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Ad Maiorem Dei Gloriam.

 GRACE ANN Q. BAJO
TIMOTHY JACOB J. PALAFOX
20 21 C H AI R PE R S O N S

KATHLEEN KAE Z. ENDOZO MEG V. BUENSALIDO

ARISTEO RAPHAEL T. MARBELLA III MARIE KAYLA C. GALIT
20 21 AD MI NI ST R A TI V E CO M MI T TE E HE A D S 20 21 A C AD E MI C C O M MI T TE E HE AD S

CARLOS ROSAURO N. MANALO

MA. CRISTINA ASUNCION
20 21 A C AD E MI C C O M MI T TE E U N D E R ST U D I E S

ATTY. RYAN JEREMIAH D. QUAN

ATTY. MARLON MANUEL

20 21 L AB OR LA W F A CU L TY AD V I SE R S

SHIKYNA JOY CASTILLO

MA. SOFIA GATCHALIAN
20 21 L AB OR LA W S U BJE C T HE AD S

MA. TERESA BEATRICE JOSE

ALEXANDRA LOUISE DISTOR
RACHEL MEGAN AGLAUA

20 21 L AB OR LA W U ND E R S TU D I E S

CAMILLE BULATAO SAMANTHA ROSE MORALES MIKKO RINGIA

JEFFREY ABRAZALDO LORIEDEL FAJARDO VERA DE VERA
JAMES ANDREW ESPIRITU STEPHANIE SERAPIO
20 21 L AB OR LA W V OLU NTE E R S
 JONATHAN DF. TORRES
GAEL PAULINE R. MORALES
RIA ALEXANDRA D. CASTILLO
NICOLE ANN C. PAGLICAWAN
JULIANNE BEATRICE N. ROSARIO
20 21 C R E ATI V E S

JOSEPH BILL P. QUINTOS STEFI MONIKA S. SUERO

SAMANTHA J. MAGAOAY KATHLEEN C. ROMINA
FREEDOM JUSTIN B. HERNANDEZ SERMAE ANGELA G. PASCUAL
20 21 TE C H NI CA L 2 02 1 FI N AN CE

AINA RAE L. CORTEZ CHRISTIAN GIO R. SENARLO

LUMINA ALINEA O. AQUINO MAEDEN M. BORCELANGO
ANNA MARIE GRACE M. ANTONIO IMI LIZA B. ESPINA
MARY STEPHANIE CABRERA CRUZ FRANCIS SABIN BELTRAN
CLARISSE MAE D. ZAPLAN ANTHONY JEFFERSON Y. JULIO
20 21 S PE CI AL P R OJ E C TS 20 21 LO GI STI C S

DONN MARIE ISABELLE BALINA MELISSA GABRIELLE P. REMULLA

ALISHA BEATRICE A. VERGARA GRACIELLA RACHEL D. ROBLES
PRISHA LEIGH D. CRUZ DANELLA DIANE D. DIMAPILIS
ALITHEA C. SORIANO REYNALDO M. REVECHE
AARON C. CHENG CZAREANA JOUSCH T. PARRA
20 21 M AR K E TI N G 20 21 PU BLI C R E L A TI ON S
 JUSTIN LUIGI V. HERNANDEZ
20 2 0 C HAI R P E R SO N

YVES PETER CARLO D. MEDINA THERESE ANNE C. ESPINOSA

KATRINA ISABELLE G. PIMENTEL HAZEL VIANCA I. ORTEGA
GENICA GALE F. LAHOZ VINCE ZYRENCE T. BARLONGAY
20 2 0 AD MI NI S TR ATI V E CO M MI T TE E HE A D S 20 2 0 HO TE L C O M MI TTE E HE A D S

EUNICE A. MALAYO MEG V. BUENSALIDO

FRANCES CHRISTINE P. SAYSON MARIE KAYLA C. GALIT
20 2 0 A CAD E MI C CO M MI T TE E HE AD S 2 02 0 A CA D E M I C CO M MIT T E E U N D E R S T U DI E S

ATTY. FILEMON RAY L. JAVIER

ATTY. MARLON MANUEL

20 2 0 L A BOR L AW F A CU L TY AD V I SE R S

PATRICIA ANNE ALARIOS

MARIAN GAE MERINO
MICHAELA FRANCESCA DEFENSOR
20 2 0 L A BOR L AW S U BJE C T HE AD S

OSCAR JOSEPH PAYAWAL

JOANNE MARIE VALLES

20 2 0 L A BOR L AW U ND E R S TU D I E S

PATRICIA JOY IGNACIO JAMES BALUCA CHRISTINA BALTAZAR

JENNICA RAYEL SARA KARMINA AVILLON JULIA NEGRE
PATRICIA KIRSTEN DOLATRE

20 2 0 L A BOR L AW V OLU NTE E R S

ATENEO CENTRAL
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TABLE OF CONTENTS

FUNDAMENTAL PRINCIPLES ...............................................................................................................1

A. LEGAL BASIS ...................................................................................................................................1

I. 1987 CONSTITUTION ............................................................................................................................. 1
II. CIVIL CODE ........................................................................................................................................... 3
III. LABOR CODE ....................................................................................................................................... 4

RECRUITMENT AND PLACEMENT ........................................................................................................5

A. DEFINITION OF RECRUITMENT AND PLACE ......................................................................................5

B. REGULATION OF RECRUITMENT AND PLACEMENT ACTIVITIES ..........................................................7
I. REGULATORY AUTHORITIES .................................................................................................................. 7
II. BAN ON DIRECT HIRING ....................................................................................................................... 7
III. ENTITIES PROHIBITED FROM RECRUITING .......................................................................................... 8
IV. SUSPENSION OR CANCELLATION OF LICENSE OR AUTHORITY ........................................................... 9
V. PROHIBITED PRACTICES .....................................................................................................................11
C. ILLEGAL RECRUITMENT ................................................................................................................. 14
I. ELEMENTS ...........................................................................................................................................18
II. TYPES OF ILLEGAL RECRUITMENT ......................................................................................................19
III. ILLEGAL RECRUITMENT AS DISTINGUISHED FROM ESTAFA ..............................................................20
D. LIABILITY OF LOCAL RECRUITMENT AGENCY AND FOREIGN EMPLOYER........................................... 20
I. SOLIDARY LIABILITY .............................................................................................................................21
II. THEORY OF IMPUTED KNOWLEDGE ...................................................................................................21
E. TERMINATION OF CONTRACT MIGRANT WORKER.......................................................................... 22
F. EMPLOYMENT OF NON-RESIDENT ALIENS ...................................................................................... 22

LABOR STANDARDS.......................................................................................................................... 25

A. CONDITION OF EMPLOYMENT ......................................................................................................25

I. HOURS OF WORK ................................................................................................................................25
II. REST PERIOD ......................................................................................................................................31
III. SERVICE CHARGE ...............................................................................................................................37
B. WAGES ........................................................................................................................................ 38
I. DEFINITION, COMPONENTS, AND EXCLUSION....................................................................................38
II. PRINCIPLE ...........................................................................................................................................46
III. MINIMUM WAGE ..............................................................................................................................47
IV. PAYMENT OF WAGE ..........................................................................................................................48
C. LEAVES ......................................................................................................................................... 56
D. SEXUAL HARASSMENT IN THE WORK ENVIRONMENT ....................................................................59
E. WORKING CONDITIONS FOR SPECIAL GROUPS OF EMPLOYEES ....................................................... 63
I. LEARNERS AND APPRENTICE ...............................................................................................................63

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II. DISABLED WORKERS ..........................................................................................................................65

III. GENDER .............................................................................................................................................67
IV. MINORS ............................................................................................................................................70
V. KASAMBAHAY ....................................................................................................................................72
VI. HOMEWORKERS ...............................................................................................................................73
VII. SOLO PARENTS .................................................................................................................................74
VIII NIGHT WORKERS .............................................................................................................................74
IX. PREGNANT WOMAN .........................................................................................................................76
X. MIGRANT WORKERS ..........................................................................................................................76
XI. SECURITY GUARDS ............................................................................................................................76

SOCIAL WELFARE LEGISLATION ......................................................................................................... 78

A. SSS LAW (R.A. NO. 8262) ............................................................................................................... 79

B. GOVERNMENTS SERVICE INSURANCE SYSTEM (GSIS) LAW ............................................................. 79
C. LIMITED PORTABILITY LAW ........................................................................................................... 90
D. DISABILITY AND DEATH BENEFITS .................................................................................................90
E SOLO PARENTS ............................................................................................................................ 100
F. KASAMBAHAY ............................................................................................................................ 100
G. AGRARIAN RELATIONS ............................................................................................................... 100
H. UNIVERSAL HEALTH CARE ........................................................................................................... 103

LABOR RELATIONS ......................................................................................................................... 107

A. RIGHT TO SELF-ORGANIZATION .................................................................................................. 107

I.WHO MAY OR MAY NOT EXERCISE THE RIGHT ..................................................................................108
II. COMMINGLING AND MIXTURE OF MEMBERSHIP ...........................................................................113
III. RIGHTS AND CONDITIONS OF MEMBERSHIP ..................................................................................115
B. BARGAINING UNIT...................................................................................................................... 119
C. BARGAINING REPRESENTATIVE ................................................................................................... 121
E. UNFAIR LABOR PRACTICE ............................................................................................................ 150
I. NATURE AND ASPECT ........................................................................................................................150
II. ACTS CONSTITUTING ULP BY EMPLOYERS .......................................................................................152
III. ACTS CONSTITUTING ULP BY ORGANIZATION ................................................................................163
F. PEACEFUL CONCERTED ACTIVITIES............................................................................................... 167
I. BY LABOR ORGANIZATION ................................................................................................................167
II. BY THE EMPLOYER ...........................................................................................................................171
III. ASSUMPTION OF JURISDICTION BY SECRETARY OF LABOR AND EMPLOYMENT ............................174

POST-EMPLOYMENT ...................................................................................................................... 183

A. EMPLOYER-EMPLOYEE RELATIONSHIP ........................................................................................ 183

I. TEST TO DETERMINE EXISTENCE .......................................................................................................184
II. LEGITIMATE CONTRACTING VS. LABOR-ONLY CONTRACTING ........................................................187
III. KINDS OF EMPLOYMENT .................................................................................................................200
B. TERMINATION OF EMPLOYER ..................................................................................................... 207

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I. REQUISITE FOR VALIDITY AND DUE PROCESS REQUIREMENTS ........................................................208

II. PREVENTIVE SUSPENSION................................................................................................................226
C. TERMINATION BY EMPLOYEE ...................................................................................................... 227
D. RETIREMENT .............................................................................................................................. 228

MANAGEMENT PREROGATIVE........................................................................................................ 233

A. DISCIPLINE ................................................................................................................................. 234

B. TRANSFER OF EMPLOYEE ............................................................................................................ 234
C. PRODUCTIVITY STANDARDS........................................................................................................ 235
D. BONUS ...................................................................................................................................... 235
E. CHANGE OF WORKING HOURS .................................................................................................... 236
F. BONA FIDE OCCUPATIONAL QUALIFICATIONS .............................................................................. 236
G. POST-EMPLOYMENT RESTRICTIONS ............................................................................................ 237
H. MARRIAGE BETWEEN EMPLOYEES OF COMPETITOR-EMPLOYERS................................................. 237

JURISDICTION AND REMEDIES ........................................................................................................ 239

A. LABOR ARBITER.......................................................................................................................... 239

I. JURISDICTION OF THE LABOR ARBITER AS DISTINGUISHED FROM THE REGIONAL DIRECTOR .........239
II. REQUIREMENTS TO PERFECT APPEAL TO NATIONAL LABOR RELATIONS COMMISSION .................243
III. REINSTATEMENT AND/OR EXECUTION PENDING APPEAL ..............................................................245
B. NATIONAL LABOR RELATIONS COMMISSION ............................................................................... 246
C. COURT OF APPEALS .................................................................................................................... 247
D. SUPREME COURT ....................................................................................................................... 248
E. BUREAU OF LABOR RELATIONS.................................................................................................... 249
F. NATIONAL CONCILIATION AND MEDIATION BOARD ..................................................................... 250
G. DEPARTMENT OF LABOR AND EMPLOYMENT REGIONAL DIRECTORS ........................................... 251
H. DEPARTMENT OF LABOR AND EMPLOYMENT SECRETARY ............................................................ 251
I. JURISDICTION ....................................................................................................................................251
II. VISITORIAL AND ENFORCEMENT POWERS.......................................................................................252
III. POWER TO SUSPEND EFFECTS OF TERMINATION ...........................................................................254
IV. REMEDIES .......................................................................................................................................255
I. VOLUNTARY ARBITRATOR ........................................................................................................... 255
I. JURISDICTION ....................................................................................................................................255
II. REMEDIES.........................................................................................................................................256
J. PRESCRIPTION OF ACTIONS ......................................................................................................... 256

ISSUANCES..................................................................................................................................... 262

A. REORGANIZATION ACT OF THE MINISTRY OF LABOR [E.O 126] ..................................................... 262

B. GUIDELINES ON THE ADOPTION OF FLEXIBLE WORK ARRANGEMENTS [DOLE ADVISORY NO. 2, S.
2009] ............................................................................................................................................. 265
C. DOLE ORDER NO. 150, S. 2016 REVISED GUIDELINES GOVERNING THE EMPLOYMENT AND WORKING
CONDITIONS OF SECURITY GUARDS AND OTHER PRIVATE SECURITY PERSONNEL IN THE PRIVATE
SECURITY INDUSTRY....................................................................................................................... 266

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D. AMENDED STANDARD TERMS AND CONDITIONS GOVERNING THE OVERSEAS EMPLOYMENT OF

FILIPINO SEAFARERS ON-BOARD OCEAN-GOING SHIPS [POEA MEMORANDUM CIRCULAR NO. 010-10] .... 275

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FUNDAMENTAL
PRINCIPLES
Labor Law
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A. LEGAL BASIS
FUNDAMENTAL PRINCIPLES I. 1987 CONSTITUTION

A. LEGAL BASIS Article II: State Policies

I. 1987 Constitution Sec. 9. The State shall promote a just and
II. Civil Code dynamic social order that will ensure the
III. Labor Code prosperity and independence of the nation and
free the people from poverty through policies that
B. STATE POLICY TOWARDS LABOR provide adequate social services, promote full
employment, a rising standard of living, and an
improved quality of life for all.

Sec. 10. The State shall promote social justice in

all phases of national development.

Sec. 18. The State affirms labor as a primary

social economic force. It shall protect the rights of
workers and promote their welfare.

Sec. 20. The State recognizes the indispensable

role of the private sector, encourages private
enterprise, and provides incentives to needed
investments.

Social Justice
Social justice is neither communism, nor
despotism, nor atomism, nor anarchy, but the
humanization of laws and the equalization of
social and economic forces by the State so that
justice in its rational and objectively secular
conception may at least be approximated.
(Calalang v. Williams, G.R. No. 47800, 1940)

Welfare state based on social justice

The welfare state concept is found in the
constitutional clause on the promotion of social
justice to ensure the well-being and economic
security of all the people, and in the pledge of
protection to labor with specific authority to
regulate the relations between landowners and
tenants and between labor and capital. (Alalayan
v. National Power Corp., G.R. No. L-24396, 1968)

Limitations of Social Justice

Social justice should be used only to correct an
injustice. It must be founded on the recognition of
the necessity of interdependence among diverse
units of a society, and of the protection that

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should be equally and evenly extended to all
groups as a combined force in our social and
economic life. (Agabon v. NLRC, G.R. No.
158693, 2004)
Social justice is not intended to countenance
wrongdoing simply because it is committed by the
underprivileged. At best it may mitigate the
penalty but it certainly will not condone the
offense. Compassion for the poor is an imperative
of every humane society but only when the
recipient is not a rascal claiming an undeserved
privilege. Social justice cannot be permitted to be
a refuge of scoundrels any more than can equity
be an impediment to the punishment of the guilty.
(Tirazona v. Philippine EDS Techno-Service,
G.R. No. 169712, 2009)
Laissez-Faire not fully embraced by the
Constitution
The Constitution is primarily a document of social
justice, and although it has recognized the
importance of the private sector, it has not
embraced fully the concept of laissez-faire or
relied on pure market forces to govern the
economy. (Employers Confederation v. NWPC,
G.R. No. 96169, 1991)
Balancing of interests
It is high time that employer and employee cease
to view each other as adversaries and instead
recognize that theirs is a symbiotic relationship,
wherein they must rely on each other to ensure
the success of the business. When they consider
only their own self-interests, and when they act
only with their own benefit in mind, both parties
suffer from short-sightedness, failing to realize
that they both have a stake in the business.
The employer wants the business to succeed,
considering the investment that has been made.
The employee in turn, also wants the business to
succeed, as continued employment means a
living, and the chance to better one’s lot in life. It
is clear then that they both have the same goal,
even if the benefit that results may be greater for
one party than the other. If this becomes a source
of conflict, there are various, more amicable
means of settling disputes and of balancing
LABOR LAW
interests that do not add fuel to the fire, and
instead open avenues for understanding and
cooperation between the employer and the
employee. (Toyota Motor Phils. Corp Workers
Ass’n. v. NLRC, G.R. No. 158786, 2007)
Article III: Bill Of Rights
Sec. 1. No person shall be deprived of life, liberty,
or property without due process of law, nor shall
any person be denied the equal protection of the
laws.
Due process
Under the Labor Code, the requirements for the
lawful dismissal of an employee by his employer
are two-fold: the substantive and the procedural.
Not only must the dismissal be for a valid or
authorized cause as provided by law, but the
rudimentary requirements of due process, basic
to which are that an opportunity to be heard and
to defend oneself must be observed before an
employee may be dismissed. (Metro Eye Security
v. Salsona, G.R. No. 167367, 2007)
Labor as Property Right
One’s employment is a property right, and the
wrongful interference therewith is an actionable
wrong. The right is considered to be property
within the protection of the constitutional
guarantee of due process of law. (Texon Mfg. v.
Millena, G.R. No. 141380, 2004)
Sec. 4. No law shall be passed abridging the
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.
Wearing armbands and putting up placards to
express one’s views without violating the rights of
3rd parties are legal per se and even
constitutionally protected. (Bascon v. CA, G.R.
No. 144899, 2004)
Sec. 8. The right of the people, including those
employed in the public and private sectors, to
form unions, associations, or societies for
purposes not contrary to law shall not be
abridged.
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Sec. 16. All persons shall have the right to a
speedy disposition of their cases before all
judicial, quasi-judicial, or administrative bodies.
Sec. 18(2). No involuntary servitude in any form
shall exist except as a punishment for a crime
whereof the party shall have been duly convicted.
Article XIII: Social Justice And Human Rights
Sec. 2. The promotion of social justice shall
include the commitment to create economic
opportunities based on freedom of initiative and
self-reliance.
Sec. 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.
Sec 13. The State shall establish a special
agency for disabled person for their rehabilitation,
self-development, and self-reliance, and their
integration into the mainstream of society.
LABOR LAW
Sec. 14. The State shall protect working women
by providing safe and healthful working
conditions, taking into account their maternal
functions, and such facilities and opportunities
that will enhance their welfare and enable them to
realize their full potential in the service of the
nation.
Management prerogative
See discussion in Part VII.
Seven basic rights of workers guaranteed by
the Constitution: (WHOSE-CD)
1. To participate in policy and Decision-making
processes affecting their rights and benefits
as may be provided by law
2. To receive a living Wage
3. To conduct Collective bargaining or
negotiation with management
4. To work under Humane conditions
5. Right to Organize
6. To enjoy Security of tenure
7. To Engage in peaceful concerted activities,
including strike in accordance with law
II. CIVIL CODE
Articles 1700 to 1703, 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.
Article 1701. Neither capital nor labor shall act
oppressively against the other, or impair the
interest or convenience of the public.
Art. 1702. In case of doubt, all labor legislation
and all labor contracts shall be construed in favor
of the safety and decent living for the laborer.
Article 1703. No contract which practically
amounts to involuntary servitude, under any
guise whatsoever, shall be valid.
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III. LABOR CODE to due process. (Gagui v. Dejero, G.R. No.

Rights Guaranteed by the Labor Code
The State shall afford protection to labor, promote
full employment, ensure equal work opportunities
regardless of sex, race or creed and regulate the
relations between workers and employers. The
State shall assure the right of workers to self-
organization, collective bargaining, security of
tenure, and just and humane conditions of work.
(Labor Code, Art. 3)
196036, 2013)
If doubts exist between the evidence presented
by the employer and the employee, the scale of
justice must be tilted in favor of the latter.
(Dreamland Hotel Resort v. Johnson, G.R. No.
191455, 2014).
———— end of topic ————

The constitutional policy to provide full protection

to labor is not meant to be a sword to oppress
employers. The commitment of this Court to the
cause of labor does not prevent us from
sustaining the employer when it is in the right.
(Sarocam v. Interorient Marine, G.R. No. 167813,
2006)

Principle of Co-Determination
Refers to the right of workers to participate in the
policy and decision making processes directly
affecting their rights and benefits, without
intruding into matters pertaining to management
prerogative. (PAL v. NLRC, G.R. No. 85985,
1993)

Construction in favor of labor; limitations

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. (Labor Code,
Art. 4)

It is construed in favor of labor if there is a doubt

as to the meaning of the legal and contractual
provision. If the provision is clear and
unambiguous, it must be applied in accordance
with its express terms. (MERALCO v. NLRC, G.R.
No. 78763, 1989)

The law also recognizes that management has

rights, which are also entitled to respect and
enforcement in the interest of fair play. (St. Luke’s
v. NLRC, G.R. No. 162053, 2007)

While labor laws should be construed liberally in

favor of labor, we must be able to balance this
with the equally important right of the [employer]

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 RECRUITMENT
AND PLACEMENT
Labor Law
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RECRUITMENT AND PLACEMENT A. DEFINITION OF RECRUITMENT AND

PLACE
A. DEFINITION OF RECRUITMENT AND
Worker – refers to any member of the labor force,
PLACEMENT
whether employed or unemployed. (Labor Code,
B. REGULATION OF RECRUITMENT
Art. 13[a]).
AND PLACEMENT ACTIVITIES
I. Regulatory authorities
Overseas Filipino – Dependents of migrant
II. Ban on direct hiring
workers and other Filipino nationals abroad who
III. Entities prohibited from
are in distress as mentioned in Sections 24 and
recruiting
26 of the Migrant Workers Act. (R.A. No. 8042,
IV. Suspension or cancellation of
Sec. 3[c])
license or authority
V. Prohibited practices
Overseas Filipino Worker – is a person who is
to be engaged, is engaged or has been engaged
C. ILLEGAL RECRUITMENT
in a remunerated activity in a state of which he or
I. Elements
she is not a citizen or on board a vessel
II. Types
navigating the foreign seas other than a
III. Illegal recruitment as
government ship used for military or non-
distinguished from estafa
commercial purposes or on an installation located
offshore or on the high seas; to be used
D. LIABILITY OF LOCAL RECRUITMENT
interchangeably with migrant worker. (R.A. No.
AGENCY AND FOREIGN EMPLOYER
8042, Sec. 2[a])
I. Solidary liability
II. Theory of imputed knowledge
Overseas Filipino
E. TERMINATION OF CONTRACT OF
Private Employment Agency – means any
MIGRANT WORKER
person or entity engaged in recruitment and
F. EMPLOYMENT OF NON-RESIDENT
placement of workers for a fee which is charged,
ALIENS
directly or indirectly, from the workers or
employers or both. (Labor Code, Art. 13[c])

Private Recruitment Entity – means any person

or association engaged in the recruitment and
placement of workers, locally or overseas,
without charging, directly or indirectly, any fee
from the workers or employees. (Labor Code, Art.
13[e])

License v. Authority
LICENSE AUTHORITY
License – means a Authority – means a
document issued by document issued by
the DOLE authorizing the DOLE authorizing
a person/entity to a person/association
operate a private to engage in
fee-charging recruitment and
placement activities

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employment as a private The number of persons dealt with is not the basis
agency. recruitment entity. in determining whether or not an act constitutes
recruitment and placement.
Private Employment Agency v. Private
Recruitment Entity The proviso about “two or more persons” merely
PRIVATE PRIVATE lays down a rule of evidence: where fee is
EMPLOYMENT RECRUITMENT collected because of a promise or offer of
AGENCY ENTITY employment to two or more prospective workers,
“Private “Private the individual or entity dealing with them shall be
employment recruitment entity” deemed to be engaged in the act of recruitment
agency” means any means any and placement. The words “shall be deemed”
person/ entity person/association create that presumption. Also, profit is not
engaged in the engaged in the necessary to constitute recruitment. (People v.
recruitment and recruitment and Panis, G.R. No. L-58674-77, 1986)
placement of workers placement of
for a fee which is workers, locally or Acts of referral
charged, directly or overseas, without The act of referral, which is included in
indirectly, from the charging, directly or recruitment, is "the act of passing along or
workers, employers, indirectly, any fee forwarding of an applicant for employment after
or both. from the workers or an initial interview of a selected applicant for
employers. employment to a selected employer, placement
Requires a license. Requires an officer or bureau." (Rodolfo vs. People, G.R. No.
authority. 146964, 2006)
(Labor Code, Art. 13)
Promising employment
Recruitment and Placement is any act of: Promising employment as factory workers and
(CETCHUP-CRAP) receiving money allegedly for processing papers
1. Canvassing without authorization or license is engaging in
2. Enlisting unlawful recruitment and placement activities.
3. Transporting The absence of the necessary license or authority
4. Contracting renders all of accused-appellant’s recruitment
5. Hiring activities criminal. (Labor Code, Art. 13[b])
6. Utilizing, or (People vs. Saulo, G.R. No. 125903, 2000)
7. Procuring workers
Perfection of employment contract gives rise
• and includes:
to Illegal recruitment
- Contract of services
The commencement of the employment
- Referrals
relationship must be treated separately from the
- Advertising for employment
perfection of an employment contract.
- Promising for employment locally or
abroad, whether for profit or not.
The perfection of the contract, which (as a
(Labor Code, Art. 13)
general rule) coincides with the date of execution,
occurred when the parties agreed on the object
Any person or entity which, in any manner, offers
and the cause, and the terms and conditions.
or promises for a fee, employment to two or
Despite the non-deployment (which caused the
more persons shall be deemed engaged in
non-commencement of the employment
recruitment and placement. (Labor Code, Art.
relationship), rights have arisen based on the
13[b])
perfected contract. (C.F. Sharp v. Pioneer
Insurance, G.R. No. 179469, 2012)

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B. REGULATION OF RECRUITMENT AND In Salazar vs. Achacoso, G.R. No. 81510, 1990,
PLACEMENT ACTIVITIES the SC ruled that Art. 38 of the LC is
unconstitutional and that the Secretary of Labor
and Employment cannot issue a warrant of arrest.
I. REGULATORY AUTHORITIES
POEA
DOLE Secretary does not have the power to
Jurisdiction of the POEA
issue search warrants and warrants of arrest.
Original and exclusive jurisdiction to hear and
(Salazar v. Achacoso, G.R. No. 81510, 1990).
decide:
a. All cases, which are administrative in
Overseas Workers Welfare Administration
character, involving or arising out of violations
(OWWA)
of rules and regulations relating to licensing
The OWWA is mandated to protect the interest
and registration of recruitment and
and promote the welfare of member-OFWs in all
employment agencies or entities
phases of overseas employment in recognition of
b. Disciplinary action cases and other special
their valuable contribution to the overall national
cases, which are administrative in character,
development effort; to facilitate the
involving employers, principals, contracting
implementation of the provisions of the Labor
partners and Filipino migrant workers (IRR of
Code, R.A. No. 8042, as amended, concerning
R.A. no. 8042, Rule X, Sec. 6)
the responsibility of the government to promote
the well-being of OFWs.
Outside of POEA Jurisdiction
a. Foreign Judgment – POEA has no jurisdiction
The OWWA shall provide legal assistance to
to hear and decide a claim for enforcement of a
member-OFWs; to provide social and welfare
foreign judgment (Pacific Asia Overseas v.
programs and services to member-OFWs, to
NLRC, G.R. No. 76595, 1988)
provide prompt and appropriate response to
b. Torts – Fall under the provisions of the Civil
global emergencies or crisis situations affecting
Code (Mckenzie v. Cui, G.R. No. 48831, 1989)
OFWs and their families; to ensure the efficiency
of collections and the viability and sustainability of
b. Regulatory and Visitorial Powers of the
the OWWA Fund; to develop, support and finance
DOLE Secretary
specific projects for the welfare of member-OFWs
and their families; and to ensure the
Regulatory & Rule-Making Powers
implementation of all laws and ratified
The Secretary of Labor shall have the power to
international conventions within its jurisdiction.
restrict and regulate the recruitment and
(R.A. No. 10801, Sec. 6)
placement activities of all agencies within the
coverage of this Title and is hereby authorized to
II. BAN ON DIRECT HIRING
issue orders and promulgate rules and
worker for overseas employment except through
regulations to carry out the objectives and
the Boards and entities authorized by the
implement the provisions of this Title. (Labor
Secretary of Labor.
Code, Art. 36
Visitorial Powers
Exceptions:
The Secretary of Labor or his duly authorized
1. Members of the diplomatic corps,
representatives may, at any time, inspect the
2. International organizations and
premises, books of accounts and records of any
3. Such other employers as may be allowed by
person or entity covered by this Title, require it to
the Secretary of Labor is exempted from this
submit reports regularly on prescribed forms, and
provision. (Labor Code, Art. 18)
act on violations of any provisions of this Title.
(Labor Code, Art. 37)

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4. Name hirees – those individuals who are able
to secure contracts for overseas employment
on their own efforts and representation
without the assistance or participation of any
agency. Their hiring, nonetheless, has to be
processed through the POEA. (Part III, Rule
III of the POEA Rules Governing Overseas
Employment as amended in 2002)
Employers cannot directly hire workers for
overseas employment EXCEPT through
authorized entities.
• The reason for the ban is to ensure full
regulation of employment in order to avoid
exploitation.
Entities Authorized To Engage In Recruitment
And Placement
1. Public employment offices
2. POEA
3. Private recruitment entities
4. Private employment agencies
5. Shipping or manning agents or
representatives
6. Such other persons or entities as may be
authorized by the DOLE Secretary
7. Construction contractor
III. ENTITIES PROHIBITED FROM
RECRUITING
Entities disqualified from Engaging in the
Business of Recruitment and Placement of
Workers for Local Employment
a) Travel agencies and sales agencies of
b) Airline companies, whether for profit or not.
(Art. 26)
c) Those who are convicted of illegal
recruitment, trafficking in persons, anti- child
labor violation, or crimes involving moral
turpitude;
d) Those against whom probable cause or
prima facie finding of guilt for illegal
recruitment or other related cases exist
particularly to owners or directors of agencies
who have committed illegal recruitment or
other related cases.
LABOR LAW
e) Those agencies whose licenses have been
previously revoked or cancelled by the
Department under Sec. 54 of these rules.
f) Cooperatives whether registered or not under
the Cooperative Act of the Philippines.
g) Law enforcers and any official and employee
of the DOLE.
h) Sole proprietors of duly licensed agencies are
prohibited from securing another license to
engage in recruitment and placement.
i) Sole proprietors, partnerships or corporations
licensed to engage in private recruitment and
placement for local employment are
prohibited from engaging in job contracting or
subcontracting activities. (Sec. 5, DO 141-14,
Revised Rules and Regulations Governing
Recruitment and Placement for Local
Employment)
Entities disqualified from Engaging or
Participating in the Business of Recruitment
and Placement of Workers for Overseas
Employment
a) Travel agencies and sales agencies of airline
companies, whether for profit or not. (Art. 26)
b) Officers or members of the Board of any
corporation or partners in a partnership
engaged in the business of a travel agency;
c) Corporations and partnerships, where any of
its officers, members of the board or partners
is also an officer, member of the board or
partner of a corporation or partnership
engaged in the business of a travel agency; 

d) Individuals, partners, officers, or directors of
an insurance company who make, propose or
provide an insurance contract under the
compulsory insurance coverage for agency-
hired OFWs;
e) Sole proprietors, partners or officers and
members of the board with derogatory
records, such as, but not limited to the ff:
a. Those convicted or against whom
probable cause or prima facie finding
of guilt is deterined by a competent
authority for illegal recruitment or for
other related crimes or offenses
committed in the course of, related
to, or resulting from, illegal
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recruitment, or for crimes involving
moral turpitude;
b. Those agencies whose licenses
have been revoked for violation of
RA 8042, PD 442, RA 9208, and their
IRRs;
c. Those agencies whose licenses
have been cancelled, or those who,
pursuant to the order of the
Administrator, were included in the
list of persons with derogatory record
for violation of recruitment laws and
regulations;
f) Any official employee of the DOLE, POEA,
OWWA, DFA, DOJ, DOH, BI, IC, NLRC,
TESDA, CFO, NBI, PNP, Civil Aviation
Authority of the Philippines, international
airport authorities, and other government
agencies directly involved in the
implementation of RA 8042, as amended,
and/or any of his/her relatives within the
fourth civil degree of consanguinity or affinity.
(Part II, Rule I, Sec. 3, 2016 Revised POEA
Rules and Regulation
IV. SUSPENSION OR CANCELLATION OF
LICENSE OR AUTHORITY
Power to suspend or cancel any license or
authority to recruit employees for overseas
employment is concurrently vested with the
POEA and the Secretary of Labor. (Labor Code,
Art. 35)
The Secretary of Labor has the power, under Art.
35 of the Code, to apply the sanctions, as well as
the authority, conferred by Art. 36, not only to
restrict and regulate the recruitment and
placement activities of all agencies, but also to
promulgate rules and regulations to carry out the
objectives and implement the provisions
governing said activities.
Pursuant to this rule-making power thus granted,
the Secretary of Labor gave the POEA on its own
initiative or upon filing of a complaint or report or
upon request for investigation by any aggrieved
person, (authority to) conduct the necessary
LABOR LAW
proceedings for the suspension or cancellation of
the license or authority of any agency or entity for
certain enumerated offenses including:
1. The imposition or acceptance, directly or
indirectly, of any amount of money, goods or
services, or any fee or bond in excess of what
is prescribed by the Administration.
2. Any other violation of pertinent provisions of
the Labor Code and other relevant laws, rules
and regulations.
The Administrator was also given the power to
order the dismissal of the case or the suspension
of the license or authority of the respondent
agency or contractor or recommend to the
Secretary the cancellation thereof. (Eastern
Assurance& Surety Corp. v. Secretary of Labor,
G.R. No. L-79436-50, 1990)
Termination/ Ban On Deployment
Notwithstanding the provisions of Section 4 of
R.A. No. 8042, as amended by R.A. No. 10022,
in pursuit of the national interest or when public
welfare so requires, the POEA Governing Board,
after consultation with the Department of Foreign
Affairs, may, at any time, terminate or impose a
ban on the deployment of migrant workers. (R.A.
No. 10022, Sec. 5)
Under Section 4 of R.A. No. 8042, as amended
by Section 3 of R.A. No. 10022, it is provided
that the State shall allow the deployment of
overseas Filipino workers only in countries where
the rights of Filipino migrant workers are
protected.
The government recognizes any of the following
as a guarantee on the part of the receiving
country for the protection of the rights of overseas
Filipino workers:
(a) It has existing labor and social laws
protecting the rights of workers, including
migrant workers;
(b) It is a signatory to and/or a ratifier of
multilateral conventions, declarations or
resolutions relating to the protection of
workers, including migrant workers; and
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(c) It has concluded a bilateral agreement or 2. Filipino servicemen working within US

arrangement with the government on the
protection of the rights of overseas Filipino
Workers:
Provided, That the receiving country is taking
positive, concrete measures to protect the rights
of migrant workers in furtherance of any of the
guarantees under subparagraphs (a), (b) and (c)
hereof.
In the absence of a clear showing that any of the
aforementioned guarantees exists in the country
of destination of the migrant workers, no permit
for deployment shall be issued by the POEA.
(R.A. No. 8042, Sec. 4)
military installations; 

3. Immigrants and Filipino professionals
working with the United Nations and its
agencies or other specialized bodies.
4. Missionaries actually engaged in missionary
work
5. All aliens granted exemption by special laws
and all those whose employment in the Phil.
determined by the Secretary of Labor to be
beneficial to national interest.

