIORARI.
The rule on the filing of a Motion for Reconsideration of the decision of the DOLE Secretary, the NLRC
and the BLR Director is mandatory and jurisdictional. Failure to comply therewith would result in the dismissal
of the Rule 65 certiorari petition. Jurisprudence abounds enunciating the rule that a motion for reconsideration is a
pre-requisite for the filing of a special civil action for certiorari.
The reason for this rule is that in labor cases, a motion for reconsideration is the plain and adequate
remedy from an adverse decision of the DOLE Secretary, the NLRC and the BLR Director.
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 THE PHILTRANCO DOCTRINE: a motion for reconsideration should be filed even though it is not
required or even prohibited by the concerned government office. This was the rule enunciated in the
2014 case of Philtranco Service Enterprises, Inc. v. Philtranco Workers Union-Association of
Genuine Labor Organizations (PWU-AGLO).1 Thus, while a government office may prohibit
altogether the filing of a motion for reconsideration with respect to its decisions or orders, the fact
remains that certiorari inherently requires the filing of a motion for reconsideration which is the tangible
representation of the opportunity given to the office to correct itself. Unless it is filed, there could be no
occasion to rectify. Worse, the remedy of certiorari would be unavailing. Simply put, regardless of the
proscription against the filing of a motion for reconsideration, the same may be filed on the assumption
that rectification of the decision or order must be obtained and before a petition for certiorari may be
instituted.
4. CERTIORARI PETITION MAY BE FILED EVEN IF THE DECISION OF THE DOLE

SECRETARY, THE COMMISSION (NLRC), OR THE BLR DIRECTOR HAS ALREADY BECOME
FINAL AND EXECUTORY.
This rule applies to the decisions rendered by the DOLE Secretary, the NLRC or the BLR Director (in
cases which he decided in his appellate jurisdiction).
If the CA grants the petition and nullifies their decisions on the ground of grave abuse of discretion
amounting to excess or lack of jurisdiction, such decisions are, in contemplation of law, null and void ab initio;
hence, they never became final and executory.
2.
JUDICIAL REVIEW OF DECISIONS
OF VOLUNTARY ARBITRATORS
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1. DECISIONS, FINAL AND EXECUTORY.
As a general rule, decisions or awards of Voluntary Arbitrators are final, inappealable and executory after ten
(10) calendar days from receipt of a copy thereof by the parties.
2. ORDINARY APPEAL UNDER RULE 43 OF THE 1997 RULES OF CIVIL PROCEDURE
– VOLUNTARY ARBITRATORS ARE OF THE SAME LEVEL AS RTC JUDGES.
Being a quasi-judicial agency, the decisions and awards of a Voluntary Arbitrator are appealable by way
of a petition for review to the Court of Appeals under Revised Administrative Circular No. 1-95 which provides
for a uniform procedure for appellate review of all adjudications of quasi-judicial entities and which is now
embodied in Section 1, Rule 43 of the 1997 Rules of Civil Procedure.
The ruling in Luzon Development Bank v. Association of Luzon Development Bank Employees,2 in
effect, equates the decisions or awards of the Voluntary Arbitrator to those of the Regional Trial Court (RTC).
Hence, in a petition for certiorari from the awards or decisions of the Voluntary Arbitrator, the Court of Appeals
has concurrent jurisdiction with the Supreme Court.
1 G.R. No. 180962, Feb. 26, 2014. Although this case involves a decision of the DOLE Secretary, the principle enunciated herein equally applies to the NLRC.
2 G.R. No. 120319, October 6, 1995.
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In Alcantara, Jr. v. CA,1 it was held that Luzon Development Bank is still a good law.
3. PERIOD OF APPEAL.
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Voluntary Arbitrator to the CA exists between the law, Article 276 [262-A] of the Labor Code, on the one hand, and the
Rules of Court, particularly Section 4, Rule 43 thereof, on the other.
Article 276 [262-A] provides, insofar as pertinent, as follows:
“The award or decision of the Voluntary Arbitrator or Panel of Voluntary Arbitrators shall contain the
facts and the law on which it is based. It shall be final and executory after ten (10) calendar days from
receipt of the copy of the award or decision by the parties.”2
Section 4, Rule 43 of the Rules of Court, on the other hand, provides for a 15-day reglementary period for filing
an appeal, thus:
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“Section 4. Period of appeal. - The appeal shall be taken within fifteen (15) days from notice of the
award, judgment, final order or resolution, or from the date of its last publication, if publication is required by
law for its effectivity, or of the denial of petitioner's motion for new trial or reconsideration duly filed in
accordance with the governing law of the court or agency a quo. Only one (1) motion for reconsideration shall
be allowed. Upon proper motion and the payment of the full amount of the docket fee before the expiration of the
reglementary period, the Court of Appeals may grant an additional period of fifteen (15) days only within
which to file the petition for review. No further extension shall be granted except for the most compelling reason
and in no case to exceed fifteen (15) days.”3
3.1. THE GUAGUA DOCTRINE - CLARIFICATION OF THE RULE ON APPEAL.

Finally, the en banc decision in the 2018 case of Guagua National Colleges v. CA,4 has laid to rest
the above conflict. The Court declared that the variable rulings notwithstanding, the period now to be followed in
appealing the decisions or awards of the Voluntary Arbitrators or Panel of Arbitrators should be as follows:
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(1) The 10-calendar day period stated in Article 276 [262-A] should be understood as the period
within which the party adversely affected by the ruling of the Voluntary Arbitrators or Panel of
Arbitrators may file a motion for reconsideration; and
(2) Only after the resolution of the motion for reconsideration may the aggrieved party appeal to the CA
by filing the petition for review under Rule 43 of the Rules of Court within 15 days from notice
pursuant to Section 4 of Rule 43.
3.
SUPREME COURT
Rule 45, Rules of Court
1. RULE 45 PETITION FOR REVIEW ON CERTIORARI, THE ONLY MODE BY WHICH A LABOR
CASE MAY REACH THE SUPREME COURT.
Since the Court of Appeals has jurisdiction over the petition for certiorari under Rule 65 that may be filed
before it from the decisions of the NLRC or the DOLE Secretary or the BLR Director (in cases decided by him in
his appellate jurisdiction), any alleged errors committed by it in the exercise of its jurisdiction would be errors of
judgment which are reviewable by means of a timely appeal to the Supreme Court and not by a special civil action
of certiorari.
If the aggrieved party fails to do so within the reglementary period and the decision accordingly becomes
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final and executory, he cannot avail himself of the writ of certiorari, his predicament being the effect of his
deliberate inaction. A petition for certiorari under Rule 65 cannot be a substitute for a lost appeal under Rule
45; hence, it should be dismissed.
2. THE NEYPES DOCTRINE (FRESH PERIOD RULE) - FRESH PERIOD FROM DENIAL OF
MOTION FOR RECONSIDERATION.
In the 2013 case of Elizabeth Gagui v. Dejero,5 petitioner successively filed two Motions for
Reconsideration of the CA’s decision but both were denied. Petitioner elevated the case to the Supreme Court
under Rule 45. In their comment, respondents alleged that the instant petition had been filed 15 days after the
prescriptive period of appeal under Section 2, Rule 45 of the Rules of Court. In her reply, petitioner countered that
she has a fresh period of 15 days from the date she received the Resolution of the CA to file the instant Rule 45
petition. In affirming the contention of petitioner, the Supreme Court cited the en banc ruling in the case of
Neypes v. CA6 which standardized the appeal periods, thus:
“To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to appeal
their cases, the Court deems it practical to allow a fresh period of 15 days within which to file the notice of
appeal in the Regional Trial Court, counted from receipt of the order dismissing a motion for a new trial or
motion for reconsideration.
“Henceforth, this ‘fresh period rule’ shall also apply to Rule 40 governing appeals from the Municipal
Trial Courts to the Regional Trial Courts; Rule 42 on petitions for review from the Regional Trial Courts to the
Court of
1 G.R. No. 143397, Aug. 6, 2002.

2 Underscoring supplied.
3 Id.
4 Guagua National Colleges v. CA, G.R. No. 188492, Aug. 28,
2018.
5 G.R. No. 196036, Oct. 23, 2013.
6 G.R. No. 141524, Sept. 14, 2005.
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Appeals; Rule 43 on appeals from quasi-judicial agencies to the Court of Appeals and Rule 45
governing appeals by certiorari to the Supreme Court. The new rule aims to regiment or make the appeal
period uniform, to be counted from receipt of the order denying the motion for new trial, motion for
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reconsideration (whether full or partial) or any final order or resolution.”
Consequently, since petitioner in Gagui received the CA Resolution denying her two Motions for
Reconsideration only on 16 March 2011, she had another 15 days within which to file her Petition, or until 31
March 2011. This Petition, filed on 30 March 2011, fell within the prescribed 15-day period.
D.
BUREAU OF LABOR RELATIONS (BLR)
1.
JURISDICTION
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1. LABOR OFFICIALS CONCERNED.
As far as labor relations cases are concerned, the following officials are involved in their adjudication:
Mediators-Arbiters (Med-Arbiters);
DOLE Regional Directors; and
BLR Director.
MED-ARBITER.
The term “Med-Arbiter” refers to an officer in the DOLE Regional Office or in the BLR authorized to hear and decide
representation cases, inter-union or intra-union disputes and other related labor relations disputes.
While the Labor Code refers to this official as “Med-Arbiter,” it should, however, be construed to mean “Mediator-
Arbiter.” Most recent DOLE issuances have specifically changed such reference to “Mediator-Arbiter” in their
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provisions. This is but proper since the word “Med” obviously is an abbreviation of the word “Mediator.”
DOLE REGIONAL DIRECTOR.
The Regional Directors are the duly authorized representatives of the DOLE Secretary in the DOLE regional offices.
They are in charge of the administration and enforcement of labor standards within their respective territorial
jurisdictions.1 Although, like the Med-Arbiters, they are not also specifically mentioned in said article, it is a known
procedural rule, however, that in addition to their jurisdiction over cases falling under Articles 128 2 and 1293 of the
Labor Code, they also have jurisdiction over certain specified cases contemplated under Article 232 [226] of the same
Code such as disputes concerning union registration and cancellation of union registration as well as CBA registration or
deregistration cases.
BLR DIRECTOR.
The BLR is headed by a Director who hears and decides certain specified cases over which he has either original or
appellate jurisdiction. In many cases, his name, instead of the BLR, is usually the one impleaded as public respondent in
certiorari petitions to the CA or subsequent appeals to the Supreme Court. Thus, one would encounter countless cases
filed against such luminaries like Pura-Ferrer Calleja, Cresenciano B. Trajano, Benedicto Ernesto R. Bitonio Jr., and
Hans Leo J. Cacdac, among others, who are sued in their capacity as BLR Directors.
III.
CASES COGNIZABLE
The following are the general classifications of the cases falling under the jurisdiction of the said officials, to wit:
Inter-union disputes;
Intra-union disputes; and
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Other related labor relations disputes.
III-A.
INTER-UNION AND INTRA-UNION DISPUTES
1. INTER-UNION OR REPRESENTATION DISPUTE.
An “inter-union dispute” or “representation dispute” is one occurring or carried on between or among unions. It
refers to a case involving a petition for certification election filed by a duly registered labor organization which is
seeking to be recognized as the sole and exclusive bargaining agent (SEBA) of the rank-and-file employees or
supervisory employees, as the case may be, in the appropriate bargaining unit of a company, firm or establishment. If
there are two or more legitimate unions involved, it also refers to any conflict between and among them concerning the
issue of which of them should be certified as the SEBA for purposes of collective bargaining with the employer.
Broadly, it covers any other conflict or dispute between legitimate labor unions.
2. INTRA-UNION OR INTERNAL UNION DISPUTE.
1 See Article 128, Labor Code.