Remittance of Foreign Exchange Earnings

It shall be mandatory for all Filipino workers
abroad to remit a portion of their foreign earnings
to their families, dependents, and/or beneficiaries
in the country. (Labor Code, Art. 22)

Amount required to be remitted (E.O. No. 857)

The amount of one’s salary required to be
remitted depends on the type or nature of work
performed by the employee.

Percentages of foreign exchange remittance

required from various kinds of migrant workers:
1. Seaman or mariner – 80% of basic salary
2. Workers for Filipino contractors and
construction companies – 70%
3. Doctors, engineers, teachers, nurses and
other professional workers whose contract
provide for free board and lodging – 70%
4. All other professional workers whose
employment contracts do not provide for free
board and lodging facilities – 50%
5. Domestic and other service workers – 50%
6. All other workers not falling under the
aforementioned categories – 50%
7. Performing artists – 50%

Individuals exempted from the mandatory

remittance requirement:
1. The immediate family members, dependents
or beneficiaries of migrant workers residing
with the latter abroad;

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V. PROHIBITED PRACTICES
LABOR CODE
It shall be unlawful for any individual, entity,
licensee, or holder of authority:
1. To charge or accept, directly or indirectly, any
amount greater than that specified in the
schedule of allowable fees prescribed by the
Secretary of Labor, or to make a worker pay
any amount greater than that actually received
by him as a loan or advance;
2. To furnish or publish any false notice or
information or document in relation to
recruitment or employment;
3. To give any false notice, testimony, information
or document or commit any act of
misrepresentation for the purpose of securing
a license or authority under this Code.
4. To induce or attempt to induce a worker
already employed to quit his employment in
order to offer him to another unless the transfer
is designed to liberate the worker from
oppressive terms and conditions of
employment;
5. To influence or to attempt to influence any
person or entity not to employ any worker who
has not applied for employment through his
agency;
6. 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;
7. To obstruct or attempt to obstruct inspection by
the Secretary of Labor or by his duly authorized
representatives;
8. To fail to file reports on the status of
employment, placement vacancies, remittance
of foreign exchange earnings, separation from
jobs, departures and such other matters or
information as may be required by the
Secretary of Labor.
9. To substitute or alter employment contracts
approved and verified by the Department of
Labor from the time of actual signing thereof by
the parties up to and including the periods of
expiration of the same without the approval of
the Secretary of Labor;
LABOR LAW
RA 8042 – OVERSEAS FILIPINOS AND
MIGRANT WORKERS ACT, AS AMENDED
Illegal recruitment shall likewise include the
following acts, whether committed by any person,
whether a non-licensee, non-holder, licensee or
holder of authority (SHOW-FROG-IN-DISC)
1. Substituting or altering DOLE-approved
employment contracts
2. Recruiting workers in jobs that are Harmful to
public health or morality of the Philippines
3. Becoming an Officer or member of the Board
of a travel agency or to be engaged directly or
indirectly in the management of a travel agency
4. Withholding or denying travel documents from
applicant workers before departure for
unauthorized monetary or financial
considerations
5. Furnishing or publishing any false notice or
information or document in relation to
recruitment or employment
6. In case of non-deployment, failing to
Reimburse expenses incurred by the worker in
connection with his documentation and
processing for purposes of deployment
7. Obstructing or attempting to obstruct
inspection by the Secretary of Labor or by his
duly authorized representatives
8. Giving any false notice, testimony, information
or document or commit any act of
misrepresentation for the purpose of securing
a license or authority under this Code
9. Inducing or attempting to induce a worker to
quit his employment in place of another
UNLESS the transfer is designed to liberate the
worker from oppressive terms and conditions
of employment
10. Allowing a Non-Filipino citizen to head or
manage a licensed recruitment/manning
agency
11. Failing to actually Deploy without valid reason
as determined by DOLE.
12. Influencing or attempting to influence any
person or entity not to employ any worker who
has not applied for employment through his
agency
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10. To become an officer or member of the Board
of any corporation engaged in travel agency or
to be engaged directly or indirectly in the
management of a travel agency; and
11. To withhold or deny travel documents from
applicant workers before departure for
monetary or financial considerations other than
those authorized under this Code and its
implementing rules and regulations. (Labor
Code, Art. 34; PERT/CPM Manpower v.
Vinuya, G.R. No. 197528, 2012)
LABOR LAW
13. Failing to file reports on the Status of
employment, placement vacancies, remittance
of foreign exchange earnings, separation from
jobs, departures and such other matters or
information as may be required by the
Secretary of Labor
14. Charging or accepting, directly or indirectly,
any amount greater than that specified in the
schedule of allowable fees prescribed by the
Secretary of Labor, or to make a worker pay
any amount greater than that actually received
by him as a loan or advance
In addition to the acts enumerated above, it shall
also be unlawful for any person or entity to commit
the following prohibited acts: (8-LR2A2I)
• 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,
postdated checks in relation to the said loan;
• 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;
• 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;
• For a suspended recruitment/manning agency
to engage in any kind of Recruitment activity
including the processing of pending workers'
applications
• 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;
• Impose a compulsory and exclusive
Arrangement whereby an overseas Filipino
worker is required to undergo training, seminar,
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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; and

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.

Differences Between Prohibited Acts: Labor Code, Art. 34 vs. Migrant Workers Act, Sec. 6
LABOR CODE MIGRANT WORKERS ACT
Illegal recruitment may only be committed by a Committed by either licensee or non-licensee (R.A.
non-licensee (Labor Code, Art. 34) No. 8042, Sec. 6)
If the recruiter is licensed, it may commit a
prohibited activity (Labor Code, Art. 38)
11 enumerated acts 14 enumerated acts considered as illegal
recruitment, including the ff:
1. Failure to actually deploy a contracted worker
without valid reason;
2. Failure to reimburse expenses incurred by the
worker in connection with his documentation
and processing for purposes of deployment, in
case of non-deployment;
3. To allow a non-Filipino citizen to head or
manage a licensed recruitment/manning
agency.
Plus, 7 additional prohibited acts.

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C. ILLEGAL RECRUITMENT furtherance of any of the guarantees under

subparagraphs (a), (b) and (c) hereof. (R.A.
ILLEGAL RECRUITMENT UNDER THE LABOR No. 8042, Sec. 3)
CODE (Art. 38) vs. MIGRANT WORKERS ACT
(Sec. 6)

Any recruitment activities, including the prohibited

practices enumerated under Art. 34 of the Labor
Code, to be undertaken by non-licensees or
non-holders of authority, shall be deemed illegal
and punishable under Art. 39. (Labor Code, Art.
38)

The Department of Labor and Employment or any

law enforcement officer may initiate complaints.
(Labor Code, Art. 38)

Any 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, when undertaken by
non-licensee or non-holder of authority
contemplated under the Labor Code. (R.A. No.
8042, Sec. 6)

Policy of Selective Deployment

The State shall allow the deployment of overseas
Filipino workers only in countries where the rights
of Filipino migrant workers are protected.

The government recognizes any of the following

as a guarantee on the part of the receiving
country for the protection of the rights of overseas
Filipino workers:
a. It has existing labor and social laws
protecting the rights of workers, including
migrant workers; 

b. It is a signatory to and/or a ratifier of
multilateral conventions, declarations or
resolutions relating to the protection of
workers, including migrant workers; and 

c. It has concluded a bilateral agreement or
arrangement with the government on the
protection of the rights of overseas Filipino
Workers: Provided, That the receiving
country is taking positive, concrete measures
to protect the rights of migrant workers in

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LABOR CODE
Local recruitment and employment
Illegal Recruitment (Art. 38)
Any recruitment activity including
Prohibited Acts under Art. 34
committed by non-licensees or
non-holders of authority.
Elements:
1. That 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. That the offender undertakes
either any activity within the
meaning of recruitment and
placement defined under Article
13(b), or any of the prohibited
practices enumerated under
Article 34.
LABOR LAW
R.A. No. 8042 – MIGRANT WORKERS ACT, AS AMENDED
Applies to recruitment for overseas employment
Illegal Recruitment (Sec. 6):
1. Any recruitment activity committed by non-licensees /
non-holders of authority; OR
2. Prohibited Acts (R.A. 8042, as amended by R.A.
10022): Illegal recruitment shall mean any 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, when undertaken by non-
licensee or non-holder of authority contemplated under
Article 13(f) of the Labor Code, as amended. Provided,
That any such non-licensee or non-holder who, in any
manner, offers or promises for a fee employment abroad
to two or more persons shall be deemed so engaged.
It shall likewise include the following acts, whether
committed by any person, whether a non-licensee, non-
holder, licensee or holder of authority:
a. To charge or accept directly or indirectly any amount
greater than that specified in the schedule of allowable
fees prescribed by the Secretary of Labor and
Employment, 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 nonexistent
work, work different from the actual overseas work, or
work with a different employer whether registered or not
with the POEA;
d. To include 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;
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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
Department of Labor and Employment 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 Department of Labor and Employment;
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.
n. 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, postdated
checks in relation to the said loan;
o. 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;
p. Refuse to condone or renegotiate a loan incurred by an
overseas Filipino worker after the latter's employment

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contract has been prematurely terminated through no

fault of his or her own;
q. 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;
r. 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 fpr recommendatory trainings
mandated by principals/shipowners where the latter
shoulder the cost of such trainings;
s. For a suspended recruitment/manning agency to engage
in any kind of recruitment activity including the processing
of pending workers' applications; and
t. 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.
A Non-Licensee / Non-Holder of
authority is any person, corporation
or entity which has not been issued a
The offender may be a non-licensee or a non-holder of
valid license or authority to engage in
authority and commits any of the acts of recruitment; OR
recruitment and placement by the
A licensee or holder of authority commits any of the
Secretary of Labor, or whose license
prohibited acts under section 6, RA 8042, as amended.
or authority has been suspended,
revoked or cancelled by the POEA or
the Secretary.

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I. ELEMENTS
The essential elements of illegal recruitment vary
in accordance with the following classifications:
1. Simple illegal recruitment
• Local workers
• Migrant workers
2. When committed by a syndicate; or
3. When committed in large scale.
Simple Illegal Recruitment for Local Workers
(Labor Code)
1. The person charged with the crime must have
undertaken recruitment activities:
a. Defined under Art. 13 (b) or
b. Prohibited activities defined under
Art. 34; and
2. The said person does not have a license or
authority to do so. (Labor Code, Art. 38)
Profit or Lack Thereof - Immaterial
It is the lack of the necessary license or authority,
not the fact of payment that renders the
recruitment activity of the agency unlawful. (C.F.
Sharp vs. Espanol, G.R. No. 155903, 2007)
Accused must give the impression of ability
to send complainant abroad
It must be shown that the accused gave
complainants the distinct impression that she had
the power or ability to send complainants abroad
for work such that the latter were convinced to
part with their money in order to be employed.
(People v. Ochoa, G.R. No. 173792, 2011)
Simple Illegal Recruitment for Migrant
Workers (R.A. No. 8042, as amended by R.A.
No. 10022)
First type of Illegal Recruitment:
1. Person charged undertakes any recruitment
activity as defined in Art.13 (b) of the Labor
Code; and 
 and placement of workers defined under Art.
2. Said person does not have a license or
authority to do so.


LABOR LAW
Second type of Illegal Recruitment:
1. Person charged commits any of the
enumerated acts under Sec. 6 of R.A. 8042,
as amended by, R.A. No. 10022.
2. It is immaterial whether he is a holder or not
of any license or authority. 

Illegal recruitment shall mean any 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, when undertaken by non-licensee or
non-holder of authority contemplated under
Article 13(f) of the Labor Code;
Provided, That any such non-licensee or non-
holder who, in any manner, offers or promises for
a fee employment abroad to two or more persons
shall be deemed so engaged. It shall likewise
include the following acts, whether committed by
any persons, whether a non-licensee, non-holder,
licensee or holder of authority.
(R.A. No. 8042, Sec. 6)
Illegal recruitment by a syndicate
1. The offender undertakes either any activity
within the meaning of "recruitment and
placement" defined under Art. 13(b), or any
of the prohibited practices enumerated under
Art. 34 of the Labor Code; 

2. He has no valid license or authority
required by law to enable one to lawfully
engage in recruitment and placement of
workers; and 

3. The illegal recruitment is committed by a
group of three (3) or more persons
conspiring or confederating with one another.
(People v. Gallo, G.R. No. 187730, 2010)
Illegal recruitment in large scale
1. The accused engages in acts of recruitment
13(b) of the Labor Code or in any prohibited
activities under Art. 34 of the Labor Code;
2. The accused has not complied with the
guidelines issued by the Secretary of Labor
and Employment, particularly with respect to
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the securing of license or an authority to
recruit and deploy workers, either locally or
overseas; and
3. The accused commits the unlawful acts
against three or more persons individually
or as a group.
Doctrines: Illegal Recruitment
Where illegal recruitment is proved but the
elements of “large scale” or “syndicate” are
absent, the accused can be convicted only of
“simple illegal recruitment”. (People v. Balagan
and Avila, G.R. No. 183099, 2010)
These categories are separate or independent
categories. If there is only one complainant in
several complaints, there is no illegal recruitment
in large scale. But where there are three
conspiring recruiters, there is illegal recruitment
by a syndicate. (People v. Fernandez, et. al., G.R.
No. 141221-36, 2002)
Appellant’s acts, which were clearly described in
the lucid testimonies of the three victims, such as
collecting from each of the complainants payment
for passport, medical tests, placement fee, plane
tickets and other sundry expenses, promising
them employment abroad, contracting and
advertising for employment, constitute acts of
large scale illegal recruitment. (People v. Diaz,
G.R. No. 112175, 1996)
Receipt of payments, after the expiration of the
license, for services rendered before said
expiration does not constitute illegal recruitment.
Recruitment refers to the offering of inducements
to qualified personnel to enter a particular job or
employment. The advertising, the promise of
future employment and other come-ons took
place while the recruiter was still licensed. The
payments are necessary in order to defray the
expenses entailed in any overseas contract of
employment. They are intended for administrative
and business expenses and for the traveling
expenses of the applicants once cleared for
overseas travel. (Aquino v. CA, G.R. No. 91896,
1991)
LABOR LAW
It is not the issuance or signing of receipts for the
placement fees that makes a case for illegal
recruitment, but rather the undertaking of
recruitment activities without the necessary
license or authority. (People v. Senoron, G.R. No.
119160, 1997)
By themselves, procuring a passport, airline
tickets and foreign visa for another individual,
without more, can hardly qualify as recruitment
activities. IR must be proved beyond reasonable
doubt. (Darvin v. CA, G.R. No. 125044, 1998).
II. TYPES OF ILLEGAL RECRUITMENT
Two Kinds of Illegal Recruiters
(1) Non-Licensee or Non-Holder of Authority
The offender commits:
a. Any of the acts defined in Art. 13(b) of the
Labor Code as recruitment and placement;
b. Illegal recruitment as defined in ¶ 1, Sec. 6 of
R.A. No. 8042, or amended; or
c. Any of the 14 acts enumerated in Sec. 6 of
R.A. No. 8042, as amended
(2) Licensed Recruiter or Holder of Authority
The offender commits any of the 14 wrongful acts
enumerated in Sec. 6 of R.A. No. 8042, as
amended (Sto. Tomas v. Salac, G.R. No. 152642,
2012) 

Kinds of Illegal Recruitment
(a) Simple Illegal Recruitment
Illegal recruitment committed by a person who is
neither a licensee nor a holder of authority;
(b) Illegal Recruitment as Economic Sabotage
Illegal recruitment when committed:
• By a syndicate; or
• In large scale,
shall be considered an offense involving
economic sabotage. (R.A. No. 10022, Sec. 5[m])
Illegal Recruitment shall be considered an
offense involving economic sabotage if any of the
following qualifying circumstances exist:
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ILLEGAL ILLEGAL • Estafa is committed by any person who

RECRUITMENT RECRUITMENT defrauds another by using fictitious name, or
COMMITTED BY COMMITTED IN falsely pretends to possess power, influence,
SYNDICATE LARGE SCALE qualifications, property, credit, agency,
Carried out by a group Committed against 3 business or imaginary transactions, or by
of 3 or more persons or more persons means of similar deceits executed prior to or
conspiring and/or individually or as a simultaneously with the commission of the
confederating with group fraud. (Revised Penal Code, Art. 315)
one another in
carrying out any • The offended party must have relied on the
unlawful or illegal false pretense, fraudulent act or fraudulent
transaction, means of the accused-appellant and as a
enterprise or scheme result thereof, the offended party suffered
falling under illegal damages.
recruitment
D. LIABILITY OF LOCAL RECRUITMENT
III. ILLEGAL RECRUITMENT AS AGENCY AND FOREIGN EMPLOYER
DISTINGUISHED FROM ESTAFA
Venue of Criminal Action
ILLEGAL The complainant, may, at his option, file at the
ESTAFA
RECRUITMENT RTC of the province or city:
It is malum prohibitum It is malum in se 1. Where the offense was committed; or
The criminal intent of The criminal intent is 2. Where the offended party resides at the time
the accused is not imperative of the commission of the offense (R.A. No.
necessary 8042, Sec. 9)
Penalized under the Penalized under the
Labor Code Revised Penal Code Prescriptive Period
Limited in scope Wider in scope and SIMPLE ECONOMIC
covers deceits SABOTAGE
whether related or not Within 20 years from
Within 5 years from
related to recruitment the time the illegal
time the illegal
activities recruitment
recruitment happened
happened

Note: Conviction under the Labor Code for illegal
recruitment does not preclude punishment under
the RPC for estafa (People v. Fernandez, G.R.
No. 199211, 2014)
A worker who suffers pecuniary damage,
regardless of amount, as a result of previous or
simultaneous false pretense resorted to by a non-
licensee or non-holder of authority, may complain
of estafa under Art. 315, par. 2(a) of the RPC,
aside from illegal recruitment. (People v.
Fernandez, G.R. Nos. 141221-36, 2002)
When maximum penalty is imposed:
• If the person illegally recruited is less
than 18 years of age; or
• If committed by a non-licensee or non-
holder of authority (R.A. No. 8042, Sec.
7)
Foreign Employer
In case of a final and executory judgement
against a foreign employer/principal, it shall be
automatically disqualified, without further
proceedings, from participating in the POEA
Program and from recruiting and hiring Filipino

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workers until and unless it fully satisfies the
judgement award. (R.A. No. 8042, Sec. 10)
I. SOLIDARY LIABILITY
The liability of the principal/employer and the
recruitment/placement agency for any and all
claims under this section shall be joint and
several.
Purpose of Solidary Liability
The agency agreement with the principal even if
ended as between them, still extends up to and
until the expiration of, the employment contracts
of the employees recruited and employed
pursuant to the said recruitment agreement.
(OSM Shipping Phil, Inc. v. NLRC, G.R. No.
138193, 2003)
• Even if the recruiter and the principal had
already severed their agency agreement at
the time employee was injured, the recruiter
may still be sued for a violation of the
employment contract because no notice of
the agency agreement's termination was
given to the employee.
• The obligations covenanted in the
recruitment agreement entered into by and
between the local agent and its foreign
principal are not coterminous with the term of
such agreement so that if either or both of the
parties decide to end the agreement, the
responsibilities of such parties towards the
contracted employees under the agreement
do not at all end, but the same extends up to
and until the expiration of the employment
contracts of the employees recruited and
employed pursuant to the said recruitment
agreement. (Catan v. NLRC, G.R. No. 77279,
1988).
II. THEORY OF IMPUTED KNOWLEDGE
Theory of Imputed Knowledge
• [This theory means] knowledge of the agent
is knowledge of the principal. (New Life v. CA,
G.R. No. 94071, 1992)
• For the liability of the agent to attach, this
theory states that the agent knew of and
LABOR LAW
consented to the extension of period of
employment. Otherwise, the liability of the
recruitment agency shall expire from the
termination of the worker's original contract.
(Sunace International Management v. NLRC,
G.R. No. 161757, 2006, Carpio Morales, J. as
seen in Veloso’ answers to the 2011 Bar
Examination)
Local Recruitment Agency
The persons criminally liable are the principals,
accomplices and accessories. In case of juridical
persons, the officers having ownership, control,
management or direction of their business who
are responsible for the commission of the offense
and the responsible employees/agents thereof
shall be liable. (RA 8042, as amended, Section 6)
• Local Recruitment Agency is solidarily liable
with foreign principal. (IRR of the Labor Code,
Book I, Rule V, Sec. 17)
• Severance of relations between local agent
and foreign principal does not affect liability of
local recruiter.
Where the workers themselves insisted for the
recruitment agency to send them back to their
foreign employer despite their knowledge of its
inability to pay their wages, the Supreme Court
absolved the agency from liability (Feagle
Construction Corp. v. Dorado, G.R. No. 86042,
1991)
Posting of Cash Bond by Recruiter
• The requirement for the posting of a cash
bond is also an indispensable requirement.
By posting such, the agency undertakes to
assume joint and solidary liability with the
employer for all claims and liabilities which
may arise in connection with the
implementation of the overseas employment
contract and to guarantee compliance with
existing Philippine labor laws and the laws of
country of employment.
• The peculiar nature of overseas employment
makes it very difficult for the Filipino overseas
worker to effectively go after his foreign
employer for employment-related claims and,
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hence, public policy dictates that the
recruitment or placement agency in the
Philippines be made to share in the
employer's responsibility. (Capricorn Travel &
Tours v. CA, G.R. No. 91096, April 3, 1990)
• The surety bond is intended to insure that if
the rights of overseas workers are violated by
their employers, recourse would still be
available against the local companies that
recruited them for the foreign principal.
(Stronghold Insurance Co. v. CA, G.R. No.
88050, 1992)
E. TERMINATION OF CONTRACT MIGRANT
WORKER
Under the Migrant Workers’ Act
A worker dismissed from overseas employment
without just, valid or authorized cause as defined
by law or contract, is entitled to:
a. Full reimbursement of the placement fee with
interest at 12% per annum PLUS
b. His salary for unexpired portion of his
employment contract OR salary for 3 months
for every year of the unexpired term,
WHICHEVER IS LESSER. (R.A. No. 8042,
Sec. 10)
Rule before Serrano (1995-2009): 3-month
salary rule
• The employment contract involved in the
instant case covers a two-year period but the
overseas contract worker actually worked for
only 26 days prior to his illegal dismissal.
Thus, the three months’ salary rule applies.
(Flourish Maritime Shipping v. Almanzor,
G.R. No. 177948, 2008)
Rule after Serrano (2009-present): it
invalidated the 3-month salary cap clause
• Full reimbursement of the placement fee
with interest at 12% per annum. This decision
held that Sec. 10 of 8042, which limited the
separation pay to three months, was
unconstitutional for violating the equal
protection clause. (Serrano v. Gallant, G.R.
No. 167614, 2009)
LABOR LAW
• Despite the fact that the clause “or for three
(3) months for every year of the unexpired
term, whichever is less” was reinstated in R.A
8042 upon promulgation of R.A. 10022 in
2010, the Supreme Court reiterated its finding
in Serrano v. Gallant Maritime that limiting
wages that could be recovered by an
illegally dismissed overseas worker to
three months is both a violation of due
process and the equal protection clauses
of the Constitution. (Sameer Overseas
Placement Agency v. Cabiles, G.R. 170139,
2014)
F. EMPLOYMENT OF NON-RESIDENT
ALIENS
ART. 40. Employment Permit of Non-resident
Aliens. - Any alien seeking admission to the
Philippines for employment purposes and any
domestic or foreign employer who desires to
engage an alien for employment in the
Philippines shall obtain an employment permit
from the Department of Labor.
The employment permit may be issued to a non-
resident alien or to the applicant employer after a
determination of the non-availability of a person
in the Philippines who is competent, able and
willing at the time of application to perform the
services for which the alien is desired.
For an enterprise registered in preferred areas of
investments, said employment permit may be
issued upon recommendation of the government
agency charged with the supervision of said
registered enterprise.
ART. 41. Prohibition Against Transfer of
Employment. (a) After the issuance of an
employment permit, the alien shall not transfer to
another job or change his employer without prior
approval of the Secretary of Labor.
(b) Any non-resident alien who shall take up
employment in violation of the provision of this
Title and its implementing rules and regulations
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shall be punished in accordance with the

provisions of Articles 289 and 29043 of the Labor
Code.

In addition, the alien worker shall be subject to

deportation after service of his sentence. ART.
42. Submission of List. Any employer employing
non-resident foreign nationals on the effective
date of this Code shall submit a list of such
nationals to the Secretary of Labor within thirty
(30) days after such date indicating their names,
citizenship, foreign and local addresses, nature of
employment and status of stay in the country. The
Secretary of Labor shall then determine if they are
entitled to an employment permit.

Considering that McBurnie, an Australian,

alleged illegal dismissal and sought to claim
under our labor laws, it was necessary for him to
establish that he was qualified and duly
authorized to obtain employment within our
jurisdiction. His failure to obtain an employment
permit, by itself, necessitates the dismissal of his
labor complaint. (McBurnie v. Ganzon, G.R. Nos.
178034, 178117 & 186984-85 (Resolution),
October 17, 2013)

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SUMMARY OF PENALTIES AND PRESCRIPTIVE PERIOD

INVOLVING
SIMPLE ILLEGAL
ECONOMIC PROHIBITED ACTS ALL CASES
RECRUITMENT
SABOTAGE
Imprisonment of not Life imprisonment Imprisonment of not Automatic revocation of the
less than 12 years and AND less than 6 years and 1 license or registration of
1 day but not more than day but not more than the recruitment/ manning
20 years 12 years agency, lending
AND institutions, training
schools or medical clinic.
Fine of not less than Fine of not less than Fine of not less than
P1M nor more than P2M nor more than P5M nor more than
P2M P5M P1M
MAXIMUM PENALTY If ALIEN
• if person illegally • Deportation without
recruited is less need for
than 18 years old, proceedings,
or
• if committed by a
non-licensee /non-
holder of authority

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 LABOR
STANDARDS
Labor Law
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A. CONDITION OF EMPLOYMENT
LABOR STANDARDS
I. HOURS OF WORK
TOPIC OUTLINE UNDER THE SYLLABUS
Book III of the Labor Code provides the conditions
A. CONDITIONS OF EMPLOYMENT or standards of employment. These standards
I. Hours of work apply only if an employer-employee relationship
II. Rest periods (EER) exist.
III. Service charge
Excluded Employees (Go-Ma-Off-FiFa-DoPe)
B. WAGES a. Government employees
I. Definition, components, and
exclusions b. Managerial employees if they meet all of
II. Principles the following conditions:
III. Minimum wage (a) Their primary duty consists of the
IV. Payment of wages management of the establishment in
V. Prohibitions regarding wages which they are employed or of a
VI. Wage determination department or sub-division thereof.
(b) They customarily and regularly direct the
C. LEAVES work of two or more employees therein.
I. Labor Code (c) They have the authority to hire or fire
II. Special Laws employees of lower rank; or their
suggestions and recommendations as to
D. SEXUAL HARASSMENT IN THE WORK hiring and firing and as to the promotion
ENVIRONMENT or any other change of status of other
I. Definition employees, are given particular weight.
II. Duties and liabilities of employers (IRR Labor Code, Book III, Rule I, Sec. 2)
III. Applicable laws
c. Officer or members of a managerial staff if
E. WORKING CONDITIONS FOR SPECIAL they perform the following duties and
GROUPS OF EMPLOYEES responsibilities:
I. Apprentices and learners a. The primary duty consists of the
II. Disabled workers performance of work directly related to
III. Gender management policies of their employer;
IV. Minors b. Customarily and regularly exercise
V. Kasambahays discretion and independent judgment;
VI. Homeworkers and
VII. Solo parents c. (i) Regularly and directly assist a
VIII. Night workers proprietor or a managerial employee
IX. Migrant workers whose primary duty consists of the
X. Security guards management of the establishment in
which he is employed or subdivision
thereof; or (ii) execute under general
supervision work along specialized or
technical lines requiring special training,
experience, or knowledge; or (iii)
execute, under general supervision,
special assignments and tasks; and

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d. Who do not devote more than 20 percent
of their hours worked in a work week to
activities which are not directly and
closely related to the performance of the
work described in paragraphs (1), (2)
and (3) above.
d. Non-agricultural Field Personnel
Non-agricultural employees who regularly
perform their duties away 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) (Autobus Transport v.
Bautista, G.R. No. 156367, 2005)
e. Members of the Family of the employer
who are dependent on him for support
f. Domestic Helpers
The mere fact that the househelper or
domestic servant is working within the
premises of the business of the employer and
in relation to or in connection with its
business, as in its staff houses for its guest or
even for its officers and employees, warrants
the conclusion that such househelper or
domestic servant is and should be
considered as a regular employee of the
employer and not as a mere family
househelper or domestic servant. (Apex
Mining Company v. NLRC, G.R. No. 94951,
1991).
g. Persons in the personal service of another
h. Workers who are paid by Results (IRR
Labor Code, Book III, Rule I, Sec. 2)
Hours of Work
(a) Principles in Determining Hours Worked
1. All hours are hours worked which the
employee is required to give to his employer,
regardless of whether or not such hours are
spent in productive labor or involve physical
or mental exertion.
2. An employee need not leave the premises of
the workplace in order that his rest period
LABOR LAW
shall not be counted, it being enough that he
stops working, may rest completely and may
leave his workplace.
3. If the work performed was necessary or it
benefited the employer, or the employee
could not abandon his work at the end of his
normal working hours because he had no
replacement, all time spent or such work shall
be considered as hours worked, if the work
was with the knowledge of his employer or
immediate supervisor.
4. The time during which an employee is
inactive by reason of interruptions in his work
beyond his control shall be considered
working time either if:
a. The imminence of the resumption of work
requires the employee's presence at the
place of work; or
b. The interval is too brief to be utilized
effectively and gainfully in the employee's
own interest. (IRR of Labor Code, Sec. 4,
Book III, Rule I)
Considered as Compensable Hours Worked
1. 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 work place;
2. All time during which an employee is suffered
or permitted to work; (IRR Labor Code, Book
III, Rule I, Sec. 3) and
3. Rest periods of short duration during working
hours. (Philippine Airlines v. NLRC, G.R. No.
132805, 1999).
Normal Hours of Work
General Rule: The normal hours of work of any
employee shall not exceed eight (8) hours a day.
(Labor Code, Art. 83)
Part-time work, or a day’s work of less than 8
hours, is not prohibited (Legend Hotel v. Realuyo,
G.R. No. 153511, 2012)
Purpose of the Law
To protect the health of the workers.
The law is designed to minimize unemployment
by forcing employers, in case where more than
eight-hour operation is necessary, to utilize
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different shifts of laborers or employees working
only for eight hours each. (Manila Terminal
Company v. CIR, G.R. No. L-4148, 1952).
Exception to 8-Hour Law: Work Hours of
Health Personnel
Health Personnel in:
a. Cities and municipalities with a
population of at least one million
(1,000,000) or
b. Hospitals and clinics with a bed capacity
of at least one hundred (100) shall hold
regular office hours for eight (8) hours a
day, for five (5) days a week, exclusive of
time for meals, except where the
exigencies of the service require that
such personnel work for six (6) days or
forty-eight (48) hours (Labor Code, Art.
83)
WORK DAY CALENDAR DAY
24-hour period 24-hour period
commencing from the commencing at 12
time an employee midnight and ending
regularly starts to at 11:59 p.m.
work regardless of
whether the work is
broken or continuous.
Compressed Work Week (CWW)
Department Order No. 21-90/ DOLE Advisory No.
2-09 and No. 02-04
Resorted to by the employer to prevent serious
losses due to causes beyond his control (i.e.
when there is substantial slump in demand for his
goods and services or when there is lack of raw
materials). (DOLE Explanatory Bulletin, July 23,
1985)
Under this scheme, the number of workdays is
reduced, but the number of work hours in a day is
increased to more than eight (8), but no overtime
pay may be claimed. Thus, a CWW scheme is an
alternative arrangement wherein the normal
workweek is reduced to less than six (6) days but
the total number of normal work hours per week
shall remain at 48 hours. (Azucena Vol. I, 9th ed.,
p. 265).
LABOR LAW
Conditions for implementation of the CWW
(DOLE Department Advisory No. 02 Series of
2004)
a. The scheme is expressly and voluntarily
supported by majority of employees affected;
b. In firms using substances, or operating in
conditions that are hazardous to health, a
certification is needed from an accredited
safety organization or the firm’s safety
committee that work beyond eight (8) hours
is within the limits or levels of exposure set by
DOLE’s occupational safety and health
standards; and
c. The DOLE Regional Office is duly notified.
Effects of a CWW Scheme:
a. Unless there is a more favorable practice
existing in the firm, work beyond eight (8)
hours will not be compensable by overtime
premium provided the total number of hours
worked per day shall not exceed twelve (12)
hours. In any case, any work performed
beyond 12 hours a day or 48 hours a week
shall be subject to overtime premium.
b. Consistent with Articles 85 of the Labor Code,
employees under a CWW scheme are
entitled to meal periods of not less than sixty
(60) minutes. Nothing herein shall impair the
right of employees to rest days as well as to
holiday pay, rest day pays or leaves in
accordance with law or applicable collective
bargaining agreement or company practice.
c. Adoption of the CWW scheme shall in no
case result in diminution of existing benefits.
Reversion to the normal eight-hour workday
shall not constitute a diminution of benefits.
The reversion shall be considered a
legitimate exercise of management
prerogative, provided that the employer shall
give the employees prior notice of such
reversion within a reasonable period of time.
Health Personnel in Hospitals and Clinics
Hospital and clinic personnel can start and end
work at any hour on any day but would not work
for more than 8 hours in a day, nor more than 40
hours in one week.
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Hospital and clinic personnel may be scheduled
to work for more than 5 days or 40 hours in a
week, if they are paid overtime. (+ at least 30%
regular rate). (Labor Code, Art. 83)
Power Interruptions/Brownout
Brownouts not exceeding twenty (20) minutes
shall be treated as hours worked.
Brownouts running for more than twenty (20)
minutes may not be treated as hours worked
provided that any of the following conditions are
present:
a. The employees can leave their work place or
go elsewhere whether within or without the
work premises; or
b. The employees can use the time effectively
for their own interest. (Policy Instruction No.
36, cited in Durabuilt Recapping Plant & Co.
vs. NLRC, G.R. No. 76746, 1987)
The time during which an employee is inactive by
reason of work interruptions beyond his control is
considered working time, either if the imminence
of the resumption of work requires the
employee’s presence at the place of work or if the
interval is too brief to be utilized effectively and
gainfully in the employee’s own interest. (IRR
Labor Code, Sec. 4[d], Rule 1, Book III)
Meal Periods
General Rule: Meal periods are NOT
compensable. Meal periods should not be less
than 60 minutes. (Labor Code, Art. 85)
Exceptions:
1. Where the lunch period or meal time is
predominantly spent for the employer’s
benefit;
2. Meal periods of 1hour are deemed
compensable when the employee is on
continuous shift (National Dev’t Corp. v. CIR,
G.R. No. 15422, 1962)
3. Shortened meal period of less than 1 hour
must be compensable (IRR Labor Code,
Book III, Rule 1, Sec. 7)
LABOR LAW
Meal period of not less than 20 minutes in the
following cases are compensable hours worked:
a. Where the work is non-manual work in nature
or does not involve strenuous physical
exertion;
b. Where the establishment regularly operates
not less than 16 hours a day;
c. In case of actual or impending emergencies
or there is urgent work to be performed on
machineries, equipment or installations to
avoid serious loss which the employer would
otherwise suffer; and
d. Where the work is necessary to prevent
serious loss of perishable goods (IRR Labor
Code, Book III, Rule 1, Sec. 7)
Note: These are the situations when meal
periods can be reduced to less than 1 hour but
not less than 20 minutes. As far as
compensability is concerned, as long as the meal
period is less than 1 hour, the period becomes
compensable.
Note: Rest periods or coffee breaks running from
5-20 minutes shall be considered compensable
working time. (IRR Labor Code, Book III, Rule 1,
Sec. 7)
Note: To shorten meal time to less than 20
minutes is not allowed. If it is less than 20
minutes, it becomes only a REST PERIOD and is
considered working time (Labor Code, Art. 84, ¶
2)
If standby is for emergency work, meal break
is part of hours worked. (Pan-American World
Airways System Philippines v. Pan-American
Employees Association G.R. No.L-16275, 1961)
Exception to the exception: Shortened meal
breaks upon the employee’s request are NOT
compensable, provided that:
1. The employees voluntarily agree in writing to
a shortened meal period of 30 minutes and
are willing to waive the overtime pay for such
shortened meal period;
2. There will be no diminution whatsoever in the
salary and other fringe benefits of the
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employees existing before the effectivity of
the shortened meal period;
3. The work of the employees does not involve
strenuous physical exertion and they are
provided with adequate “coffee breaks” in the
morning and afternoon.
4. The value of the benefits derived by the
employees from the proposed work
arrangement is equal to or commensurate
with the compensation due them for the
shortened meal period as well as the
overtime pay for 30 minutes as determined by
the employees concerned;
5. The overtime pay of the employees will
become due and demandable if ever they are
permitted or made beyond 4:30pm; and
6. The effectivity of the proposed working time
arrangement shall be of temporary duration
as determined by the Secretary of Labor
(2004 BWC Manual on Labor Standards).
complied with, the period of such rest shall not be
counted. (Luzon Stevedoring v. Luzon Marine
Department Union, G.R. No. L-9265, 1957)
Waiting time spent by an employee shall be
considered as working time if:
1. Waiting is an integral part of his work; or
2. The employee is required or engaged by the
employer to wait. (IRR Labor Code, Sec. 5[a],
Rule 1, Book III)
When Employee is Considered Working while
on call - When employee
1. Is required to remain on call in the employer’s
premises or so close thereto; or
2. Cannot use the time effectively and gainfully for
his own purpose (IRR Labor Code, Sec. 5[b],
Rule 1, Book III)

Note: For a full one (1) hour undisturbed lunch

break, the employees can freely and effectively
use this hour not only for eating but also for their
rest and comfort. Since the employees are no
longer required to work during this 1-hour lunch
break, there is no more need for them to be
compensated for this period. (Sime Darby
Pilipinas v. NLRC, G.R. No. 119205, 1998)

Waiting Time
Whether waiting time constitutes working time
depends upon the circumstances of each
particular case. The facts may show that the
employee was engaged to wait or may show that
he waited to be engaged. The controlling factor
is whether waiting time spent in idleness is
spent predominantly for the employer’s
benefit or the employee’s (Azucena Vol. I, 9th
ed., p. 231).