2 Visitorial and enforcement powers of the DOLE Secretary and his duly authorized representatives, the DOLE Regional Directors.
3 See Article 129, Labor Code, involving monetary claims of ₱5,000 or less.
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An “intra-union dispute” or “internal union dispute” refers to a conflict within or inside a labor union. It may
refer to any conflict between and among officers and/or members of one particular union, including grievances arising
from any violation of the rights and conditions of membership, violation of or disagreement over any provision of the
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union’s constitution and by-laws,1 issues over control, supervision and management of its internal affairs, or
disputes arising from chartering or affiliation of a union.
3. RUNDOWN OF INTER-UNION AND INTRA-UNION CASES.
In accordance with the Labor Code’s Implementing Rules, as amended in 2015,2 the following is a rundown
of all possible inter-union/intra-union disputes:
a) Cancellation of registration of a labor organization filed by its members or by another labor organization;
b) Conduct of election of union and workers’ association officers or nullification of election of union and
workers' association officers;
c) Audit/accounts examination of union or workers' association funds;
d) Deregistration of collective bargaining agreements;
e) Validity/invalidity of union affiliation or disaffiliation;
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f) Validity/invalidity of acceptance/non-acceptance for union membership;
g) Validity/invalidity of impeachment/expulsion of union and workers' association officers and members;
h) Validity/invalidity of Request for SEBA Certification3 (Replacing “Voluntary Recognition” as a mode of securing
sole and exclusive bargaining agent status);
i) Opposition to application for union and CBA registration;
j) Violations of or disagreements over any provision in a union or workers' association constitution and by-laws;
k) Disagreements over chartering or registration of labor organizations and collective bargaining agreements;
I) Violations of the rights and conditions of union or workers' association membership;
m) Violations of the rights of legitimate labor organizations, except interpretation of collective bargaining
agreements;4 and
n) Such other disputes or conflicts involving the rights to self-organization, union membership and
collective bargaining -
1) Between and among legitimate labor organizations; or
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2) Between and among members of a union or workers’ association.
III-B.
OTHER RELATED LABOR RELATIONS DISPUTES
1. MEANING OF “OTHER RELATED LABOR RELATIONS DISPUTES.”
“Other related labor relations dispute” refers to any conflict between a labor union and the employer or any
individual, entity or group that is not a labor union or workers’ association.5
More specifically, it may refer to any of the following:
(a) Any conflict between:
(1) a labor union and an employer, or
(2) a labor union and a group that is not a labor organization; or
(3) a labor union and an individual who is not a member of such union;
(b) Cancellation of registration of unions and workers’ associations filed by individuals other than its
members, or group that is not a labor organization; and
(c) A petition for interpleader involving labor relations.6
IV.
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ORIGINAL AND EXCLUSIVE JURISDICTION
OF MED-ARBITERS, DOLE DIRECTORS AND BLR DIRECTOR
Having known the various cases afore-described, a discussion of the respective jurisdictions of the Med-
Arbiters, DOLE Directors and BLR Director over these cases may now be made with greater clarity.
1.
MED-ARBITERS
The cases falling under the original and exclusive jurisdiction of the Med-Arbiters are as follows:
(1) Inter-union disputes (representation or certification election conflicts), such as:
(a) Request for SEBA certification when made in an unorganized establishment with only one1 or
more than one (1) legitimate union2 or in an organized establishment;3 or
1 Section 1 [bb], Rule I, Book V, Ibid.; Diokno v. Hon. Cacdac, supra; Bautista v. CA, supra.
2 See Section 1, Rule XI, Book V of the Rules to Implement the Labor Code, as previously amended by Department Order No. 40-F-03, Series of 2008 [October 30, 2008] which
designated this section as “Section 1(A)”, and as further amended by Section 18, Department Order No. 40-I-15, Series of 2015 [September 07, 2015], entitled “Further Amending
Department Order No. 40, Series of 2003, Amending the Implementing Rules and Regulations of Book V of the Labor Code of the Philippines, as Amended.”
3 This is in the nature of an inter-union dispute which may be occasioned by the introduction of a new mode of securing the status of sole and exclusive bargaining agent (SEBA). The
Labor Code’s Implementing Rules, particularly its RULE VII on “Voluntary Recognition” was actually repealed and replaced by a completely new provision entitled “REQUEST FOR
SOLE AND EXCLUSIVE BARGAINING AGENT (SEBA) CERTIFICATION” This was introduced by the amendatory provision of Section 3, Department Order No. 40-I-15, Series of
2015 [September 07, 2015], Ibid.
4 Disputes over the interpretation or implementation of the CBA are considered as grievable issues cognizable by and should be processed through the grievance machinery and
voluntary arbitration provided in the CBA itself. (See Articles 273 [260] and 274 [261], Labor Code).
5 Section 1 [rr], Rule I, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003].
6 Section 1[B] (formerly Section 2), Rule XI, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-F-03, Series of 2008 [Oct. 30, 2008].
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(b) Petition for certification election, consent election, run-off election or re-run election;
(2) Intra-union disputes;
Other related labor relations disputes;4
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(3)
(4) Injunction cases;5 and
(5) Contempt cases.6
On No. 1[a] above, the Mediator-Arbiter will have jurisdiction over a Request for SEBA Certification if it is
made in an organized establishment as well as in instances where it is made in an unorganized establishment
with more than one (1) legitimate organization. Under this situation, the DOLE Regional Director, before whom the
said Request is filed, is required to refer it to the Mediator-Arbiter for the determination of the propriety of
conducting a certification election; consequently, the Mediator-Arbiter would now have the jurisdiction to take
cognizance of the certification election.7
2.
DOLE REGIONAL DIRECTORS
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The DOLE Regional Directors have original and exclusive jurisdiction over numerous cases.8 But not all of
them are relevant to or connected with the three (3) classes of cases9 expressly mentioned in Article 232 [226]. Only the
following cases cognizable by them are related thereto or connected therewith by virtue of laws and rules:
(1) Visitorial cases under Article 289 [274],10 involving examination of books of accounts of
independent unions, local chapters/chartered locals and workers’ associations;
(2) Union registration-related cases, such as:
a) Applications for union registration of independent unions, local chapters and workers’ associations;11
b) Denial of application for registration12 of said unions;13
c) Petitions for revocation or cancellation of registration14 of said unions;15
(3) Denial of registration of single-enterprise16 CBAs or petitions for deregistration thereof;17 and
(4) Request for SEBA certification when made in an unorganized establishment with only one (1)
legitimate union.18
1
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In case the Request is made in an unorganized establishment with only one (1) legitimate union, and the requesting union or local fails to complete the requirements for SEBA
certification during the validation conference before the DOLE Regional Director, in which event, such Request should be referred to the Election Officer for the conduct of
certification election (Section 4, Rule VII of the Rules to Implement the Labor Code, as amended by Department Order No. 40-I-15, Series of 2015 [September 07, 2015]. The
election should be conducted in accordance with Rule IX thereof.), which necessarily would mean that such certification election should now be conducted under the
jurisdiction of the Mediator-Arbiter to whom the Election Officer is duty-bound to report the outcome of the election proceeding. Certainly, the ensuing certification election cannot
be conducted under the directive of the DOLE Regional Director without the participation of the Mediator-Arbiter who, under the law, is the one possessed of the original and
exclusive jurisdiction over certification election cases, including the proclamation of the winning SEBA. (See Section 21, Rule IX, Book V, Rules to Implement the Labor Code,
as ordered renumbered by Section 17, Department Order No. 40-I-15, Series of 2015 [September 07, 2015]. This section was originally numbered Section 20, per Department
Order No. 40-03, Series of 2003, [Feb. 17, 2003], but it was subsequently re-numbered to Section 19, per Department Order No. 40-F-03, Series of 2008 [Oct. 30, 2008]).
2 Section 5, Rule VII, in relation to Rules VIII and IX, Department Order No. 40-I-15, Series of 2015 [September 07, 2015].
3 Section 6, Rule VII, in relation to Rules VIII and IX, Ibid.
4 Section 1 [ii], Rule I, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]; Section 4, Rule XI, Book V of the
Rules to Implement the Labor Code, as amended by Department Order No. 40-F-03, Series of 2008 [October 30, 2008]. See also Article 226, Labor Code; Policy Instructions No. 6;
Villaor v. Trajano, G.R. No. 69188, Sept. 23, 1986.
5 Med-Arbiters have the authority to issue temporary restraining orders (TROs) and writs of injunction in appropriate cases. Section 5, Rule XVI, Book V of the Omnibus Rules
Implementing the Labor Code states: “Sec 5. Injunctions. -- No temporary injunctions or restraining order in any case involving or growing out of a labor dispute shall be issued by
any court or other entity. On the other hand, the Office of the President, the Secretary of Labor, the Commission, the Labor Arbiter or Med-Arbiter may enjoin any or all acts
involving or arising from any case pending before any of said offices or officials which if not restrained forthwith may cause grave or irreparable damage to any of the parties to
the case or seriously affect social or economic stability.”
6 Section 4, Rule XVI, Book V, Rules to Implement the Labor Code.
8 All the cases cognizable by the DOLE Regional Directors are as follows: (a) Visitorial (inspection) cases under Article 37; (b) Visitorial (inspection) and enforcement cases under
Article 128; (c) Visitorial cases under Article 289 [274], involving examination of books of accounts of independent unions, local chapters/chartered locals and workers’ associations;
(d) Occupational safety and health violations; (e) Small money claims cases arising from labor standards violations in an amount not exceeding ₱5,000.00 and not accompanied
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with a claim for reinstatement under Article 129; (f) Cases related to private recruitment and placement agencies (PRPAs) for local employment, such as: (1) Applications for
license or denial thereof; (2) Complaints for suspension or cancellation of license by reason of administrative offenses; (3) Complaints for illegal recruitment; and (4) Petition for
closure of agency; (g) Cases submitted for voluntary arbitration in their capacity as Ex-Officio Voluntary Arbitrators (EVAs) under Department Order No. 83-07, Series of 2007;
(h) Union registration-related cases, such as: 1) Applications for union registration of independent unions, local chapters and workers’ associations; 2) Petition for denial of
application for registration of said unions; 3) Petitions for revocation or cancellation of registration of said unions; (i) Notice of merger, consolidation, affiliation and change of
name of said unions and or petition for denial thereof; (j) CBA-related cases, such as: 1) Application for registration of single-enterprise CBAs or petition for deregistration
thereof; 2) Petition for denial of registration of single-enterprise CBAs or denial of deregistration thereof; and (k) Request for SEBA certification when made in an unorganized
establishment with only one (1) legitimate union.
9 These are (1) inter-union disputes; (2) intra-union disputes; and (3) Other related labor relations disputes.
10 “Article 289 [274]. Visitorial power. The Secretary of Labor and Employment or his duly authorized representative is hereby empowered to inquire into the financial activities of
legitimate labor organizations upon the filing of a complaint under oath and duly supported by the written consent of at least twenty percent (20%) of the total membership of the
labor organization concerned and to examine their books of accounts and other records to determine compliance or non-compliance with the law and to prosecute any violations of
the law and the union constitution and by-laws: Provided, That such inquiry or examination shall not be conducted during the sixty (60)-day freedom period nor within the thirty
(30) days immediately preceding the date of election of union officials.” (As amended by Section 31, Republic Act No. 6715, March 21, 1989).
11 Section 3, Rule II of the Med-Arbitration Rules states: “SEC. 3. Jurisdiction of the Regional Director.- The Regional Director shall exercise original and exclusive jurisdiction over
application for union registration, petitions for cancellation of union registration and complaints for examination of unions books of accounts.” See also Section 1, Rule II, Rules of
Procedure on Mediation-Arbitration.
12 See Article 243 [236] of the Labor Code which provides: “Art. 243 [236]. Denial of registration; appeal. The decision of the Labor Relations Division in the regional office denying
registration may be appealed by the applicant union to the Bureau within ten (10) days from receipt of notice thereof.”
13 Referring to independent unions, local chapters and workers’ associations, as distinguished from federations, national unions, industry unions, trade union centers and their local
chapters/chartered locals, affiliates and member organizations whose application for registration as well as denial or cancellation or revocation of registration is cognizable by the BLR
Director in his original and exclusive jurisdiction [infra].
14 Specifically cited as exception to Med-Arbiter’s jurisdiction is cancellation of union registration, per Section 1 [ii], Rule I, Book V, Rules to Implement the Labor Code, as amended by
Department Order No. 40-03, Series of 2003, [Feb. 17, 2003].

15 Section 3, Rule II of the Med-Arbitration Rules, supra; See also Section 4, Rule XI, Book V of the Rules to Implement the Labor Code, as amended by Department Order No. 40-F-
03, Series of 2008 [October 30, 2008].