A laborer need not leave the premises of the

factory, shop or boat in order that his period of
rest shall not be counted, it being enough that he
"cease to work", may rest completely and leave
or may leave at his will the spot where he actually
stays while working, to go somewhere else,
whether within or outside the premises of said
factory, shop or boat. If these requisites are

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TRAVEL TIME

TRAVEL THAT IS
TRAVEL FROM HOME TO WORK TRAVEL AWAY FROM HOME
ALL IN DAYS WORK
Normal travel from home to work which is Time spent by an Travel that keeps an employee
not work time employee in travel as away from home overnight
part of his principal
activity, like travel
from jobsite to jobsite
during the workday
General Rule: NOT compensable because Counted as hours Work time when it cuts across an
it is a normal incident of employment worked employee’s workday.

Exceptions: Compensable It substitutes for the hours the

1. Where employee made to work on an employee should have been in
emergency call and travel is necessary the office
in proceeding to the workplace
2. Travel is done through a conveyance
provided by the employer
3. Travel is done under the supervision
and control of the employer
4. Travel is done under vexing and
dangerous circumstances

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The fact that [petitioner Rada] picks up NOT

COMPENSABLE
employees at certain specified points in EDSA in COMPENSABLE
HOURS WORKED
going to the project site and drops them off at the HOURS WORKED
same time on his way back from the field office 1. Attendance in 1. Attendance in
going home to Marikina is not merely incidental to lectures, meetings, hearings in cases filed
his job as a driver. Said transportation and training periods by the employee
arrangement had been adopted not so much for sanctioned by the 2. Participation in
the convenience of the employees, but primarily employer strikes
for the benefit of the employer. Since the 2. Attendance in CBA
assigned task of fetching and delivering negotiations or
employees is indispensable and consequently grievance meetings
mandatory, then the time required of and used by
petitioner in going from his residence to the field Semestral break of teachers is compensable
office and back should be paid as overtime work. hours worked for it is a form of interruption
(Rada v. NLRC, G.R. No. 96078, 1992) beyond their control. Applies only for regular full-
time teachers.(University of Pangasinan Faculty
Sleeping Time Union v. Univ. of Pangasinan, G.R. 64821-23,
Whether sleeping time allowed an employee will 1993).
be considered as part of his working time will
depend upon the express or implied agreement II. REST PERIOD
of the parties. In the absence of an agreement, it
will depend upon the nature of the service and its Weekly Rest Periods – applies to all employers
relation to the working time. whether operating for profit or not, including
public utilities operated by private persons
When Sleeping is Considered Working Time
CONSIDERED NOT CONSIDERED It is the duty of every employer, whether operating
WORKING TIME WORKING TIME for profit or not, including public utilities operated
If sleeping time is If there an opportunity by private persons, to provide each of his
subject to serious for comparatively employees a rest period of not less than 24
interruption, or takes uninterrupted sleep consecutive hours for every 6 normal work days.
place under under fairly desirable (Labor Code, Art. 91)
conditions conditions
substantially less Business on Sundays/Holidays – All
desirable than would establishments and enterprises may operate or
be likely to exist at the open for business on Sundays and holidays
employee’s home provided that the employees are given the weekly
(Azucena Vol. I, 9th ed., p. 233). rest day and the benefits as provided.

Lectures, Meeting, Trainings, Programs Who Determines Weekly Rest Days

General Rule: Considered working time
Exception: NOT considered working time if the
following conditions are met:
1. Attendance is outside of the employee's
regular working hours
2. Attendance is voluntary
3. The employee does not perform any
productive work during such attendance.
(IRR Labor Code, Sec. 6, Book III, Rule 1)
The employer determines and schedules the
weekly rest period subject to the following:
1. Collective Bargaining Agreement;
2. Rules and regulations issued by the
Secretary of Labor; and
3. Employee’s preference based on religious
grounds

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Preference of employee – The preference of the
employee as to his weekly day of rest shall be
respected by the employer if the same is based
on religious grounds. (Labor Code, Art. 91)
The employee shall make known his
preference to the employer in writing at least
seven (7) days before the desired effectivity of the
initial rest day so preferred. (IRR Labor Code,
Sec. 4, Rule III, Book III)
Exception: Where, the choice of the employee
as to his rest day based on religious grounds will
inevitably result in serious prejudice or
obstruction to the operations of the undertaking
and the employer cannot normally be expected to
resort to other remedial measures, the employer
may schedule the weekly rest day of his
choice for at least two (2) days in a month.
(IRR Labor Code, Sec. 4, Rule III, Book III)
Schedule of Rest Day
a. Where the weekly rest is given to all
employees simultaneously – the employer
shall make known such rest period by means
of a written notice posted conspicuously in
the work place at least one week before it
becomes effective 
 such desire in writing, subject to payment of
b. Where the rest period is not granted to all
employees simultaneously and collectively –
the employer shall make known to the
employees their respective schedules of
weekly rest through written notices posted
conspicuously in the work place at least one
week before they become effective 
 The failure to work during an employer’s rest day
Employer May Require Work on Rest Day
General Rule: The employer may not require the
employees to work on a rest day.
Exceptions: (UAAP FAN)
1. In case of Urgent work to be performed on
machineries, equipment or installations to
avoid serious loss which the employer would
otherwise suffer
2. In case of Actual or impending
emergencies caused by serious accident,
fire, flood, typhoon, earthquake, epidemic or
LABOR LAW
other disaster or calamity, to prevent loss of
life or property, or in cases of force majeure
or imminent danger to public safety
3. In the event of Abnormal pressure of work
due to special circumstances, where the
employer cannot ordinarily be expected to
resort to other measures
4. To prevent serious loss of Perishable goods
5. Where the Nature of the work is such that
the employees have to work continuously for
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 (IRR Labor
Code, Sec. 6, Rule III, Book III)
6. Under other Analogous or similar
circumstances
7. Where nature of work requires continuous
operations and the stoppage of work may
result in irreparable injury or loss to the
employer (Labor Code, Art. 92)
Other than the above circumstances, no
employee shall be required against his will to
work on his scheduled rest day.
When an employee volunteers to work on his rest
day under other circumstances, he shall express
additional compensation. 

An employee shall be entitled additional
compensation for work performed on a Sunday
only when it is his established rest day.
does not justify the disciplinary sanction of
outright dismissal from employment as such is so
severe a consequence, moreso when justifiable
grounds exist for said failure (Remerco Garments
Manufactuing v. Minister of Labor, G.R. No. L-
56176-77, 1985)
Employees NOT covered
Employees excepted under Article 82 of the
Labor Code are, generally, not covered by the
rule on additional compensation.
Remuneration of employee working on a rest
day – REGULAR REMUNERATION (100%) +
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PREMIUM PAY (additional sum of at least 30% Coverage:

of the regular remuneration)
Note: There can be no valid waiver of
compensation for work done on a rest day or
holiday.
Synthesis of the Rules
1. Rest day of not less than 24 consecutive
hours after 6 consecutive days of work. 
 more than five (5) workers;
2. No work, no pay principle applies 
 3. Domestic helpers and persons in the
3. If an employee works on his designated rest
day, he is entitled to a premium pay. 
 4. Managerial employees as defined in
4. Premium pay is additional 30% of the basic
pay. 

5. Employer selects the rest day of his
employees 

6. However, employer must consider the
religious reasons for the choice of a rest day.
7. When the choice of the employee as to his
rest day based on religious grounds will
inevitably result in serious prejudice or
obstruction to the operations and the
employer cannot normally be expected to
resort to other measures, the employer may
so schedule the weekly rest day of his choice
for at least two days in a month. (IRR Labor
Code, Sec. 4, Book III, Rule III)
Night Shift Differential
This benefit applies to ALL employees EXCEPT:
(Go-FR-PMS)
1. Those of the government and any of its
political subdivisions, including
government-owned and/or controlled
corporations;
2. Those of retail and service
establishments regularly employing not
personal service of another;
Book Three of this Code;
5. Field personnel and other employees
whose time and performance is
unsupervised by the employer including
those who are engaged on task or
contract basis, purely commission basis,
or those who are paid a fixed amount for
performing work irrespective of the time
consumed in the performance thereof.
(IRR Labor Code, Book III, Rule II, Sec.
1)
NSD = (10% x regular wage/hr.) x no. of hrs. of
work between 10 pm – 6 am
NOTE: If work done between 10 pm and 6 am is
OT work, the NSD should be based on the OT
rate.

Night Worker:
NOTE: Additional compensation for nighttime
Any employed person whose work requires
work is founded on public policy. (Mercury Drug
performance of a substantial number of hours of
v. Dayao, G.R. No. L-30452) NSD is not waivable
night work which exceed a specified limit. This
except for higher and bigger benefits.
limit shall be fixed by the Secretary of Labor after
consulting the workers’ representatives/labor
organizations and employers. (Labor Code, Art.
Overtime Work
154, as amended by R.A. No. 10151)
OVERTIME PAY (OT)
Night Shift Differential, defined (R.A. 10151)
Work exceeding eight hours within the worker’s
Definition: Every employee shall be paid a night
24-hour workday regardless whether the work
shift differential of not less than 10% of his regular
covers 2 calendar days.
wage for each hour of work performed between
ten o’clock in the evening (10 pm) and six o’clock
in the morning (6 am). (Labor Code, Art. 86)

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Coverage:
This benefit applies to all employees EXCEPT
(Go-Ma-Off-FiFa-DoPe):
a. Government employees
b. Managerial employees if they meet all of
the following conditions:
(a) Their primary duty consists of the
management of the establishment in
which they are employed or of a
department or sub-division thereof.
(b) They customarily and regularly direct the
work of two or more employees therein.
(c) They have the authority to hire or fire
employees of lower rank; or their
suggestions and recommendations as to
hiring and firing and as to the promotion
or any other change of status of other
employees, are given particular weight.
(IRR Labor Code, Book III, Rule I, Sec. 2)
c. Officer or members of a managerial staff if
they perform the following duties and
responsibilities:
a. The primary duty consists of the
performance of work directly related to
management policies of their employer;
b. Customarily and regularly exercise
discretion and independent judgment;
and
c. (i) Regularly and directly assist a
proprietor or a managerial employee
whose primary duty consists of the
management of the establishment in
which he is employed or subdivision
thereof; or (ii) execute under general
supervision work along specialized or
technical lines requiring special training,
experience, or knowledge; or (iii)
execute, under general supervision,
special assignments and tasks; and
d. Who do not devote more than 20 percent
of their hours worked in a work week to
activities which are not directly and
closely related to the performance of the
work described in paragraphs (1), (2)
and (3) above.
LABOR LAW
d. Non-agricultural Field Personnel
Non-agricultural employees who regularly
perform their duties away 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) (Autobus Transport v.
Bautista, G.R. No. 156367, 2005)
e. Members of the Family of the employer
who are dependent on him for support
f. Domestic Helpers
The mere fact that the househelper or
domestic servant is working within the
premises of the business of the employer and
in relation to or in connection with its
business, as in its staff houses for its guest or
even for its officers and employees, warrants
the conclusion that such househelper or
domestic servant is and should be
considered as a regular employee of the
employer and not as a mere family
househelper or domestic servant. (Apex
Mining Company v. NLRC, G.R. No. 94951,
1991).
g. Persons in the personal service of another
h. Workers who are paid by Results (IRR
Labor Code, Book III, Rule I, Sec. 2)
Overtime Pay Rates
SCENARIO RATE
OT ON A Regular wage + at least
REGULAR DAY 25% thereof
OT ON A Rest day or special
HOLIDAY/SPECIAL holiday wage rate
DAY/EMPLOYEES (130%) + 30% thereof.
REST DAY
OT ON A HOLIDAY Rest day & holiday
WHICH FALLS ON wage rate (150%) +
A REST DAY 30% thereof.
NOTE: Since OT work is considered hourly, the
pay rate is computed on per hour basis. The daily
wage is divided by 8 to get the hourly base rate.
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If employee is paid on a monthly salary basis, the 3. OT work is with the knowledge and consent
daily rate is obtained by the following formula: of the employer (Azucena, 254)

Daily Rate = monthly salary x 12 ___ NOTE: On rest days and holidays, written
Total no of days considered authority after office hours is required for
paid in a year entitlement to compensation (Global Incorporated
v. Atienza)
It is permissible for the employer to stipulate that
the employee’s monthly salary constitutes Proof of Hours Worked
payment for all the days of the month, including Entitlement to overtime pay must first be
rest days and holidays, where the employee’s established by proof that said overtime work was
monthly salary, when converted by the increased actually performed, before an employee may
divisor into its daily equivalent, would still meet avail of said benefit. (Lagatic v. NLRC, G.R. No.
minimum wage. (Interphil Laboratories 121004, 1998)
Employees Union-FFW v. Interphil Laboratories,
Inc., G.R. No. 142824, 2001) Burden of Proof: When an employer alleges that
his employee works less than the normal hours of
Regular Wage employment as provided for in the law, the
Includes the cash wage only, without deduction employer bears the burden of proving his
on account of facilities provided by the employer. allegation with clear and satisfactory evidence.
(Bisig ng Manggagawa ng Philippine Refining Co. (Prangan v. NLRC, G.R. No. 126569, 1998)
v. Philipine Refining Co., G.R. No. L-2776, 1981)
Emergency OT Work
NOTE: When the overtime work is performed on General Rule: Employees cannot be compelled
the employee’s rest day or on special days or to render overtime work against their will.
regular holidays (Labor Code, Arts. 93-94), the
premium pay must be included in the computation Exceptions: (P2W2IM)
of overtime pay (Bureau of Working Conditions, 1. When the country is at war or when any other
Handbook on Worker’s Statutory Monetary national or local emergency has been
Benefits, p. 19, 2006) declared by Congress or the Chief Executive;
2. When overtime work is necessary to prevent
OVERTIME PAY PREMIUM PAY loss of life or property, or in case of imminent
Additional Additional danger to public safety due to actual or
compensation for compensation impending emergency in the locality caused
work performed required by law for by serious accident, fire, floods, typhoons,
beyond 8 hours a day. work performed within earthquake, epidemic or other disaster or
Every employee who 8 hours on non- calamities;
is entitled to premium working days, such as 3. When there is urgent work to be performed
pay is likewise entitled rest days, and regular on machines, installations, or equipment, in
to the benefit of and special holidays. order to avoid serious loss or damage to the
overtime pay. employer or some other causes of similar
nature;
Conditions to be entitled to OT pay 4. When the work is necessary to prevent loss
1. Actual rendition of OT work or damage to perishable goods;
2. Submission of sufficient proof that said work 5. When the completion or continuation of work
was actually performed (Cagampan v. NLRC, started before the 8th hour is necessary to
G.R. No. 85122-24) prevent serious obstruction or prejudice to
the business or operations of the employer;
or

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6. When overtime work is necessary to avail of
favorable weather or environmental
conditions where performance or quality of
work is dependent thereon (IRR Labor Code,
Book III, Rule I, Sec. 10)
Note: This is an exclusive list. (IRR Labor Code,
Book III, Rule I, Sec. 10)
Undertime NOT offset by OT
Undertime work on any particular day shall not be
offset by overtime work on any other day.
Permission given to the employee to go on leave
on some other day of the week shall not exempt
the employer from paying the additional
compensation required in this Chapter. (Labor
Code, Art. 88)
Overtime pay does not preclude night shift
differential pay
When the tour of duty of a laborer falls at
nighttime [between 10:00pm and 6:00am], the
receipt of overtime pay will not preclude the right
to night differential pay. The latter is payment for
work done during the night while the other is
payment for the excess of the regular eight-hour
work. (Naric v. Naric Workers Union, G.R. No.
12075, 1959)
Waiver of overtime pay
Right to OT pay cannot be waived. But when the
alleged waiver of OT pay is in consideration of
benefits and privileges, which may even exceed
the OT pay, the waiver may be permitted. (Bisig
Manggagawa sa Tryco v. NLRC, G.R. No.
151309, 2008)
In Intertranz Container Lines, Inc. v. Bautista,
(G.R. No. 187693, 2010), the Court held that an
employee may not sweepingly claim that
overtime work was performed and consequent
payment for such work is compensable absent
any evidence that overtime work was indeed
performed considering that a pre-approved
overtime schedule and daily time record is
required before overtime pay can be claimed.
While as a general rule, the parties may enter into
any kind of stipulation in a contract and the same
LABOR LAW
shall be considered as the law between them,
however, it must be emphasized that a labor
contract is not an ordinary contract since it is
impressed with public interest. Thus, the parties
are prohibited to enter into any stipulation which
may result in the reduction of any employee
benefits. (Labor Code, Art. 100; Republic
Planters Bank v. NLRC, G.R. 117460, 1997)
The employer and the employee are not
prohibited under the law to enter into an
agreement for the increase of whatever benefit
being mandated by law for the simple reason that
any such increase certainly redounds to the
benefit of the employee. Thus, the employer and
the employee may legally and validly agree to
increase the minimum percentage provided for
night differential pay, overtime pay, and premium
pay. (Republic Planters Bank v. NLRC, G.R.
117460, 1997)
Note: Compressed work week is an exception to
OT (DOLE Advisory No. 2-04)
Work Hours of Seamen
Seamen are required to stay on board of their
vessels by the very nature of their duties, and it is
for this reason that, in addition to their regular
compensation, they are given free living quarters
to be on board. It could not have been the
purpose of the law to require their employers to
pay them overtime pay even when they are not
actually working. The correct criterion in
determining whether sailors are entitled to
overtime pay is whether they actually rendered
service in excess of said number of hours.
(Cagampan v. NLRC, G.R. No. 85122-24, 1991)
Composite or package pay is not per se illegal
Composite or “package pay” or “all-inclusive
salary” is an arrangement where the employee’s
salary includes the overtime pay. The overtime
pay is “built-in” (Trans-Asia Phils. Employees
Association v. NLRC, G.R. No. 118289, 1999)
Two conditions for validity of such arrangement:
1) There is a clear written arrangement knowingly
and freely entered by the employee; and
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2) The mathematical result shows that the agreed restaurants and similar establishments shall be
legal wage rate and the overtime pay, computed distributed completely and equally among the
separately, are equal to or higher than the covered employees except managerial
separate amounts legally due (Damasco v. employees. (Labor Code, Art. 96, as amended by
NLRC, G.R. No. 115755, 2000) RA 11360)

Synthesis: Overtime Rules The basis of the amount to be integrated shall be

1) An employer cannot compel an employee to
work overtime
Exception: Emergency overtime work (Labor
Code, Art. 89)
the average monthly share of each employee for
the past 12 months immediately preceding the
abolition of withdrawal of the charges. (IRR Labor
Code, Sec. 5, Rule VI, Book 3)

2) Additional compensation is demandable only if

the employer had knowledge and consented to
the overtime work rendered by the employee

Exception: Express approval by a superior NOT

a requisite to make overtime compensable:
1. If the work performed is necessary, or that it
benefited the company; or
2. That the employee could not abandon his
work at the end of his eight-hour work
because there was no substitute ready to
take his place (Manila Railroad Co. v. CIR,
G.R. No. L-4614, 1952)

NOTE: The claim for overtime is not justified

in the absence of a written authority to render
overtime after office hours during Sundays
and holidays (Global Incorporate v. Atienza,
G.R. No. L-51612, 1986)

3) Compensation for work rendered in excess of

the 8 normal working hours a day
1. For ordinary days, additional 25% of the
basic hourly rate
2. For rest day/special day/holiday,
additional 30% of the basic hourly rate

4) A given day is considered an ordinary day,

unless it is a rest day

5) Undertime does not offset overtime (Labor

Code, Art. 88)

III. SERVICE CHARGE

All service charges collected by hotels,

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B. WAGES Wage or Salary includes:

I. DEFINITION, COMPONENTS, AND Commission; Facilities; and Commodities/
EXCLUSION Supplements

(a) “Wage” Computation of additional compensation

(rates only); facilities vs. supplements
Wages paid to any employee shall mean the:
1. Remuneration or earnings, however Facilities versus supplements
designated, capable of being expressed in
terms of money, whether fixed or ascertained (a) Facilities
on a time, task, piece, or commission basis, Articles or services for the benefit of the employee
or other method of calculating the same, or his family but shall not include tools of the trade
which is payable by an employer to an or articles or ; may be deducted from the
employee under a written or unwritten employees’ wages.
contract of employment for work done or to
be done, or for services rendered or to be Acceptance of Facilities
rendered; In order that the cost of facilities furnished by the
employer may be charged against an employee,
2. INCLUDES, the fair and reasonable value, as the employee’s acceptance of such facilities
determined by the DOLE Secretary, of board, must be voluntary.
lodging, or other facilities customarily
furnished by the employer to the employee. Requirements for deducting value of
(Labor Code, Art. 97) facilities:
1. Proof must be shown that such facilities are
"Fair and reasonable value" shall not customarily furnished by the trade
include any profit to the employer, or to any 2. The provision of deductible facilities must be
person affiliated with the employer. (Id.) voluntarily accepted in writing by the
employee
WAGE SALARY 3. The facilities must be charged at fair and
Paid for skilled or Paid to white collar reasonable value. (SLL International Cable
unskilled manual workers and denote a Specialists v. NLRC, G.R. No. 172161,
labor higher grade of 2011).
employment
Not subject to Not exempt from Note: As regards meals and snacks, the
execution, execution, employer may deduct from the wages not more
garnishment or garnishment or than 70% of the value of the meals and snacks
attachment except attachment. (Gaa v. enjoyed by the employees, provided that such
for debts related to CA, G.R. No. L- deduction is authorized in writing by the
necessities (Civil 44169, 1985) employees.
Code, Art. 1708)
The remaining 30% of the value has to be
Minimum wage is set by law or wage order issued subsidized by the employer. (IRR Labor Code,
by the Regional Tripartite Wages and Productivity Sec. 1, Rule VII-A, Book III)
Boards (RTWPB’s) or the rate which may be fixed
by the employer provided the same is not lower (b) Supplements
than the legally mandated minimum wage for The benefit or privilege given to the employee which
agricultural or non-agricultural workers. constitutes an extra remuneration over and above
his basic or ordinary earning or wage, is
supplement. Thus, free meals supplied by the ship

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operator to crew members, out of necessity, cannot and/or controlled corporations with
be considered as facilities but supplements which original charters or created under special
could not be reduced having been given not as part laws;
of wages but as a necessary matter in the 2. Those of retail and service
maintenance of the health and efficiency of the crew establishments regularly employing less
personnel during the voyage. (States Marine than ten (10) workers;
Corporation and Royal Line, Inc. v. Cebu Seamen’s 3. Kasambahay and persons in the
Association, Inc., G.R. No. L-12444, 1963). personal service of another;
4. Managerial employees, if they meet all of
Criterion: In determining whether a privilege is a the following conditions:
facility, the criterion is not so much its kind but its 4.1. Their primary duty is to manage the
PURPOSE (Millares v NLRC & PICOP, G.R. no. establishment in which they are
122827, 1999) employed or of a department or
subdivision thereof;
FACILITIES SUPPLEMENTS 4.2. They customarily and regularly
What it is direct the work of two or more employees
Necessary items of Extra remuneration or therein; and
expense, articles, or special privileges/ 4.3. They have the authority to hire or fire
services benefits/ articles or other employees of lower rank; or their
services / tools of the suggestions and recommendations as to
trade hiring, firing, and promotion, or any other
Who Benefits change of status of other employees are
For the benefit of the For the benefit or given particular weight.
employee and his convenience of the 5. Officers or members of a managerial
family; for their employer staff, if they perform the following duties
existence and and responsibilities:
subsistence 5.1. Primarily perform work directly
Deductibility from wage related to management policies of their
Part of the wage Independent of the employer;
wage 5.2. Customarily and regularly exercise
Deductible from the Not wage deductible discretion and independent judgment;
wage 5.3. (a) Regularly and directly assist a
Holiday Pay: Coverage; Exclusions proprietor or managerial employee in the
management of the establishment or
Right to Holiday Pay subdivision thereof in which he or she is
Holiday pay refers to the payment of the regular employed; or (b) execute, under general
daily wage for any unworked regular holiday. supervision, work along specialized or
(Handbook on Workers’ Statutory Monetary technical lines requiring special training,
Benefits, Bureau of Working Conditions, p. 12, experience, or knowledge; or (c) execute,
2020) under general supervision, special
assignments and tasks; and
Coverage: 5.4. Do not devote more than twenty
General Rule: Applies to ALL employees. percent (20%) of their hours worked in a
Exceptions: workweek to activities which are not
1. Government employees, whether directly and closely related to the
employed by the National Government or performance of the work described in
any of its political subdivisions, including paragraphs 5.1, 5.2, and 5.3 above.
those employed in government-owned 6. Field personnel and other employees
whose time and performance is

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unsupervised by the employer, including holiday pay under Labor Advisory No. 13. (Labor
those who are engaged on task or Advisory No. 13-A series of 2020, dated April 1,
contract basis, purely commission basis 2020)
or those who are paid a fixed amount for
performing work irrespective of the time Muslim Holidays
consumed in the performance thereof. General Rule: Muslim holidays are observed
(Handbook on Workers’ Statutory only in specified areas
Monetary Benefits, Bureau of Working 1. Amun Jadid (New Year)
Conditions, p. 12, 2020) 2. Maulid un-Nabi (Birthday of the Prophet
Muhammad)
REGULAR HOLIDAYS 3. Lailatul Isra Wal Miraj (Nocturnal Journey and
New Year’s Day Jan 1 the Ascencion of the Prophet Muhammad)
Maundy Thursday Movable date
Good Friday Movable date Exception: Eid al Fit’r and Eid ul Adha
Araw ng Kagitingan April 9 (Celebrated nationwide)
Labor Day May 1
Independence Day June 12 Muslim employees working outside of the
Nat’l Heroes Day Last Mon. of Aug specified areas shall be excused from reporting
Bonifacio Nov. 30 for work during the observance of the Muslim
holidays as recognized by law, without diminution
Eid’l al Fit’r Movable date
of salary or wages during the period.
Eid al Adha Movable date
Christmas Day Dec. 25
Considering that all private corporations, offices,
Rizal Day Dec. 30
agencies, and entities or establishments
Total Number of 12 days
operation within the designated Muslim provinces
Regular Holidays
and cities are required to observe Muslim
holidays, both Muslims and Christians
SPECIAL DAYS
working within the Muslim areas may not
Ninoy Aquino Day Aug 21 report for work on the days designated by law
All Saints’ Day Nov. 1 as Muslim Holidays. (SMC v. CA, G.R. No.
Last day of the Year Dec. 31 146775, January 30, 2002).
Special Public Holidays
Special Public Holiday Successive Regular Holidays
Special National Holiday Where there are 2 successive regular holidays,
like Holy Thursday and Good Friday, an
Feast of the Immaculate Dec. 8 (RA
employee may not be paid for both holidays if he
Conception of Mary 10966)
absents himself from work on the day
immediately preceding the first holiday, unless he
Deferment of Holiday Pay due to COVID19
works on the first holiday, in which case he is
Pandemic
entitled to his holiday pay on the second holiday.
The employers are allowed to defer payment of
holiday pay on April 9, 10, and 11, 2020 as may
Double Holiday
be applicable, pursuant to Labor Advisory No.13
1. If unworked – employee entitled to 200% of
until such time that the present emergency
basic wage, provided he was present or on
situation has been abated and the normal
leave with pay on the preceding work day
operations of the establishment is in place.
2. If worked – employee entitled to 300% of basic
Establishments that have totally closed or ceased
wage. Only an employee who works on the
operations during the enhance community
day immediately preceding or after a regular
quarantine are exempted from the payment of
holiday shall be entitled to the holiday pay. A

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paid legal holiday occurring during the
scheduled vacation leave will result in holiday
payment in addition to normal vacation pay but
will not entitle the employee to another
vacation leave. (Asian Transmission v. CA,
GR No. 144664, March 15, 2004)
Holiday-Sunday
A legal holiday falling on a Sunday creates no
legal obligation for the employer to pay extra,
aside from the usual holiday pay, to its monthly-
paid employees.
In cases temporary cessation of work
Regular holidays falling within this period are
compensable (i.e. yearly inventory, repair or
cleaning of machineries or equipment, etc).
However, in the case of a regular holiday during
the cessation of operations due to business
reverses as authorized by the Secretary of Labor,
the employer may not pay the regular holidays
during this period.
In cases of periodic and temporary closures, the
Omnibus Rules Implementing the Labor Code
Book 3 Rule IV Section 7 provides that in cases
of temporary or periodic shutdown and temporary
cessation of work of an establishment, as when a
yearly inventory or when the repair of cleaning
machines and equipment is undertaken, the
regular holidays falling within the period shall be
compensated.
Teachers, Pieceworkers, Takay, Seasonal
Workers, Seafarers
Holiday Pay of Certain Employees:
1. Private School teachers including faculty
members of college and universities –
may not be paid for the regular holidays
during semestral vacations. Paid for the
regular holidays during Christmas vacation
(Jose Rizal College v. NLRC & NATOW, G.R.
No. L-65428, 1987)
2. Employee paid by results (payment on
piece-work) – holiday pay shall not be less
than his average daily earnings for the last 7
actual working days preceding the regular
holiday; Provided, However, that in no case
LABOR LAW
shall the holiday pay be less than the
applicable statutory minimum wage rate
3. Seafarers – any hours of work or duty
including hours of watch keeping performed
on designated rest days and holidays shall be
paid rest day or holiday
4. Seasonal workers – may not be paid the
required holiday pay during off-season when
they are not at work
5. Workers without regular working days –
entitled to the benefits, under item d, Section
8, Rule IV of the Omnibus Rules
Implementing the Labor Code.
Holiday pay is a legislated benefit enacted as part
of the Constitutional imperative that the State
shall afford protection to labor. Its purpose is not
merely “to prevent diminution of the monthly
income of the workers on account of work
interruptions. In other words, although the worker
is forced to take a rest, he earns what he should
earn, that is, his holiday pay.” (RFM Corporation
v. Kasapian, GR No. 162324, 2009)
There is no provision of law requiring any
employer to make such adjustments in the
monthly salary rate set by him to take account of
legal holidays falling on Sundays in a given year,
or, contrary to the legal provisions bearing on the
point, otherwise to reckon a year at more than
365 days. What the law requires of employers
opting to pay by the month is to assure that "the
monthly minimum wage shall not be less than the
statutory minimum wage multiplied by 365 days
divided by twelve," and to pay that salary "for all
days in the month whether worked or not," and
"irrespective of the number of working days
therein." (Wellington v. Trajano, GR No. 114698,
1995)
Divisors
The divisor assumes an important role in
determining whether or not holiday pay is already
included in the monthly paid employee’s salary
and in the computation of his daily rate. (Union of
Filipro Empl. v. Vivar, Jr., G.R. No. 79255, 1992)
The divisor used in arriving at an employee’s daily
rate for the purpose of computing salary-related
benefits is 261. From the 365 days in a year, we
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deduct 104 rest days which gives a total of 261 hourly rate
days. Now, if 261 days is the number of working SPECIAL WORKING HOLIDAYS – only the
days of the employees then, there is a disputable basic rate
presumption that the employees are paid their
holiday pay. (Producer’s Bank v. NLRC, G.R. Service incentive leaves
No.100701, 2001)
(a) Right To Service Incentive Leave
The 251 working days divisor is the result of Definition: Every employee who has rendered at
subtracting all Saturdays, Sundays and the ten least 1 year of service shall be entitled to a yearly
(10) legal holidays from the total number of service incentive leave of 5 days with pay. (Labor
calendar days in a year. If the employees are Code, Art. 95)
already paid for all non-working days, the divisor
should be 365 and not 251. (Chartered Bank v. Coverage:
Ople, GR No. L-44717, 1985) This benefit applies to all employees, EXCEPT:
1. Government employees, whether employed
Outline of Rules on Payment of Holiday Pay by the National Government or any of its
REGULAR HOLIDAYS political subdivisions, including those
employed in government-owned and/or
Falling on a regular work day
controlled corporations with original charters
100% (EXCEPT: in retail and
Unworked or created under special laws;
service establishments
2. House helpers and persons in the personal
employing less than 10 workers)
service of another;
First 8 Hours 200%
3. Managerial employees, if they meet all of the
+ 30% of
Worked Excess of 8 following conditions.
hourly rate
Hours 3.1. Their primary duty is to manage the
on said day
establishment in which they are
Falling on a rest day employed or of a department or
Unworked 100% subdivision thereof;
+ 30% of 3.2. They customarily and regularly direct the
First 8 hours
200% work of two or more employees therein;
+ 30% of 3.3. They have the authority to hire or fire
Worked
Excess of 8 hours hourly rate other employees of lower rank; or their
on said day suggestions and recommendations as
SPECIAL DAYS to hiring, firing, and promotion, or any
NO PAY, unless there is a other change of status of other
favorable company policy, employees are given particular weight.
Unworked practice or CBA granting 4. Field personnel and those whose time and
payment of wages on special performance is unsupervised by the
days even if unworked employer;
+ 30% of 5. Those already enjoying this benefit;
First 8 hours the daily 6. Those enjoying vacation leave with pay of at
rate (100%) least five (5) days; and
Worked + 30% of 7. Those employed in establishments regularly
Excess of 8 hours hourly rate employing less than ten (10) employees.
on said day (IRR Labor Code, Sec. 1, Rule V, Book III)
Worked & +50% of
First 8 hours
Falling On daily rate Meaning of “at least 1 year of service”
A Rest Day Excess of 8 hours +30% of Service for not less than 12 months, whether
continuous or broken reckoned from the date the

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employee started working, including authorized employee did not make use of said leave credits
absences and paid regular holidays unless the but instead chose to avail of its commutation.
working days in the establishment as a matter of Accordingly, if the employee wishes to
practice or policy, or that provided in the accumulate his leave credits and opts for its
employment contract is less than 12 months, in commutation upon his resignation or separation
which case said period shall be considered as from employment, his cause of action to claim the
one year (Integrated Contractor and Plumbing whole amount of his accumulated service
Works v. NLRC, G.R. No. 152427, 2005) incentive leave shall arise when the employer
fails to pay such amount at the time of his
Usage/Conversion to Cash resignation or separation from employment.
General Rule: Commutable to its money (Autobus Transport System Inc. v. Bautista, G.R.
equivalent if not used or exhausted at the end of No. 156367, 2005)
the year. (Fernandez v. NLRC, G.R. No. 105982,
1998) Vacation Leave (VL) / Sick Leave (SL)
Not required by law and depends on voluntary
Note: The basis for the computation is the salary employer policy (management prerogative) or
at the date of commutation/conversion of the SIL. collective bargaining. (see Sugue v. Trimpuh
International [Phils], G.R. No. 164804, 2009)
Exception: Under the Kasambahay Law, a
domestic worker who has rendered at least one It can be waived, as the VL/SL may be considered
(1) year of service shall be entitled to an annual a concession or act of grace of the employer.
service incentive leave of five (5) days with pay,
provided that any unused portion of said annual SUMMARY OF EXCLUSIONS
leave shall NOT be cumulative or carried over to NSD Holida SIL
the succeeding years. Unused leaves shall NOT y Pay
be convertible to cash. (R.A. No. 10361, Sec. 29) Gov’t x x x
employees
Illegal Dismissal Retail/ 5 9 and 9 and below
An employee who is illegally dismissed is entitled Service and below (establishme
to service incentive leave benefits computed 1 Establishme belo nts in
year from the date she started working until the nts w general)
date of her actual reinstatement. (Imbutido v. Domestic x x x
NLRC, G.R. No. 114734, 2000) Workers
Managerial x x x
Prescription of Claim for SIL Employees
Art. 306 is not a prescription of a period of time
Field x x x
for the computation of money claims but is a
Personnel
prescription of filing an action upon monetary
claims from the time the cause of action accrued.
The employee may use his SIL benefits as leave When the employee first experienced chest
days or he may collect its monetary value. To limit pains, the CBA was no longer in effect. Therefore,
the award to 3 years is to unduly restrict such he is not entitled to the sickness allowance under
right. (Fernandez v. NLRC, G.R. No. 105892, the CBA. (Perea v. Elburg Shipmanagement
1998) Philippines, Inc., G.R. No. 206178, August 9,
2017.)
The cause of action of an entitled employee to
claim his service incentive leave pay accrues
from the moment the employer refuses to
remunerate its monetary equivalent if the

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13th Month Pay
Governing Laws
P.D. No. 851 (The 13 th-month Pay Law) and the
Revised Guidelines on the Implementation of the
13th Month Pay Law
a. Coverage:
All employers are required to pay all their rank-
and-file employees, a 13th month pay not later
than December 24 of every year, provided that
they have worked for at least 1 month during a
calendar year.
b. Exempted employers:
a. Government and any of its political
subdivisions, including GOCCs, except those
corporations operating essentially as private
subsidiaries of the Government;
b. Employers already paying their employees
13th month pay or more in a calendar year or
its equivalent at the time of issuance of PD
851
• “Its equivalent” – includes Christmas
bonus, mid-year bonus, cash bonuses
and other payments amounting to not
less than 1/12 of the basic salary but shall
not include cash and stock dividends,
COLA and all other allowances regularly
enjoyed by the employee as well as non-
monetary benefits.
c. Employers of household helpers and persons
in the personal service of another in relation
to such workers
d. Employers of those who are paid on
commission, boundary, or task basis, and
those who are paid a fixed amount for
performance of a specific work, irrespective
of the time consumed in the performance
thereof
Exception: where the workers are paid on a
piece-rate basis, in which case the employer
shall grant the required 13th month pay to
such workers.
• Piece Rate – employees who are paid a
standard amount for every piece or unit
of work produced that is more or less
LABOR LAW
regularly replicated, without regard to the
time spent in producing the same.
Computation of 13th month pay
13th Month Pay = 1/12th of the basic salary of an
employee within a calendar year.
Basic Salary
INCLUDES:
All remunerations or earnings paid by an
employer to an employee for services rendered .
DOES NOT INCLUDE:
1. Cost of living allowances (COLA),
2. Profit-sharing payments and
3. All allowances and monetary benefits (e.g.
unused VL and sick leave credits, OT
premium, night differential and holiday pay)
which are not considered or integrated as
part of the regular or basic salary of the
employee. However, the above should be
included in the computation if by individual or
collective agreement, company practice or
policy.
Time of Payment
The thirteenth-month pay shall be paid not later
than December 24 of every year. An employer,
however, may give to his or her employees one-
half (1/2) of the thirteenth-month pay before the
opening of the regular school year and the
remaining half on or before December 24 of every
year.
The frequency of payment of this monetary
benefit may be the subject of an agreement
between the employer and the
recognized/collective bargaining agent of the
employees.
13th Month Pay for Certain Types of
Employees
1. Employees paid by results – entitled to 13th
month pay
2. Those with Multiple Employers – entitled to
the 13th month pay from all their private
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employers regardless of their total earnings
from each or all of their employers
3. Private School Teachers – entitled regardless
of the number of months they teach or are
paid within a year, if they have rendered
service for at least 1 month within a year.
13th Month Pay of Resigned or Separated
Employee
Employee is entitled to the benefit in proportion to
the length of time he worked during the year,
reckoned from the time he started working during
the calendar year up to the time of his resignation
or termination from the service. Can be
demanded by the employee upon the cessation
of EER.
Non-inclusion in Regular Wage
Benefit need not be credited as part of regular
wage of employees for purposes of determining
OT pay and premium pays, fringe benefits as well
as contributions to the state insurance fund,
Social Security, Medicare, and private retirement
plans.
c. Nature of 13th month pay
All rank-and-file employees who have worked for
at least one (1) month during the calendar year,
are entitled to receive 13th month pay regardless
of the nature of their employment and irrespective
of the methods by which their wages are
paid. (P.D. No. 851, Sec. 1)
The payment of a thirteenth-month pay is a
statutory grant, and compliance therewith is
mandatory. The benefit is deemed written in
every CBA.
Food and other material things are not substitute
for 13th month pay.
Proportionate 13th month pay accrues to
employees who worked only for a period of less
than twelve months in a given year.
Note: 13th month pay is a non-strike able issue.
LABOR LAW
d. Commissions vis-à-vis 13th month pay
If the commissions may be properly considered
part of the basic salary – included in computing
the 13th month pay
If the commissions are not part of basic salary –
excluded.
In Boie-Takeda Chemicals v. Hon. Laserna (GR
No. 92174, 1993) we note that productivity
bonuses are generally tied to the productivity, or
capacity for revenue production, of a corporation;
such bonuses closely resemble profit-sharing
payments and have no clear director necessary
relation to the amount of work actually done by
each individual employee. More generally, a
bonus is an amount granted and paid ex gratia to
the employee; its payment constitutes an act of
enlightened generosity and self-interest on the
part of the employer, rather than as a
demandable or enforceable obligation.
In principle, where these earnings and
remuneration are closely akin to fringe benefits,
overtime pay or profit-sharing payments, they are
properly excluded in computing the 13th month
pay. However, sales commissions which are
effectively an integral portion of the basic salary
structure of an employee, shall be included in
determining his 13th month pay. (Philippine
Duplicators v. NLRC, GR No. 110068, 1995)
e. CBA vis-à-vis 13th month pay
Employers who are already paying their
employees a 13th month pay “or its equivalent”
are not covered by the decree.
Note: “Equivalent” includes:
a) Christmas bonus, mid-year bonus, cash
bonuses;
b) and Other payments amounting to not less
than 1/12 of the basic salary;
c) But shall not include cash and stock dividends,
cost of living allowances, and all other allowances
regularly enjoyed by the employee as well as non-
monetary benefits (IRR P.D. 851, Sec. 3[e])
An employer is not obliged to give a 13th month
salary in addition to other bonuses stipulated in a
CBA amounting to more than a month’s pay. (See
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Brokenshire Memorial Hospital Inc., v. NLRC,
G.R. No. L-69741, 1986)
In Relation to Collective Bargaining
Agreements and Employer-Employee
Agreements
1. Nothing in the Rules shall prevent the
employer and employee from entering into
any agreement with terms more favorable to
the employees than those granted therein, or
be used to diminish any benefit granted to the
employees under existing laws, agreement
AND voluntary employer practice. (Sec. 6,
Rule VI, Book 3, IRR) 
 exclusive of the land on which the particular
2. The rule is without prejudice to existing,
future collective bargaining agreements.
(Sec. 7, Rule VI, Book 3, IRR) 
 5. Cooperatives. (Benguet Electric Cooperative
No Work – No Pay Principle
General Rule: A fair day’s wage for a fair day’s
labor. (Sugue v. Triumph International [Phils.],
G.R. No. 164804, 2009)
Exception: Where the employer was able,
willing, and ready to work but was prevented by
management or was illegally locked out,
suspended or dismissed, or otherwise illegally
prevented from working (Sugue v. Triumph
International, supra)
BUT: Where the failure of employees to work was
not due to the employer’s fault, the burden of
economic loss suffered by the employees should
not be shifted to the employer. Each party must
bear his own loss.
II. PRINCIPLE
Equal Pay for Equal Work
Employees holding the same position and rank
are presumed to be performing equal work. The
rule equal pay for equal work applies whether the
employee is hired locally or abroad (ISAE v.
Quisumbing, G.R. No. 128845, 2000)
Coverage/Exclusion
The rule on wages applies to ALL workers. (SLL
International Cables, G.R. No. 172161, 2011).
LABOR LAW
EXCEPT: (FaB-CD-CHR10)
1. Farm tenancy / leasehold
2. Domestic service
3. Persons working in their respective homes in
needle work or in any Cottage industry duly
registered in accordance with law
4. Barangay micro business enterprise (BMBE)
under RA 9178, the BMBE Law. BMBE – any
business entity or enterprise engaged in the
production, processing, or manufacturing of
products or commodities, including agro-
processing, trading and services, whose total
assets including those arising from loans but
business entity’s office, plant and equipment
are situated, shall not be more than P3M.
v. Hon. Ferrer-Calleja, G.R. No. 79025,
December 29, 1989).
6. Homeworkers employed in any
establishment duly registered with the
National Cottage Industries and
Development Authority in accordance with
RA 8470
7. Retail and service establishments regularly
employing not more than 10 workers
Minimum Wage of Workers Paid BY RESULTS
i. Workers paid by results
All workers paid by result, including those who are
paid on piecework, takay, pakyaw or task basis,
shall receive not less than the prescribed wage
rates per eight (8) hours of work a day, or a
proportion thereof for working less than eight (8)
hours. (Labor Code, Art. 124)
ii. Apprentices
Wage rates of apprentices shall conform to the
rules issued by the Secretary of Labor. Wages
shall in no case be less than 75% of the
applicable minimum wage rates. (Labor Code,
Art. 61 & 75)
Note: Learners employed in piece or incentive-
rate jobs during the training period shall be paid
in full for the work done (Labor Code, Art. 76)
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The Secretary of Labor may authorize the hiring
of apprentices without compensation whose
training on the job is required by the school or
training program curriculum or as a requisite for
graduation or board examination. (Labor Code,
Art.72)
iii. Learners
Wages of learners shall begin at not less than
75% of the applicable minimum wage. (Labor
Code, Art. 75)
Learners employed in piece or incentive-rate jobs
during the training period shall be paid in full for
the work done. (Labor Code, Art. 76)
iv. Persons with Disability
A qualified disabled employee shall be subject to
the same terms and conditions of employment
and the same compensation, privileges, benefits,
fringe benefits or allowances as qualified, able-
bodied persons (R.A. No. 7277, Sec. 5)
Commissions
Commissions have been defined as the
recompense, compensation, or reward of an
agent, salesman, executor, trustee, receiver,
factor, broker or bailee, when the same is
calculated as a percentage on the amount of his
transactions or on the profit to the principal. (Phil.
Duplicators’ Inc. v. NLRC, G.R. No. 110068,
1993)
The Court held that the definition of “wages”
under Art. 97 (f) of the Labor Code explicitly
includes commissions as part of wages. While
commissions are incentives to inspire employees
to put a little more industry on the jobs particularly
assigned to them, still, these commissions are
direct remunerations for services rendered.
There is no law mandating that commissions be
paid only after the minimum wage has been paid
to the employee. Verily, the establishment of a
minimum wage only sets a floor below which an
employee’s remuneration cannot fall, not that
commissions are excluded from wages in the
compliance with the minimum wage law. (Iran v.
NLRC, G.R. No. 121927, 1998)
LABOR LAW
However, for commissions to be included in the
employees’ salary, the employee must have
earned them through performing actual business
transactions. (Phil. Duplicators’ Inc. v. NLRC,
G.R. No. 110068, 1995)
III. MINIMUM WAGE
Current Minimum Wage
PhP 537 (Wage Order No. NCR-22, October 30,
2018)
Standards/Criteria for minimum wage fixing
The regional minimum wages to be established
by the Regional Board shall be as nearly
adequate as is economically feasible to maintain
the minimum standards of living necessary for the
health, efficiency and general well-being of the
employees within the framework of the national
economic and social development program.
In the determination of such regional minimum
wages, the Regional Board shall, among other
relevant factors, consider the following:
1. The demand for living wages;
2. Wage adjustment vis-à-vis the consumer
price index
3. The cost of living and changes or increases
therein
4. The needs of workers and their families
5. The need to induce industries to invest in the
countryside
6. Improvements in standards of living
7. The prevailing wage levels
8. Fair return of the capital invested and
capacity to pay of employees
9. Effects on employment generation and family
income
10. The equitable distribution of income and
wealth along the imperatives of economic
and social development (Labor Code, Art.
124)
Two Methods of fixing the minimum wage
rate.
1. Floor Wage Method
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Method which involves the fixing of a determinate
amount to be added to the prevailing statutory
minimum wage rates.
2. Salary Cap Method
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. (Employers Confederation of the
Philippines v. National Wages and Productivity
Commission, G.R. No. 96169, 1991).
Pursuant to its authority, the Regional Wage
Boards may issue wage orders which set the daily
minimum wage rates. It has no authority to grant
an across-the-board wage increase.
(Metropolitan Bank and Trust Company v.
NWPC, 2007).
IV. PAYMENT OF WAGE
Means of Payment
The employer cannot pay his workers by means
of any of the following:
1. Vouchers;
2. Promissory notes;
3. Any object other than legal tender;
4. Coupons;
5. Chits;
6. Tokens; or
7. Tickets (Labor Code, Art. 102)
General Rule: No employer shall pay the wages
of an employee by any other means other than
legal tender, even when expressly requested by
the employee. (Congson v. NLRC, G.R. No.
114250, April 5, 1995)
Exception: Payment of wages by bank checks,
postal checks or money orders is allowed where:
1. Such manner of wage payment is customary
on the date of the Labor Code’s effectivity;
2. It is stipulated in a collective agreement;
3. All of the following conditions are met; or
LABOR LAW
a. There is a bank or other facility for
encashment within a radius of 1 kilometer
from the workplace
b. The employer or any of his agents or
representatives does not receive any
pecuniary benefit directly or indirectly
from the arrangement
c. The employees are given reasonable
time during banking hours to withdraw
their wages from the bank which time
shall be considered as compensable
hours worked if done during working
hours
d. The payment by check is with the written
consent of the employees concerned if
there is no collective agreement
authorizing the payment of wages by
bank checks
4. Necessary because of special circumstances
as specified in appropriate regulations issued
by the Secretary of Labor (IRR Labor Code,
Sec. 2, Rule VIII, Book III)
Time of Payment
General Rule: At least once every 2 weeks or
twice a month at intervals not exceeding 16 days.
Exceptions:
1. In case of force majeure or other
circumstances beyond the employer’s
control, payment must be made immediately
after such occurrence has ceased; and
2. In case of payment of wages by result
involving work which cannot be completed in
two weeks and in the absence of CBA or
arbitration award:
- Payments are made at intervals not
exceeding 16 days, in proportion to the
amount of work completed; and
- Final settlement is made upon
completion of the work. (IRR Labor Code,
Sec. 3, Rule VIII, Book III)
In ALL Cases: No employer shall make payment
with less frequency than once a month.
If on account of force majeure or circumstances
beyond the employer’s control, payment of wages
on or within the time herein provided cannot be
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made, the employer shall pay the wages
immediately after such force majeure or
circumstances have ceased.
Place of Payment
General Rule: Payment of wages shall be made
at or near the place of undertaking
Exceptions: Payment in a place other than the
work place shall be permissible only under the
following circumstances:
1. When payment cannot be effected at or near
the place of work by reason of the
deterioration of peace and order conditions,
or by reason of actual or impending
emergencies caused by fire, flood, epidemic
or other calamity rendering payment thereat
impossible
2. When the employer provides free
transportation to the employees back and
forth
3. Under any other analogous circumstances;
Provided, That the time spent by the
employees in collecting their wages shall be
considered as compensable hours worked
(Labor Code, Art. 103; IRR Labor Code, Sec.
4, Rule VIII, Book III)
Prohibited Place of Payment
General Rule: Payment cannot be made in a bar,
night or day club, drinking establishment,
massage clinic, dance hall, or other similar places
or in places where games are played with stakes
of money or things representing money
Exception: Persons employed in the
abovementioned places may be paid there (IRR
Labor Code, Sec. 4[b], Rule VIII, Book III)
Payment through Banks; Requisites
1. There must be a written permission of the
majority of the employees concerned in an
establishment
2. The establishment must have 25 or more
employees
3. The establishment must be located within 1
km. radius to the bank.
LABOR LAW
Payment through ATM; Requisites
Payment through automated teller machines
(ATM) of banks is allowed, provided the ff.
conditions are met [CTARRDR]:
1. The ATM system of payment is with the
written Consent of the employees concerned;
2. The employees are given reasonable Time to
withdraw their wages from the bank facility
which time, if done during working hours,
shall be considered compensable hours
worked;
3. The system shall Allow workers to receive
their wages within the period or frequency
and in the amount prescribed under the Labor
Code;
4. There is a bank or ATM facility within a
Radius of one (1) kilometer to the place of
work;
5. Upon request of the concerned employee/s,
the employer shall issue a Record of payment
of wages, benefits and deductions for a
particular period;
6. There shall be no additional expenses and no
Diminution of benefits and privileges as a
result of the ATM system of payment;
7. The employer shall assume Responsibility in
case the wage protection provisions of law
and regulations are not complied with under
the arrangement (DOLE’s Explanatory
Bulletin on Wage Payment Through ATM
Facility, November 25, 1996)
To Whom Wages are Paid
General Rule: Wages shall be paid directly to the
workers to whom they are due (Labor Code, Art.
105)
Exceptions:
1. Payment through another person
(a) In cases of force majeure rendering such
payment impossible or under other
special circumstances to be determined
by the Secretary – the worker may be
paid through another person under
written authority given by the worker for
the purpose (Labor Code, Art. 105[a]); or
(b) When authorized under existing law,
including:
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i. Payments for the insurance chits, or any other object

premiums of the employee other than legal tender
ii. Union dues where the right to Once every two weeks or
check-off has been recognized by WHEN twice a month at intervals not
the employer in accordance with a exceeding 16 days
collective agreement At or near the place of
WHERE
iii. Authorized in writing by the undertaking
individual employees concerned Directly to the employee
(IRR of Labor Code, Sec. 5[b], Rule HOW
entitled thereto
VIII)

2. Payment through heirs of the worker V. PROHIBITIONS REGARDING WAGE

Where the worker has died – the employer may Deductions from Wages (Labor Code, Art.
pay the wages of the deceased worker to the 113)
heirs of the latter without the necessity of intestate General Rule: Wage deduction is strictly
proceedings. (Labor Code, Art. 105[b]) prohibited.

Procedure:
• The claimants, if they are all of age (or in
case of a minor, by the natural guardians
or next-of-kin), shall execute an affidavit
attesting to their relationship to the
deceased and the fact that they are his
heirs, to the exclusion of all other persons.
• If any of the heirs is a minor, the affidavit
shall be executed on his behalf by his
natural guardian or next-of-kin.
• The affidavit shall be presented to the
employer who shall make payment
through the Secretary or his
representative. The representative of the
Secretary shall act as referee in dividing
the amount paid among the heirs.
• The payment of wages under this Article
shall absolve the employer of any further
liability with respect to the amount paid.
3. Payment through member of worker’s
family
Where the employer is authorized in writing by the
employee to pay his wages to a member of his
family (IRR Labor Code, Sec. 5[a], Rule VIII, Book
III)
Summary of Rules on Payment of Wages
Legal tender; Prohibited:
WHAT MUST
Promissory notes, vouchers,
BE PAID
coupons, tokens, tickets,
Exceptions:
1. With Employee’s Consent in Writing
• Value of meals and other facilities
• Payments to third persons with
employee’s consent and without
pecuniary benefit
• Deduction for unpaid absences
2. Without Employee’s Consent
• Worker’s insurance acquired by the
employer
• Union dues, where the right to check-off
has been recognized by the employer or
authorized in writing by the employee
• Cases where the employer is authorized
by law or regulations issued by the
Secretary of Labor
• Debts of the employee to the employer
that have become due and demandable
Withholding tax
NOTE: Persons earning minimum wage are
exempted from income tax.
3. When Authorized by Law
• Deposit for loss/breakage (Labor
Advisory, No. 11 [2014], Sec. 3)
• In cases where the employee is indebted
to the employer, where such
indebtedness has become due and
demandable (Civil Code, Art. 1706)