16 As distinguished from cases involving multi-empoyer CBAs which fall under the original jurisdiction of the BLR Director.
17 Section 4 [formerly Section 5], Rule XI, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003], and as re-
numbered by Department Order No. 40-F-03, Series of 2008 [Oct. 30, 2008].
18 Section 4, Rue VII, Department Order No. 40-I-15, Series of 2015 [September 07, 2015]. Under this situation, the DOLE Regional Director, before whom the Request for SEBA
Certification is filed, should refer the Request for SEBA Certification to the Mediator-Arbiter for the determination of the propriety of conducting a certification election, in which case,
the Mediator-Arbiter now has the jurisdiction to decide the certification election issue. (Section 6, Rule VII, in relation to Rules VIII and IX, Department Order No. 40-I-15, Series of
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On No. 1 above, it is imperative to point out that although by nature, this is an intra-union dispute, the
rules, however, treat this separately from those generally applicable to intra-union disputes1 and accordingly vest
jurisdiction thereover in the DOLE Regional Directors and not in the Med-Arbiters.
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examinations of accounts are under the jurisdiction of the BLR, however, the Rules of Procedure on Mediation-
Arbitration purposely and expressly separated or distinguished examinations of union accounts from the genus of
intra-union conflicts and provided a different procedure for their resolution. Consequently, original jurisdiction over
complaints for examinations of union accounts is vested not in the Med-Arbiter but in the DOLE Regional Director.
This is apparent from Section 34 thereof.
But there is a need to point out though that the foregoing rule applies only when the request for examination
of books of accounts concerns only those of independent unions, local chapters/chartered locals and workers’
associations. If what is involved are those of federations, national unions, industry unions or trade union centers,
and their local chapters/chartered locals, affiliates and member organizations, the jurisdiction thereover is vested
with the BLR Director and not with the DOLE Regional Director.
On No. 2[a] above, as far as workers’ associations are concerned, if they operate in more than one region,
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the application for registration should be filed with the BLR or the Regional Offices, but either way, it should be
processed by the BLR.5 This is so in order to have a unified resolution of the merits of the application by one, single
agency.
On No. 4 above, when the Request for SEBA Certification is made in an unorganized establishment with
only one (1) legitimate union, it should be filed with the DOLE Regional Director who will make an immediate
determination on whether there is majority support by the members of the bargaining unit to the requesting union. Once
the majority support is confirmed and the requesting union does not fail to complete the requirements for SEBA
certification during the validation conference, the requesting union is immediately certified by the DOLE Regional
Director as the SEBA without conducting a certification election.
As a consequence of this latest change in the Rules, it may be said that the DOLE Regional Director, in a way,
is now empowered to rule on a “representation” issue which, technically speaking, falls under and is covered by the
general class of “inter-union disputes” that falls within the jurisdiction of the Mediator-Arbiter. In fact, the very
Request itself speaks of “SEBA Certification,” a relief that is not the consequence of “Voluntary Recognition” - the
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original remedy intended to be replaced by this Request mode.
For it is clear that under the previous repealed rule on voluntary recognition, the DOLE Regional Director
never issues a “SEBA Certification”; what is done is the mere recording6 of the “Notice of Voluntary
Recognition” jointly submitted by the employer and the union to the DOLE Regional Office which issued the
recognized labor union’s certificate of registration or, in the case of local chapter, where the charter certificate and the
other documents required under Article 241 [234-A] were submitted and filed.7 Since it is crystal clear under existing
laws, rules and jurisprudence that it is the Mediator- Arbiter who has the original and exclusive jurisdiction to issue a
“SEBA Certification” under any of the modes8 of selecting a SEBA, it is not surprising if the issue of the validity of
the exercise of similar power to issue the SEBA Certification by the DOLE Regional Director would be raised in an
appropriate proceeding.
But the rule is quite clear that the Mediator-Arbiter would acquire original jurisdiction over the Request for
SEBA Certification under the following situations:
(1) In case the Request is made in an unorganized establishment with only one (1) legitimate union, and
the requesting union or local fails to complete the requirements for SEBA certification during the validation conference
before the DOLE Regional Director, in which event, such Request should be referred to the Election Officer9 for the
conduct of certification election10 which necessarily would mean that such certification election should now be
conducted under the jurisdiction of the Mediator-Arbiter to whom the Election Officer is duty-bound to report the
outcome of the election proceeding.11 Certainly,
1
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2015 [September 07, 2015]). Note must be made that when the Request for SEBA Certification is made in an unorganized establishment with more than one (1) legitimate labor
organization, the Med-Arbiter takes over from the DOLE Regional Director in the matter of hearing and resolving the issue of certification election.
See Section 3, Rule XIII, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003], thus, a request for examination
of books of accounts pursuant to Article 289 [274], in the absence of allegations pertaining to a violation of Article 250 [241], should not be treated as an intra-union dispute.
2 G.R. No. 120220, June 16, 1999.
3 Citing La Tondena Workers Union v. Secretary of Labor, G.R. No. 96821, Dec. 9, 1994, 239 SCRA 117.
application for union registration, petitions for cancellation of union registration and complaints for examination of unions books of accounts.”
5 See 2nd paragraph, Section 1, Rule III, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]; See also Section 1, Rule
II, Rules of Procedure on Mediation-Arbitration.

6 Under the previous repealed provision, it is stated that where the notice of voluntary recognition is sufficient in form, number and substance and where there is no other registered
labor union operating within the bargaining unit concerned, the DOLE Regional Office, through the Labor Relations Division shall, within ten (10) days from receipt of the notice,
record the fact of voluntary recognition in its roster of legitimate labor unions and notify the labor union concerned. (See the repealed provision of Section 3, Rule VII, Book V, Rules
to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]).
Where the notice of voluntary recognition is insufficient in form, number and substance, the DOLE Regional Office shall, within the same period, notify the labor union of its findings
and advise it to comply with the necessary requirements. Where neither the employer nor the labor union failed to complete the requirements for voluntary recognition within thirty
(30) days from receipt of the advisory, the DOLE Regional Office shall return the notice of voluntary recognition together with all its accompanying documents without prejudice to
its re- submission. (Section 3, Rule VII, Book V, Ibid.).
7 Section 1, Rule VII, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003].
8 Besides this mode, the other modes of selecting or designating a SEBA are certification election, consent election, run-off election, and lately, re-run election.
9 “Election Officer” refers to an officer of the Bureau of Labor Relations or the Labor Relations Division in the Regional Office authorized to conduct certification elections, election of
union officers and other forms of elections and referenda. (Section 1 [o], Rule I, and Sections 2-5, Rule XII, Book V, Rules to Implement the Labor Code, as amended by
Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]). It is the Election Officer who shall have control of the pre-election conference and election proceedings. (Section
1, Rule IX, Book V, Ibid.).
10 Section 4, Rule VII of the Rules to Implement the Labor Code, as amended by Department Order No. 40-I-15, Series of 2015 [September 07, 2015]. The election should be
conducted in accordance with Rule IX thereof.

11 Under the Rules, within 24 hours from the final canvass of votes, there being a valid election, the Election Officer shall transmit the records of the case to the Med-Arbiter who shall,
within the same period from receipt of the minutes and results of election, issue an order proclaiming the results of the election and certifying the union which obtained the majority of
the valid votes cast as the sole and exclusive bargaining agent in the subject bargaining unit, xxx. (The provision entitled “Proclamation and certification of the result of the election”
should now be denominated as Section 21, Rule IX, Book V, Rules to Implement the Labor Code, by virtue of the re-numbering ordered by Section 17, Department Order No. 40-I-
15, Series of 2015 [September 07, 2015]. This section was originally numbered Section 20, per Department Order No. 40-03, Series of 2003, [Feb. 17, 2003], but it was
subsequently re-numbered to Section 19, per Department Order No. 40-F-03, Series of 2008 [Oct. 30, 2008]. This latest 2015 re-numbering was effected through said Section 17
which states: “Sections subsequent to inserted new provisions and/or renumbered sections are renumbered accordingly.”).
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the ensuing certification election cannot be conducted under the directive of the DOLE Regional Director without
the participation of the Mediator-Arbiter who, under the law,1 is the one possessed of the original and exclusive
jurisdiction over certification election cases, including the proclamation of the winning SEBA.2
nRobles Bar (2) In case the Request is made in an unorganized establishment with more than one (1) legitimate union,
in which event, the DOLE Regional Director is required to refer the Request directly to the Election Officer for the
conduct of a certification election3 which should be in accordance with the Rules4 that state, in its Section 2, Rule
VIII, that the “(Request) shall be heard and resolved by the Mediator-Arbiter.” Resultantly, it is still the Mediator-
Arbiter who should take cognizance of the Request which, in this case, is the equivalent of the Petition for
Certification Election over which he exercises original jurisdiction.
(3) In case the Request is made in an organized establishment, in which case, the Regional Director should
refer the same to the Mediator-Arbiter for the determination of the propriety of conducting a certification election.5
3.
BLR DIRECTOR
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ORIGINAL AND EXCLUSIVE JURISDICTION.
At the outset, it must be stressed that reference in the law and pertinent rules to “BLR”, as far as the issue
of jurisdiction is concerned, should appropriately mean “BLR Director.” This is as it should be because “BLR” is a
generic term that includes not only the Med-Arbiters and DOLE Regional Directors but the BLR Director himself. More
significantly, there is jurisprudential variance in the cases cognizable by the BLR Director, in relation to Med-
Arbiters and DOLE Regional Directors, hence, referring to the cases properly falling under the jurisdiction of the
“BLR Director” as such would be more appropriate and less confusing than simply referring to them as falling under
the jurisdiction of the “BLR.”
The BLR Director exercises two (2) kinds of jurisdiction, namely: original and appellate.6 The following cases
fall under the first:
Complaints and petitions involving the application for registration, revocation or cancellation of registration
(1)
of federations, national unions, industry unions, trade union centers and their local chapters/chartered
locals, affiliates and member organizations;7
(2)
(3)
(4)
the Labor Code;
Intra-union disputes involving said labor organizations;9 ChanRobles Bar
Request for examination of books of accounts of said labor organizations8 under Article 289 [274] of
Notice of merger, consolidation, affiliation and change of name of said unions and or petition for
denial thereof;10
(5) Registration of multi-employer11 CBAs or petitions for deregistration thereof;12
(6) Contempt cases.
As far as No. 3 above is concerned, the 2010 case of Atty. Montaño v. Atty. Verceles,13 is relevant.
Petitioner14 here claimed that under the Implementing Rules,15 it is the DOLE Regional Director and not the BLR
(Director) who has jurisdiction over intra-union disputes involving federations which, in this case, pertains to the
election protests in connection with the election of officers of the federation (Federation of Free Workers [FFW]). In
finding no merit in petitioner’s contention, the High Court pointed out that Article 226 of the Labor Code clearly
provides that the BLR (Director) and the Regional Directors of DOLE have concurrent jurisdiction over inter-union
and intra-union disputes. Such disputes include the conduct or nullification of election of union and workers’
association officers. There is, thus, no doubt as to the BLR (Director)’s jurisdiction over the instant dispute
involving member-unions of a federation arising from disagreement over the provisions of the federation’s constitution
and by-laws. It agreed with the following observation of the BLR (Director):
“Rule XVI lays down the decentralized intra-union dispute settlement mechanism. Section 1 states that any
complaint in this regard ‘shall be filed in the Regional Office where the union is domiciled.’ The concept of domicile
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in labor relations regulation is equivalent to the place where the union seeks to operate or has established a
geographical presence for purposes of collective bargaining or for dealing with employers concerning terms and
conditions of employment.
“The matter of venue becomes problematic when the intra-union dispute involves a federation, because the
geographical presence of a federation may encompass more than one administrative region. Pursuant to its
authority under Article 232 [226], this Bureau exercises original jurisdiction over intra-union disputes involving
federations. It is well-settled that FFW, having local unions all over the country, operates in more than one
administrative region.
1 Article 232 [226], Labor Code.

2 See Section 21, Rule IX, Book V, Rules to Implement the Labor Code, as ordered renumbered by Section 17, Department Order No. 40-I-15, Series of 2015 [September 07, 2015].
This section was originally numbered Section 20, per Department Order No. 40-03, Series of 2003, [Feb. 17, 2003], but it was subsequently re-numbered to Section 19, per
Department Order No. 40-F-03, Series of 2008 [Oct. 30, 2008].
3 Section 5, Rule VII, Rules to Implement the Labor Code, as amended by Department Order No. 40-I-15, Series of 2015 [September 07, 2015].
4 Referring to Rule IX of the Rules to Implement the Labor Code, as amended by Department Order No. 40-I-15, Series of 2015 [September 07, 2015]. Note must be made that when
the Request for SEBA Certification is made in organized establishment, in which case, the Regional Director should refer the same to the Mediator-Arbiter for the determination of the
propriety of conducting a certification election. (Section 6, Rule VII, Ibid. in accordance with Rules VIII and IX, Ibid.).
6 The appellate jurisdiction of the BLR Director is discussed in another section below.
7 As distinguished from petitions for cancellation of registration of independent unions, local chapters and workers’ associations, as provided in Section 3, Rule II of the Med-Arbitration
Rules which states: “SEC. 3. Jurisdiction of the Regional Director.- The Regional Director shall exercise original and exclusive jurisdiction over application for union registration,
petitions for cancellation of union registration and complaints for examination of unions books of accounts.” See also Section 4, Rule XI, Book V of the Rules to Implement the
Labor Code, as amended by Department Order No. 40-F-03, Series of 2008 [October 30, 2008] and Section 1, Rule II, Rules of Procedure on Mediation-Arbitration.
8 Referring to federations, national unions, industry unions and trade union centers, as distinguished from independent unions, local chapters and workers’ associations.
9 Id.
10 Section 5, Rule IV, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003] and as further amended by
Department Order No. 40-D-05, Series of 2005, Sept. 13, 2005.