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• Court judgment, but only for debts
incurred for food, shelter, clothing, and
medical attendance (Civil Code, Art.
1708)
SSS, PHILHEALTH, PAG-IBIG Fund payments
are authorized deductions.
4. Regulation Issued by the Secretary of Labor
Deposits for Loss or Damage
General Rule: No employer shall require his
worker to make deposits for the reimbursement of
loss of or damage to material, equipment, or tools
supplied by the employer.
Exception: When the trade, occupation or
business of the employer recognizes or considers
the practice of making deductions or requiring
deposits necessary or desirable. (Labor Code,
Art. 114)
Requisites for Valid Deduction for
Loss/Damage
1. The employee concerned is clearly shown to
be responsible for the loss or damage
2. The employee is given reasonable
opportunity to show cause why deduction
should not be made
3. The amount of such deduction is fair and
reasonable and shall not exceed the actual
loss or damage
4. The deduction from the wages of the
employee does not exceed 20% of the
employee's wages in a week (IRR Labor
Code, Sec. 11, Rule VIII, Book III)
Note: Art. 144 provides for the rule on deposits
for the loss or damage to tools, materials, or
equipment supplied by the employer. The same
does not apply to or permit deposits to defray any
deficiency, which the taxi driver may incur in the
remittance of “boundary” (Five J Taxi v. NLRC,
G.R. No. 111474, 1994)
Prohibited / Unlawful Acts
1. Withhold any amount from the wages of a
worker or induce him to give up any part of
his wages by force, stealth, intimidation,
LABOR LAW
threat or by any other means whatsoever
without the worker’s consent. (Labor Code,
Art. 116)
2. Deduction from the wages of any employee
for the benefit of the employer or his
representative or intermediary as
consideration of a promise of employment or
retention in employment. (Labor Code, Art.
117)
3. Refuse to pay or reduce the wages and
benefits, discharge or in any manner
discriminate against any employee who has
filed any complaint or instituted any
proceeding under this Title or has testified or
is about to testify in such proceedings. (Labor
Code, Art. 118)
4. Make any statement, report, or record filed or
kept pursuant to the provisions of this Code
knowing such statement, report or record to
be false in any material respect. (Labor Code,
Art. 119)
Non-Interference in Disposal of Wages (Civil
Code Provisions)
1. The laborer’s wages shall be paid in legal
currency (Civil Code, Art. 1705)
2. Withholding of wages, except for a debt due,
shall not be made by the employer (Civil
Code, Art. 1706)
3. The laborer’s wages shall be a lien on the
goods manufactured or the work done (Civil
Code, Art. 1707)
4. The laborer’s wages shall not be subject to
execution or attachment, except for debts
incurred for food, shelter, clothing, and
medical attendance (Civil Code, Art. 1708)
5. The employer shall neither seize nor retain
any tool or other articles belonging to the
laborer (Civil Code, Art. 1709)
Withholding of wages and benefits where
employee has debts and liabilities due
As a general rule, employers are prohibited from
withholding wages as provided under Article 116
of the LABOR CODE. Art. 100 also prohibits
elimination or diminution of benefits.
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Art. 113(3) allows exceptions to the general rule
that wages may not be withheld and benefits may
not be diminished in cases where the employer is
authorized by law or regulations issued by the
Secretary of Labor and Employment. Article 1706
of the Civil Code provides that the employer is
authorized to withhold wages for debts due.
"Debt" in this case refers to any obligation due
from the employee to the employer. It includes
any accountability that the employee may have to
the employer. "Accountability," in its ordinary
sense, means obligation or debt and does not
limit the definition to those incurred in the
worksite. Accountabilities of employees are
personal. They need not be uniform among all
employees in order to be included in
accountabilities incurred by virtue of an employer-
employee relationship.
The employer who allowed the use of its property
for the benefit of the employees out of liberality
may demand the property at will. Return of the
property’s possession became an obligation or
liability on the part of the employees when the
EER ceased. The employer is allowed to withhold
wages and benefits subject to the return of the
possession of property. (Milan v. National Labor
Relations Commission, G.R. No. 202961,
February 4, 2015)
Wage Order
An order issued by the Regional Board whenever
the conditions in the region so warrant after
studying and investigating and studying all
pertinent facts and based on the standards and
criteria prescribed by the Labor Code. (Labor
Code, Art. 123)
A wage order adjusts the minimum level but not
the levels above the minimum. It does not
mandate across the board salary increase.
Employees NOT Covered
1. Family drivers and workers in the personal
service of another
2. Workers and employees in retail/service
establishments regularly employing not more
LABOR LAW
than 10 workers, when exempted from
compliance, for a period fixed by the
Commission/Boards
3. Workers and employees in new business
enterprises outside the National Capital
Region and export processing zones for a
period of not more than two or three years, as
the case may be, from the start of operations
when exempted (R.A. No. 6727)
In addition to setting the minimum wage, the
RTWPB can provide additional exemptions since
it is vested with the competence to determine the
industries and sectors to exempt from the
coverage of their wage orders. (National Wages
and Productivity Commission (NWPC) and the
Regional Tripartite Wages and Productivity Board
(RTWPB) vs. Alliance of Progressive Labor (APL)
and the Tunay na Nagkakaisang Manggagawa sa
Royal (TNMR), G.R. No. 150326, 2014)
The RTWPBs shall issue wage orders covering
household or domestic helpers. (Kasambahay
Law, Sec. 41)
Effectivity of Wage Orders
Takes effect after 15 days from its complete
publication in at least one newspaper of general
circulation in the region. (NWPC Guidelines No.
001-95, Sec. 4, Rule IV)
Public Hearings and Consultations Mandatory
Notice must be given to employees’ and
employers’ groups, provincial, city and municipal
officials and other interested parties.
A wage order issued without the required public
consultation and newspaper publication is null
and void.
Frequency
General Rule: A wage order issued by the Board
may not be disturbed for a period of 12 months
from its effectivity and no petition for wage
increase shall be entertained during said period
(NWPC Guidelines No. 001-05, Sec. 3, Rule IV)
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Exceptions:
1. When Congress itself issues a law
increasing wages; or
2. Supervening conditions, such as
extraordinary increases in prices of petroleum
products and basic goods / services
Standards/Criteria for Minimum Wage Fixing
Must be economically feasible to maintain the
minimum standards of living necessary for the
health, efficiency and general well-being of the
employees within the framework of the national
economic and social development program.
Factors to Consider: (SNAPE CRIED)
1. Improvements in Standards of living
2. The Needs of workers and their families
3. Wage Adjustment vis-à-vis the consumer
price index
4. The Prevailing wage levels
5. Effects on employment generation and family
income
6. The Cost of living and changes or increases
7. Fair Return of the capital invested and
capacity to pay of employers
8. The need to induce Industries to invest in the
countryside
9. The Equitable distribution of income and
wealth along the imperatives of economic
and social development
10. The Demand for living wages (Labor Code,
Art. 124)
Appeal
A party aggrieved by a Wage Order may appeal
to the NWPC not later than 10 days from the date
of the publication of the order (NWPC Guidelines
No. 001-95, Sec. 1, Rule V)
Effect of Appeal
General Rule: Appeal does not stay the effect of
the wage order
Exception: Unless the party appealing such
order shall file with the NWPC an undertaking
with a surety/sureties (surety bond) satisfactory to
the Commission for payment to employees
affected by the order for the corresponding
LABOR LAW
increase, in the event that such order is affirmed
(IRR of R.A. No. 6727, Sec. 5, Rule V)
Doctrine of Double Indemnity
The employer concerned shall be ordered to pay
an amount equivalent to double the unpaid
benefits owing to the employees: Provided, That
payment of indemnity shall not absolve the
employer from the criminal liability imposable
under this Act. (RA 6727, as amended by RA
8188, Sec. 12)
Payment to a concerned employee of the
prescribed increase or adjustments in the wage
rate which was not paid by an employer in an
amount equivalent to twice the unpaid benefits
owing to such employee (D.O. No. 10, Sec. 2[1]
[1998])
Wage Distortion
A situation where an increase in prescribed wage
rates results in the elimination or severe
contraction of intentional quantitative differences
in wage or salary rates between and among
employee groups in an establishment as to
effectively obliterate the distinctions embodied in
such wage structure based on skills, length of
service or other logical basis of differentiation.
(Labor Code, Art. 124)
Simply, if the pay advantage of a position over
another is removed or significantly reduced by a
pay adjustment required by a wage order, such
pay advantage should be restored. Manila
Mandarin Employees Union v. NLRC, (G.R. No.
108556, 1996)
For a distortion to exist, the law does not require
an elimination or total abrogation of quantitative
wage or salary difference; a severe contraction
thereof is enough. (MBTC Employees Union-
ALU-TUCP v. NLRC, G.R. No. 102636, 1993)
Wage distortion involves comparison of jobs
located in the same region. Examination of
alleged salary distortion is limited to jobs or
positions in the same employer in the same
region; thus, the comparison of salaries has to be
intra-region, not inter-region. (Prubankers
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Association v. Prudential Bank and Trust Co.,
G.R. No. 131247, 1999)
Elements of Wage Distortion:
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.
4. The existence of the distortion in the same
region of the country. (Alliance Trade unions
v. NLRC, G.R. No. 140689, 2004)
Correction of Wage Distortion
A. In case of an ORGANIZED establishment
1. Employer and union shall negotiate to
correct the distortion
2. Any dispute arising should be resolved
through grievance procedure under CBA
3. If dispute remains unresolved, through
voluntary arbitration (Labor Code, Art. 124)
B. In case of an UNORGANIZED
establishment
1. The employer and employees shall endeavor
to correct the distortion
2. Any dispute shall be settled through National
Conciliation and Mediation Board (NCMB)
3. If remains unresolved after 10 days of
conciliation, it shall be referred to the NLRC
(Labor Code, Art. 124)
Note: Any issue involving wage distortion is not a
valid ground for a strike or a lockout. (Ilaw at
Buklod ng Manggagawa, G.R. No. 91980, 1991)
Amount of Distortion Adjustment
The restoration of the previous pay advantage is
the aim but not necessarily to the last peso.
Restoration of appreciable differential, a
significant pay gap, should suffice as correction.
Suggested Formula to Correct a Salary
Distortion
(Existing Minimum Wage / Actual Salary of
Employee) x Prescribed Wage Increase
LABOR LAW
The distortion that should be rectified refers to
distortion arising from compliance with a
government wage order. It does not refer to
distortion caused by salary revisions voluntarily
initiated by the employer unless such a duty
exists because of a CBA stipulation or company
practice. (Bankard Employees Union – WATU v.
NLRC, G.R. No. 140689, 2004)
CBA vis-à-vis Wage Orders – CBA
Creditability
The provisions of the CBA should be read in
harmony with the wage orders, whose benefits
should be given only to those employees covered
thereby. (P.I. Manufacturing, Inc., v. P.I.
Manufacturing Supervisors and Foreman Ass’n
and the NLRC, G.R. No. 167217, 2008).
Summary of Principles on Wage Distortion
(NFL v. NLRC, G.R. No. 103586, 1994)
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.
Wage distortions have often been the result of
government-decreed increases in minimum
wages. There are, however, other causes of
wage distortions (such as merger).
Should a wage distortion exist, there is no legal
requirement that the gap which had been
previously existed be restored in precisely the
same amount. Correction of a wage distortion
may be done by re-establishing a substantial or
significant gap (as distinguished from the
historical gap) between the wage rages of the
differing classes of employees.
The re-establishment of a significant wage
difference may be done through the grievance
procedure or collective bargaining negotiations.
Non-diminution of benefits
There is diminution of benefits when:
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1. The grant or benefit is founded on a policy or
has ripened into a practice over a long period
of time
2. The practice is consistent and deliberate
3. The practice is not due to error in the
construction or application of a doubtful or
difficult question of law, and
4. The diminution or discontinuance is done
unilaterally by the employer. (TSPIC v.
TSPIC Employee Union, G.R. No. 163419,
2008).
5. The “benefits” refer to monetary benefits or
privileges given to the employee with
monetary equivalents. (Royal Plant Workers
Union vs. Coca-Cola Bottlers Philippines,
Inc.-Cebu Plant, G.R. 198783, 2013).
Non-Diminution Rule
General Rule: Nothing in the Labor Code shall
be construed to eliminate or in any way diminish
supplements, or other employee benefits being
enjoyed at the time of promulgation of the Labor
Code. Benefits being given to employees shall
not be taken back or reduced unilaterally by the
employer because the benefit has become part of
the employment contract, written or unwritten.
(Labor Code, Art. 100)
Exception: To correct an error, otherwise, if the
error is left uncorrected for a reasonable period of
time, it ripens into a company policy and
employees can demand for it as a matter of right.
When Non-Diminution Rule Applicable
The rule is applicable if it is shown that:
1. The practice is consistent and deliberate
(Metrobank v. NLRC, G.R. No. 152928,
2009)
2. The diminution or discontinuance is done
unilaterally by the employer (Steel
Corporation v. Nagkakaisang
Manggagawang Supreme Independent
Union, G.R. No. 185556, 2011);
3. The grant of the benefit is founded on a policy
or has ripened into a practice over a long
period (Phil. Appliance Corp. v. CA, G.R. No.
149434, 2004); and
4. The practice is not due to error in the
construction or application of a doubtful or
LABOR LAW
difficult question of law (Vergara, Jr., v. Coca
Cola, G.R. No. 176985, 2013)
When not applicable
At least one of the requisites is absent.
1. At least one of the requisites is absent
2. Mistake in the application of the law (Globe
Mackay v. NLRC, G.R. No. 82511, 1988)
3. Negotiated benefits (Azucena)
4. Reclassification of Positions – e.g. loss of
some benefits by promotion.
5. Contingent or Conditional Benefits – the rule
does not apply to a benefit whose grant
depends on the existence of certain
conditions, so that the benefit is not
demandable if those preconditions are
absent.
Past Errors
If it is a past error that is being corrected, no
vested right may be said to have arisen nor any
diminution of benefit under Art. 100 may be said
to have resulted by virtue of the correction (TSPIC
Corp. v. TSPIC Employees Union, G.R. No.
163419, 2008)
Benefits initiated through negotiation between
Employee and Employer, e.g. CBA, can only be
eliminated or diminished bilaterally. A union is not
prohibited from offering and agreeing to reduce
wages and benefits of the employees during CBA
negotiations. (Insular Hotel Employees Union v.
Waterfront, G.R. 174040-41, 2010)
The transition allowance was given only to
comply with the non-diminution clause of the law.
It is not meant to serve as an additional
compensation to the standardized pay. Upon
effectivity of the law, all allowances, except those
specifically excluded were deemed integrated
into the employee’s basic salary. The transition
allowance given to employees was meant to
bridge the difference in pay between the pre-RA
6758 salary of government employees and their
standardized pay rates thereafter. (Republic v.
Cortez G.R. No. 187257 8 August 2017)
Bonus
A benefit which is contingent or conditional; its
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demandability depends on certain pre-conditions.
It is an amount granted voluntarily to an employee
for his/her industry and loyalty, which contributed
to the success and realization of profits of the
employer’s business.
General Rule: Bonus is not demandable as a
matter of right. It is a management prerogative,
given in addition to what is ordinarily received by
or strictly due to the recipient (Producers Bank v.
NLRC, G.R. No. 100701, 2001)
Exceptions:
1. When it was promised to be given without any
conditions imposed for its payment in which
case it is deemed part of the wage; and
2. When it has ripened into practice (Marcos v.
NLRC, G.R. No. 111744, 1995)
Prescriptive Period for Money Claims
Article 291 of the Labor Code covers claims for
overtime pay, holiday, service incentive leave
pay, bonuses, salary differentials, and illegal
deductions by an employer. It also covers money
claims arising from seafarer contracts. The
provision, however, does not cover “money
claims” consequent to an illegal dismissal such as
backwages. It also does not cover claims for
damages due to illegal dismissal.
These claims are governed by Article 1146 (1) of
the Civil Code, which provides that an action upon
injury to the right of the plaintiff must be instituted
within 4 years. An employees claims for unpaid
salaries arises from employer-employee relation,
and Article 291 of the Labor Code applies. On the
other hand, backwages, damages, and attorney’s
fees arise from the claim of illegal dismissal,
which has a 4-year prescriptive period. (Arriola v.
Pilipino Star Ngayon, G.R. No. 175689, August
13, 2014).
Issues raised for the first time on appeal
Rule VI, Sec. 4(d) of the 2005 Revised Rules of
Procedure of the NLRC, categorically states that
in deciding an appeal, the NLRC shall limit itself
to the specific issues elevated on appeal. It
LABOR LAW
appears that the pre-existing condition was never
raised by the parties before the LA or even the
NLRC. Therefore, the NLRC should not have
considered the matter. (Perea v. Elburg
Shipmanagement Philippines, Inc., G.R. No.
206178, August 9, 2017.)
C. LEAVES
Service Incentive Leave (SIL) (supra, p. 42)
Maternity Leave
105-Day Expanded Maternity Leave Law
A female Social Security System (SSS) member
who has paid at least three (3) monthly
contributions in the twelve (12)-month period
immediately preceding the semester of her
childbirth, miscarriage, or emergency termination
of pregnancy shall be paid her daily maternity
benefit which shall be computed based on her
average monthly salary credit for one hundred
five (105) days, regardless of whether she gave
birth via caesarian section or natural delivery.
Conditions for entitlement:
1. That the female worker shall have notified her
employer of her pregnancy and the probable
date of her childbirth, which notice shall be
transmitted to the SSS in accordance with the
rules and regulations it may provide;
2. That the full payment shall be advanced by
the employer within thirty (30) days from the
filing of the maternity leave application;
3. That payment of daily maternity benefits shall
be a bar to the recovery of sickness benefits
provided under Republic Act No. 1161, as
amended, for the same period for which daily
maternity benefits have been received;
4. That the SSS shall immediately reimburse
the employer of one hundred percent (100%)
of the amount of maternity benefits advanced
to the female worker by the employer upon
receipt of satisfactory and legal proof of such
payment; and
5. That if a female worker should give birth or
suffer a miscarriage or emergency
termination of pregnancy without the required
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contributions having been remitted for her by
her employer to the SSS, or without the latter
having been previously notified by the
employer of the time of the pregnancy, the
employer shall pay to the SSS damages
equivalent to the benefits which said female
member would otherwise have been entitled
to. (RA 11210, Sec. 5a)
In case the employee qualifies as a solo parent
under the Solo Parents’ Welfare Act, the
employee shall be paid an additional maternity
benefit of 15 days. (RA 11210, Sec. 5a)
An additional maternity leave of 30 days, without
pay, can be availed of, at the option of the female
worker, provided:
1. That the employer shall be given due notice,
in writing, at least 45 days before the end of
her maternity leave;
2. That no prior notice shall be necessary in the
event of a medical emergency but
subsequent notice shall be given to the head
of the agency. (RA 11210, Sec. 5b)
Workers availing of the maternity leave period
and benefits must receive their full pay.
Employers from the private sector shall be
responsible for payment of the salary differential
between the actual cash benefits received from
the SSS by the covered female workers and their
average weekly or regular wages, for the entire
duration of the maternity leave, except:
1. Those operating distressed establishments;
2. Those retail/service establishments and
other enterprises employing not more than 10
workers;
3. Those considered as micro-business
enterprises and engaged in the production,
processing, or manufacturing of products or
commodities including agro-processing,
trading, and services, whose total assets are
not more than Three million pesos
(₱3,000,000.00); and
3. Those who are already providing similar or
more than the benefits herein provided. (RA
11210, Sec. 5c)
LABOR LAW
Notes:
Women in the military, police, and other services
shall be entitled to leave benefits such as
maternity leave, as provided for by existing laws
(Magna Carta of Women, Sec. 15)
It is not necessary that the woman be
impregnated by her legitimate husband. It is
immaterial who the father is.
Every pregnant woman in the private sector,
whether married or unmarried, is entitled to the
maternity leave benefits.
Paternity Leave (R.A. No. 8187)
Definition:
Paternity Leave refers to the benefits granted to
a married male employee allowing him not to
report for work for seven (7) days but continues
to earn the compensation therefor, on the
condition that his spouse has delivered a child or
suffered a 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. (R.A. No. 8187, Sec. 3)
Coverage
Paternity Leave is granted to all married male
employees in the private sector, regardless of
their employment status (e.g., probationary,
regular, contractual, project basis).
Government employees are also entitled to the
paternity leave benefit. They shall be governed by
the Civil Service rules.
Conditions to entitlement:
1. A married male employee at the time of
delivery of his child;
2. Cohabiting with his spouse at the time she
gives birth or suffers a miscarriage;
3. Applied for paternity leave within a
reasonable period from the expected date of
delivery by the pregnant spouse, or within
such period as may be provided by company
rules or by CBA; provided that prior
application is not required in case of
miscarriage;
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4. Wife has given birth or suffered a
miscarriage.
5. Where a male employee is already enjoying
the paternity leave benefits by reason of
contract, company policy or CBA, the greater
benefit prevails.
Application for Paternity Leave
The male employee applying for paternity leave
shall notify his employer of the pregnancy of his
legitimate spouse and the expected date of such
delivery by the pregnant spouse, or within such
period as may be provided by company rules and
regulations or by collective bargaining
agreement, provided that prior application for
leave shall not be required in case of miscarriage
(IRR of R.A. No. 8187 for the private sector, Sec.
4)
Non-conversion to Cash
In the event that the paternity leave is not availed
of, it shall not be convertible to cash and shall not
be cumulative. IRR of R.A. No. 8187, Sec. 7)
Solo Parent Leave
Parental (Solo Parent Leave)
Benefits granted to a solo parent to enable
him/her to perform parental duties and
responsibilities where physical presence is
required. The parental leave, in addition to leave
privileges under existing laws, shall be for seven
(7) work days every year, with full pay, consisting
of basic salary and mandatory allowances fixed
by the Regional Wage Board, if any, provided that
his/her pay shall not be less than the mandated
minimum wage. (IRR of R.A. No. 8972, Sec. 6[g])
Coverage:
Who are considered Solo Parents:
a. A parent left alone with the responsibility of
parenthood because of death of one’s
spouse.
b. A parent left alone with the responsibility of
parenthood because of any physical and/or
mental incapacity of one’s spouse as certified
by a public medical practitioner
LABOR LAW
c. A parent left alone with the responsibility of
parenthood because one has legally
separated from his spouse or because they
have been separated for at least one year
and the child is in solo parent’s custody
d. A parent left alone with the responsibility of
parenthood because the marriage was
annulled by a court or a church decree, and
the child is in solo parent’s custody.
e. A parent left alone with the responsibility of
parenthood because his spouse abandoned
him for at least one year.
f. A parent left solo or alone with the
responsibility of parenthood because his
spouse is detained or is serving sentence for
a crime for at least one year.
g. An unmarried mother or father who has
preferred to keep and rear the child himself,
instead of having others care for them or give
up to a welfare institution.
h. Solely provides parental care and support to
a child or children.
i. Assumes responsibility of head of the family
as a result of the death, abandonment,
disappearance or prolonged absence of the
children’s parents or solo parent.
j. A victim of rape and/or other crimes against
chastity, have given birth to a child as a result
and have decided to keep and raise his child.
(R.A. No. 8972, Sec. 3[a])
Children
3. Those living with and dependent upon the
solo parent for support who are unmarried,
unemployed and not more than 18 years of
age; or
4. Those even over 18 years but are incapable
of self-support because of mental and/or
physical defect (R.A. No. 8972, Sec. 3[e])
Conditions to Entitlement
1. He/she has rendered at least 1 year of
service, whether continuous or broken;
2. He/she has notified his/her employer of the
availment thereof within a reasonable period
3. He/she has presented a Solo Parent
Identification Card to his/her employer which
may be obtained from the DSWD office of the
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city or municipality where he/she resides
(IRR of R.A. No. 8972, Sec. 19)
Availment
A parental leave of not more than 7 working days
every year shall be granted to any solo parent
employee who has rendered service of at least 1
year.
Non-Conversion to Cash
Unused parental leave is not convertible to cash
unless otherwise provided by the CBA. (IRR of
R.A. No. 8972, Sec. 20)
Termination of the benefit
A change in the status or circumstance of the
parent claiming benefits under this Act, such that
he/she is no longer left alone with the
responsibility of parenthood, shall terminate
his/her eligibility for these benefits. (R.A. No.
8972, Sec. 3[a])
Leaves Benefits for Women Workers Under
Special Laws
R.A. No. 9710 or the Magna Carta for Women
A special leave benefit for women was granted
under R.A. No. 9710 (August 14, 2009). Women
who qualify under R.A. No. 9710 are entitled to a
special leave benefit of two (2) months with full
pay based on her gross monthly compensation
following surgery caused by gynecological
disorders.
Conditions for Entitlement:
1. A woman employee must have rendered
continuous aggregate employment service of
at least six (6) months for the twelve (12)
months immediately prior to the surgery
2. She has filed an application for special leave
with her employer within a reasonable period
of time from the expected date of surgery or
within such period as may be provided by
company rules and regulations or collective
bargaining agreement; and
3. She has undergone surgery due to
gynecological disorders as certified by a
competent physician.
LABOR LAW
R.A. No. 9262 or the Anti-Violence Against
Women and their Children Act of 2004
Violence against women and their children refers
to any act or a series of acts committed by any
person against a woman who is his wife, former
wife, or against a woman with whom the person
has or had a sexual or dating relationship, or with
whom he has a common child, or against her child
whether legitimate or illegitimate, within or without
the family abode, which will result in or is likely to
result in physical, sexual, psychological harm or
suffering, or economic abuse including threats of
such acts, battery, assault, coercion, harassment
or arbitrary deprivation of liberty. (R.A. 9262
“Anti-Violence Against Women and Their
Children Act of 2004”)
Coverage:
Allows the victim of violence, which may be
physical, sexual, or psychological, to apply for the
issuance of a protection order. If such victim is an
employee, she is entitled to a paid leave of up to
10 days in addition to other paid leaves under the
Labor Code, other laws and company policies.
Conditions to entitlement
1. The employee has to submit a certification
from the Punong Barangay or Kagawad or
prosecutor or Clerk of Court that an action
under RA 9262 has been filed and is pending.
2. The use of the 10-day leave is at the option
of the employee
3. It shall be used for the days that she need to
attend to medical and legal concerns.
4. Leaves not availed of are non-cumulative and
not convertible to cash.
Availment
Leave of up to ten (10) days in addition to other
paid leaves under the Labor Code, or other laws.
(Sec. 43, RA 9262)
D. SEXUAL HARASSMENT IN THE WORK
ENVIRONMENT
Where Committed (WET)
a. Working
b. Education
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c. Training environment c. The refusal to grant the sexual favor

results in limiting, segregating or
Who Commits (MEE-PATIS-COT) classifying the employee which in any
1. Manager way would discriminate, deprive or
2. Employer diminish employment opportunities or
3. Employee otherwise adversely affect said employee
4. Professor 2. The above acts would impair the employee’s
5. Agent of the employer rights or privileges under existing labor laws.
6. Teacher 3. The above acts would result in an
7. Instructor intimidating, hostile or offensive environment
8. Supervisor for the employee. (Sec. 3[a])
9. Coach
10. Trainer Education or Training Environment, Sexual
11. Any Other person having authority, influence Harassment Committed When
or moral ascendancy over another (R.A. No. 1. The sexual favor is made as a condition:
7877, Sec. 3) 2. The above acts would impair the employee’s
rights or privileges under existing labor laws.
How Committed 3. The above acts would result in an
Person liable demands, requests, or otherwise intimidating, hostile or offensive environment
requires any sexual favor from the other, for the employee. (Sec. 3[a])
regardless of whether the demand, request or
requirement for submission is accepted by the Duty of Employer
latter. 1. Promulgate appropriate rules and regulations
prescribing the procedure for investigation of
It is not necessary that a demand, request or sexual harassment cases as well as
requirement of sexual favor be articulated in a guidelines on proper decorum in the
categorical oral or written statement. It may be workplace.
discerned, with equal certitude, from acts of the 2. Create a committee on decorum and
offender. (Domingo v. Rayala, G.R. No. 155831, investigation of cases on sexual harassment.
2008). (Sec. 4)

It is also not essential that the demand, request,
or requirement be made as a condition for
continued employment or for promotion to a
higher position. It is enough that the offender’s
acts result in creating an intimidating, hostile, or
offensive environment for the employee.
(Domingo v. Rayala, G.R. No. 155831, 2008)
Work-Related/Employment Environment,
Sexual Harassment Committed When
1. The sexual favor is made as a condition:
a. In hiring or in the employment,
reemployment or continued employment
of said individual
b. In granting said individual favorable
compensation, terms, conditions,
promotions or privileges
Liability of Employer / Head of Office
Solidarily liable for damages arising from the acts
of sexual harassment committed in the
employment, education or training environment if
the employer is informed of such acts by the
offended party and no immediate action is taken.
Prescriptive period to file action: 3 years
(Sec. 7)
Safe Spaces Act (R.A. No. 11313)
The crime of gender-based sexual harassment in
the workplace includes the following:
(a) An act or series of acts involving any
unwelcome sexual advances, requests or
demand for sexual favors or any act of sexual

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nature, whether done verbally, physically or
through the use of technology such as text
messaging or electronic mail or through any other
forms of information and communication
systems, that has or could have a detrimental
effect on the conditions of an individual’s
employment or education, job performance or
opportunities;
(b) A conduct of sexual nature and other conduct-
based on sex affecting the dignity of a person,
which is unwelcome, unreasonable, and
offensive to the recipient, whether done verbally,
physically or through the use of technology such
as text messaging or electronic mail or through
any other forms of information and
communication systems;
(c) A conduct that is unwelcome and pervasive
and creates an intimidating, hostile or humiliating
environment for the recipient: Provided, That the
crime of gender-based sexual harassment may
also be committed between peers and those
committed to a superior officer by a subordinate,
or to a teacher by a student, or to a trainer by a
trainee; and
(d) Information and communication system refers
to a system for generating, sending, receiving,
storing or otherwise processing electronic data
messages or electronic documents and includes
the computer system or other similar devices by
or in which data are recorded or stored and any
procedure related to the recording or storage of
electronic data messages or electronic
documents. (RA 11313)
Duties of Employer
Employers or other persons of authority,
influence or moral ascendancy in a workplace
shall have the duty to prevent, deter, or punish
the performance of acts of gender-based sexual
harassment in the workplace. Towards this end,
the employer or person of authority, influence or
moral ascendancy shall:
5. Disseminate or post in a conspicuous place a
copy of this Act to all persons in the
workplace;
6. Provide measures to prevent gender-based
sexual harassment in the workplace, such as
LABOR LAW
the conduct of anti-sexual harassment
seminars;
7. Create an independent internal mechanism
or a committee on decorum and investigation
to investigate and address complaints of
gender-based sexual harassment which
shall;
(1) Adequately represent the management,
the employees from the supervisory rank, the
rank-and-file employees, and the union, if
any;
(2) Designate a woman as its head and not
less than half of its members should be
women;
(3) Be composed of members who should be
impartial and not connected or related to the
alleged perpetrator;
(4) Investigate and decide on the complaints
within ten days or less upon receipt thereof;
(5) Observe due process;
(6) Protect the complainant from retaliation;
and
(7) Guarantee confidentiality to the greatest
extent possible
8. Provide and disseminate, in consultation with
all persons in the workplace, a code of
conduct or workplace policy which shall;
(1) Expressly reiterate the prohibition on
gender-based sexual harassment;
(2) Describe the procedures of the internal
mechanism created under Section 17(c) of
this Act; and
(3) Set administrative penalties. (Sec. 17, RA
11313)
Duties of Employees and Co-workers
a. Refrain from committing acts of gender-
based sexual harassment;
b. Discourage the conduct of gender-based
sexual harassment in the workplace;
c. Provide emotional or social support to
fellow employees, co-workers,
colleagues or peers who are victims of
gender-based sexual harassment; and
d. Report acts of gender-based sexual
harassment witnessed in the workplace.
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Liability of Employers
a. Non-implementation of their duties under
Section 17 of this Act, as provided in the
penal provisions: or
b. Not taking action on reported acts of
gender-based sexual harassment
committed in the workplace.

Any person who violates subsection (a) of this

section, shall upon conviction, be penalized with
a fine of not less than Five thousand pesos
(P5,000.00) nor more than Ten thousand pesos
(P10,000.00).

Any person who violates subsection (b) of this

section, shall upon conviction, be penalized with
a fine of not less than Ten thousand pesos
(P10,000.00) nor more than Fifteen thousand
pesos (P 15,000.00). (Sec. 19, RA 11313)

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E. WORKING CONDITIONS FOR SPECIAL GROUPS OF EMPLOYEES

I. LEARNERS AND APPRENTICE

LEARNERS APPRENTICES
1. Persons hired as trainees in semi- skilled and 1. Practical training on the job
other industrial occupations 2. Supplemented by related
2. Non- apprenticeable 3. theoretical
3. May be learned through practical training on 4. instruction
the job in a relatively short period of time 5. Covered by a
4. Shall not exceed 3 months 6. Written apprenticeship agreement with an
individual employer or entity
7. Needs DOLE approval
8. Shall not exceed 6 months
Training Agreement
Governed by Learnership Agreement Apprenticeship Agreement
Occupation
learnable occupations consisting of semi-skilled Apprenticeable occupations or any trade, form of
and other industrial occupations which are non- employment or occupation approved for
apprenticeable apprenticeship by the DOLE Secretary
Theoretical instructions
Learnership may or may not be supplemented by Apprenticeship should always be supplemented by
related theoretical instructions related theoretical instructions
Ratio of theoretical instructions and on OJT
For both, the normal ratio is one hundred (100) hours for every two thousand 2,000 hours of practical or
on-the-job training
Competency-based system
It is required that learnership be implemented on Not required
the TESDA-approved competency-based system
Duration of training
Not exceeding three (3) months of practical training More than three (3) months, but not over six (6)
months
Qualifications
Law does not mention any qualification Art. 59 of the Labor Code:
4. Be at least fifteen (15) years of age; (IRR and
R.A. 7610, as amended by R.A. 7658)
5. Possess vocational aptitude and capacity for
appropriate tests; and
6. Possess the ability to comprehend and follow
oral and written instructions.
Circumstances justifying hiring of trainees
Art. 74. Pre-requisites before learners may be Law does not expressly mention any
validly employed:
1. When no experienced workers are available;
2. The employment of learners is necessary to
prevent curtailment of employment
opportunities; and

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3. The employment does not create unfair

competition in terms of labor costs or impair or
lower working standards

Limitation on the number of trainees

In learnership, a participating enterprise is allowed No similar cap is imposed in the case of
to take in learners only up to a maximum of twenty apprenticeship
percent (20%) of its total regular workforce
Option to employ
The enterprise is obliged to hire the learner after The enterprise is given only an “option” to hire the
the lapse of the learnership period; apprentice as an employee.
Wage rate
The wage rate of a learner or an apprentice is set at seventy-five percent (75%) of the statutory minimum
wage.

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Requisites for a Valid Apprenticeship (Art
58(b) Labor Code):
1. Qualifications of apprentice are met
2. The apprentice earns not less than 75% of
the prescribed minimum salary
3. Apprenticeship agreement duly executed and
signed
4. Apprenticeship program approved by the
sec. Of labor; otherwise, the apprentice shall
be deemed as a regular employee
5. Period of apprenticeship not exceed 6
months
At the termination of the apprenticeship, the
employer is not required to continue the
employment.
Employer may not pay wage if the apprenticeship
is:
a. A requirement for graduation
b. Required by the School
c. Required by the Training Program Curriculum
d. Requisite for Board examination
Art. 63, Labor Code. Venue of Apprenticeship
Programs
The plant, shop, premises of the employer or firm
concerned if the apprenticeship program is
organized by an individual employer or firm.
The premises of one or several firms designated
for the purpose by the organizer of the program if
such organizer is an association of employers,
civic groups and the like.
DOLE training center or other public training
institutions with which the Bureau has made
appropriate arrangements.
Contents of Learnership Agreement
1. Names and addresses of employer and
learner
2. Occupation to be learned and the duration of
the training period which shall not exceed 3
months
3. Wage of the learner which shall be at least
75% of the applicable minimum wage
LABOR LAW
4. Commitment to employ the learner, if he so
desires, as a regular employee upon
completion of training (Labor Code, Art. 75)
A learner who has worked during the first two
months shall be deemed a regular employee if
training is terminated by the employer before the
end of the stipulated period through no fault of the
learner.
II. DISABLED WORKERS
Those whose earning capacity is impaired by age
or physical or mental deficiency or injury, disease
or illness. (Art. 78, Labor Code)
There must be a link between the deficiency and
the work which entitles the employer to lessen the
worker’s wage. If the disability of the person is not
in any way related to the work for which he was
hired, he should not be so considered as a
handicapped worker.
PERSONS WITH DISABILITY
(R.A. No. 7277, as Amended by R.A. No. 9442)
Persons with Disability 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.
Impairment refers to any loss, diminution or
aberration of psychological, physiological, or
anatomical structure or function.
Disability means:
a. A physical or mental impairment that
substantially limits one or more
psychological, physiological or anatomical
functions of an individual or activities of such
individual;
b. A record of such an impairment; or
c. Being regarded as having such an
impairment.
Handicap refers to a disadvantage for a given
individual, resulting from an impairment or a
disability that limits orprevents the function or
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activity that is considered normal given the age
and sex of the individual.
When Employable
1. their employment is necessary to prevent
curtailment of employment opportunities;
2. does not create unfair competition in labor
costs; and
3. does not impair or lower working standards.
Handicapped workers may be hired as
apprentices or learners if their handicap is not
such as to effectively impede the performance of
job operation in the particular position for which
they are hired.
Handicapped Workers May Become Regular
Employees – if their handicap is not such as to
effectively impede the performance of job
operations in the particular occupations for which
they were hired.
Rules on Handicapped Workers
Handicapped workers may be employed when:
1. Their employment is necessary to prevent
curtailment of employment opportunities 

2. Does not create unfair competition in labor
costs 
 employment of PWDs?
3. Does not impair or lower working standards.
(Labor Code, Art. 79)
Employment Agreement; Contents
1. Names and addresses of the employer and
the handicapped worker
2. Rate of pay of the handicapped worker which
shall not be less than 75% of the legal
minimum wage
3. Nature of work to be performed by the
handicapped worker
4. Duration of the employment (Labor Code, Art.
80)
a) Equal Opportunity for Employment
No disabled person shall be denied access to
opportunities for suitable employment. Qualified
disabled employees shall be subject to same
terms and conditions of employment and the
same compensation, privileges, benefits, fringe
LABOR LAW
benefits, incentives or allowances as a qualified
able-bodied person
What are the rights of PWDs?
Under the law, 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.
What is the wage rate of PWDs?

The wage rate of PWDs is 100% of the applicable
minimum wage. 

What is the wage rate of PWD if hired as
apprentice or learner? 

A PWD hired as an apprentice or learner shall be
paid not less than seventy-five percent (75%) of
the applicable minimum wage.
a) Discrimination on Employment
What is the rule on discrimination against
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. (RA 7277, Sec. 32)
A Qualified Individual with a Disability means
an individual with a disability who, with or without
reasonable accommodations, can perform the
essential functions of the employment position
that such individual holds or desires. However,
consideration shall be given to the employer’s
judgement as to what functions of a job are
essential, and if an employer has prepared a
written description before advertising or
interviewing applicants for the job, this description
shall be considered evidence of the essential
functions of the job. (RA 7277, Sec. 4l)
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The following constitute acts of
discrimination:
1. Limiting, segregating or classifying a job
applicant with disability in such a manner that
adversely affects his work opportunities;
2. 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;
3. Utilizing standards, criteria, or methods of
administration that:
4. Have the effect of discrimination on the basis
of disability; or
5. Perpetuate the discrimination of others who
are subject to common administrative control.
6. 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;
7. Favoring a non-disabled employee over a
qualified employee with disability with respect
to promotion, training opportunities, study
and scholarship grants, solely on account of
the latter’s disability;
8. Re-assigning or transferring an employee
with a disability to a job or position he cannot
perform by reason of his disability;
9. 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;
10. 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
LABOR LAW
11. Excluding PWD from membership in labor
unions or similar organizations.
b) Incentives for Employers (Sec. 8)
To encourage the active participation of the
private sector in promoting the welfare of disabled
persons and to ensure gainful employment for
qualified disabled persons, adequate incentives
shall be provided to private entities which employ
disabled persons.
Private entities that employ disabled persons who
met the required skills or qualifications, either as
regular employee, apprentice or learner, shall be
entitled to an additional deduction, from their
gross income, equivalent to 25% of the total
amount paid as salaries and wages to disabled
persons. Private entities that improve or modify
their physical facilities in order to provide
reasonable accommodation for disabled persons
shall also be entitled to an additional deduction
from their net taxable income, equivalent to 50%
of the direct costs of the improvements or
modifications.
III. GENDER
a) Discrimination
Unlawful for any employer to discriminate against
any woman employee with respect to terms and
conditions of employment solely on account of
her sex (Labor Code, Art. 135)
Acts of Discrimination
1. Payment of a lesser compensation, including
wage, salary or other form of remuneration
and fringe benefits, to a female employees as
against a male employee, for work of equal
value
2. Favoring a male employee over a female
employee with respect to promotion, training
opportunities, study and scholarship grants
solely on account of their sexes
a. Person guilty of committing these acts
are criminally liable under Arts. 288-289
of the Labor Code
b. That the institution of any criminal action
under this provision shall not bar the
aggrieved employee from filing an
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entirely separate and distinct action for
money claims, which may include claims
for damages and other affirmative reliefs.
The actions hereby authorized shall
proceed independently of each other.
3. Favoring a male applicant with respect to
hiring where the particular job can equally be
handled by a woman; and
4. Favoring a male employee over a female
employee with respect to dismissal of
personnel
b) Stipulation Against Marriage
It shall be unlawful for the employer:
1. To require as a condition of employment or
continuation of employment that a woman
employee shall not get married;
2. To stipulate expressly or tacitly that upon
getting married, a woman employee shall be
deemed resigned or separated
3. To actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee
merely by reason of her marriage (Labor
Code, Art. 136)
1. Philippine Telegraph and Telephone
Company v. NLRC (G.R. No. 118978, 1997)
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. 
 nature might compromise the interests of the
2. Star Paper Corp. v. Simbol, (G.R. No.
164774, 2006)
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”: 
 When the employer can prove that the
i) New applicants will not be allowed to be
hired if in case he/she has [a] relative, up to
LABOR LAW
[the] 3rd degree of relationship, already
employed by the company. 

ii) 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 (G.R.
No. 162994, Sept. 17, 2004)
- 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 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
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.
Bona fide occupational qualification
exception
reasonable demands of the business require a
distinction based on marital status and there is no
better available or acceptable policy which would
better accomplish the business purpose, an
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employer may discriminate against an employee
based in the identity of the employee’s spouse.
(Star Paper Corp. vs. Simbol, G.R. No. 164774,
2006)
The Court sustained the validity of employer
policy prohibiting an employee from having a
personal or marital relationship with an employee
of a competitor. The prohibition was reasonable
under the circumstances because relationships of
such nature might compromise the interests of
the company. (Duncan Association of Detailmen
v. Glaxo Wellcome, G.R. no. 162994, 2004)
Classification of Certain Women Workers
Any woman who is permitted or suffered to work,
with or without compensation, in any night club,
cocktail lounge, massage clinic, bar or similar
establishments under the effective control or
supervision of the employer for a substantial
period of time as determined by the Secretary of
Labor and Employment, shall be considered as
an employee of such establishment for purposes
of labor and social legislation. (Labor Code, Art.
138)
c) Prohibited Acts
Art. 137 Prohibited Acts (DEP-R-TeC)
It is unlawful for any employer:
a. To Deny any woman the benefits provided for
under the Code
b. To discharge any woman employed by him
for the purpose of preventing such woman
from Enjoying the maternity leave, facilities
and other benefits provided under the Code
c. To discharge such woman employee on
account of her Pregnancy, or while on leave
or in confinement due to her pregnancy (Del
Monte v. Velasco, G.R. No. 153477 (March 6,
2007).
d. To discharge or refuse the admission of such
woman upon Returning to her work for fear
that she may be pregnant
e. To discharge any woman or child or any other
employee for having filed a complaint or
having Testified or being about to testify
under the Code
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f. To require as a Condition for a 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 her marriage
e) Facilities for Women
The DOLE Secretary may require employers to:
• Provide seats proper for women and permit
them to use such seats when they are free
from work and during working hours,
provided they can perform their duties in this
position without detriment to efficiency
• Establish separate toilet rooms and lavatories
for men and women and provide at least a
dressing room for women
• Establish a nursery in a workplace for the
benefit of the women employees therein
• Determine appropriate minimum age and
other standards for retirement or termination
in special occupations such as those of flight
attendants and the like (Labor Code, Art. 132)
Family Planning Services; Incentives for
Family Planning
Employers who habitually employ more than 200
workers in any locality shall provide free family-
planning services to their employees and their
spouses which shall include but not limited to, the
application or use of contraceptives (Labor Code,
Art. 134)
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IV. MINORS

ALLOWABLE WORK FOR MINORS

Below 15 NOT employable,

EXCEPT:
1. When the child works directly under the sole responsibility of his/her parents/legal
guardian and where only members of his/her family are employed, under the ff.
conditions:
• employment does not endanger the child’s life, safety, health and morals
• employment does not impair the child’s normal development; and
• the parent/legal guardian provides the child with primary/secondary
education
2. When the child’s employment or participation in public entertainment or information
through cinema, theater, radio or television is essential, provided that:
• the employment contract is concluded by the child’s parents/legal guardian,
with the express agreement of the child concerned, if possible, and the
approval of the DOLE
• the following requirements are complied with:
o employer shall ensure protection, health, morals, and normal
development of the child
o employer shall institute measures to prevent child’s exploitation /
discrimination taking into account the system and level of remuneration,
duration, and arrangement of working time
o employer shall formulate and implement a continuing program for
training and skills acquisition of the child, subject to approval and
supervision of competent authorities (as amended by RA 9231)

In these two cases: employer must first secure a work permit from the DOLE before
engaging the child

Note: This also applies to those 15- below 18 group

15 – ALLOWED ONLY in: non-hazardous or non-deleterious undertakings
Below 18
“Hazardous Workplaces”
1. Nature of the work exposes the workers to dangerous environmental elements,
contaminants or work conditions
2. Workers are engaged in construction work, logging, fire-fighting, mining, quarrying,
blasting, stevedoring, dock-work, deep sea fishing, and mechanized farming
3. Workers are engaged in the manufacture or handling of explosives and other
pyrotechnic products
4. Exposed to or use of heavy power-driven machinery or equipment
5. Workers use or are exposed to power-driven tools

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Regulation of working hours of a child health, safety or morals of children, such that
it:
15 AND a) Debases, degrades or demeans the
AGE BELOW 15
BELOW 18 intrinsic worth and dignity of a child
Not more Not more as a human being; or
DAY
than 4 hours than 8 hours b) Exposes the child to physical,
Not more Not more emotional or sexual abuse, or is
WEEK than 20 than 40 found to be highly stressful
hours hours psychologically or may prejudice
8pm to 6am 10pm to morals; or
of the 6am of the c) Is performed underground,
PROHIBITION underwater or at dangerous heights;
following following
day day or
d) Involves the use of dangerous
Employment of the child in public machinery, equipment and tools
entertainment (please refer to the table above) such as power-driven or explosive
power-actuated tools; or
Prohibition on the employment of children in e) Exposes the child to physical danger
certain undertaking and certain such as, but not limited to the
advertisements dangerous feats of balancing,
NO CHILD shall be employed as a model in any physical strength or contortion, or
advertisement directly/indirectly promoting which requires the manual transport
alcoholic beverage, intoxicating drinks, tobacco of heavy loads; or
and its byproducts, gambling or any form of f) Is performed in an unhealthy
violence or pornography. (Sec. 5) environment exposing the child to
hazardous working conditions,
Prohibition against worst forms of child labor elements, substances, co-agents or
“Worst forms of child labor” refers to: processes involving ionizing,
1. All forms of slavery, as defined under the radiation, fire, flammable
"Anti-trafficking in Persons Act of 2003", or substances, noxious components
practices similar to slavery such as sale and and the like, or to extreme
trafficking of children, debt bondage and temperatures, noise levels, or
serfdom and forced or compulsory labor, vibrations; or
including recruitment of children for use in g) Is performed under particularly
armed conflict; or difficult conditions; or
2. The use, procuring, offering or exposing of a h) Exposes the child to biological
child for prostitution, for the production of agents such as bacteria, fungi,
pornography or for pornographic viruses, protozoans, nematodes and
performances; or other parasites; or
3. The use, procuring or offering of a child for i) Involves the manufacture or handling
illegal or illicit activities, including the of explosives and other pyrotechnic
production and trafficking of dangerous drugs products. (RA 9231, Sec. 12-D)
and volatile substances prohibited under
existing laws; or
4. Work which, by its nature or the
circumstances in which it is carried out, is
hazardous or likely to be harmful to the

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V. KASAMBAHAY
Coverage
This Act applies to all domestic workers
employed and working within the country.
a) Definition
Domestic worker or “Kasambahay” refers to
any person engaged in domestic work within an
employment relationship such as, but not limited
to, the following: general househelp, nursemaid
or “yaya”, cook, gardener, or laundry person, but
shall exclude any person who performs domestic
work only occasionally or sporadically and not on
an occupational basis. (R.A. No. 10361, Sec.
2[d])
b) Benefits accorded to househelpers
Rights and privileges of domestic worker:
a. The domestic worker shall not be subjected
to any kind of abuse or any form of physical
violence or harassment or any act tending to
degrade his or her dignity.
b. The employer shall provide for the basic
necessities of the domestic worker to include
at least three (3) adequate meals a day and
humane sleeping arrangements that ensure
safety.
c. Respect for the privacy of the domestic
worker
Employment contract
An employment contract shall be executed by
and between the domestic worker and the
employer before the commencement of the
service in a language or dialect understood by
both parties and shall include the following:
1. the kasambahay's duties and responsibilities
2. period of employment
3. compensation
4. authorized deductions
5. working conditions
6. Termination of employment
7. any other lawful condition agreed upon by
both parties. (Sec. 11)
Note: A kasambahay assigned to work in a
commercial, industrial or agricultural enterprise,
LABOR LAW
will be entitled to the applicable minimum wage
for agricultural or non-agricultural workers.
Pre-employment requirements:
1. Medical certificate or a health certificate
issued by a local government health officer
2. Barangay and police clearance
3. NBI clearance
4. Duly authenticated birth certificate or if not
available, any other document showing the
age of the domestic worker such as voter’s
identification card, baptismal record or
passport. (Sec. 12)
Terms and conditions of employment
1. Minimum Wage
• Those employed in the National Capital
Region – P2,500 a month
• Those employed in chartered cities and
first class municipalities – P2,000 a month
• Those employed in other municipalities –
P1,500 a month
2. Rest period
• Daily rest period – aggregate of 8 hours
per day
• Weekly rest period - at least 24
consecutive hours of rest in a week
3. Thirteenth month pay
• The domestic worker is entitled to 13th
month pay as provided for by law
4. Leave benefits
• A domestic worker who has rendered at
least 1 year of service shall be entitled to
an annual service incentive leave of 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.
5. Social and other benefits
• A domestic worker who has rendered at
least 1 month of service shall be covered
by the Social Security System (SSS), the
Philippine Health Insurance Corporation
(PhilHealth), and the Home Development
Mutual Fund or Pag-IBIG, and shall be
entitled to all the benefits in accordance
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with the pertinent provisions provided by
law.
• Premium payments or contributions shall
be shouldered by the employer. However,
if the domestic worker is receiving a wage
of P5,000.00 and above per month, the
domestic worker shall pay the
proportionate share in the premium
payments or contributions.
c) Termination of Employment
A. Initiated by the domestic worker
1. Verbal or emotional abuse of the domestic
worker by the employer or any member of the
household
2. Inhuman treatment including physical abuse
of the domestic worker by the employer or
any member of the household
3. Commission of a crime or offense against the
domestic worker by the employer or any
member of the household
4. Violation by the employer of the terms and
conditions of the employment contract and
other standards set forth under this law
5. Any disease prejudicial to the health of the
domestic worker, the employer, or member/s
of the household
6. Other causes analogous to the foregoing
(Sec. 32)
Note: If the domestic worker leaves without
justifiable reason, any unpaid salary due not
exceeding the equivalent 15 days work shall be
forfeited. In addition, the employer may recover
from the domestic worker costs incurred related
to the deployment expenses, provided that the
service has been terminated within 6 months from
the domestic worker’s employment.
B. Initiated by the employer
1. Misconduct or willful disobedience by the
domestic worker of the lawful order of the
employer in connection with the former’s
work
2. Gross or habitual neglect or inefficiency by
the domestic worker in the performance of
duties
LABOR LAW
3. Fraud or willful breach of the trust reposed by
the employer on the domestic worker
4. Commission of a crime or offense by the
domestic worker against the person of the
employer or any immediate member of the
employer’s family
5. Violation by the domestic worker of the terms
and conditions of the employment contract
and other standards set forth under this law
6. Any disease prejudicial to the health of the
domestic worker, the employer, or member/s
of the household
7. Other causes analogous to the foregoing
(Sec. 34)
d) Reliefs for unjust termination
If the domestic worker is unjustly dismissed, the
domestic worker shall be paid the compensation
already earned plus the equivalent of 15 days
work by way of indemnity.
e) Penalties
Any violation of R.A. No. 10391 declared unlawful
shall be punishable with a fine of not less than
Ten thousand pesos (P10,000.00) but not more
than Forty thousand pesos (P40,000.00) without
prejudice to the filing of appropriate civil or
criminal action by the aggrieved party.
VI. HOMEWORKERS
Homeworker
Applies to any person who performs industrial
homework for an employer, contractor or sub-
contractor
Industrial Homework
Industrial Homework is 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 or
methods of work. (D.O. No. 05-92, Sec. 2[a])
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Industrial Homeworker
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 (Labor Code, Art. 154)
Employer of Homeworker
Includes any person, natural or artificial who, for
his account or benefit, or on behalf of any person
residing outside the country, directly or indirectly,
or through an employee, agent contractor, sub-
contractor or any other person:
• 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
directions
• Sells any goods, articles or materials to be
processed or fabricated in or about a home
and then re-buys them after such processing
or fabrication, either by himself or through
some other person (D.O. No. 05-92)
Rights and benefits accorded to
homeworkers
Immediately upon receipt of the finished goods or
articles, the employer shall pay the homeworker
of the contractor or subcontractor, as the case
may be, for, the work performed less
corresponding homeworkers’ share of SSS,
MEDICARE AND ECC premium contributions
which shall be remitted by the
contractor/subcontractor or employer to the SSS
with the employer’s share. However, where
payment is made to a contractor or subcontractor,
the homeworker shall likewise be paid
immediately after the goods or articles have been
collected from the workers. (D.O. No. 05-92, Sec.
6)
Conditions for deductions from
homeworker’s earnings
No employee, contractor, or sub-contractor shall
make any deduction from the homeworker's
earnings for the value of materials which have
LABOR LAW
been lost, destroyed, soiled or otherwise
damaged unless the following conditions are met:
• The homeworker concerned is clearly shown
to be responsible for the loss or damage;
• The employee is given reasonable
opportunity to show cause why deductions
should not be made;
• The amount of such deduction is fair and
reasonable and shall not exceed the actual
loss or damages; and
• The deduction is made at such rate that the
amount deducted does not exceed 20% of
the homeworker's earnings in a week.
Liability of employer and contractor
Whenever an employer shall contract with
another for the performance of the employer's
work, it shall be the duty of such employer to
provide in such contract that the employees or
homeworkers of the contractor and the latter's
sub-contractor shall be paid in accordance with
the provisions of this Rule.
In the event that such contractor or sub-
contractor fails to pay the wages or earnings of
his employees or homeworkers, such employer
shall be jointly and severally liable with the
contractor or sub-contractor to the workers of the
latter, to the extent that such work is performed
under such contract, in the same manner as if the
employees or homeworkers were directly
engaged by the employer.
Prohibitions for Homework
1. Explosives, fireworks and articles of like
character
2. Drugs and poisons
3. Other articles, the processing of which
requires exposure to toxic substance
VII. SOLO PARENTS
See separate discussion on page 58.
VIII NIGHT WORKERS
R.A. No. 10151
An Act Allowing the Employment of Night
Workers, Thereby Repealing Articles 130 and
131 of Presidential Decree Number Four
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Hundred Forty-Two, as amended, otherwise
known as the Labor Code of the Philippines, 2011
This new Republic Act provides that women can
now work on night time.
Coverage
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
Secretary of Labor and Employment, after
consulting the workers’ representative/labor
organizations and employers.
Night Worker means any employed person
whose work requires performance of a
substantial number of hours of night work which
exceeds a specified limit. This limit shall be fixed
by the Secretary of Labor after consulting the
workers’ representative/labor organizations and
employers.”
Health Assessment
At their request, workers shall have the right to
undergo a health assessment without charge and
to receive advice on how to reduce or avoid
health problems associated with their work:
a. Before taking up an assignment as a night
worker;
b. At regular intervals during such an
assignment; and
c. If they experience health problems during
such an assignment which are not caused by
factors other than the performance of night
work.
With the exception of a finding of unfitness for
night work, the findings of such assessments
shall not be transmitted to others without the
workers’ consent and shall not be used to their
detriment.
Mandatory Facilities
Suitable first-aid facilities shall be made available
for workers performing night work, including
LABOR LAW
arrangements where such workers, where
necessary, can be taken immediately to a place
for appropriate treatment. The employers are
likewise required to provide safe and healthful
working conditions and adequate or reasonable
facilities such as sleeping or resting quarters in
the establishment and transportation from the
work premises to the nearest point of their
residence subject to exceptions and guidelines to
be provided by the DOLE.
Transfer
Night workers who are certified as unfit for night
work, due to health reasons, shall be transferred,
whenever practicable, to a similar job for which
they are fit to work. If such transfer to a similar job
is not practicable, these workers shall be granted
the same benefits as other workers who are
unable to work, or to secure employment during
such period. A night worker certified as
temporarily unfit for night work shall be given the
same protection against dismissal or notice of
dismissal as other workers who are prevented
from working for reasons of health.
Compensation
The compensation for night workers in the form of
working time, pay or similar benefits shall
recognize the exceptional nature of night work.
Social Services
Appropriate social services shall be provided for
night workers and, where necessary, for workers
performing night work.
Night Work Schedules
Before introducing work schedules requiring the
services of night workers, the employer shall
consult the workers’ representatives/labor
organizations concerned on the details of such
schedules and the forms of organization of night
work that are best adapted to the establishment
and its personnel, as well as on the occupational
health measures and social services which are
required. In establishments employing night
workers, consultation shall take place regularly.
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CBA provision vis-à-vis overtime work
CBA may stipulate higher overtime pay rate.
The basis of computation of overtime pay beyond
that required by Art. 87 of the Labor Code must
be the collective agreement. It is not for the court
to impose upon the parties anything beyond what
they have agreed upon which is not tainted with
illegality. On the other hand, where the parties fail
to come to an agreement, on a matter not legally
required, the court abuses its discretion when it
obliges any of them to do more than what is
legally obliged. (PNB v. PNB Employee’s Assoc.,
G.R. No. L-30279, 1982).
IX. PREGNANT WOMAN
Measures shall be taken to ensure that an
alternative to night work is available to women
workers who would otherwise be called upon to
perform such work –
1. Before or after childbirth, for a period of at
least 16 weeks, which shall be divided
between the time before and after childbirth;
2. For additional periods in respect of which a
medical certificate is produced stating that
said additional periods are necessary for the
health of the mother or the child –
a. During pregnancy
b. Determined by DOLE after
consultation with employer and
labor representatives
During the periods referred to in this article:
a. A woman worker shall not be dismissed or
given notice of dismissal, except for just or
authorized causes provided for in this Code
that are not connected with pregnancy,
childbirth and childcare responsibilities.
b. A woman worker shall not lose the benefits
regarding her status, seniority, and access to
promotion which may attach to her regular
night work position.
Pregnant women are allowed to work at night only
if a competent physician other than the company
physician shall certify their fitness to render night
work, and specify the period of the pregnancy that
they can safely work.
LABOR LAW
The measures referred to in this article may
include transfer to day work where this is
possible, the provision of social security benefits
or an extension of maternity leave. The provisions
of this article shall not have the effect of reducing
the protection and benefits connected with
maternity leave under existing laws.
X. MIGRANT WORKERS
Migrant Workers (R.A. No. 8042 or the Migrant
Workers and Overseas Filipinos Act of 1995,
as amended by R.A. No. 10022)
a) Claims for Compensability of Work-Related
Death, Sickness, or Disability
See separate discussion
XI. SECURITY GUARDS
Rights of security guards and other private
security personnel
All security guards and other private security
personnel, whether deployed or assigned as
reliever, seasonal, week-ender, or temporary,
shall be entitled to all the rights and privileges as
provided for in the Labor Code, which shall
include:
a. Safe and healthful working conditions;
b. Labor standards as may be provided in
the Service Agreement or under the
Labor Code;
c. Retirement benefits under RA 7641, RA
1161, as amended by RA 8282, and
retirement plans of the security service
contractor, if any;
d. Social security and welfare benefits;
e. Right to self-organization and collective
bargaining, subject to the provisions of
existing laws; and
f. Security of tenure. (Sec. 6, DO 150-16)
PNP Examination required for employment
The security guards and other private security
personnel in the employ of any security service
contractor (SSC)/private security agency (PSA)
should be duly licensed and must have passed
the physical and neuro-psychiatric examination
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and drug test required by the PNP for pre- paraphernalia, such may only be imposed
employment and for continued employment. once.
Expenses for these examinations and test shall The amount of the bond should not be more than
be shouldered by the security guards. 5% of the amount of the firearm issued to the
Any additional test may be required at the security guard and other private security
expense of the requesting party. (Sec. 7.1, DO personnel. The said cash bond, less the cost of
150-16) damage or loss of firearms or paraphernalia due
to the fault of the security guard, shall be refunded
Minimum wage to the security guards and other private security
Unless a higher minimum wage is agreed upon personnel within 15 calendar days from
by the parties, the security guards and other severance of employment.
private security personnel shall be entitled to
receive a salary of not less than the minimum Prohibition against wage deductions for
wage rate prescribed for non-agricultural sector deduction from deposits.
or industry in the region where he/she is In the event that a SSC/PSA requires a cash
assigned, regardless of the nature of business of deposit from its employees, the maximum
the principal. (Sec. 7.3, DO 150-16) amount shall not exceed the employee’s 1 month
In case of transfer, the wage rate most favorable basic salary. The said cash deposit may be
to the security guards and other private security deducted from the employee’s wages in an
personnel shall apply. (Sec. 7.4, DO 150-16) amount which shall not exceed 20% of the
employee’s wages in a week. The full amount of
Deductions from salary cash deposit deducted shall be returned to the
No deduction shall be made from the salary of the employee within 10 days from his/her separation
security guards and other private security from the service. (Sec. 8, DO 150- 1)
personnel, except for:
a. SSS contribution; ———— end of topic ————
b. Pag-IBIG contribution;
c. PhilHealth contribution;
d. Withholding tax from income, provided a
e. proper withholding tax receipt is issued to the
employee before the filing of income tax
return every year;
f. Union dues, if authorized in writing;
g. Agency fees which may be collected from
employees who are not members of
thebargaining agent but accept benefits
under
h. the collective bargaining agreement (CBA);
and
i. Other deduction as may be authorized in
writing by the security guard and other private
security personnel for payment to a third
person and the employer agrees to do so,
provided that the latter does not receive any
pecuniary benefit, directly or indirectly, from
the transaction.
j. In case an SSC/PSA requires its security
guard and other private security personnel to
post a bond for use of firearms and other

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 SOCIAL
LEGISLATION
Labor Law
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SOCIAL WELFARE LEGISLATION

TOPIC OUTLINE UNDER THE SYLLABUS

A. SSS LAW (R.A. NO. 8262)

I. Coverage and Exclusions
II. Dependents; Beneficiaries
III. Benefits

B. GOVERNMENT SERVICE INSURANCE

SYSTEM LAW
I. Coverage and Exclusions
II. Dependents; Beneficiaries
III. Benefits

C. LIMITED PORTABILITY LAW

D. DISABILITY AND DEATH BENEFITS

I. Labor Code
II. Employees Compensation and State
Insurance Fund
III. POEA-Standard Employment
Contract

E. SOLO PARENTS
F. KASAMBAHAY
G. AGRARIAN REFORM
H. UNIVERSAL HEALTH CARE

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A. SSS LAW (R.A. NO. 8262)

B. GOVERNMENTS SERVICE INSURANCE SYSTEM (GSIS) LAW
B. GOVERNMENT
A. SOCIAL SECURITY C. EMPLOYEE’S
SERVICE INSURANCE
ACT OF 1997 (R.A. No. COMPENSATION LAW
ACT OF 1997
8282) (P.D. No. 626)
(R.A. No. 8291)
1. Employer – any 1. Employer – the 1. Employer - any
person, natural or national government, person, natural or
judicial, domestic or its political juridical, employing
foreign who carries subdivisions, the services of the
on in the Philippines branches, agencies or employee.
any trade, business, instrumentalities,
industry undertaking, including GOCCs, 2. Employees –
or activity of any kind and financial belonging to either of
and uses the institutions with the following sectors:
services of another original charters, the
person who is under constitutional Public sectors,
his orders as regards commissions and the comprised of the
employment. judiciary following:
(a) Employed
*EXCEPT: Government 2. Employee – any workers covered by
and any of its political person receiving the GSIS, including
subdivisions, branches compensation while in members of the AFP;
and instrumentality, service of an (b) Elective officials
COVERED including GOCCs, i.e., employer as defined who are receiving
SCOPE those under GSIS. herein, whether by regular salary;
election or (c) Those employed
2. Employee – any appointment as Casual,
person who performs Contractual,
services for an Emergency,
employer who Temporary or
receives Substitute Employees
compensation for (Labor Code, Art.
such services, where 173[g])
there is an employer-
employee Private sector,
relationship. comprising all the
employed workers
3. Self-Employed – who are covered by
considered both the SSS;
employer and
employee. Overseas Filipinos
(ECL Rules, Sec. 5,
Rule 1)
1. Legal spouse entitled for support; 1. Legitimate spouse
DEPENDENTS 2. Child, whether legitimate, legitimated, legally living with the
adopted or illegitimate; employee

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3. Parents receiving regular support from the 2. Child, whether

member. legitimate, legitimated
or legally adopted;
3. Parents of said
employee wholly
dependent upon him
for regular support.

1. Unmarried;
Not gainfully employed;

2. Has not reached 21 2. Not over age of 2. Not over 21 years of

CONDITIONS years of age; OR majority; OR age provided that he is
FOR CHILD TO enrolled in school; OR
BE CONSIDERED 3. Incapable of supporting himself either physically 3. Over twenty-one years
DEPENDENT or mentally prior to 21 years of age or age of of age provided that he is
majority, as the case may be congenitally incapacitated
and incapable of self-
support physically or
mentally
a. Dependent Spouse, a. Legal Dependent a. Dependent Spouse
until remarriage; AND Spouse until until he remarries; AND
b. Dependent Legitimate remarriage ;AND b. Dependent Children
BENEFICIARIES
or Legitimated or b. Dependent Children who are the primary
1. PRIMARY
Legally Adopted and beneficiaries.
Illegitimate Children

a. Dependent Parents a. Dependent Parents a. Dependent Parents

b. Absent primary and AND b. Illegitimate Children
secondary b. Legitimate and Legitimate
beneficiaries, any descendants, subject Descendants, who are the
2. SECONDARY other person to restrictions on secondary beneficiaries
designated by dependent children
member as
secondary
beneficiary
As to DEATH
BENEFITS, if no
3. OTHERS beneficiary qualifies
under the Act, benefits
shall be paid to Legal
Heirs in accordance with
Law of Succession
1. Monthly Pension 1. Monthly Pensions 1. Medical
2. Dependents Pension 2. Separation 2. Temporary Total
BENEFITS 3. Retirement 3. Unemployment or Disability
4. Death Involuntary Separation 3. Permanent Total
5. Permanent Disability 4. Retirement Disability

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6. Funeral 5. Disability 4. Permanent Partial

7. Sickness 6. Survivorship Disability
8. Maternity (ONLY 1ST 7. Funeral 5. Death
FOUR DELIVERIES 8. Life Insurance
OR 9. Loan Grants
MISCARRIAGES)
*EXCEPT Judiciary and
Constitutional
Commissions who shall
have life insurance only
a. All employees not All employees receiving a. All employers;
over 60 years of compensation who have b. Employees not over
age and their not reached compulsory 60 years old;
employers; retirement age, c. Employees over 60
(effective date: on irrespective of years old and paying
the first day of his employment status contributions;
COVERAGE operation and that of d. Employee coverable
the employee on the by both the GSIS and
1. Compulsory day of his SSS are compulsorily
employment) covered by both
b. Self-employed Systems; and
persons, as may be e. Filipino employees
determined by the employed abroad
Commission under subject to prescribed
such rules and EC regulations
regulations as it may (Labor Code, Art. 175;
prescribe, including, Amended Rules on
but not limited to: Employees’
i. all self-employed Compensation, Rule 1,
professionals; Sec. 2)
ii. partners and
single-proprietors Compulsory coverage of
of business; the employer shall take
iii. actors and effect on the first day of
actresses, his operation.
directors,
scriptwriters and Compulsory coverage of
news the employee shall take
correspondents effect on the first day of
not employees; his employment. (ECL
iv. professional Rules, Sec. 6, Rule 1)
athletes, coaches,
trainers and
jockeys, and
individual farmers
and fishermen;

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(effective date: on
registration with the
SSS)
c. Domestic helpers
60 years of age and
below, provided,
that their monthly
income is not less
than P1,000;
(effective date: upon
rendering at least 1
month of service)
a. Filipinos recruited
by foreign-based
employers for
employment abroad;
b. Employee
separated from
employment to
maintain his right to
full benefits;
c. Self-employed who
realizes no income
for a certain month;
d. Spouses who
devote full time to
managing household
and family affairs,
unless specifically
2. VOLUNTARY mandatorily covered.

*BY AGREEMENT:
Any foreign government,
international
organization or wholly
owned instrumentality
employing workers in the
Philippines or employing
Filipinos outside the
Philippines, may enter
agreement with
Philippines for inclusion
of such employees in
SSS EXCEPT those
already covered by their
respective civil service
retirement system.

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1. Employment 1. Members of the AFP

purely casual and and PNP, subject to
not for the purpose the condition that they
of occupation, or must settle first their
business of the financial obligation
employer with the GSIS;
2. Service performed 2. Contractual
on or in connection employees, who
with alien vessel, if have no employer-
employed when employee relationship
such vessel is with the agencies they
outside of serve;
Philippines 3. Uniformed personnel
3. Employees of of the Bureau of Fire
Philippine Protection (BFP);
government or 4. Uniformed personnel
instrumentality or of the Bureau of Jail
agency thereof Management and
4. Service performed Penology (BJMP);
in the employ of a 5. Barangay and
foreign Sanggunian Officials
government, or who are not receiving
EXCLUSIONS international fixed monthly
FROM organizations, or compensation;
COVERAGE wholly owned 6. Employees who do
instrumentality not have monthly
employing workers regular hours of work
in the Philippines or and are not receiving
employing Filipinos fixed monthly
outside of the compensation
Philippines (IRR of R.A. No. 8291,
5. Services performed Rule II, Sec 3, Par. 2)
by temporary
employees and
other employees
excluded by SSS
regulation;
employees of bona
fide independent
contractors shall not
be deemed
employees of the
employer engaging
the services of an
independent
contractor

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All actual remuneration The basic pay or salary All payments made for
for employment, received by an employee, income benefits, and
including the mandated pursuant to his medical or related
cost-of-living allowance, election/appointment, benefits.
the cash value of any excluding per diems,
COMPENSATION remuneration paid in any bonuses, overtime pay,
medium other than cash honoraria, allowances
EXCEPT that part of the and any other
remuneration in excess emoluments received in
of the maximum salary addition to the basic pay
credit
Non-work connected Work-connected exempt
disability, sickness, from liability where
maternity, death and old permanent disability due
age and other to his grave misconduct,
BASIS OF CLAIM
contingencies resulting habitual intoxication, or
in loss of income or willful intention to kill
financial burden (Sec. 2) himself or another (Sec.
15-17)
1. Employer’s 1. Member shall Employer's obligation to
contribution on his continue to be a pay the monthly
account ceases at member; and contribution arising from
the end of the month 2. Member shall be that employment shall
of separation; entitled to whatever cease at the end of the
2. Employee’s benefits he has month of contingency
obligation to qualified to in the and during such months
contribute also event of any that he is not receiving
ceases at the end of contingency wages or salary.
EFFECTS OF
the month of compensable under
SEPARATION
separation; this Act.
FROM
3. Employee shall be
EMPLOYMENT
credited with all
contributions paid on
his behalf and
entitled to benefits;
4. Employee may
continue to pay the
total contributions to
maintain his right to
full benefits.
A. Employer: Employer: A. Any physician
Report immediately to Report to GSIS the attending an injured or
SSS the names, ages, names, employment sick employee shall report
REPORTING civil status, occupations, status, positions, salaries concerning his condition
REQUIREMENTS salaries and dependents of the employee and such or treatment, and
of all his covered other matter as thereafter, make available
employees. determined by the GSIS. to the employee or the

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B. Self-employed: System such medical

Report to SSS within 30 information.
days from the first day of
his operation, his name, B. Within five days after
age, civil status, entry in the logbook, the
occupation, average employer shall report to
monthly net income and the System only those
his dependents. contingencies it deems to
be work-connected.
1. Employer’s contributions 1. Employer’s
2. Employee’s/member’s contributions contributions
FUNDING 2. Government
guarantee

EXEMPTION Property, assets, and revenues of SSS and GSIS are State Insurance Fund and
FROM TAX/ all exempt from taxes, and all benefits paid by SSS or all its assets shall be
LEGAL GSIS shall likewise be exempt from taxes, exempt from any tax, fee,
PROCESS/ assessments, fees, charges, and duties of all kind charge, levy, or customs
LIEN or import duty
Dispute arising from: Any dispute arising under Dispute arising from:
1. Coverage this Act and other laws 1. Coverage
2. Benefits administered by GSIS 2. Benefits
3. Contributions 3. Contributions
4. Penalties Jurisdiction: GSIS 4. Penalties
5. Any matters related 5. Any matter related
thereto When decision made: 30 thereto
days from receipt of the
Jurisdiction: Social hearing officer’s findings Jurisdiction: SSS or GSIS,
Security Commission and recommendations or as the case may be.
DISPUTE
30 days after submission
SETTLEMENT
When decision made: for decision Appeal:
Mandatory period of 20 The Commission - decide
days from submission of Appeal: within twenty working
evidence CA – Rule 43, Section 31 days from the submission
SC – Rule 45 of the evidence.
Appeal:
CA – questions of law SC – questions of law only
and facts
SC – questions of law
only
20 years from: 4 years from date of Claim for compensation
1. time delinquency is contingency EXCEPT for - 1 year from notice to the
known; life and retirement employer
PRESCRIPTIVE
2. time the assessment benefits
PERIOD
is made by the SSS; All money claims arising
or from employer-employee
relations accruing during

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3. time the benefit the effectivity of this Code

accrues. - within 3 years from the
(as the case may be) time the cause of action
accrued