11 As distinguished from cases involving single-enterprise CBAs which fall under the jurisdiction of the DOLE Regional Director.
12 Section 4, Rule XI, Book V of the Rules to Implement the Labor Code, as amended by Department Order No. 40-F-03, Series of 2008 [October 30, 2008].
13 G.R. No. 168583, July 26, 2010.
14 Petitioner was elected the National Vice President of FFW in the National Convention held at Subic International Hotel, Olongapo City over the strong opposition and protest of
respondent Atty. Ernesto C. Verceles, a delegate to the convention and president of University of the East Employees Association (UEEA-FFW) which is an affiliate union of FFW.
15 See Section 6 of Rule XV, in relation to Section 1 of Rule XIV of Book V of the Rules to Implement the Labor Code.
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Therefore, this Bureau maintains original and exclusive jurisdiction over disputes arising from any violation of or
disagreement over any provision of its constitution and by-laws.”1
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APPELLATE JURISDICTION OF THE BLR DIRECTOR
AS DISTINGUISHED FROM THAT OF THE DOLE SECRETARY
1. NECESSITY FOR JURISDICTIONAL DISTINCTIONS.
The distinctions pointed out above between the respective jurisdictions of the Med-Arbiters, DOLE
Regional Directors and the BLR Director acquire significance in determining which of the cases over which they
exercise jurisdiction may be appealed to the BLR Director and those that may be appealed to the DOLE Secretary, both
of whom, based on law and jurisprudence, are possessed of exclusive appellate jurisdiction over certain cases
decided by the Med-Arbiters, DOLE Regional Directors and BLR Director.
The Supreme Court had occasion to distinguish the appellate jurisdiction of the BLR Director from that of
the DOLE Secretary in the case of Abbott Laboratories Philippines, Inc. v. Abbott Laboratories Employees Union.2
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Accordingly, the appellate jurisdiction of the DOLE Secretary is limited only to the review of decisions rendered by the
BLR Director in the exercise of his exclusive and original jurisdiction. The DOLE Secretary has no jurisdiction over
decisions of the BLR Director rendered in the exercise of his appellate jurisdiction over decisions made by Med-
Arbiters and DOLE Regional Directors in the exercise of their respective original and exclusive jurisdictions, the reason
being that such decisions are final and inappealable.
2. APPEALS FROM DECISIONS OF MED-ARBITERS.
Decisions in the cases falling under the original and exclusive jurisdiction of the Med-Arbiters are appealable as follows:
(1) Inter-union disputes (representation or certification election conflicts) – to DOLE Secretary3
(a) Request for SEBA certification when made in an unorganized establishment with only one4 or more
than one (1) legitimate union5 or in an organized establishment – to DOLE Secretary
(b) Petition for certification election, consent election, run-off election or re-run election - to DOLE Secretary
(2) Intra-union disputes6 – to BLR Director
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(3) Other related labor relations disputes - to BLR Director
(4) Injunction cases - to BLR Director
(5) Contempt cases - to BLR Director
2.1. DIFFERENT RULE RE APPELLATE JURISDICTION OVER MED-ARBITER’S DECISIONS IN
INTER-UNION DISPUTES.
a. Legal basis.
While generally, the decisions of the Med-Arbiters are appealable to the BLR Director, excepted therefrom are
their decisions in inter-union disputes7 which are appealable directly to the DOLE Secretary by virtue of Article 272
[259]8 of the Labor Code.
b. Variance in the rule on appeal in unorganized and organized establishments.
The rule on appeal in certification election cases in unorganized establishments is different from that of organized
establishments, to wit:
(1) Appeal in unorganized establishments. - The order granting the conduct of a certification election in
an unorganized establishment is not subject to appeal. Any issue arising from its conduct or from its results is proper
subject of a protest. Appeal may only be made to the DOLE Secretary in case of denial of the petition within ten (10)
calendar days from receipt of the decision of denial.9
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(2) Appeal in organized establishments. - The order granting the conduct of a certification election in an
organized establishment and the decision dismissing or denying the petition for certification election may be
appealed to the DOLE Secretary within ten (10) calendar days from receipt thereof.10
3. APPEALS FROM DECISIONS OF DOLE REGIONAL DIRECTORS.
1 Emphasis supplied.
2 G.R. No. 131374, Jan. 26, 2000.
3 This is by virtue of Article 272 [259] of the Labor Code. This article is entitled “Appeal from Certification Election Orders” and it provides as follows: “Article 259. Appeal from
Certification Election Orders. – Any party to an election may appeal the order or results of the election as determined by the Med-Arbiter directly to the Secretary of Labor and
Employment on the ground that the rules and regulations or parts thereof established by the Secretary of Labor and Employment for the conduct of the election have been violated.
Such appeal shall be decided within fifteen (15) calendar days.” Prior to the amendment of Article 272 [259] by R.A. No. 6715, the decisions of the Med-Arbiter in certification
election cases are appealable to the BLR. Now, they are appealable to the DOLE Secretary. (A’ Prime Security Services, Inc. v. Hon. Secretary of Labor, G.R. No. 91987, July
17, 1995). It must be emphasized that as far as intra-union disputes are concerned, the decisions of the Med-Arbiters thereon remain appealable to the BLR. (See Section 1 [1],
Rule III, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases).
4 In case the Request is made in an unorganized establishment with only one (1) legitimate union, and the requesting union or local fails to complete the requirements for SEBA
certification during the validation conference before the DOLE Regional Director, in which event, such Request should be referred to the Election Officer for the conduct of
certification election (Section 4, Rule VII of the Rules to Implement the Labor Code, as amended by Department Order No. 40-I-15, Series of 2015 [September 07, 2015]. The
election should be conducted in accordance with Rule IX thereof.), which necessarily would mean that such certification election should now be conducted under the jurisdiction of
the Mediator-Arbiter to whom the Election Officer is duty-bound to report the outcome of the election proceeding. Certainly, the ensuing certification election cannot be conducted
under the directive of the DOLE Regional Director without the participation of the Mediator-Arbiter who, under the law, is the one possessed of the original and exclusive
jurisdiction over certification election cases, including the proclamation of the winning SEBA. (See Section 21, Rule IX, Book V, Rules to Implement the Labor Code, as ordered
renumbered by Section 17, Department Order No. 40-I-15, Series of 2015 [September 07, 2015]. This section was originally numbered Section 20, per Department Order No.
40-03, Series of 2003, [Feb. 17, 2003], but it was subsequently re-numbered to Section 19, per Department Order No. 40-F-03, Series of 2008 [Oct. 30, 2008]).
6 Section 1 [1], Rule III, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases.
7 Otherwise known as representation or certification election conflicts.
8 Supra.
9 Section 18 [formerly Section 17], Rule VIII, Book V, of the Rules to Implement the Labor Code, as amended by Department Order No. 40-F-03, Series of 2008 [October 30, 2008].
10 Id.
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a. Decisions appealable to the BLR Director.

Not all decisions, awards or orders rendered by the DOLE Regional Directors are appealable to the BLR Director.
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Only decisions in the following cases relevant and related to labor relations, are appealable to the BLR Director:
(1) Visitorial cases under Article 289 [274], involving examination of books of accounts of independent
unions, local chapters/chartered locals and workers’ associations;1
(2) Union registration-related cases, such as:
a) Denial of applications2 for union registration of independent unions, local chapters and
workers’ associations;
b) Revocation or cancellation3 of registration of said unions;
(3) Notice of merger, consolidation, affiliation and change of name of said unions and or petition for
denial thereof;4
(4) CBA-related cases, such as:
a) Application for registration of single-enterprise5 CBAs or petition for deregistration thereof;6
b) Petition for denial of registration of single-enterprise CBAs or denial of petition deregistration thereof.
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As far as No. 1 above is concerned, appellate authority over decisions of the DOLE Regional Directors
involving examinations of union accounts is expressly conferred on the BLR Director under the Rules of
Procedure on Mediation- Arbitration,7 to wit:
“RULE II
MED-ARBITRATION
“SEC. 3. Jurisdiction of the Regional Director. - The Regional Director shall exercise original and exclusive
jurisdiction over application for union registration, petitions for cancellation of union registration and complaints
for examination of union books of accounts.
SEC. 4. Jurisdiction of the Bureau.-
xxx
“(b) The Bureau shall exercise appellate jurisdiction over all cases originating from the Regional Director involving
union registration or cancellation of certificates of union registration and complaints for examination of union books of accounts.”8
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The language of the law is categorical. Any additional explanation on the matter is superfluous. It is thus clear
then that the DOLE Secretary has no appellate jurisdiction over decisions of DOLE Regional Directors involving
petitions for examinations of union accounts.9
b. Cases not appealable to the BLR Director but to some other labor officials.
For greater clarity in presentation and to avoid any confusion, it is worthy to mention that the decisions of
the DOLE Regional Directors in the following cases which are not related to labor relations are appealable to the
DOLE Secretary and not to the BLR Director:
(a) Visitorial (inspection) cases under Article 37;10
(b) Visitorial (inspection) and enforcement cases11 under Article 128, (either routine or initiated
through a complaint);12
(c) Occupational safety and health violations;13
(d) Cases related to private recruitment and placement agencies (PRPAs) for local employment, such as:
1) Applications for license or denial thereof;
2) Complaints for suspension or cancellation of license by reason of administrative offenses;
3) Complaints for illegal recruitment; and
1 The BLR Director, not the DOLE Secretary, has the appellate authority over decisions of the DOLE Regional Directors involving examinations of union accounts as provided under
Rule II of the Rules of Procedure on Mediation-Arbitration, issued on April 10, 1992, to wit: “SEC. 3. Jurisdiction of the Regional Director. - The Regional Director shall exercise
original and exclusive jurisdiction over application for union registration, petitions for cancellation of union registration and complaints for examination of unions books of accounts.
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SEC. 4. Jurisdiction of the Bureau.- xxx “(b) The Bureau shall exercise appellate jurisdiction over all cases originating from the Regional Director involving union registration or
cancellation of certificates of union registration and complaints for examination of union books of accounts.”
3 See Article 245 [238] of the Labor Code which provides: “Art. 245 [238]. Cancellation of registration; appeal. The certificate of registration of any legitimate labor organization, whether
national or local, shall be cancelled by the Bureau if it has reason to believe, after due hearing, that the said labor organization no longer meets one or more of the requirements
herein prescribed.”

5 As distinguished from cases involving multi-employer CBAs which fall under the original jurisdiction of the BLR Director.
7 Issued on April 10, 1992.
8 Italics and underlining supplied.
9 Barles v. Bitonio, G.R. No. 120220, June 16, 1999.
10 “Article 37. Visitorial Power. - The Secretary of Labor or his duly authorized representatives may, at any time, inspect the premises, books of accounts and records of any person or
entity covered by this Title, require it to submit reports regularly on prescribed forms, and act on violation of any provisions of this Title.” (Referring to Tile I [Recruitment and
Placement of Workers], Book I, Labor Code).
11 Visitorial cases involve inspection of establishments to determine compliance with labor standards; while enforcement cases involve issuance of compliance orders and writs of
execution.
12 Based on the 2nd paragraph of Article 128(b), Labor Code, which states: “An order issued by the duly authorized representative of the Secretary of Labor and Employment under this
Article may be appealed to the latter. xxx” (As amended by Republic Act No. 7730, June 2, 1994). Additionally, it is provided in Section 1, Rule IV, of the Rules on the Disposition of
Labor Standards Cases in the Regional Offices, thus: “Section 1. Appeal. – The order of the Regional Director shall be final and executory unless appealed to the Secretary of Labor
and Employment within ten (10) calendar daysfrom receipt thereof.” The grounds for the appeal are provided in Section 2 thereof, thus: “Grounds for appeal. – The aggrieved party
may appeal to the Secretary the Order of the Regional Director on any of the following grounds: (a) there is a prima facie evidence of abuse of discretion on the part of the Regional
Director; (b) the Order was secured through fraud, coercion or graft and corruption; (c) the appeal is made purely on questions of law; and (d) serious errors in the findings of facts
were committed which, if not corrected, would cause grave irreparable damageor injury to the appellant.” (See also Section 2, in relation to Section 3(a), Rule X, Book III of the Rules
to Implement the Labor Code}.
13 Section 6(a) of Rule VI [Health and Safety Cases] of the Rules on the Disposition of Labor Standards Cases in the Regional Offices which provides: Section 6. Review by the
Secretary. - (a) The Secretary at his own initiative or upon the request of the employer and/or employee, may review the order of the Regional Director which shall be immediately
final and executory unless stayed by the Secretary upon posting by the employer of a reasonable cash or performance bond as fixed by the Regional Director.” See also the 2nd
paragraph of Article 128(b), Labor Code.
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4) Petition for closure of agency.1

Additionally, their decisions on small money claims cases arising from labor standards violations in an amount
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not exceeding ₱5,000.00 and not accompanied with a claim for reinstatement under Article 129 are appealable to the
NLRC.
VI.
REMEDIES FROM DECISIONS OF
BLR DIRECTOR AND DOLE
SECRETARY
RENDERED IN THEIR APPELLATE JURISDICTION
1. APPEALS END WITH BLR DIRECTOR AND DOLE SECRETARY.
Notably, the remedy of appeal involved in the cases contemplated under Article 232 [226] is available only up
to the level of either the BLR Director or the DOLE Secretary, as the case may be. Appeal to the CA from their
decisions rendered in their respective appellate jurisdictions is not available; the only remedy being the filing of an
original special civil action for certiorari under Rule 65 of the Rules of Court.2
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In the case of decisions rendered by the BLR Director in his appellate jurisdiction, they can no longer be
appealed to the DOLE Secretary because another appeal to the DOLE Secretary is not tenable anymore, the BLR
Director’s decisions thereon having already become final and executory.3
2. REMEDY FROM CA DECISIONS TO THE SUPREME COURT.
There is only one mode to elevate labor cases from the CA to the Supreme Court and that is, through Rule
45 petition for review on certiorari.
E.
NATIONAL CONCILIATION AND MEDIATION BOARD
(NCMB)
1.
1. NCMB IS NOT A QUASI-JUDICIAL AGENCY.