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EMPLOYEE’S COMPENSATION LAW [ECL]
(P.D. No. 626)
Definition of Injury, Accident, and Death
1. Injury: Any harmful change in the human
organism from any accident arising out of
and in the course of employment. (ECC v.
Sanico, G.R. No. 134028, 1999)
2. “Arising out of” refers to the origin or
cause of the accident. “In the course of
employment” refers to the injury that takes
place within the period of employment, at
the place where the employee reasonably
may be, and while fulfilling his duties or is
engaged in doing something incidental
thereto (Iloilo Dock & Engineering Co. v.
WCC, G.R. No. L-26341, 1968)
3. “Accident” is an unintentional and
unforeseen injurious occurrence that which
happens by chance or fortuitously without
intention and design and which is
unexpected, unusual, and unforeseen
(Sunga v. Virgen Shipping Corp., G.R. No.
198640, 2014)
An “assault” although resulting from a
deliberate act of the slayer, is considered
an “accident” under the law, since the word
“accident” is intended to indicate that “the
act causing the injury shall be casual or
unforeseen, an act for which the injured
party is not legally responsible.” (Taller
Vda. de Nava v. Ynchausti Steamship,
G.R. No. 35741, 1932)
4. “Death” is the loss of life resulting from
injury or sickness (Labor Code, Art. 173[m])
5. “Sickness” is any illness defined accepted
as occupational disease listed by the
Commission, or caused by employment,
subject to proof that the risk of contracting
the same is increased by work conditions
(Labor Code, Art. 173[i])
LABOR LAW
6. “Disability” means loss or impairment of a
physical or mental function resulting from
injury or sickness (Labor Code, Art. 173[n])
Abolishment of Presumption of
Compensability (doctrine under Workman’s
Compensation Act, predecessor law of ECL)
While the presumption of compensability and
theory of aggravation under the Workmen's
Compensation Act may have been abandoned
under the New Labor Code, it is significant that
the liberality of the law in general in favor of the
workingman still subsists. (Lazo v. ECC, G.R. No.
78167, 1990)
Rules on Compensability
1. For the injury and the resulting disability or
death to be compensable, the injury must
be the result of accident arising out of and
in the course of the employment (ECC
Resolution No. 2799, 1984); and
2. For the sickness and the resulting disability
or death to be compensable, the sickness
must be the result of an occupational
disease listed under the Annex “A” of the
Rules dealing with occupational diseases
with the conditions set therein satisfied.
Otherwise, proof must be shown that the
risk of contracting the disease is increased
by the working conditions (ECL Rules, Sec.
1, Rule III)
3. Only injury or sickness that occurred on or
after January 1, 1975 and the resulting
disability or death shall be compensable
(ECL Rules, Sec. 1, Rule III)
Limitations – No compensation
No compensation shall be allowed to the
employee or his dependents when the injury,
sickness, disability, or death was occasioned by
any of the following:
1. His intoxication;
2. His willful intention to injure or kill himself or
another; or
3. His notorious negligence (Labor Code, Art.
178; ECL Rules, Sec. 1, Rule IV)
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Sufficient proof of insanity or mental sickness
may be presented to negate the requirement of
willfulness as a matter of counter-defense (Agile
Maritime Resources v. Siador, G.R. No. 191034,
2014)
Intoxication alone is not sufficient to defeat the
recovery of compensation when intoxication does
not incapacitate the employee from performing
his functions and duties and from following his
occupation (De Yohanon v. Balena, G.R. No. L-
43641, 1977)
Direct Premises Rule
The accident should have occurred at the place
of work to be compensable.
General Rule: In the absence of special
circumstances, an employee injured in, going to
or coming from, his place of work is excluded from
the benefits of workmen’s compensation acts
(Iloilo Dock and Engineering Co. v. WCC, G.R.
No. L-26341, 1978)
Exceptions:
1. Where the employee is proceeding to or
from his work on the premises of his
employer;
2. Where the employee is about to enter or
about to leave the premises of his employer
by way of the exclusive or customary
means of ingress and egress;
3. Where the employee is charged, while on
his way to or from his place of employment
or at his home, or during his employment,
with some duty or special errand connected
with his employment; and
4. Where the employer, as an incident of the
employment, provides the means of
transportation to and from the place of
employment (Iloilo Dock and Engineering
Co. v. WCC, G.R. No. L-26341, 1978)
Street Peril Principle
1. The act of the employee of going to, or
coming from, the workplace, must have
been a continuing act, that is, he had not
been diverted therefrom by any other
LABOR LAW
activity; and he had departed from his usual
route to, or from, his workplace; or
2. An employee on a special errand that must
have been official and in connection with
his work (ECC Resolution No. 3914-A,
1988)
Proximate Cause Doctrine
The proximate legal cause is that acting first and
production the injury either immediately or by
setting others in motion, they constitute a natural
and continuous chain of events, each having a
close causal connection with its immediate
predecessor. (Azucena, The Labor Code with
Comments and Cases, Vol. 1, p. 529, 2016)
General Rule: Proximate cause resulting to
injury is an injury arising out of employment.
Exception: When independent intervening cause
ensues attributable to claimant’s fault.
24-Hour Duty Doctrine
Members of the national police by the nature of
their functions are technically on duty 24 hours a
day, except when they are on vacation leave.
The 24-hour duty doctrine should not be
sweepingly applied to all acts and circumstances
causing the death of a police officer but only to
those which, although not on official line of duty,
are nonetheless basically police service in
character. (Tancinco v. GSIS, G.R. No. 132916,
2001)
Incidents of Employment Doctrine
Acts which are reasonably incidental to the
employment are deemed arising out of such
employment, thus compensable
1. Acts of personal ministration for the comfort
or convenience of the employee;
2. Slight deviation from work, from curiosity,
or otherwise;
3. Acts for the benefit of the employer;
4. Acts in emergencies; and
5. Acts done to further the Goodwill of the
business. (Horovitz, 3 NACCA L.J. 28-30)
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Force majeure
General Rule: Employer is not responsible.
Exception: Positional and local risks doctrine
When one in the course of his employment is
reasonably required to be at a particular place at
a particular time and there meets an accident,
although one which any other person then and
there present would have meet irrespective of his
employment, that accident is one arising out of
the employment if the person is so injured.
(Azucena, The Labor Code with Comments and
Cases, Vol. 1, p. 552-553, 2016)
Assault of an Employee considered as an
Accident
An “assault” although resulting from a deliberate
act of the slayer, is considered an “accident”
under the law, since the word “accident” is
intended to indicate that “the act causing the
injury shall be casual or unforeseen, an act for
which the injured party is not legally responsible.”
(Taller Vda. de Nava v. Ynchausti Steamship,
G.R. No. 35741, 1932)
The death of an employee due to a murderous
assault is compensable when the same occurred
in the course of performance of official functions.
The motive of assault need not be established if
the covered employee sustained the injury while:
1. The employee was at the
assigned/designated workplaces; or
2. The employee was executing orders of the
employer, regardless of the time and place
of the incident
Rule on Injury or Death in the Course of
Assault
1. When the injured was the unlawful
aggressor, not compensable (Mabuhay
Shipping Services v. NLRC, G.R. No.
94167, 1991)
2. When the injured was a victim of the
assault and it occurred in the course of
performance of official functions,
compensable (Lentejas v. ECC, G.R. No.
89168, 1991)
LABOR LAW
Bunkhouse Rule
Where the employee is required to stay in the
premises or in quarters furnished by the
employer, injuries sustained therein are in the
course of employment regardless of the time the
same occurred. (Uy v. WCC, G.R. No. L-43389,
1980)
SICKNESS AND OCCUPATIONAL DISEASE
Conditions for Compensability of
Occupational Disease and Resulting
Disability or Death
1. His sickness was the result of an
occupational disease listed under Annex A
of the Rules of the Employees
Compensation; or
2. The risk of contracting the disease was
increased by his working conditions
(Barrios v. ECC, G.R. No. 148089, 2006)
Theory of Increased Risks
If the ailment is not included in the list of
occupational diseases, the claimant has the
burden of proving that the nature of the work
increased the risk of contracting the disease.
(Dabatian v. GSIS, G.R. No. 4721, 1987)
Where the cause of the disease is unknown, the
theory of increased risk is applicable (Panotes v.
ECC, G.R. No. L-64802, 1985)
“Increased Risk” Jobs
1. Keeping the peace or guarding property
2. Keeping or carrying of money or valuables
3. Expose employee to direct contact with
lawless and irresponsible people
4. Bus driver, taxi driver, or street car
conductor. (Batangas Transportation Co.
v. Vda de Rivera, G.R. No. L-7658, 1956)
5. Expose employee to illness; and
6. Prolonged sitting down and putting off
urination. (Barrios v. ECC, G.R. No.
148089 March 24, 2006)
Reasonable Proof of Connection
What the law requires is reasonable work
connection and not a direct causal relation. It is
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sufficient that the hypothesis on which workmen’s
claim is based is probable since probability, not
certainty, is the touchstone. (Castro-Garupa v.
ECC, G.R. No. 158268, 2006)
C. LIMITED PORTABILITY LAW
A covered worker who transfers employment
from one sector to another or is employed in both
sectors shall have his credible services or
contributions in both Systems credited to his
service or contribution record in each of the
Systems and shall be totalized for purposes of
old-age, disability, survivorship and other benefits
in case the covered member does not qualify for
such benefits in either or both Systems without
totalization: Provided, however, That overlapping
periods of membership shall be credited only
once for purposes of totalization. (Sec. 3, RA
7699)
All contributions paid by such member personally,
and those that were paid by his employers to both
Systems shall be considered in the processing of
benefits which he can claim from either or both
Systems: Provided, however, That the amount of
benefits to be paid by one System shall be in
proportion to the number of contributions actually
remitted to that System. (Sec. 4, RA 7699)
D. DISABILITY AND DEATH BENEFITS
1. TEMPORARY TOTAL DISABILITY
As a result of injury or sickness, the employee is
unable to perform any gainful occupation for a
continuous period not exceeding 120 days.
(Barko International v. Alcayno, G.R. No. 188190,
2014)
Amount of Benefits
Income benefit equivalent to 90% of his average
daily salary credit subject to the following:
1. Benefit shall not be less than P10 or more
than P90; not paid lower than 120 days
unless injury or sickness requires more
extensive treatment that lasts beyond 120
days not exceeding 240 days from the
onset of disability, in which case he shall be
paid benefit for Temporary Total Disability
LABOR LAW
during the extended period (P10 – P200
per day, maximum 120 days).
2. Benefit shall be suspended if employee
failed to submit monthly medical report
certified by attending physician. (Amended
Rules on Employees’ Compensation, Rule
X, Sec. 3)
Period of Relapse
The period covered by any relapse he suffers, or
recurrence of the illness, which results in
disability and is determined to be compensable,
shall be considered independent of, and separate
from, the period covered by the original disability.
Such a period shall not be added to the period
covered by his original disability (Amended Rules
on Employees’ Compensation, Rule X, Sec. 2[b])
2. PERMANENT TOTAL DISABILITY
In means incapacity to perform gainful work
which is expected to be permanent. This status
does not require a condition of complete
helplessness. Nor is it affected by the
performance of occasional odd jobs.
There is permanent total disability if as a result of
the injury or sickness, the employee is unable to
perform any gainful occupation for a continuous
period exceeding 240 days. (Abaya v. ECC, G.R.
No. 64255, 1989)
Test of Permanent Total Disability
The test of whether an employee suffers from
“permanent total disability” is a showing of the
capacity of the employee to continue performing
his work notwithstanding the disability he
incurred. (Vicente v. ECC, G.R. No. 85024, 1991)
Instances of Permanent Total Disability
1. Temporary total disability lasting
continuously for more than one hundred
twenty days, except as otherwise provided
for in the Rules;
2. Complete loss of sight of both eyes;
3. Loss of two limbs at or above the ankle or
wrist;
4. Permanent complete paralysis of two limbs;
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5. Brain injury resulting in incurable imbecility
or insanity; and
6. Such cases as determined by the Medical
Director of the System and approved by the
Commission. (Labor Code, Art. 198[c])
When temporary total disability becomes
permanent total disability
1. Declared by the company-designated
physician within 120 or 240 day treatment
period; or
2. In case of absence of such a declaration
either of fitness or permanent total
disability, upon the lapse of the 120 or 240
day treatment period, while the employee’s
disability continues and he is unable to
engage in gainful employment during such
period, and the company physician fails to
arrive at a definite assessment of the
employee’s fitness or disability (Alpha Ship
Management v. Calo, G.R. No. 192034,
2014)
If the company-designated physician fails to
make a full, complete and definitive assessment
beyond this period, the seafarer’s disability
becomes permanent and total. Without a valid
final and definitive assessment from the
company-designated physician, the employee’s
temporary and total disability became permanent
and total by operation of law. (Orient Hope
Agencies, Inc. v. Jara, G.R. No. 204307, June 6,
2018.)
An interim disability grading is merely an initial
prognosis and does not provide sufficient basis
for an award of disability benefits. Failure to issue
a fit-to work certification or a final disability rating
after an employee’s operation and before the
lapse of 240 days from his repatriation renders
the employee as permanently and totally
disabled. (Sharpe Sea Personnel, Inc. v.
Mabunay, G.R. No. 206113, November 6, 2017.)
When the company-designated physician and
employee-designated physician disagree
If a doctor appointed by the seafarer disagrees
with the assessment of the company-designated
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doctor, a 3rd doctor may be agreed jointly
between the employer and the seafarer, and the
3rd doctors’ decision shall be final and binding on
both parties. (Bahia Shipping v. Constantino,
G.R. No. 180343, 2014)
Since the employee was cleared for work by the
company-designated physicians who monitored
his condition over a prolonged period conducting
extensive examinations, the employee is deemed
not to have a compensable disability. The opinion
of the other specialist who saw the employee only
on one occasion and did not even order that
medical tests be done to support his declaration
that the employee is unfit for work as a seaman,
cannot overturn the findings of the company-
designated physicians. (Perea v. Elburg
Shipmanagement Philippines, Inc., G.R. No.
206178, August 9, 2017)
When referral to a third doctor mandatory
If an employee-designated physician disagrees
with the company-designated physician, a third
doctor may be agreed jointly between the
employer and the seafarer. The third doctor's
decision shall be final and binding on both parties.
The assessment referred to is the declaration of
fitness to work or the degree of disability. It
presupposes that the company-designated
physician came up with a valid, final, and definite
assessment on the seafarer's fitness to work
before the 120-day or 240-day period expires.
Referral to a third doctor is mandatory when:
(1) there is a valid and timely assessment
made by the CDP; and
(2) the seafarer's appointed doctor refuted
such assessment.
These 2 conditions must be present to trigger the
mandatory rule on third doctor referral. It is the
seafarer's duty to signify the intention to resolve
the conflict through the referral to a third doctor. If
the seafarer does not contest the findings and
fails to refer the assessment to a third doctor, the
company can insist on its disability rating even
against a contrary opinion by another physician.
Securing a third doctor's opinion is the duty of the
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employee, who must actively or expressly
request for it. Without the referral to a third doctor,
there is no valid challenge to the company-
designated physician's findings.
Absent a final, definite disability assessment from
a company-designated physician, the mandatory
rule on a third doctor referral will not apply. When
a company-designated physician fails to arrive at
a final and definite assessment of a seafarer's
fitness to work or level of disability within the
prescribed periods, a presumption arises that the
seafarer's disability is total and permanent.
(Esteva v. Wilhelmsen Smith Bell Manning, Inc.,
G.R. No. 225899, July 10, 2019.)
Failure to observe the procedure under the 2010
POEA-SEC means that the assessment of the
company-designated physician prevails. The
referral to a 3rd doctor is a mandatory procedure.
When the seafarer fails to express his or her
disagreement by asking for the referral to a 3rd
doctor, the findings of the company-designated
physician is given more credence and is final and
binding on the parties.
Nevertheless, this is not a hard and fast rule. In
instances where the company-designated
physician’s assessment is not supported by
medical records, the courts may give greater
weight to the findings of the seafarer’s personal
physician. Disability ratings should be adequately
established in a conclusive medical assessment
by a company-designated physician.
To be conclusive, a medical assessment must be
complete and definite to reflect the seafarer’s true
condition and give the correct corresponding
disability benefits. The medical assessment
issued by the company-designated physician
cannot be regarded as definite and conclusive
when the records show that the said physician
failed to conduct all the proper and recommended
tests. In the letter of one of the company-
designated physician, he disclosed that a
complete neurologic examination was
recommended to adequately assess petitioner’s
disability rating. However, this was never
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conducted. (Toquero V. Crossworld Marine
Services, Inc. G.R. No. 213482 26 June 2019)
When the employee fails to have himself
examined by the company-designated
physician
Failure of an employee to have himself examined
by the company-designated physician shall result
in the forfeiture of the right to claim disability
benefits. The POEA SEC mandates seafarers to
see a company-designated physician for a post-
employment medical examination, which must be
done within 3 working days from their arrival.
(Ebuenga v. Southfield Agencies, Inc., G.R. No.
208396. March 14, 2018)
Under Annex “A” of the Amended Rules on
Employee Compensation, for cardio-vascular
diseases to be compensable as an occupational
disease, any of the following conditions must be
proven by substantial evidence:
(a) If the heart disease was known to have been
present during employment, there must be
proof that an acute exacerbation was clearly
precipitated by the unusual strain by reason
of the nature of his work;
(b) The strain of work that brings about an acute
attack must be of sufficient severity and must
be followed within twenty-four (24) hours by
the clinical signs of a cardiac assault to
constitute causal relationship; or
(c) If a person who was apparently
asymptomatic before subjecting himself to
strain of work showed signs and symptoms of
cardiac injury during the performance of his
work and such symptoms and signs
persisted, it is reasonable to claim a causal
relationship.
Failure to adduce proof that the employee
experienced any symptom of a heart ailment
while employed, or any sign that his heart
condition was aggravated by his job, renders
unmeritorious the entitlement to death benefits.
(Barsolo v. Social Security System, G.R. No.
187950, January 11, 2017.)
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Summary of rules regarding duty of the
company-designated physician in issuing a
final medical assessment (Talaroc v. Arpaphil
Shipping Corp):
1. Company-designated physician must issue a
final medical assessment on the seafarer's
disability grading within a period of 120 days
from the time the seafarer reported to him;
2. If the company-designated physician fails to
give his assessment within the period of 120
days, without any justifiable reason, then the
seafarer's disability becomes permanent and
total;
3. If the company-designated physician fails to
give his assessment within the period of 120
days with a sufficient justification (e.g.,
seafarer required further medical treatment or
seafarer was uncooperative), then the period
of diagnosis and treatment shall be extended
to 240 days. The employer has the burden to
prove that the company-designated
physician has sufficient justification to extend
the period; and
4. If the company-designated physician still fails
to give his assessment within the extended
period of 240 days, then the seafarer's
disability becomes permanent and total,
regardless of any justification.
Through all his check-ups and tests, the
employee did not receive any medical
assessment of his fitness to resume work from
the company-designated physician. There was
also no declaration from the company-designated
physician about his fitness to return to work, while
his own physician advised him to refrain from
undergoing strenuous activities. (Magsaysay Mol
Marine, Inc. v. Atraje, G.R. No. 229192, July 23,
2018)
There are no compelling reasons to accord the
exceptional clause 'physically incapacitated to do
so' a liberal reading. Hence, since complainant's
failure to observe his reportorial duty is by reason
of alleged mental or psychological condition, it
cannot be equated with physical incapacity.
Moreover, the complainant offered no
explanation as to why he did not notify his
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manning agent by some other means. For these
two reasons, his disability compensation —
assuming he was entitled thereto — is deemed
forfeited.
Suspension of Income Benefits
Monthly income benefits can be suspended
under any of the following conditions:
1. Failure of the employee to present himself
for examination at least once a year upon
notice by the System;
2. Failure to submit a quarterly Medical
Report certified by the attending physician;
3. Complete or full recovery from his
permanent disability; or
4. Upon being Gainfully employed. (Amended
Rules on Employees’ Compensation, Rule
XI, Sec. 2)
3. PERMANENT PARTIAL DISABILITY
A disability is partial and permanent if as a result
of the injury or sickness, the employee suffers a
permanent partial loss of the use of any part of his
body. (Abaya v. ECC, G.R. No. 64255, 1989)
Distinguished from Permanent Total
Disability
The test of whether an employee suffers from
“permanent total disability” is a showing of the
capacity of the employee to continue performing
his work notwithstanding the disability he
incurred. (Vicente v. ECC, G.R. No. 85024, 1991)
Receipt of Disability Benefit Precludes Claim
for Loss of Future Earnings
Once given disability compensation for loss of
earning capacity, an additional award for loss of
earnings (future earnings) no longer lies,
otherwise, it will result in double recovery.
(Magsaysay Maritime Corp .v. Chin, Jr., G.R. No.
199022, 2014)
NOTES: It must be shown that the injury or illness
was contracted during the term of employment.
The unqualified phrase “during the term” covers
all injuries or illnesses occurring during the
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lifetime of the contract. (Wallem Maritime
Services v. Tanawan, G.R. No. 160444, 2012)
Reimbursement for Medical Expenses are
separate and distinct from Disability Benefits.
(Javier v. PH, Inc., G.R. No. 204101, 2014)
DISABILITY BENEFITS (2010 AMENDED
POEA-SEC)
Liabilities of Employer (ER) for Work-related
Injury or Illness (IN/ILL) of the Seafarer During
Term of Contract
1. ER will continue to pay the seafarer his
wages during the time he is on board the
ship.
2. If IN/ILL requires medical and/or dental
treatment in a foreign port, ER shall be
liable for full cost of such treatment as
well as board and lodging until the
seafarer is declared fit to work or to be
repatriated.
NOTE: If after repatriation, seafarer still requires
medical attention, he shall be provided such
treatment until he is declared fit or the degree of
his disability had been established by company-
designated physician at the expense of the ER.
3. Seafarer shall also receive sickness
allowance from his employer. The
amount is equivalent to his basic wage
computed from the time he signed off
until he is declared fit to work or the
degree of disability has been assessed
by the company-designated physician.
The period within which the seafarer shall
be entitled to his sickness allowance
shall not exceed 120 days. Payment
shall be made on a regular basis, but
not less than once a month.
NOTE: Under the 2010 POEA-SEC, the
assessment made by company-designated
physician for permanent disability shall in no
case exceed 120 days.
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Elburg Shipmanagement Phils., Inc. v. Ouioguie,
Jr. provided a summation of periods when the
company-designated physician must assess the
seafarer:
a. 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;
b. 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;
c. If the company-designated physician fails to
give his assessment within the period of 120
days with a sufficient justification (e.g.,
seafarer required further medical treatment or
seafarer was uncooperative), then the period
of diagnosis and treatment shall be extended
to 240 days. The employer has the burden to
prove that the company-designated
physician has sufficient justification to extend
the period; and
d. 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.
Hence, the general rule is that the 120-day period
is an absolute rule. The company-designated
physician must provide a sufficient
justification to extend the original 120-day
period of assessment. (Career Philippines
Shipmanagement, Inc. v. Silvestre, G.R. No.
213465, 2018).
NOTE: Prior to Elburg ruling, the Court held in
Vergara v. Hammonia Maritime Services, Inc.
that seafarers could not automatically claim
permanent and total disability even though the
120-day period for medical evaluation was
exceeded for it was possible to extend the
evaluation or treatment period to 240 days.
(Vergara v. Hammonia Maritime Services, Inc.,
588 Phil. 895, 2008).
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If the employer’s failure to make a declaration on
the fitness or disability of the seafarer is due to
the latter’s need for further medical attention, the
period of temporary and total disability may be
extended to a maximum of 240 days. The
company-designated physician was justified in
not issuing a medical certificate on whether the
employee was fit to work after the lapse of 120
days because her treatment required more than
120 days. Her illness could not be automatically
considered total and permanent because there
was no certification that she is fit to work after 120
days. (Nonay v. Bahia Shipping Services, Inc.,
G.R. No. 206758, February 17, 2016)
4. Seafarer is entitled to reimbursement of
the cost of medicines prescribed by
company-designated physician.
If treatment is on an out-patient basis as
determined by the company-designated
physician, the company shall approve the
appropriate mode of transportation and
accommodation.
The reasonable cost of actual traveling
expenses and/or accommodation shall
be paid subject to liquidation and
submission of official receipts and/or
proof of expenses.
NOTE: To be entitled to the foregoing monetary
benefits, seafarer shall submit himself to a post-
employment medical examination by a company-
designated physician within 3 working days
upon his return.
EXCEPT when he is physically incapacitated to
do so. In such case, a written notice to the agency
within the same period (3 working days upon
return) is deemed as compliance.
The seafarer shall also report regularly to the
company-designated physician.
LABOR LAW
Failure of the seafarer to comply with the
mandatory reporting requirement shall result
in his forfeiture of the right to claim the above
benefits.
When the seafarer suffers work-related illness
during the term of his contract, the employer shall
be liable to pay for: (1) the seafarer's wages; (2)
costs of medical treatment both in a foreign port
and in the Philippines until the seafarer is
declared fit to work, or the disability rating is
established by the company-designated
physician; (3) sickness allowance which shall not
exceed 120 days; and (4) reimbursement of
reasonable medicine, traveling, and
accommodation expenses. However, to be
qualified for the foregoing monetary benefits, the
same section of the POEA Contract requires the
seafarer to submit himself/herself to a post-
employment medical examination by a company-
designated physician within three working days
upon his return to the Philippines, except when he
is physically incapacitated to do so. The seafarer
is likewise required to report regularly to the
company-designated physician during the course
of his treatment. The three-day reporting
requirement is MANDATORY. (Manila
Shipmanagement & Manning, Inc. v. Aninang,
G.R. No. 217135, 2018)
Failure to comply with such requirements results
in the forfeiture of the seafarer's claim for
disability benefits. The exceptions to the rule are:
(1) when the seafarer is incapacitated to report 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.
When an employee fails to observe his reportorial
duty is by reason of alleged mental or
psychological condition, it cannot be equated with
physical incapacity.
However, the employee is entitled to his salary for
the expired portion of his contract because the
alleged illness is not caused by the duties and
responsibilities of a his work, but is due to the
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seafarer's work environment. (Toliongco v. Court
of Appeals, G.R. No. 231748, July 8, 2020)
5. Illnesses NOT listed in Sec. 32 of POEA-
SEC are disputably presumed as
work-related.
6. In case seafarer is disembarked from
ship for medical reasons, ER shall bear
full cost of repatriation if seafarer is
declared:
a. fit for repatriation; or
b. fit to work but the employer is
unable to find employment for
the seafarer on board his former
ship or another ship of the
employer.
7. In case of permanent total or partial
disability of the seafarer, he shall be
compensated in accordance with the
schedule of benefits enumerated in
Section 32 of POEA-SEC. Computation
of his benefits shall be governed by the
rates and the rules of compensation
applicable at the time the illness or
disease was contracted.
NOTE: The disability shall be based solely
on the disability gradings provided under
Section 32. It shall NOT be measured or
determined by the number of days a
seafarer is under treatment or the number of
days in which sickness allowance is paid.
8. The aforementioned benefits are
separate and distinct from other benefits
the seafarer is entitled to.
In determining the compensability of an illness, it
is not required that the employment be the sole
factor in the growth, development, or acceleration
of a claimants' illness to entitle him to the benefits
provided for. It is enough that his employment
contributed, even if only in a small degree, to the
development of the disease.
Even assuming that the ailment of the worker was
contracted prior to his employment, this still would
not deprive him of compensation benefits. For
what matters is that his work had contributed,
even in a small degree, to the development of the
LABOR LAW
disease. Neither is it necessary, in order to
recover compensation, that the employee must
have been in perfect health at the time he
contracted the disease. A worker brings with him
possible infirmities in the course of his
employment, and while the employer is not the
insurer of the health of the employees, he takes
them as he finds them and assumes the risk of
liability. (Skippers United Pacific, Inc. v. Lagne,
G.R. No. 217036, 2018)
For disability to be compensable, 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.
Work-related injury pertains to injuries resulting in
disability or death arising out of, and in the course
of, employment. 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.
Proof of entitlement must be established by
substantial evidence
Whoever claims entitlement to the benefits
provided by law should establish his or her right
thereto by substantial evidence. Petitioner failed
to prove that the injury suffered is work-related.
Hence, he is not entitled to disability benefits.
(Guerrero v. Philippine Transmarine Carriers,
Inc., G.R. No. 222523, 2018)
Where the employee fails to prove the elements
under Sec. 32-A, who additionally admits that he
had family history of hypertension and that he
smoked about one pack a day for 30 years, the
illness is not work-related. (Monana v. MEC
Global Shipmanagement and Manning Corp.,
G.R. No. 196122, November 12, 2014).
To be deemed “work-related,” there must be a
reasonable linkage between the disease or injury
suffered by the employee and his work. For a
disability to be compensable, it is not required that
the seafarer’s nature of employment was the
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singular cause of the disability s/he suffered. It is
sufficient that there is a reasonable linkage
between the disease or injury suffered by the
seafarer and his/her work to conclude that the
work may have contributed to establishment or,
at least, aggravate any preexisting condition the
seafarer might have had.
Once it has been established that the two
elements are present, the employee-victim is
deemed entitled to disability compensation under
the POEA SEC. The lower courts erroneously
imposed a new prerequisite for the disability’s
compensability – that the injury must be caused
by an accident. Furthermore, the POEA SEC
disqualifies claims caused by the willful or
criminal act or intentional breach of the duties
done by the claimant, not by the assailant. It is
unjust to preclude a seafarer’s disability claim
because of the assailant’s willful or criminal act or
intentional breach of duty. (Toquero V.
Crossworld Marine Services, Inc. G.R. No.
213482 26 June 2019)
A cardio-vascular disease may be considered
occupational under Sec. 32-A (11) if, among
others, it can be established that the employee
showed signs and symptoms during the
performance of his work and such symptoms and
signs persisted. (Magsaysay Maritime Corp. v. de
Jesus, G.R. No. 203943, August 30, 2017.)
The employee, who was suffering from heart
ailments and was declared to be fit to work, took
medication to normalize his high blood pressure,
but the working conditions and mandatory diet
aboard the vessel made it difficult and nearly
impossible for him to maintain a healthy lifestyle.
Although he was declared fit to work in his pre-
employment medical examination, poor food
choices and stressful conditions in his workplace
led or contributed to his heart disease. He is
entitled to disability claims. (Paringit vs. Global
Gateway Crewing Services, Inc., G.R. No.
217123, February 6, 2019.)
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Employee cannot claim disability benefits if
he was not medically repatriated
Sec. 32 provides that illnesses not listed
thereunder are disputable presumed work-
related. An employee cannot rely on the
disputable presumption. He must subtantiate his
claims to be entitled to disability benefits.
(Madridejos v. NYK-FIL Ship Management, G.R.
No. 204262, June 7, 2017).
Sickness allowance
Sec. 20 of the POEA SEC provides that seafarers
are entitled to receive sickness allowance in the
amount equivalent to their basic wage computed
from the time they signed off until they are
declared fit to work, or once the degree of
disability has been assessed by the company-
designated physician. The period shall not
exceed 120 days. Here, Petitioner is entitled to
sickness allowance equivalent to his basic wage
for 55 days (from the day he signed off of work
until the day he was declared by the company-
designated physician as fit to go back to work).
(Toquero V. Crossworld Marine Services, Inc.
G.R. No. 213482 26 June 2019)
Sec. 32-A of the POEA Contract 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. However, for it to be
compensable, the claimant must fulfill the
following:
1. The seafarer’s work must involve the
risks described herein;
2. The disease was contracted as a result
of the seafarer’s exposure to the
described risks;
3. The disease was contracted within a
period of exposure and under such other
factors necessary to contract it;
4. There was no notorious negligence on
the part of the seafarer.
In Magsaysay Maritime Services v. Laurel, the
Court recognized that the nature of employment
can possibly aggravate a pre-existing illness.
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However, the causation between the nature of
employment and the aggravation of the illness
must still be proven before compensation can be
granted. For the illness to be compensable, it is
not necessary that the nature of the employment
be the sole and only reason for the illness
suffered by the seafarer. It is sufficient if there is
a reasonable linkage between the disease
suffered by the employee and his work to lead a
rational mind to conclude that his work may have
contributed to the establishment or, at the very
least, aggravation of any pre-existing condition he
might have had.
Failure to fulfill these requirements, i.e. failure to
allege how the nature of work contributed to the
development or aggravation of the illness does
not merit entitlement to death benefits. (Dayo v.
Status Maritime Corp. and/Or NAFTO Trade
Shipping Commercial S.A. G.R. No. 210660 21
January 2015)
DEATH BENEFITS
The System shall pay to the primary
beneficiaries, upon the death of the covered
employee, an amount equivalent to his monthly
income benefit, plus 10% thereof, for each
dependent child, but not exceeding 5, beginning
with the youngest and without substitution. The
income benefit shall be guaranteed for 5 years.
(Amended Rules on Employees’ Compensation,
Rule XIII, Sec.3)
Conditions to entitlement
1. The employee has been duly reported to
the System;
2. He died as a result of an injury or sickness;
and
3. The System has been duly notified of his
death, as well as the injury or sickness
which caused his death.
NOTES: Employer shall be liable for the benefit if
such death occurred before the employee is duly
reported for coverage to the System.
If the employee has been receiving monthly
income benefit for permanent total disability at the
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time of his death, the surviving spouse must show
that the marriage has been validly subsisting at
the time of his disability.
The cause of death must be a complication or
natural consequence of the compensated
Permanent Total Disability
(Amended Rules on Employees’ Compensation,
Rule XIII, Sec.1)
Amount of Benefits
1. For life to the primary beneficiaries,
guaranteed for 5 years;
2. For not more than 60 months to secondary
beneficiaries;
3. Total benefits shall be at least P15,000
(Labor Code, Art. 200[a])
Persons Entitled to Funeral Benefits
A funeral benefit of P30,000 (ECC Board
Resolution No. 16-05-28, May 31, 2016) shall be
paid to:
1. Surviving spouse; or
2. Legitimate child who spent for funeral
services;
3. Any other person who can show
incontrovertible proof of having borne the
funeral expenses. (Amended Rules on
Employees’ Compensation, Rule XI)
Death Benefits (2010 AMENDED POEA-SEC)
Work-related death of seafarer during the term of
his contract, the employer shall pay his
beneficiaries $50,000 in Philippine currency and
an additional amount of $7,000 to each child
under the age of 21 but not exceeding 4 children,
at the exchange rate prevailing during the time of
payment. (Sec. 20 (B) (1), POEA-SEC)
Compensation payable shall be doubled where
death is caused by warlike activity while sailing
within a declared war zone or war risk area, the
compensation payable shall be doubled. (Sec. 20
(B) (2), POEA-SEC)
The aforementioned benefits are separate and
distinct from other benefits the seafarer is entitled
to. (Sec. 20 (B) (3), POEA-SEC)
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The other liabilities of the employer when
seafarer dies as a result of work-related injury or
illness during the term of employment:
1. Pay the deceased’s beneficiary all
outstanding obligations due the seafarer
under the Contract.
2. Transport the remains and personal
effects of the seafarer to the Philippines
at employer’s expense EXCEPT:
a. If death occurred in a port where
local government laws or
regulations do not permit the
transport of such remains.
b. In case death occurs at sea, the
disposition of the remains shall
be handled or dealt with in
accordance with the master’s
best judgment.
In all cases, the employer/master shall
communicate with the manning agency
to advise for disposition of seafarer’s
remains.
3. Pay the beneficiaries of the seafarer
$1,000 in Philippine currency for burial.
expenses at the exchange rate prevailing
during the time of payment. (Sec. 20 (B)
(4), POEA-SEC)
Injury/Incapacity/Disability/Death Resulting
from Willful or Criminal Act or Intentional
Breach of Duties
Compensation and benefits shall not be payable
in case of 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.
(Sec. 20 (C) POEA-SEC)
Disqualification due to Misrepresentation
A seafarer who knowingly conceals a pre-existing
illness or condition in the Pre- Employment
Medical Examination (PEME) shall be liable for
LABOR LAW
misrepresentation and shall be disqualified from
any compensation and benefits.
This is likewise a just cause for termination of
employment and imposition of appropriate
administrative sanctions. (Sec. 20 (D) POEA-
SEC).
Pre-existing illness
Common sense dictates that an illness could not
possibly have been "contracted as a result of the
seafarer's exposure to the described risks" if it
has been existing before the seafarer's services
are engaged. Still, pre-existing illnesses may be
aggravated by the seafarer's working conditions.
To the extent that any such aggravation is
brought about by the work of the seafarer,
compensability ensues.
The POEA-SEC bars the compensability of
disability arising from a pre-existing illness when
attended by an employee's fraudulent
misrepresentation. Fraudulent misrepresentation
means that he or she deliberately concealed it for
a malicious purpose. To amount to fraudulent
misrepresentation, falsity must be coupled with
intent to deceive and to profit from that deception.
When, during a PEME, an employee was
recorded to have categorically answered 'no'
when asked whether he has ever suffered from or
has been told to have hypertension and diabetes
and after repatriation and while being treated by
the company-physician, he again denied having
such illnesses, but such is contradicted by the
findings of his own physician that he indeed have
such illnesses and was taking medicines for it,
there is fraudulent misrepresentation and is this
not entitled to total and permanent disability
benefits. (Manansala v. Marlow Navigation Phils.,
Inc., G.R. No. 208314, August 23, 2017)
The burden is on the employer to prove the
concealment of a pre-existing illness or medical
condition to disqualify seafarers from
compensation. An illness shall be considered as
pre-existing if prior to the processing of the POEA
contract, any of the following conditions is
present: (a) the advice of a medical doctor on
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treatment was given for such continuing illness or
condition (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.
(Clemente v. Status Maritime Corp., G.R. No.
238933, July 1, 2020)
E SOLO PARENTS
Flexible Work Schedule
The employer shall provide for a flexible working
schedule for solo parents: Provided, That the
same shall not affect individual and company
productivity: Provided, further, That any employer
may request exemption from the above
requirements from the DOLE on certain
meritorious grounds. (Sec. 6, RA 8972)
Parental Leave
In addition to leave privileges under existing laws,
parental leave of not more than seven (7) working
days every year shall be granted to any solo
parent employee who has rendered service of at
least one (1) year. . (Sec. 8, RA 8972)
Educational Benefits
The DECS, CHED and TESDA shall provide the
following benefits and privileges:
(1) Scholarship programs for qualified solo
parents and their children in institutions of basic,
tertiary and technical/skills education; and
(2) Nonformal education programs appropriate
for solo parents and their children.
The DECS, CHED and TESDA shall promulgate
rules and regulations for the proper
implementation of this program. (Sec. 9, RA
8972)
Housing Benefits
Solo parents shall be given allocation in housing
projects and shall be provided with liberal terms
of payment on said government low-cost housing
projects in accordance with housing law
provisions prioritizing applicants below the
poverty line as declared by the NEDA. . (Sec. 10,
RA 8972)
LABOR LAW
Medical Assistance. – The DOH shall develop a
comprehensive health care program for solo
parents and their children. The program shall be
implemented by the DOH through their retained
hospitals and medical centers and the local
government units (LGUs) through their
provincial/district/city/municipal hospitals and
rural health units (RHUs). (Sec. 11, RA 8972)
F. KASAMBAHAY
A domestic worker who has rendered at least one
(1) month of service shall be covered by the SSS,
the Philhealth, and the Home Development
Mutual Fund or Pag-IBIG, and shall be entitled to
all the benefits in accordance with the pertinent
provisions provided by law.
Premium payments or contributions shall be
shouldered by the employer. However, if the
domestic worker is receiving a wage of Five
thousand pesos (P5,000.00) and above per
month, the domestic worker shall pay the
proportionate share in the premium payments or
contributions, as provided by law.
The domestic worker shall be entitled to all other
benefits under existing laws. (Sec. 30, RA 10361)
G. AGRARIAN RELATIONS
Concept of Agrarian Reform
Declaration of Policy
The agrarian reform program is founded on the
right of farmers and regular farmworkers, who are
landless, to own directly or collectively the lands
they till or, in the case of other farm workers, to
receive a just share of the fruits thereof.
To this end, the State shall encourage and
undertake the just distribution of all agricultural
lands, subject to the payment of just
compensation. (Sec. 2, RA 6657)
Agrarian Reform
The redistribution of lands, regardless of crops or
fruits produced to farmers and regular
farmworkers who are landless, irrespective of
tenurial arrangement, including:
1. The totality of factors and support services
designed to lift the economic status of the
beneficiaries; and
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2. All other arrangements alternative to the
physical redistribution of lands, such as:
a. Production or profit-sharing,
b. Labor administration, and
c. The distribution of shares of stocks,
which will allow beneficiaries to
receive a just share of the fruits of the
lands they work. (Sec. 3(a), RA
6657)
Existence and Concept of Agricultural
Tenancy
Agricultural tenancy – The physical possession
by a person of land devoted to agriculture
belonging to, or legally possessed by another:
1. For the purpose of production through the
labor of the former and of the members of his
immediate farm household
2. In consideration of which the former agrees
to:
a. Share the harvest with the latter; OR
b. Pay a price certain, either in produce
or in money, or both. (Sec. 3, RA
1199)
Tenancy Relationship
Tenancy relationship is a juridical tie which arises
between a landholder and a tenant once they
agree, expressly or impliedly, to undertake jointly
the cultivation of land belonging to the former,
either under the share tenancy or leasehold
tenancy system, as a result of which relationship
the tenant acquires the right to continue working
on and cultivating the land, until and unless he is
dispossessed of his holdings for any of the just
causes enumerated in Sect. 50 or the relationship
is terminated in accordance with Sec. 9 of the
same act . (Sec. 6 RA 1199)
Elements to Constitute a Tenancy
Relationship
1. The parties are the landowner and the tenant
or agricultural lesses;
2. The subject matter of the relationship is
agricultural land;
3. There is consent between the parties to the
relationship;
4. The purpose of the relationship is to bring
about agricultural production;
LABOR LAW
5. There is personal cultivation on the part of the
tenant or agricultural lessee; and
6. The harvest is shared between the landowner
and the tenant or agricultural lessee.
If the land is an exempted property from CARP
coverage, the land cannot be considered as
agricultural land hence the parties cannot be
considered agricultural tenants. (Automat Realty
v. Spouses Dela Cruz, G.R. No. 192026, October
1, 2014).
Establishment of Tenancy Relationship and
Security of Tenure
Tenancy relationship may be established either
verbally or in writing, expressly or impliedly. Once
such relationship is established, the tenant shall
be entitled to security of tenure as hereinafter
provided. (Sec. 7, RA 1199)
Limitations of Relation
The relation of landholder and tenant shall be
limited to the person who furnishes land, either as
owner, lessee, usufructuary, or legal possessor,
and to the person who actually works the land
himself with the aid of labor available from within
his immediate farm household. (Sec. 8, RA 1199)
Severance of Relationship
The tenancy relationship is extinguished by the
voluntary surrender of the land by, or the death or
incapacity of, the tenant, but his heirs or the
members of his immediate farm household may
continue to work the land until the close of the
agricultural year. The expiration of the period of
the contract as fixed by the parties, and the sale
or alienation of the land do not of themselves
extinguish the relationship. In the latter case, the
purchaser or transferee shall assume the rights
and obligations of the former landholder in
relation to the tenant. In case of death of the
landholder, his heir or heirs shall likewise assume
his rights and obligations. (Sec. 9, RA 1199)
Types of Agricultural Tenancy
1. Share tenancy
a. Two persons agree on a joint undertaking for
agricultural production; 