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NATURE OF PROCEEDINGS
NCMB is not a quasi-judicial agency, according to the 2009 case of Tabigue v. International Copra
Export Corporation. 4
“Quasi-judicial function” is a term which applies to the action, discretion, etc. of public
administrative officers or bodies, who are required to investigate facts or ascertain the existence of facts, hold
hearings, and draw conclusions from them as a basis for their official action and to exercise discretion of a judicial
nature.
2. NOT BEING A QUASI-JUDICIAL AGENCY, NCMB’S RULINGS CANNOT BE ELEVATED TO, AND
COGNIZABLE BY, THE COURT OF APPEALS.
Rule 43 of the Rules of Court applies only to awards, judgments, final orders or resolutions of or authorized
by any quasi-judicial agency in the exercise of its quasi-judicial functions. Hence, NCMB’s decision, not having
been rendered by a quasi-judicial body, cannot be elevated to the Court of Appeals under said rule.
2.
CONCILIATION VS. MEDIATION
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1. CONCILIATION AND MEDIATION, MEANING.
Both the terms “conciliation” and “mediation” refer to a process whereby a third person usually called
Conciliator (in case of conciliation) or Mediator (in case of mediation), intervenes in a dispute involving two or
more conflicting parties for the purpose of reconciling their differences or persuading them into adjusting or
settling their dispute. The Conciliator or Mediator normally does not make or render any decision, his role being
confined to the functions afore- described.
3. DISTINCTION BETWEEN CONCILIATION AND MEDIATION.
Generally, there are no marked distinctions between conciliation and mediation. The reason is that in
both cases, a neutral third party (called Conciliator or Mediator) is tasked to assist two or more opposing parties
in finding appropriate resolution to a dispute.
In the NCMB, the hearing officer is called Conciliator-Mediator. There is no separate classification
between conciliators and mediators. When the Conciliator-Mediator performs his task, he does not make any
distinction when he is acting as Conciliator or as Mediator.
In other jurisdictions, the principal distinction between conciliation and mediation lies on the extent
of the power and authority granted to the neutral third party.
1 Section 62, Department Order No. 141-14, Series of 2014, Nov. 20, 2014.
2 Section 23, Rule XI, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]; National Federation of Labor [NFL]
v. Laguesma, G.R. No. 123426, March 10, 1999.
3 Abbott Laboratories Philippines, Inc. v. Abbott Laboratories Employees Union, G.R. No. 131374, Jan, 26, 2000.
4 G.R. No. 183335, Dec. 23, 2009.
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In mediation, the Mediator normally facilitates a deliberation or discussion of the issues between the
parties. He may or may not offer any opinions on the strength and weaknesses of each party's positions and
arguments. Thus, mediation may be classified into two, namely:
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2. Evaluative Mediation where the Mediator offers an opinion which is not binding on the parties.
It bears stressing, however, that regardless of which of the 2 methods above is chosen, the Mediator is
not empowered to impose his will on the parties.
In conciliation, the Conciliator is given more power and authority in that he may not only offer an opinion
on the issues at hand but may actually make a binding opinion thereon provided the parties stipulate in advance to
this effect. His opinion is based on the facts and the law involved in the controversy before him.
It may thus be observed that conciliation is more formal than mediation in the sense that the
Conciliator’s opinion, unlike the Mediator’s, may be binding on the parties, although it may be merely temporary in
character.
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3.
PREVENTIVE MEDIATION
1. PREVENTIVE MEDIATION AS A REMEDY.

“Preventive mediation,” as a remedy, is not found in the Labor Code. But under the law which created the
NCMB, it is expressly stated that one of its functions is to provide preventive mediation to disputing parties.
The term “preventive mediation case” refers to the potential or brewing labor dispute which is the
subject of a formal or informal request for conciliation and mediation assistance sought by either or both parties in
order to remedy, contain or prevent its degeneration into a full blown dispute through amicable settlement.
2. HOW TO INITIATE PREVENTIVE MEDIATION.
Preventive mediation proceeding may be initiated in two (2) ways:
(1) By filing a notice or request of preventive mediation, as distinguished from a notice of
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strike/lockout; or
(2) By conversion of the notice of strike/lockout into a preventive mediation case.
3. AUTHORITY TO CONVERT A NOTICE OF STRIKE/LOCKOUT INTO A PREVENTIVE

MEDIATION CASE.
The NCMB has the authority to convert a notice of strike/lockout filed by the union/employer into a
preventive mediation case under any of the following circumstances:
1. When the issues raised in the notice of strike/lockout are not strikeable in character.
2. When the party which filed the notice of strike/lockout voluntarily asks for the conversion.
3. When both parties to a labor dispute mutually agree to have it subjected to preventive
mediation proceeding.
Such authority is in pursuance of the NCMB’s duty to exert all efforts at mediation and conciliation to
enable the parties to settle their dispute amicably and in line with the State policy of favoring voluntary modes of
settling labor disputes.
4. CONVERSION OF A NOTICE OF STRIKE OR NOTICE OF LOCKOUT INTO A PREVENTIVE
MEDIATION CASE RESULTS IN ITS DISMISSAL.
Once the notice of strike is converted into a preventive mediation case, the notice is deemed dropped from
the dockets as if no notice of strike has been filed. Since there is no more notice of strike to speak about, any
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strike subsequently staged by the union after the conversion is deemed not to have complied with the requirements
of a valid strike and therefore illegal.
The same rule applies in the case of lockout by an employer.
5. RELEVANT CASES.
A case in point is Philippine Airlines, Inc. v. Secretary of Labor and Employment,1 where the strike
was declared illegal for lack of a valid notice of strike in view of the NCMB’s conversion of said notice into a
preventive mediation case.
It is clear, according to San Miguel Corporation v. NLRC,2 that the moment the NCMB orders the
preventive mediation in a strike case, the union thereupon loses the notice of strike it had filed. Consequently, if it
still defiantly proceeds with the strike while mediation is on-going, the strike is illegal.
F.
DOLE REGIONAL DIRECTORS
1.
JURISDICTION
1. ROLE OF THE DOLE REGIONAL DIRECTORS.
1 G.R. No. 88210, Jan. 23, 1991, 193 SCRA

223.
2 G.R. No. 119293, June 10, 2003.
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The DOLE has a total of 16 Regional Offices nationwide each one of them is headed by a Regional Director.
The DOLE Regional Directors are the duly “authorized representatives” of the DOLE Secretary referred to in Article
128 of the Labor Code which grants to them both visitorial and enforcement powers. They are in charge of the
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administration and enforcement of labor standards within their respective territorial jurisdictions.1
2. JURISDICTION OF THE DOLE REGIONAL DIRECTORS.
The DOLE Regional Directors have original and exclusive jurisdiction over the following cases:
(a) Visitorial (inspection) cases under Article 37;2
(b) Visitorial (inspection) and enforcement cases3 under Article 128,4 (either routine or initiated
through a complaint);
(c) Visitorial cases under Article 289 [274],5 involving examination of books of accounts of
independent unions, local chapters/chartered locals and workers’ associations;
(d) Occupational safety and health violations;6
(e) Small money claims cases arising from labor standards violations in an amount not exceeding ₱5,000.00 and not
accompanied with a claim for reinstatement under Article 129;
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(f) Cases related to private recruitment and placement agencies (PRPAs) for local7 employment, such as:
1) Applications for license or denial thereof;8
2) Complaints for suspension or cancellation of license by reason of administrative offenses;9
3) Complaints for illegal recruitment;10 and
4) Petition for closure of agency;11
(g) Cases submitted for voluntary arbitration in their capacity as Ex-Officio Voluntary Arbitrators (EVAs) under
Department Order No. 83-07, Series of 2007.12
(h) Union registration-related cases, such as:
1) Applications for union registration of independent unions, local chapters and workers’ associations;13
2) Petitions for denial of application for registration14 of said unions;15
3) Petitions for revocation or cancellation of registration16 of said unions;17
(i) Notice of merger, consolidation, affiliation and change of name of said unions and or petition for
denial thereof;18
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(j) CBA-related cases, such as:
1) Application for registration of single-enterprise19 CBAs or petition for deregistration thereof;20
2) Petition for denial of registration of single-enterprise CBAs or denial of petition for deregistration thereof; and
(k) Request for SEBA certification when made in an unorganized establishment with only one (1)
legitimate union.21
I.
LABOR STANDARDS ENFORCEMENT CASES
1. SUBJECT OF THE VISITORIAL AND ENFORCEMENT POWERS - THE ESTABLISHMENT AND
NOT THE EMPLOYEES THEREIN.
1 See Section 3, Rule I, Rules on the Disposition of Labor Standards Cases in the Regional Offices [Sept. 16, 1987]; Atilano v. De la Cruz, G.R. No. 82488, Feb. 28, 1990, 182 SCRA
886; San Miguel Corporation v. The Hon. CA, G.R. No. 146775, Jan. 30, 2002.
2 “Article 37. Visitorial Power. - The Secretary of Labor or his duly authorized representatives may, at any time, inspect the premises, books of accounts and records of any person or
entity covered by this Title, require it to submit reports regularly on prescribed forms, and act on violation of any provisions of this Title.” (Referring to Tile I [Recruitment and
Placement of Workers], Book I, Labor Code).
3 Visitorial cases involve inspection of establishments to determine compliance with labor standards; while enforcement cases involve issuance of compliance orders and writs of
execution.
4 Article 128 is entitled “Visitorial and Enforcement Power.”
5 Article 289 [274] is entitled “Visitorial Power.”
6 Section 6 of Rule VI [Health and Safety Cases] of the Rules on the Disposition of Labor Standards Cases in the Regional Offices.
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7 As distinguished from recruitment and placement of workers for overseas employment which falls under the jurisdiction of the Philippine Overseas Employment Administration
(POEA).
8 Section 8, Department Order No. 141-14, Series of 2014 (Revised Rules and Regulations Governing Recruitment and Placement for Local Employment), Nov. 20, 2014; See
previous provision on this matter in Section 36, Rule VII, Rules And Regulations Governing Private Recruitment and Placement Agency for Local Employment, June 5, 1997. See
also National Federation of Labor v. Laguesma, G.R. No. 123426, March 10, 1999.
9 Section 54, in relation to Section 51, Department Order No. 141-14, Series of 2014, Ibid.
10 Section 45, Department Order No. 141-14, Series of 2014, Ibid.
11 Section 47, Department Order No. 141-14, Series of 2014, Ibid.
12 Issued by former DOLE Secretary, now Associate Justice of the Supreme Court, Arturo D. Brion on June 8, 2007.
application for union registration, petitions for cancellation of union registration and complaints for examination of unions books of accounts.” See also Section 1, Rule II, Rules of
Procedure on Mediation-Arbitration.
15 Referring to independent unions, local chapters and workers’ associations, as distinguished from federations, national unions, industry unions, trade union centers and their local
chapters/chartered locals, affiliates and member organizations whose application for registration as well as denial or cancellation or revocation of registration is cognizable by the BLR
Director in his original and exclusive jurisdiction [infra].
16 See Article 245 [238] of the Labor Code which provides: “Art. 245 [238]. Cancellation of registration; appeal. The certificate of registration of any legitimate labor organization, whether
national or local, shall be cancelled by the Bureau if it has reason to believe, after due hearing, that the said labor organization no longer meets one or more of the requirements
herein prescribed.”
17 Section 3, Rule II of the Med-Arbitration Rules, supra; See also Section 4, Rule XI, Book V of the Rules to Implement the Labor Code, as amended by Department Order No. 40-F-
03, Series of 2008 [October 30, 2008].


19 As distinguished from cases involving multi-empoyer CBAs which fall under the original jurisdiction of the BLR Director.
21 Under this situation, the DOLE Regional Director, before whom the Request for SEBA Certification is filed, should refer the Request for SEBA Certification to the Mediator-Arbiter for
the determination of the propriety of conducting a certification election, in which case, the Mediator-Arbiter now has the jurisdiction to decide the certification election issue. (Section 6,
Rule VII, in relation to Rules VIII and IX, Department Order No. 40-I-15, Series of 2015 [September 07, 2015]). Note must be made that when the Request for SEBA Certification is
made in an unorganized establishment with more than one (1) legitimate labor organization, the Med-Arbiter takes over from the DOLE Regional Director in the matter of hearing and
resolving the issue of certification election.
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The subject of the visitorial and enforcement powers granted to the DOLE Secretary or his duly
authorized representatives under Article 128 is the establishment which is under inspection and not the employees
thereof.
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are equally applicable to all those who were employed by the establishment concerned at the time the
complaint was filed, even if they were not signatories thereto. The reason is that the visitorial and
enforcement powers are relevant to, and may be exercised over, establishments, not over individual
employees thereof, to determine compliance by such establishments with labor standards laws.
Necessarily, in case of an award from such violation by the establishment, all its existing employees
should be benefited thereby. It must be stressed, however, that such award should not apply to those who
resigned, retired or ceased to be employees at the time the complaint was filed.
2. ORIGINAL JURISDICTION.
The DOLE Regional Directors exercise original jurisdiction over the following:
(a) Cases involving inspection of establishments to determine compliance with labor standards (Visitorial Power); and
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(b) Cases involving issuance of compliance orders and writs of execution (Enforcement Power).
3. VISITORIAL POWER OF REGIONAL DIRECTORS UNDER ARTICLE 128(a).

Pursuant to their visitorial power under Article 128(a), the DOLE Regional Directors shall have:
(a) access to employer’s records and premises at any time of the day or night, whenever work is
being undertaken therein; and
(b) the right:
(1) to copy from said records;
(2) to question any employee and investigate any fact, condition or matter which may be necessary
to determine violations or which may aid in the enforcement of the Labor Code and of any labor
law, wage order, or rules and regulations issued pursuant thereto.
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4. ENFORCEMENT POWER OF REGIONAL DIRECTORS UNDER ARTICLE 128(b).
The statutory basis of the authority of the DOLE Regional Directors to administer and enforce labor
standards is found in Article 128(b) of the Labor Code, as amended.
Pursuant thereto, the DOLE Regional Director, in cases where the employer-employee relationship still
exists, shall have the power:
a. to issue compliance orders to give effect to the labor standards provisions of the Labor Code and
other labor legislations based on the findings of labor employment and enforcement officers or
industrial safety engineers made in the course of inspection.
b. to issue writs of execution to the appropriate authority for the enforcement of their orders, except in
cases where the employer contests the findings of the labor employment and enforcement officer
and raises issues supported by documentary proofs which were not considered in the course of
inspection, in which case, the contested case shall fall under the jurisdiction of the Labor Arbiter to
whom it should be endorsed by the Regional Director.
c. to order stoppage of work or suspension of operations of any unit or department of an establishment
when non-compliance with the law or implementing rules and regulations poses grave and imminent
danger to the health and safety of workers in the workplace. Within 24 hours, a hearing shall be
conducted to determine whether an order for the stoppage of work or suspension of operations shall
be lifted or not. In case the violation is attributable to the fault of the employer, he shall pay the
employees concerned their salaries or wages during the period of such stoppage of work or suspension
d.
of operation.
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to require employers, by appropriate regulations, to keep and maintain such employment records as
may be necessary in aid of his visitorial and enforcement powers under the Labor Code.
II.
SMALL MONEY CLAIMS CASES
1. JURISDICTION OVER CLAIMS NOT EXCEEDING P5,000.
The DOLE Regional Director has original jurisdiction over small money claims cases arising from
labor standards violations in the amount not exceeding P5,000.00 and not accompanied with a claim for
reinstatement under Article 129 of the Labor Code.
Article 129 contemplates the recovery of wages and other monetary claims and benefits, including legal
interest, owing to an employee arising from employer-employee relations provided the claim does not exceed
P5,000.00. Note must be made that under R.A. No. 10361, otherwise known as the Domestic Workers Act or Batas
Kasambahay, jurisdiction over all labor-related disputes involving a kasambahay, including all money claims, illegal
dismissal and other issues, is now lodged entirely with the DOLE Regional Director. The Labor Arbiter has no more
jurisdiction over small money claims of
₱5,000.00 or less. Consequently, any appeal therefrom should be done to the DOLE Secretary. (See Section 37, Chapter VII of
R.A. No. 10361 and Section 1, Rule XI of this law’s Implementing Rules and Regulations).
2. REQUISITES FOR THE VALID EXERCISE OF JURISDICTION BY DOLE REGIONAL
DIRECTORS UNDER ARTICLE 129.
The following requisites must all concur, to wit:
(1) The claim is presented by an employee;
(2) The claimant, no longer being employed, does not seek reinstatement; and
(3) The aggregate money claim of the employee does not exceed P5,000.00.
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In the absence of any of the aforesaid three (3) requisites, the Labor Arbiters have original and
exclusive jurisdiction over all claims arising from employer-employee relations, other than claims for employees’
compensation, social security, PhilHealth and maternity benefits.
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CASES SUBMITTED TO REGIONAL DIRECTORS AND ASSISTANT REGIONAL
DIRECTORS FOR VOLUNTARY ARBITRATION IN THEIR CAPACITY AS EX-
OFFICIO VOLUNTARY ARBITRATORS (EVAs)
1. JURISDICTION.
As EVAs, the DOLE Regional Directors and their Assistants have jurisdiction over the following cases:
(a) All grievances arising from the interpretation or implementation of the CBA;
(b) All grievances arising from the interpretation or enforcement of company personnel policies which
remain unresolved after exhaustion of the grievance procedure;
(c) Cases referred to them by the DOLE Secretary under the DOLE’s Administrative Intervention for
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Dispute Avoidance (AIDA) initiative (provided under DOLE Circular No. 1, Series of 2006); and
(d) Upon agreement of the parties, any other labor dispute may be submitted to the EVAs for
voluntary arbitration.
G.
DOLE SECRETARY
1. POWERS OF THE DOLE SECRETARY.

The DOLE Secretary, being the head of the Department of Labor and Employment, is possessed of a
number of powers, some of which are mentioned in the syllabus, to wit:
1. Visitorial and enforcement powers;
2. Power to suspend the effects of termination;
3. Assumption of jurisdiction;
4. Appellate jurisdiction; and
5. Voluntary arbitration powers.
2. CASES FALLING UNDER THE DOLE SECRETARY’S ORIGINAL JURISDICTION.
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The DOLE Secretary has original jurisdiction over the following cases:
(1) Petition to assume jurisdiction over labor disputes affecting industries indispensable to the national
interest (national interest cases);1
(2) Petition to certify national interest cases to the NLRC for compulsory arbitration;2
(3) Petition to suspend effects of termination;3
(4) Administrative Intervention for Dispute Avoidance (AIDA) cases;4
(5) Voluntary arbitration cases;5 and
(6) Contempt cases.6
1.
VISITORIAL AND ENFORCEMENT POWERS
1. THREE (3) KINDS OF POWER UNDER ARTICLE 128.
Article 128 of the Labor Code, as amended, basically enunciates the three (3) kinds of power which the
DOLE Secretary and/or the Regional Directors, his duly authorized representatives, may exercise in
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connection with the administration and enforcement of the labor standards provisions of the Labor Code and of
any labor law, wage order or rules and regulations issued pursuant thereto.
The three (3) kinds of power are as follows:
1) Visitorial power:
2) Enforcement power: and
3) Appellate power or power of review.
2. WHO EXERCISE THE POWERS.
Nos. 1 and 2 above are exercised under the original jurisdiction of the DOLE Regional Directors.
This has been earlier discussed under the separate topic of “VII. PROCEDURE AND JURISDICTION, E.
DOLE Regional Directors, 1. Jurisdiction”, supra. Hence, the same will no longer be touched under the instant
topical discussion.
The appellate power in No. 3 above may only be exercised by the DOLE Secretary in respect to any
decision, order or award issued by the DOLE Regional Directors.
1 See paragraph (g) of Article 278 [263], Labor Code.

2 Id.
3 See paragraph (b) of Article 292 [277], Labor Code.
4 This is a new form of dispute settlement introduced by the DOLE Secretary under DOLE Circular No. 1, Series of 2006, issued on August 11, 2006 by former DOLE Secretary Arturo
D. Brion, later a distinguished member of the Highest Court. This was issuedin line with the objectives of R.A. No. 9285, otherwise known as the “Alternative Dispute Resolution Act
of 2004” [approved on April 2, 2004], Executive Order No. 523 dated April 07, 2006 and the mandate of the DOLE to promote industrial peace.
5 As mandated under DOLE Circular No. 1, Series of 2006, Ibid.
6 As provided under Article 231 [225] which states: Article 231 [225]. Contempt powers of the Secretary of Labor. In the exercise of his powers under this Code, the Secretary of
Labor may hold any person in direct or indirect contempt and impose the appropriate penalties therefor.
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3. NATURE OF THE VISITORIAL AND ENFORCEMENT POWERS.

The visitorial and enforcement powers granted to the DOLE Secretary and the DOLE Regional Directors
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who are his duly authorized representatives, are quasi-judicial in nature.
4. IT IS THE REGIONAL DIRECTORS WHO HAVE ORIGINAL JURISDICTION TO EXERCISE
THE VISITORIAL AND ENFORCEMENT POWERS UNDER ARTICLES 37, 128 AND 274.
In the instances contemplated under Articles 37, 128 and 274, it is the DOLE Regional Directors, the
DOLE Secretary’s duly authorized representatives commonly referred to in these three (3) articles, who have
the original jurisdiction to exercise the visitorial power granted therein.
5. THE ROLE OF THE DOLE SECRETARY IN THE EXERCISE OF VISITORIAL AND
ENFORCEMENT POWERS IS APPELLATE IN NATURE.
It is clear from the above disquisition that the original jurisdiction over the exercise of the visitorial
and enforcement powers belongs to the DOLE Regional Directors, as the duly authorized representatives of the
DOLE Secretary.
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The role of the DOLE Secretary is confined to the exercise of his appellate jurisdiction over the
decisions, orders and awards of the DOLE Regional Directors in cases brought before them for adjudication under
Articles 128 and 274.
2.
POWER TO SUSPEND EFFECTS OF TERMINATION
1. GROUNDS.
The DOLE Secretary may suspend the effects of termination pending resolution of the dispute in the event
of a prima facie finding by the appropriate official of the DOLE before whom the dispute is pending that:
1. the termination may cause a serious labor dispute; and/or
2. the termination is in implementation of a mass lay-off.
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2. RATIONALE FOR SUSPENDING THE EFFECTS OF TERMINATION.
The obvious purpose behind this rule is to bring the parties back to the status quo ante litem, that is, their
state of relationship prior to the termination. In this way, the workers will be litigating the issue of the validity or
legality of their termination on more or less equal footing with the employer since they will be immediately
reinstated and accordingly not be deprived of their wages while the litigation is on-going.
3. REINSTATEMENT PENDING RESOLUTION OF THE TERMINATION DISPUTE.
Suspension of the effects of termination will necessarily result in the immediate reinstatement of the
terminated employees. An order of reinstatement pending resolution of the case may thus be issued by the
DOLE Secretary pursuant to this power.
4. DISTINGUISHED FROM DOLE SECRETARY’S POWER OF ASSUMPTION OR CERTIFICATION
IN NATIONAL INTEREST CASES.
a. Different power of the DOLE Secretary.
This power of the DOLE Secretary granted under Article 277(b) should be distinguished from his power
to assume or certify labor disputes involving industries indispensable to the national interest under Article
263(g). The following distinctions may be cited:
First, the exercise of the power to suspend the effects of termination involves only the issue of termination
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of employment which may cause a serious labor dispute or is in implementation of a mass lay-off; while the
power to assume or certify labor disputes is applicable to all labor disputes, irrespective of the grounds therefor,
provided such labor disputes will cause or likely to cause strikes or lockouts in industries indispensable to the
national interest.
Second, the former requires the conduct of preliminary determination of the existence of prima facie
evidence that the termination may cause a serious labor dispute or is in implementation of a mass lay-off to be
conducted by the appropriate official of the DOLE before whom the termination dispute is pending; while the latter
does not require such preliminary prima facie determination. In fact, prior notice and hearing are not required
before the DOLE Secretary may issue an assumption or certification order.
Third, the “serious labor dispute” contemplated under the former may or may not involve a strike or
lockout; while the labor dispute referred to in the latter will cause or likely to cause a strike or lockout.
Fourth, the former may be exercised in cases of termination of employment for as long as any of the two
(2) grounds mentioned in Article 277(b) exists, irrespective of the nature of the business of the employer; while
the latter may only be exercised in industries indispensable to the national interest.
Fifth, the remedy under the former is immediate reinstatement pending resolution of the termination
case; while in the latter, the remedy is the automatic return to work of the strikers or locked-out employees, if the
strike or lock-out is on-going at the time of the issuance of the assumption/certification order or the enjoining of
the strike or lockout, if one has not taken place, pending the resolution of the issues raised in the notice of strike or
lockout.
3.
ASSUMPTION OF JURISDICTION
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The DOLE Secretary is granted under Article 263(g) of the Labor Code, the extraordinary police power
of assuming jurisdiction over a labor dispute which, in his opinion, will cause or likely to cause a strike or
lockout in an industry indispensable to the national interest, or the so-called “national interest” cases.
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Alternatively, he may certify the labor dispute to the NLRC for compulsory arbitration.
4.
APPELLATE JURISDICTION
I.
VARIOUS APPEALS TO THE DOLE SECRETARY
UNDER THE LABOR CODE AND APPLICABLE RULES
1. OFFICES FROM WHICH APPEALS MAY ORIGINATE.
Appeals to the DOLE Secretary may originate from any of the following offices:
(1) DOLE Regional Directors;
(2) Med-Arbiters;
(3) Director of the Bureau of Labor Relations (BLR); and
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(4) Philippine Overseas Employment Administration (POEA).
2. CASES NOT APPEALABLE TO THE DOLE SECRETARY.
The following decisions, awards or orders are not appealable to the Office of the DOLE Secretary:
(1) Those rendered by Labor Arbiters that are appealable to the Commission (NLRC) which has
exclusive appellate jurisdiction thereover;
(2) Those rendered by the Commission (NLRC) since they can be elevated directly to the CA by way of a
Rule 65 certiorari petition;
(3) Those rendered by the BLR Director in the exercise of his appellate jurisdiction since they can be
brought directly to the CA under Rule 65 certiorari petition;
(4) Those rendered by DOLE Regional Directors under Article 129 of the Labor Code since they
are appealable to the NLRC;
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(5) Those issued by DOLE Regional Directors in their capacity as Ex-Officio Voluntary Arbitrators
(EVAs) since they can be brought directly to the CA under Rule 43 of the Rules of Court; and
(6) Those rendered by Voluntary Arbitrators which are appealable directly to the CA under Rule 43 of
the Rules of Court.
II.
APPEALS FROM DOLE REGIONAL DIRECTORS
1. CASES APPEALABLE TO DOLE SECRETARY.
Not all decisions, awards or orders rendered by the DOLE Regional Directors are appealable to the
DOLE Secretary. Only those issued in the following cases are so appealable:
(a) Labor standards enforcement cases under Article 128;
(b) Occupational safety and health violations; and
(c) Complaints against private recruitment and placement agencies (PRPAs) for local employment.
2. CASES NOT APPEALABLE TO THE DOLE SECRETARY.
As earlier pointed out, the following cases decided by the DOLE Regional Directors are not appealable to
the DOLE Secretary but to some other agencies/tribunals indicated below:
(a) Decisions in small money claims cases arising from labor standards violations in the amount not
appealable to the NLRC;

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exceeding P5,000.00 and not accompanied with a claim for reinstatement under Article 129 are
(b) Decisions in cases submitted to DOLE Regional Directors for voluntary arbitration in their capacity
as Ex-Officio Voluntary Arbitrators (EVAs) under Department Order No. 83-07, Series of 2007 may
be elevated directly to the Court of Appeals by way of a Rule 43 petition. This is so because the
DOLE Regional Directors, in so deciding, are acting as Voluntary Arbitrators; hence, what should
apply are the rules on appeal applicable to voluntary arbitration.
III.
APPEALS FROM DECISIONS OF
MEDIATORS-ARBITERS (MED-ARBITERS) AND BLR DIRECTOR
(NOTE: See discussion above in connection with
the jurisdiction of the Bureau of Labor Relations
[BLR])
V.
APPEALS FROM DECISIONS OF POEA
1. CASES APPEALABLE TO THE DOLE SECRETARY.
The decisions in the following cases rendered by the Philippine Overseas Employment Administration
(POEA) in its original jurisdiction are appealable to the DOLE Secretary:
(a) Recruitment violations and other related cases. - All cases which are administrative in
character, involving or arising out of violation of rules and regulations relating to licensing and
registration of
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recruitment and employment agencies or entities, including refund of fees collected from workers
and violation of the conditions for the issuance of license to recruit workers.
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(b) Disciplinary action cases and other special cases which are administrative in character,
involving employers, principals, contracting partners and Filipino migrant workers.
It must be noted that the POEA ceased to have any jurisdiction over money claims of OFWs, or those
arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers
for overseas deployment including claims for actual, moral, exemplary and other forms of damages. The
jurisdiction over these claims was transferred to the Labor Arbiters of the NLRC by virtue of Section 10 of R.A.
No. 8042, as amended. Hence, appeals therefrom may be instituted to the Commission (NLRC).
5.
DOLE SECRETARY’S VOLUNTARY ARBITRATION POWERS
1. AIDA.
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a. New rule on voluntary settlement of cases by the DOLE Secretary.
A new form of dispute settlement by the DOLE Secretary was introduced by DOLE Circular No. 1,
Series of 2006. Called Administrative Intervention for Dispute Avoidance (AIDA), this is a new administrative
procedure for the voluntary settlement of labor disputes in line with the objectives of R.A. No. 9285, Executive
Order No. 523 and the mandate of the DOLE to promote industrial peace.
b. Nature of administrative intervention by DOLE Secretary.
This recourse is separate from the established dispute resolution modes of mediation, conciliation
and arbitration under the Labor Code, and is an alternative to other voluntary modes of dispute resolution such
as the voluntary submission of a dispute to the Regional Director for mediation, to the NCMB for preventive
mediation, or to the intervention of a regional or local tripartite peace council for the same purpose.
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c. Parties who may request for DOLE Secretary’s intervention.
Either or both the employer and the certified collective bargaining agent (or the representative of
the employees where there is no certified bargaining agent) may voluntarily bring to the Office of the DOLE
Secretary, through a Request for Intervention, any potential or ongoing dispute defined below.
d. Potential or on-going dispute.
A potential or on-going dispute refers to:
(a) a live and active dispute;
(b) that may lead to a strike or lockout or to massive labor unrest; and
(c) is not the subject of any complaint or notice of strike or lockout at the time a Request for Intervention
is made.
2. VOLUNTARY ARBITRATION BY DOLE SECRETARY.
If the intervention through AIDA fails, either or both parties may avail themselves of the remedies
provided under the Labor Code. Alternatively, the parties may submit their dispute to the Office of the DOLE
Secretary for voluntary arbitration. Such voluntary arbitration should be limited to the issues defined in the
parties' submission to voluntary arbitration agreement and should be decided on the basis of the parties'
position papers and submitted evidence. The Office of the DOLE Secretary is mandated to resolve the dispute
within sixty (60) days from the parties' submission of the dispute for resolution.
3. DOES THE DOLE SECRETARY ASSUME THE ROLE OF VOLUNTARY ARBITRATOR ONCE HE
ASSUMES JURISDICTION OVER A LABOR DISPUTE?
In the 2014 case of Philtranco Service Enterprises, Inc. v. Philtranco Workers Union-Association of
Genuine Labor Organizations (PWU-AGLO),1 this poser was answered in the negative. A notice of strike was
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filed by respondent union which, after failure of conciliation and mediation by the NCMB, was referred by the
Conciliator- Mediator to the Office of the DOLE Secretary who thereby assumed jurisdiction over the labor
dispute. The case was resolved by the Acting DOLE Secretary in favor of respondent union. A motion for
reconsideration was filed by petitioner company. The DOLE Secretary, however, declined to rule on the
motion citing a DOLE regulation, applicable to voluntary arbitration, which provided that the Voluntary
Arbitrators’ decisions, orders, resolutions or awards shall not be the subject of motions for reconsideration. The
DOLE Secretary took the position that when he assumed jurisdiction over the labor dispute, he was acting as a
Voluntary Arbitrator. Petitioner subsequently filed a Rule 65 certiorari petition with the CA. The CA, however,
dismissed petitioner company’s Rule 65 certiorari petition on the ground, among others, that the decision of
the DOLE Secretary, having been rendered by him in his capacity as Voluntary Arbitrator, is not subject to a
Rule 65 certiorari petition but to a Rule 43 petition for review which properly covers decisions of Voluntary
Arbitrators.
Before the Supreme Court, petitioner asserted that, contrary to the CA’s ruling, the case is not a
simple voluntary arbitration case. The character of the case, which involves an impending strike by petitioner’s
employees; the nature of petitioner’s business as a public transportation company, which is imbued with public
interest; the merits of its case; and the assumption of jurisdiction by the DOLE Secretary – all these circumstances
removed the case from the coverage of Article 262, and instead placed it under Article 263, of the Labor Code.
For its part, respondent union
1 G.R. No. 180962, Feb. 26, 2014. Although this case involves a decision of the DOLE Secretary, the principle enunciated herein equally applies to the NLRC.
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argued that the DOLE Secretary decided the assumed case in his capacity as Voluntary Arbitrator; thus, his
decision, being that of a Voluntary Arbitrator, is only assailable via a petition for review under Rule 43.
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The Supreme Court, however, pronounced that:
“It cannot be said that in taking cognizance of NCMB-NCR CASE No. NS-02-028-07, the Secretary of
Labor did so in a limited capacity, i.e., as a voluntary arbitrator. The fact is undeniable that by referring the
case to the Secretary of Labor, Conciliator-Mediator Aglibut conceded that the case fell within the coverage of
Article 263 of the Labor Code; the impending strike in Philtranco, a public transportation company whose
business is imbued with public interest, required that the Secretary of Labor assume jurisdiction over the
case, which he in fact did. By assuming jurisdiction over the case, the provisions of Article 263 became
applicable, any representation to the contrary or that he is deciding the case in his capacity as a voluntary arbitrator
notwithstanding.”
Consequently, the Supreme Court reversed and set aside the CA ruling and reinstated the case and directed
the CA “to resolve the same with deliberate dispatch.”
H.
GRIEVANCE MACHINERY
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GRIEVANCE OR GRIEVABLE ISSUE.
1.
SUBJECT MATTER OF GRIEVANCE
A “grievance” or “grievable issue” is any question raised by either the employer or the union regarding any of the
following issues or controversies:
The interpretation or application of the CBA;
The interpretation or enforcement of company personnel policies; or
Violation of any provisions of the CBA or company personnel policies.
VALIDITY AND BINDING EFFECT OF DECISIONS OF GRIEVANCE COMMITTEE.
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A member of the bargaining union who brought his grievable issue for resolution by the Grievance Committee is bound
by whatever disposition the latter may render thereon.
ELEVATION OF GRIEVANCE TO VOLUNTARY ARBITRATION

UNRESOLVED GRIEVANCES.
All grievances submitted to the grievance machinery which are not settled within seven (7) calendar days from the date
of their submission for resolution should automatically be referred to voluntary arbitration prescribed in the CBA.
The various internal procedural steps or stages of resolving grievances under the grievance machinery in a CBA should
be fully exhausted before resort to voluntary arbitration may be made. The 7-calendar day period is usually reckoned
from the date of their submission for resolution to the last step of the internal grievance machinery. Simply stated, only
after exhausting all the internal procedures and only after the lapse of this period that unsettled or unadjusted grievances
should automatically be referred to voluntary arbitration enunciated in the CBA.
A PARTY IS NOT ALLOWED TO GO DIRECTLY TO COURT IN DISREGARD OF VOLUNTARY
ARBITRATION AFTER DECISION IS RENDERED BY GRIEVANCE COMMITTEE.
Before a party is allowed to seek the intervention of the court, it is a precondition that he should have availed of all the
means of administrative processes afforded him. Hence, if a remedy within the administrative machinery can still be
resorted to by giving the administrative officer concerned every opportunity to decide on a matter that comes within his
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jurisdiction, then such remedy should be exhausted first before the court’s judicial power can be sought. The premature
invocation of the court’s judicial intervention is fatal to one’s cause of action.” Indeed, the underlying principle of the
rule on exhaustion of administrative remedies rests on the presumption that when the administrative body, or
grievance machinery, is afforded a chance to pass upon the matter, it will decide the same correctly.
I. VOLUNTARY ARBITRATION
1. VOLUNTARY ARBITRATION.
“Voluntary arbitration” refers to the mode of settling labor-management disputes in which the parties
select a competent, trained and impartial third person who is tasked to decide on the merits of the case and whose
decision is final and executory. It is a third-party settlement of a labor dispute involving the mutual consent by the
representatives of the employer and the labor union involved in a labor dispute to submit their case for arbitration.
2. VOLUNTARY ARBITRATOR.
a. Who is a Voluntary Arbitrator?
A “Voluntary Arbitrator” refers to:
(1) any person who has been accredited by the National Conciliation and Mediation Board (“NCMB” or
“Board”) as such; or
(2) any person named or designated in the CBA by the parties as their Voluntary Arbitrator; or
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(3) one chosen by the parties with or without the assistance of the NCMB, pursuant to a selection
procedure agreed upon in the CBA; or
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(4) one appointed by the NCMB in case either of the parties to the CBA refuses to submit to
voluntary arbitration.
This term includes a panel of Voluntary Arbitrators.
3. VOLUNTARY ARBITRATOR ACTS IN QUASI-JUDICIAL CAPACITY.
Although not a part of a government unit or a personnel of the Department of Labor and Employment,
a Voluntary Arbitrator, by the nature of his functions, acts in a quasi-judicial capacity. He is a means by which
government acts, or by which a certain government act or function is performed. He performs a state function
pursuant to a governmental power delegated to him under the Labor Code. The landmark case of Luzon
Development Bank v. Association of Luzon Development Bank Employees,1 clearly declared that a
Voluntary Arbitrator, whether acting solely or in a panel, enjoys in law the status of a quasi-judicial agency.
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1. ORIGINAL AND EXCLUSIVE JURISDICTION.
1.
JURISDICTION
a. In general.
The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have exclusive and original jurisdiction
over the following cases:
(1) Unresolved grievances arising from the interpretation or implementation of the collective
bargaining agreement (CBA).
(2) Unresolved grievances arising from the interpretation or enforcement of company personnel policies.
(3) Violations of the CBA which are not gross in character.
(4) Other labor disputes, including unfair labor practices and bargaining deadlocks, upon agreement of
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the parties.
(5) National interest cases.
(6) Wage distortion issues arising from the application of any wage orders in organized establishments.
(7) Unresolved grievances arising from the interpretation and implementation of the Productivity
Incentive Programs under R.A. No. 6971.
2.
JURISDICTION OVER OTHER LABOR DISPUTES
Under Article 275 [262] of the Labor Code, upon agreement of the parties, the Voluntary Arbitrator or
panel of Voluntary Arbitrators may also hear and decide all other labor disputes, including unfair labor
practices and bargaining deadlocks. For this purpose, before or at any stage of the compulsory arbitration
process, parties to a labor dispute may agree to submit their case to voluntary arbitration.
3.
JURISDICTION OVER NATIONAL INTEREST CASES
Article 278(g) [263(g)] of the Labor Code which involves the DOLE Secretary’s power of assumption
of jurisdiction or certification to the NLRC of labor disputes affecting industries indispensable to the national
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interest, also provides that “[b]efore or at any stage of the compulsory arbitration process, the parties may opt
to submit their dispute to voluntary arbitration.”
This means that even if the case has already been assumed by the DOLE Secretary or certified to the
NLRC for compulsory arbitration, or even during its pendency therewith, the parties thereto may still withdraw the
case from the DOLE Secretary or NLRC, as the case may be, and submit it to a Voluntary Arbitrator for
voluntary arbitration purposes.
4.
JURISDICTION OVER WAGE DISTORTION CASES
 Jurisdiction over wage distortion cases depends on whether the establishment is organized or unorganized.
In organized establishments, the employer and the union are required to negotiate to correct the wage
distortion. Any dispute arising from such wage distortion should be resolved through the grievance procedure under
the CBA and if it remains unresolved, through voluntary arbitration.
In unorganized establishments, where there are no CBAs or recognized or certified collective
bargaining unions, the jurisdiction is with the Labor Arbiter.
SOME PRINCIPLES.
1) Cases cognizable by Voluntary Arbitrators in their original jurisdiction but ERRONEOUSLY filed with
Labor Arbiters, DOLE Regional Offices or NCMB should be disposed of by referring them to the
Voluntary Arbitrators or panel of Voluntary Arbitrators mutually chosen by the parties.
1 G.R. No. 120319, Oct. 6,

1995.
151
h
2) Cases cognizable by Voluntary Arbitrators but filed with regular courts should be dismissed.
3) THE WELL-ENTRENCHED RULE IS THAT WHEN A CASE DOES NOT INVOLVE THE
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PARTIES TO A CBA – REFERRING TO THE EMPLOYER AND THE BARGAINING UNION -
IT IS NOT SUBJECT TO VOLUNTARY ARBITRATION. While individual or group of employees,
without the participation of the union, are granted the right to bring grievance directly to the
employer, they cannot submit the same grievance, if unresolved by the employer, for voluntary
arbitration without the union’s approval and participation. The reason is that it is the union which is
the party to the CBA, and not the individual or group of employees. - This rule was lately affirmed in
the 2009 case of Tabigue v. International Copra Export Corporation. Pursuant to Article 260 of the
Labor Code, the parties to a CBA shall name or designate their respective representatives to the grievance
machinery and if the grievance is unsettled in that level, it shall automatically be referred to the
voluntary arbitrators designated in advance by parties to a CBA. Consequently only disputes
involving the union and the company shall be referred to the grievance machinery or voluntary
arbitrators.”
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REMEDIES
1. RELIEFS AND REMEDIES THAT MAY BE GRANTED BY VOLUNTARY ARBITRATORS.
Besides the procedural remedies discussed above, the Voluntary Arbitrator or panel of Voluntary
Arbitrators may grant the same reliefs and remedies granted by Labor Arbiters under Article 279 of the Labor
Code, such as:
(1) In illegal dismissal cases:
(a) Actual reinstatement;
(b) Separation pay in lieu of reinstatement, in case reinstatement becomes impossible, non-feasible
or impractical;
(c) Full backwages;
(d) Moral and exemplary damages; and
(e) Attorney’s fees.
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(2) Monetary awards in monetary claims cases in which case, the decision should specify the
amount granted and the formula used in the computation thereof.
J.
PRESCRIPTION OF ACTIONS
1. MONEY CLAIMS
CASES.
a. Prescriptive period is three (3) years under Article 291 of the Labor Code. - The prescriptive period
of all money claims and benefits arising from employer-employee relations is 3 years from the time the
cause of action accrued; otherwise, they shall be forever barred.
b. All other money claims of workers prescribe in 3 years. - Article 291 contemplates all money
claims arising from employer-employee relationship, including:
1. Money claims arising from the CBA.
2. Incremental proceeds from tuition increases.
3. Money claims of Overseas Filipino Workers (OFWs).
Note must be made that in the 2010 case of Southeastern Shipping v. Navarra, Jr.,1 the 1-year
prescriptive period in Section 28 of POEA-SEC was declared null and void. The reason is that Article 291 of
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the Labor Code is the law governing the prescription of money claims of seafarers, a class of overseas contract
workers. This law prevails over said Section 28.
2. ILLEGAL DISMISSAL CASES.
a. Legal basis is not Article 291 of the Labor Code but Article 1146 of the Civil Code. - The 3-
year prescriptive period in Article 291 solely applies to money claims but not to illegal dismissal cases
which are not in the nature of money claims. The prescriptive period of illegal dismissal cases is 4
years under Article 1146 of the Civil Code.
3. UNFAIR LABOR PRACTICE (ULP) CASES.
a. Prescriptive period of ULP cases is 1 year (Article 290, Labor Code). - The prescriptive period for
all complaints involving unfair labor practices is one (1) year from the time the acts complained of
were committed; otherwise, they shall be forever barred.
b. Pre-requisite for prosecution of criminal cases. - Before a criminal action for ULP may be filed, it is
a condition sine qua non that a final judgment finding that an unfair labor practice act was committed
by the respondent should first be secured or obtained in the labor case initiated before the Labor
Arbiter or the Voluntary Arbitrator, as the case may be. Final judgment is one that finally disposes
of the action or proceeding. For instance, if the remedy of appeal is available but no appeal is made,
then, the judgment is deemed final and executory. If an appeal is made, then the final judgment
rendered by the last tribunal, say the Supreme Court, to which the case was elevated should be the
reckoning factor.
c. Interruption of prescriptive period of offenses. - As far as ULP cases are concerned, the running of
the one (1) year prescriptive period is interrupted during the pendency of the labor proceeding.
a 1 G.R. No. 167678, June 22,
2010.
152
d. Evidentiary value of the final judgment in the labor case. - In ULP cases, the final judgment in
the labor case cannot be presented as evidence of the facts proven therein or as evidence of the guilt
of the respondent therein. Its evidentiary or probative value is confined merely in proving the fact of
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secured in the labor proceeding finding that an unfair labor practice act was in fact committed by the
respondent.
4. OFFENSES PENALIZED UNDER THE LABOR CODE AND ITS IMPLEMENTING RULES AND
REGULATIONS (IRR).
a. Prescriptive period is 3 years (Article 290, Labor Code). - The prescriptive period of all criminal
offenses penalized under the Labor Code and the Rules to Implement the Labor Code is three (3) years
from the time of commission thereof.
b. Consequence of non-compliance with prescriptive period under Article 290. - Failure to initiate or
file the criminal action or complaint within the prescriptive period shall forever bar such action.
c. Illegal dismissal is not an “offense” under Article 290. - The act of the employer in dismissing an
employee without cause, although a violation of the Labor Code and its implementing rules, does
not amount to an “offense” as this term is understood and contemplated under Article 290.
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5. ILLEGAL RECRUITMENT CASES.
a. Simple illegal recruitment cases. – The prescriptive period is five (5) years.
b. Illegal recruitment cases involving economic sabotage. – The prescriptive period is twenty (20) years.
GOOD LUCK AND GOD BLESS!

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UPDATED NOTES IN LABOR LAW

Prof. Joselito Guianan Chan

1. Under Article 3 of Labor Code:

a) Full protection to labor;

2. Under Article XIII, Section 3 of the Constitution:

a) Full protection to labor, local and overseas, organized and unorganized;

1. Under Article 1702 of the Civil Code.

3. Follow this rule in interpreting and construing:

a. DOUBTS OR AMBIGUITIES IN LABOR CONTRACTS such as employment contract and

1. Selected Constitutional Provisions.

 Under Article II (Declaration of Principles and State Policies):

 Under Article III (Bill of Rights):

THIS FREEDOM GUARANTEED UNDER ARTICLE III, SECTION 4 OF THE CONSTITUTION

THIS IS KNOWN AS “FREEDOM OF ASSOCIATION.” THIS PROVISION IS THE BASIS FOR

c. Non-impairment of obligations of contracts.

THE CONCEPT OF THIS RIGHT IN POLITICAL LAW IS SIMILAR IN LABOR LAW.

d. Right to speedy disposition of cases in judicial, quasi-judicial or administrative bodies.

THIS CAN BE INVOKED IN LABOR CASES AT ALL LEVELS, to wit:

(1) Before quasi-judicial or administrative bodies, such as:

(2) Before judicial bodies, such as:

e. Prohibition against involuntary servitude.

THIS PRINCIPLE IS RELEVANT ONLY IN THREE (3) SITUATIONS: NAMELY: (1)

 Under Article XIII (Social Justice and Human Rights):

2. Selected Civil Code Provisions.

 Who may commit illegal recruitment?

LICENSE VS. AUTHORITY

 What is a “license” for overseas recruitment?

ELEMENTS OF ILLEGAL RECRUITMENT

 What are the elements of illegal recruitment?

SIMPLE ILLEGAL RECRUITMENT

 What are the 2 elements of simple illegal recruitment?

 Can a recruiter be a natural or juridical person?

ILLEGAL RECRUITMENT AS A FORM OF ECONOMIC SABOTAGE

 When is illegal recruitment considered a crime involving economic sabotage?

1. When committed by a syndicate; or

NOTE: THE FIGURE THREE (3) MAKES THE DIFFERENCE, THUS:

 3 OR MORE RECRUITERS REGARDLESS OF NO. OF RECRUITEES = BY A SYNDICATE

 When is illegal recruitment considered in large scale?

If committed against three (3) or more persons individually or as a group.

ILLEGAL RECRUITMENT VS. ESTAFA

NATURE OF LIABILITY OF LOCAL RECRUITMENT AGENCY

THEORY OF IMPUTED KNOWLEDGE

 What is meant by this theory?

TERMINATION OF CONTRACT OF MIGRANT WORKER

 Can an OFW acquire regularity of employment?

1 G.R. No. 196036, Oct. 23, 2013.

 What is the doctrine of processual presumption?

“Presumed-identity approach” or “processual presumption” is an International Law doctrine which

(1) All salaries for the unexpired portion of the contract;

1 G.R. No. 138193, March 5, 2003.

BAN ON DIRECT HIRING

What is direct hiring?

Those hired by international organizations;

 What is an ALIEN EMPLOYMENT PERMIT (AEP)?

 What is the period of validity of an AEP?

One (1) year is the validity of an AEP.

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 What are compensable hours worked?

The following shall be considered as compensable hours worked:

a) All time during which an employee is required to be on duty or to be at the employer’s

 What is the total normal hours of work per day?

Eight (8) hours daily.

 What are the effects of power interruptions/brownouts?