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b. Wherein one party furnishes land and 
the
other his labor; 
 in minor industries, the products of
c. With either or both contributing any one 
or
several of the items of production; 

d. The tenant cultivating the land personally with
the aid of labor available to members of his
immediate 
farm household; 

e. And the produce thereof to be divided 
 i. If the landholder
between the landholder and the tenant in
proportion to their respective contributions. 
 site for the tenant’s
2. Leasehold tenancy
a. A person, who either personally or with 
the
aid of labor available from the members of his
immediate farm household; 
 RA1199, as amended
b. Undertakes to cultivate a piece of agricultural
land susceptible of cultivation by a single
person, together with members of his
immediate farm household;
c. Belonging to or legally possessed by,
another, in consideration of a fixed amount in
money or in produce or in both. (Sec. 4, RA
1199, as amended by RA 2263
Rights of Agricultural Tenants
Rights common to both share and leasehold
tenants
The tenant shall:
1. Be free to work elsewhere whenever the
nature of his farm obligation;
2. Have the right to provide any of the
contributions for production, aside from
his labor, whenever he can do so
adequately and on time subject to the
provisions of Sec. 14 of this Act
3. Have the right to demand for a home lot
suitable for dwelling with an area:
a. not more than 3% of the area of his
landholding; provided
b. it does not exceed 1000 sq. m.; and
c. that it shall be located at a
convenient and suitable place within
the land of the landholder to be
designated by the latter where the
tenant shall construct his dwelling
and may raise vegetables, poultry,
LABOR LAW
pigs and other animals and engage
which shall accrue to the tenant
exclusively.
d. The tenant’s dwelling shall not be
removed from the lot already
assigned to him by the landholder,
except:
designates another
home lot and the
tenant agrees to the
transfer (Sec. 26,
by RA2263)
ii. There is a severance
of the tenancy
relationship
iii. The tenant is ejected
for cause
In any case, the tenant shall only be removed
after the expiration of 45 days following such
severance of relationship or dismissal for cause.
(Sec. 22, RA 1199, as amended by RA 2263)
Specific rights of rice share tenants
The rice share tenant shall have the right to:
1. Determine when to scatter the seeds, to
transplant the seedlings, and to reap the
harvest, provided they shall be in accordance
with proven farm practices and after due
notice to the landholder.
2. Choose the thresher which shall thresh the
harvest whenever it is the best available in
the locality and the best suited to the
landholder’s and tenant’s needs and
provided that the rate charged by the owner
of other threshers under similar
circumstances.
a. If there are multiple tenants, the
choice of the majority of the tenants
shall prevail.
b. If the landholder is the owner of a
thresher and is ready and willing to
grant equal or lower rates under the
same conditions, the use of the
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landholder’s thresher shall be given
preference.
3. Apply appropriate pest, insect, disease and
rodent control measures whenever in his
judgment such action is necessary.
4. Apply fertilizer of the kind or kinds shown by
proven farm practices to be adapted to the
requirements of the land, provided the
landholder has not exercised his right to
require the use of such fertilizer. (Sec. 36,
RA1199)
Specific rights of leasehold tenants
The tenant-lessee shall have the right to:
1. Enter the premises of the land, and to the
adequate and peaceful enjoyment thereof;
2. Work the land according to his best judgment,
provided this manner and method of
cultivation and harvest are in accordance with
proven farm practices.
Upon termination of the relationship, have 1⁄2 of
the value of the improvements made by him,
provided they are reasonable and adequate to
the purposes of the lease. (Sec. 43, RA 1199)
Concept of farmworkers
The State shall, by law, undertake an agrarian
reform program founded on the right of farmers
and regular farm workers, who are landless, to
own directly or collectively the lands they till on,
or in the case of other farm workers, to receive a
just share of the fruits thereof. (Sec. 4, Art. XIII,
1987 Constitution)
The 1987 Constitution distinguishes between
regular farmworkers and other farmworkers.
1. Farmers and regular farmworkers have the
right to own directly or collectively the lands
they till on.
2. Other farmworkers have the right to receive
a just share of the fruits thereof.
Farmworker
A natural person who renders services for value
as an employee or laborer in an agricultural
enterprise or farm regardless of whether his
compensation is paid on a daily, weekly, monthly
or “pakyaw” basis. The term includes an
LABOR LAW
individual whose work has ceased as a
consequence of, or in connection with, a pending
agrarian dispute and who has not obtained a
substantially equivalent and regular farm
employment. (Sec. 3(g), RA 6657)
Types of Farmworkers
1. Regular Farmworker is a natural person who
is employed on a permanent basis by an
agricultural enterprise or farm. (Sec. 3(h), RA
6657)
2. Seasonal Farmworker is a natural person
who is employed on a recurrent, periodic or
intermittent basis by an agricultural enterprise
or farm, whether as a permanent or a non-
permanent laborer, such as “dumaan”,
“sacada”, and the like. (Sec. 3(i), RA 6657)
3. Other Farmworker is a farmworker who does
not fall under paragraphs (g), (h) and (i).
(Sec. 3(j), RA 6657)
Seasonal Farmworkers
Seasonal farm workers, not having a
constitutional right to own land, do not have a
legal or actual and substantial interest in the land
subject of agrarian reform. They may not be
allowed to intervene in the case concerning the
land. (Fortich v. Corona, G.R. No. 131457, April
24, 1998)
H. UNIVERSAL HEALTH CARE
It is the policy of the State to promote and protect
the right to health of all Filipinos and instill health
consciousness among them. Towards this end,
the State shall adopt:
1. An integrated and comprehensive approach
to ensure that all Filipinos are health literate,
provided with healthy living conditions, and
protected from hazards and risks that could
affect their health;
2. A health care model that provides all Filipinos
access to a comprehensive set of quality and
cost-effective, promotive, preventive,
curative, rehabilitative and palliative health
services without causing financial hardship,
and prioritizes the needs of the population
who cannot afford such services;
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3. A framework that fosters a whole-of- system,
whole-of-government, and whole- of-society
approach in the development,
implementation, monitoring, and evaluation
of health policies, programs and plans; and
4. A people-oriented approach for the delivery
of health services that is centered on people's
needs and well-being, and cognizant of the
differences in culture, values, and beliefs.
(Sec. 2, RA 11223)
The Universal Health Care Act seeks to:
1. Progressively realize universal health care in
the country through a systemic approach and
clear delineation of roles of key agencies and
stakeholders towards better performance in
the health system; and
2. Ensure that all Filipinos are guaranteed
equitable access to quality and affordable
healthcare goods and services, and
protected against financial risk. (Sec. 3, RA
11223)
Population coverage: Every Filipino citizen shall
be automatically included into the National Health
Insurance Program. (Sec. 5, RA 11223)
Service coverage: Every Filipino shall be
granted immediate eligibility and access to
preventive, promotive, curative, rehabilitative,
and palliative care for medical, dental, mental and
emergency health services, delivered either as
population-based or individual-based health
services.
Provided, That the goods and services to be
included shall be determined through a fair and
transparent Health Technology Assessment
(HTA) Process. (Sec. 6, RA 11223)
Health Technology Assessment - The
systematic evaluation of properties, effects, or
impact of health-related technologies, devices,
medicines, vaccines, procedures and all other
health-related systems developed to solve a
health problem and improve quality of lives and
health outcomes. (Sec. 4[n], RA 11223)
Every Filipino shall register with a public or private
primary care provider of choice. The DOH shall
promulgate the guidelines on the licensing of
primary care providers and the registration of
LABOR LAW
every Filipino to a primary care provider. (Sec. 6
[d], RA 11223)
Financial coverage: Population-based health
services shall be financed by the National
Government through the DOH and provided free
of charge at point of service for all Filipinos. (Sec.
7, RA 11223)
Population-based health service - interventions
such as health promotion, disease surveillance,
and vector control, which have population groups
as recipients. (Sec. 4[p], RA 11223
Individual-based health services - services
which can be accessed within a health facility or
remotely that can be definitively traced back to 1
recipient, has limited effect at a population level
and does not alter the underlying cause of illness
such as ambulatory and inpatient care,
medicines, laboratory tests and procedures,
among others (Sec. 4[p], RA 11223) Individual-
based health services shall be financed primarily
through prepayment mechanisms such as social
health insurance private health insurance, and
HMO plans to ensure predictability of health
expenditures. (Sec. 7[b], RA 11223)
National Health Insurance Program
Every member shall be granted immediate
eligibility for health benefit package under the
Program: Provided, That PhilHealth Identification
Card shall not be required in the availment of any
health service: Provided, further, That no co-
payment shall be charged for services rendered
in basic or ward
accommodation: Provided, furthermore, That co-
payments and co-insurance for amenities in
public hospitals shall be regulated by the DOH
and PhilHealth: Provided, finally, That the current
PhilHealth package for members shall not be
reduced.
PhilHealth shall provide additional Program
benefits for direct contributors, where
applicable: Provided, That failure to pay
premiums shall not prevent the enjoyment of any
Program benefits: Provided, further, That
employers and self-employed direct contributors
shall be required to pay all missed contributions
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with an interest, compounded monthly, of at least
three percent (3%) for employers and not
exceeding one and one-half percent (1.5%) for
self-earning, professional practitioners, and
migrant workers. (Sec. 9, RA 11223)
Direct contributors
1. Employees with formal employment
characterized by the existence of an
employer-employee relationship, which
include workers in the government and
private sector, whether regular, casual, or
contractual, are occupying either an elective
or appointive position, regardless of the
status of appointment, whose premium
contribution payments are equally shared by
the employee and the employer;
2. Kasambahays, as defined in the
Kasambahay Law;
3. All other workers who are not covered by
formal contracts or agreements or who have
no employee-employer relationship and
whose premium contributions are self- paid,
and with capacity to pay premiums, such as
the following:
a. Self-earning individuals; and
b. Professional practitioners;
4. Overseas Filipino Workers
5. Filipinos living abroad;
6. Filipinos with dual citizenship;
7. Lifetime members as defined in RA 10606
(National Health Insurance Act); and
8. All Filipinos aged 21 years and above who
have the capacity to pay premiums. (Sec. 8,
Implementing Rules and Regulations of RA
11223)
Indirect contributors
1. Indigents identified by the DSWD;
2. Beneficiaries of Pantawid Pamilyang Pilipino
Program/Modified Conditional Cash Transfer
(4Ps/MCCT);
3. Senior citizens who are not currently covered
by the Program;
4. Persons with disability, as defined in RA
10754 (An Act Expanding the Benefits and
Privileges of Persons with Disability);
LABOR LAW
5. All Filipinos aged 21 years old and above
without the capacity to pay premiums;
6. Sangguniang Kabataan officials, as defined
in RA 10742 (Sangguniang Kabataan Reform
Act);
7. and those previously identified at point-of-
service (POS) or during registration,
members previously sponsored by LGUs and
those who are not yet in the PhilHealth
database and are financially incapable to pay
premiums. (Sec. 8, IRR of RA 11223)
Dependents
1. Legal spouse/s who is/are not an active
member;
2. Unmarried and unemployed legitimate,
illegitimate children, and legally adopted or
stepchildren below twenty-one (21) years of
age;
3. Foster children as defined in RA 10165
(Foster Care Act of 2012); and
4. Parents who are sixty (60) years old and
above, not otherwise an enrolled member.
(Sec. 8, IRR of RA 11223)
Benefits
Every member shall be granted immediate
eligibility for health benefit package under the
NHIP under the following rules:
1. The PhilHealth ID Card shall not be required
in the availing of any health service.
2. No co-payment shall be charged for services
rendered in basic or ward accommodation.
3. Co-payments and co-insurance for amenities
in public hospitals shall be regulated by the
DOH and PhilHealth
a. Co-payment - a flat fee or
predetermined rate paid at point of
service (Sec. 4[e], IRR of RA 11223)
b. Co-insurance - a percentage of a
medical charge that is paid by the
insured, with the rest paid by the
health insurance plan (Sec. 4[d], IRR
of RA 11223)
4. The current PhilHealth package for members
shall not be reduced.
PhilHealth shall provide additional NHIP benefits
for direct contributors, where applicable:
Provided,
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1. Failure to pay premiums shall not prevent the

enjoyment of NHIP benefits.
2. Employers and self-employed direct
contributors shall be required to pay all
missed contributions with an interest,
compounded monthly, of at least 3% for
employers and not exceeding 1.5% for self-
earning, professional practitioners, and
migrant workers. (Sec. 9, IRR of RA 11223

———— end of topic ————

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LABOR RELATIONS
Labor Law
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LABOR RELATIONS
TOPIC OUTLINE UNDER THE SYLLABUS
A. RIGHT TO SELF-ORGANIZATION
I. Who may or may not exercise
the right
II. Commingling or mixture of
membership
III. Rights and conditions of
membership
B. BARGAINING UNIT
C. BARGAINING REPRESENTATIVE
D. RIGHTS OF LABOR ORGANIZATIONS
I. Check off, assessment, agency
fees
II. Collective Bargaining
E. UNFAIR LABOR PRACTICES
I. Nature, aspects
II. By employers
III. By labor organizations
F. PEACEFUL CONCERTED ACTIVITIES
I. By labor organization
II. By employer
III. Assumption of jurisdiction by
Secretary of Labor and
Employment
LABOR LAW
LABOR RELATIONS UNDER THE
CONSTITUTION
The Constitution guarantees to all workers their
right, among others, to:
1. Self-organization;
2. Collective bargaining and negotiations;
3. Peaceful and concerted activities
including the right to strike in accordance
with law;
4. Entitled to security of tenure, humane
conditions of work, and a living wage; and
5. Participate in policy and decision-making
processes affecting their rights and
benefits as may be provided by law (Phil.
Const. art. XIII, §3)
6. Form unions, associations, or societies
for purposes not contrary to law (Phil.
Const. art. XIII, §8)
A. RIGHT TO SELF-ORGANIZATION
Scope of Self-Organization Under the Labor
Code
1. Forming, joining, or assisting labor
organizations for the purpose of
collective bargaining through
representatives of their own choosing.
2. To engage in lawful concerted activities
for the purpose of collective bargaining or
for their mutual aid and protection. (Labor
Code, Art. 257)
The right to form, join, assist a union is specifically
protected by Art. XIII, Section 3 of the Constitution
and Art 257 of the Labor Code, and shall not be
abridged. (SS Ventures Intl. v. SS Ventures Labor
Union, G.R. No. 161690, 2008)
What the Constitution guarantees is the right to
form or join organizations. It is the employee who
should decide for himself whether he should join
or not in an association. The right to join a union
includes the right to abstain from joining any
union. (Victoriano v. Elizalde Rope Workers’
Union, G.R. L-25246, 1974)
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WORKERS’ bargaining (FEU-Dr. Nicanor Reyes Medical

UNION
ASSOCIATION Foundation v. Trajano, G.R. No. 76273, 1992)
Organization of workers
Any labor formed for the mutual aid EMPLOYEES OF GOCCs CREATED UNDER
organization in and protection of its THE CORPORATION CODE
the private members or for any
sector organized legitimate purpose other (See discussion below.)
for collective than collective bargaining
bargaining and SUPERVISORY EMPLOYEES
for other NOTE: Workers have the Supervisory employees shall not be eligible for
legitimate right to choose whether to membership in the collective bargaining unit of
purpose form or join a union or the rank-and-file employees but may join, assist
workers’ association. or form separate collective bargaining units
and/or legitimate labor organizations of their own.
The last sentence of Art. 253 broadens the (Labor Code, Art. 255)
coverage of workers who can form or join a
workers’ association and is not exclusive to Rationale: Supervisory employees, while in the
ambulant, intermittent and itinerant workers. performance of supervisory functions, become
(Samahan ng mga Manggagawa sa Hanjin, G.R. the alter ego of the management in the making
211145, 2015). and the implementing of key decisions. It would
be difficult to find unity or mutuality of interests in
I.WHO MAY OR MAY NOT EXERCISE THE a bargaining unit consisting of a mixture of rank-
RIGHT and-file and supervisory employees. (Toyota
Motor Phil. Corp. v. Toyota Motor Phil. Corp.
GENERAL RULE: Labor Union, G.R. No. 121084, 1997)
ALL EMPLOYEES
1. ALL persons employed in: Commercial, ALIENS
industrial, agricultural enterprises, religious, General Rule: All aliens, natural or juridical, [...]
charitable, medical or educational are strictly prohibited from engaging directly or
institutions, whether or not operated for profit. indirectly in all forms of trade union activities.
(Labor Code, Art. 284)
Purpose: Collective bargaining, engaging in
lawful concerted activities for collective Exceptions: Aliens may exercise the right to self-
bargaining, and mutual aid and protection (Labor organization and join or assist labor unions for
Code, Art. 253). purposes of collective bargaining, provided the
following requisites are fulfilled:
2. Ambulant, intermittent and itinerant and rural 1. With valid working permits issued by
workers, the self-employed and those with no DOLE; and
definite employers may form labor 2. They are nationals of a country which
organizations. grants the same or similar rights to
Filipino workers:
Purpose: Mutual aid and protection (Labor Code, a. As certified by the DFA; or
Art. 253). b. Ratified either the ILO
Convention No. 8 or ILO
Note: Employees of non-profit organizations are Convention No. 98
now permitted to form, organize, or join labor
unions of their choice for purposes of collective SECURITY GUARDS
The security guards and other personnel
employed by the security service contractor shall

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have the right to form, join, or assist in the
formation of a labor organization and even
engage in concerted activities.
Note: The right to organize cannot be bargained
away (Southern Philippines Federation of Labor
v. Calleja, G.R. No. 80882, 1989)
EXCEPTIONS:
Supervisors have the task of simply ensuring that
such policies are carried out by the rank-and-file
employees, or who may merely recommend
strategic and operational policies
(recommender).
Supervisors can unionize. (Pagkakaisa ng mga
Manggagawa sa Triumph International v. Pura
Ferrer-Calleja, G.R. No. 85915, 1990)

1. Managerial and Confidential employees Note: Supervisors are allowed to form unions.
What is prohibited is the co-mingling of rank-and-
Managerial vs. Supervisory vs. Confidential file employees and supervisors in one bargaining
Employees unit. They may join, assist, or form separate
collective bargaining units and/or legitimate labor
MANAGERIAL EMPLOYEE: one who is vested organizations of their own. They may also join the
with powers or prerogatives: same federation or national union.
1. To lay down and execute management
policies and/or Managerial Employee vs. Supervisor
2. To hire, transfer, suspend, layoff, recall, MANAGERIAL
SUPERVISOR
discharge, assign or discipline employees. EMPLOYEE
(Labor Code, Art. 219[m]) Has power to
recommend those
Has power to decide
Managerial employees have the authority to managerial acts, such
and do managerial
devise, implement, and control strategic and as laying down policy,
acts.
operational policies (decision maker). hiring, or dismissing
employees, and so on.
Managerial Functions refers to powers such as
to: Note: The power of the position, not the title,
1. Effectively recommend managerial actions; make the position-holder a manager or a
2. Formulate or execute management policy or supervisor.
decisions; or
3. Hire, transfer, suspend, lay-off, recall, For an Employee to be Considered a Supervisor,
dismiss, assign or discipline employees (San Recommendation Must Be;
Miguel Supervisors v. Laguesma, G.R. No. 1. Discretionary or judgmental (not clerical);
110399, 1997) 2. Independent (not a dictation of someone
else); and
Managers cannot unionize. (United Pepsi-Cola 3. Effective (given particular weight in making
Supervisory Union v. Laguesma, G.R. No. the management decision). (Azucena,
122226, 1998; Labor Code, Art. 255) Everyone’s Labor Code, 2015 ed.)

SUPERVISORS: are those employees, who in

the interest of the employer: CONFIDENTIAL EMPLOYEES: those who
Effectively recommend such managerial actions 1. By the nature of his functions, assist or act in
If the exercise of such authority is not merely a confidential capacity, in regard to persons
routinary or clerical in nature but requires who formulate, determine policies; and
independent judgment. (Labor Code, Art. 219) 2. Assists the person who effectuate
management policies, specifically in the field

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of labor relations. (Sugbuanon Rural Bank v.
Laguesma, G.R. No. 116194, 2000)
Because of such fiduciary role, he has necessary
access to confidential information in the area of
labor relations.
Confidential employees, by reason of their
position or nature of work are required to assist or
act in a fiduciary manner to managerial
employees, they are likewise privy to sensitive
and highly confidential records. (Standard
Chartered Bank Union v. Standard Chartered
Bank, G.R. No. 161933, 2008)
Confidentiality Must be Related to Labor
Relations, and Not a Business Standpoint
An employee must assist or act in a confidential
capacity and obtain confidential information
relating to labor relations policies. Exposure to
internal business operations of the company is
not per se a ground for the exclusion in the
bargaining unit. (Tunay na Pagkakaisa ng
Manggagawa sa Asia Brewery v. Asia Brewery,
G.R. No. 162025, 2010)
a. Doctrine of necessary implication
While Art. 255 of the Labor Code singles out
managerial employees as ineligible to join, assist
or form any labor organization, under the doctrine
of necessary implication, confidential employees
are similarly disqualified. This doctrine states
that what is implied in a statute is as much a part
thereof as that which is expressed. (NATU v.
Republic Planters Bank, G.R. No. 93468, 1994;
United Pepsi Cola v. Laguesma, G.R. No. 9663,
1999)
Note: Confidentiality may attach to a managerial
or non-managerial position. Confidentiality is not
determined by rank, but by the nature of the job.
Note: Confidential employees are excluded from
joining labor organization under the doctrine of
necessary implication. If confidential employees
could unionize in order to bargain for advantages
for themselves, then they could be governed by
their own motives rather than the interest of the
employers. They may become the source of
LABOR LAW
undue advantage. Said employees may act as
spy or spies of either party to a collective
bargaining agreement. (Pepsi-Cola Products, Inc.
v. Secretary of Labor, G.R. 96663, 1999)
2. Employee-Members of Cooperatives
An employee of a cooperative who is a member
and co-owner thereof cannot invoke the right to
collective bargaining, for certainly, an owner
cannot bargain with himself or his co-owners.
However, insofar as it involves cooperatives with
employees who are not members or co-owners
thereof, such employees are entitled to exercise
the rights of all workers to organization, collective
bargaining negotiations and others. (San Jose
Electric Service Cooperative v. Ministry of Labor,
G.R. No. 77231, 1989)
Employee-Members of cooperatives cannot
invoke the right to collective bargaining due to the
fact of ownership but they are allowed to form
an association for their mutual aid and
protection as employees. (Planters Products,
G.R. No. 78524, 1989; Benguet Electric, G.R. No.
79025, 1989)
3. Religious Objectors
Under the Industrial Peace Act (1953), members
of religious sects cannot be compelled or coerced
to join labor unions even when said unions have
closed shop agreements with employers
(Victoriano v. Elizalde Rope Workers’ Union, G.R.
no. L-25246, 1974)
Note: While the Victoriano decision was penned
citing the Industrial Peace Act, and while said act
was repealed by R.A. No. 3350, which does not
contain the same exception, subsequent
decisions still uphold the religious objector
exception (see Ebralinag v. Division
Superintendent of Cebu, G.R. No. 95770, 1993)
However: The Victoriano decision does not bar
the members of the Iglesia ni Kristo from forming
their own union. (Kapatiran sa Meat and Canning
Division v. BLR Director, G.R. No. L-82914, 1988)
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In fact, religious objectors can vote for “No-Union”
in a certification election in the exercise of their
right to self-organization (Reyes v. Trajano, G.R.
No. 84433, 1992)
4. Employees of Foreign Embassies,
Consulates and International Organizations
For example, the employees of International
Catholic Migration Commission cannot unionize
nor conduct a certification election (International
Catholic Migration Commission v. Hon. Calleja,
G.R. No. 85750, 1990)
The International Rice Research Institute (“IRRI”)
enjoys immunity from local jurisdiction; it has the
discretion whether to waive its immunity (Callado
v. International Rice Research Institute, G.R. No.
106483, 1995)
Note: Aliens working in the country with valid
work permits issued by the DOLE, may exercise
right to self-organization subject to rule on comity.
(Labor Code, Art. 284)
5. Government Employees
Note: The prohibition/s are not absolute.
Employees of government corporations
established under the Corporation Code shall
have the right to organize and to bargain
collectively with their respective employers.
All other employees of the civil service shall have
the right to form associations for purposes not
contrary to law. (Art. 254, Labor Code)
E.O. 180: Guidelines for the exercise of the right
to organize of government employees, creating a
Public Sector Labor-Management Council, and
for other purposes.
Right to Self-Organization under EO 180 is for a
limited purpose – only for the furtherance and
protection of their interests not for purposes of
collective bargaining.
Coverage of EO 180
Applies to all government employees
LABOR LAW
Employees of all branches, subdivisions,
instrumentalities, and agencies of the
government, including GOCCs with original
charters. (§1)
Excluded from Coverage
1. Members of the Armed Forces of the
Philippines
2. Including police officers
3. Policemen
4. Firemen and
5. Jail guards (§4)
Right to Organize
All government employees can form, join or assist
employees’ organizations of their own choosing
for the furtherance and protection of their
interests. They can also form, in conjunction with
appropriate government authorities, labor-
management committees, work councils, and
other forms of workers’ participation schemes for
the same objectives. (§2)
Under RA 6715, security guards may freely join
a labor organization of the rank and file or that of
the supervisory union, depending on their rank
(Manila Electric Company v. The Hon. Secretary
of Labor and Employment, Staff and Technical
Employees Association of Meralco et al, G.R. No.
91902, 1991)
Who are Ineligible to Join Organization of
Rank & File Government Employees
High-level employees whose functions are
normally considered as policy-making or
managerial or whose duties are of a highly
confidential nature. (§3)
Protection of Right to Organize
1. They shall not be discriminated against in
respect of their employment by reason of
their membership or participation in
employees’ organizations.
2. Employment shall not be subject to the
condition that they shall not join or shall
relinquish their membership therein. (§5)
Non-Interference of Government Authorities
Government authorities shall not interfere in the
establishment, functioning or administration of
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government employees' organizations through 4. Secretary; Department of Justice Member

acts designed to place such organizations under 5. Secretary; Department of Budget and
the control of government authority. (§6) Management Member (§15).

Place of Registration Settlement of Disputes

CSC and DOLE. (§7)
Procedure for the Registration of Employees’
Organizations
1. File application with BLR or Regional Office,
which shall transmit the application to the
BLR within 3 days from receipt.
2. BLR shall process the application in
accordance with the Labor Code. (§7)
3. Upon approval, a registration certificate will
be issued, recognizing it as a legitimate
employees’ organization with the right to
represent its members and undertake
activities to further and defend its interests.
4. The certificates of registration shall be jointly
approved by the Chairman of the CSC and
Secretary of DOLE. (§8)
Subject of Negotiation
Terms and conditions of employment or
improvements thereof, except those that are fixed
by law, may be the subject of negotiations
between duly recognized employees'
organizations and appropriate government
authorities. (§13)
The Civil Service and labor laws and procedures,
whenever applicable, shall be followed in the
resolution of complaints, grievances and cases
involving government employees. In case any
dispute remains unresolved after exhausting all
the available remedies under existing laws and
procedures, the parties may jointly refer the
dispute to the Council, for appropriate action.
(§16)
The BLR has the jurisdiction to call for and
supervise the conduct of certification elections in
the public sector. There is no constitutional
objection to DOLE handling the certification
process considering its expertise, machinery and
experience in this particular activity. EO 180
requires organizations of government employees
to register with both DOLE and CSC. This
ambivalence notwithstanding, the CSC has no
facilities, personnel and experience in the
conduct of certification elections. BLR has to do
the job. (Bautista v. CA, G.R. No. 123357, 2005)
DEFINITION OF A MANAGERIAL EMPLOYEE:
LABOR STANDARDS VS. LABOR RELATIONS

Peaceful Concerted Activities and Strikes LABOR STANDARDS LABOR RELATIONS

The Civil Service laws and rules governing Includes the officers Does not include the
concerted activities and strikes in the government and members of the managerial staff since
service shall be observed, subject to any managerial staff they are classified as
legislation that may be enacted by Congress. (supervisory supervisory
(§14) employees); such is employees; used in
important to be able to order to determine an
Public Sector Labor-Management Council determine if employee’s eligibility
(Council) employees are in joining or forming a
It is the body charged with implementing and covered by the Labor union.
administering EO 180. Code on Conditions of
Employment.
The Council shall be composed of the following:
1. Chairman; Civil Service Commission Extent of Limitation on Right to Self-
Chairman Organization
2. Secretary; Department of Labor and Art. 255 only disallows managerial employees
Employment Vice Chairman from joining “labor organizations” (means any
3. Secretary; Department of Finance Member union or association of employees which exists in

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whole or in part for the purpose of collective with employees and workers in their exercise of
bargaining or of dealing with the employer the right to self-organization (Labor Code, Art. 25)
concerning terms and conditions of employment).
Art. 255 does not absolutely disqualify Preliminary: Discussion of Registration and
managerial employees from exercising their right Cancellation of Labor Organizations
of association. (United Pepsi v. Laguesma, G.R. DEFINITION OF TERMS
No. 122226, 1998) Any union or association of
employees in the private
II. COMMINGLING AND MIXTURE OF sector which exists in whole
MEMBERSHIP or in part for the purposes of
Labor
collective bargaining,
Organization
WORKERS' CONSTITUTIONAL RIGHT TO mutual aid, interest,
SELF-ORGANIZATION, amending the Labor cooperation, protection, or
Code modified previous Supreme Court rulings other lawful purposes
prohibiting supervisors’ unions from joining with (Labor Code, Art. 219[g])
the same federation as the rank and file. Any labor organization in
the private sector organized
New law now explicitly ALLOWS for the for collective bargaining and
Union
commingling of the two. for other legitimate purpose
Sec. 8 of new law provides: “Article 245 (now (Sec. 1[ccc], Rule I, DO 40-
255) of the Labor Code is hereby amended to 03)
read as follows – Any labor organization in
the private sector registered
Art. 245 (now 255). Ineligibility of Managerial or reported with the DOLE,
Employees to Join any Labor Organization; which includes a
Legitimate
Right of Supervisory Employees. - Managerial local/chapter directly
Labor
employees are not eligible to join, assist or form chartered by a legitimate
Organization
any labor organization. Supervisory employees federation or national union
shall not be eligible for membership in the which has been duly
collective bargaining unit of the rank-and-file reported to the Department
employees but may join, assist or form separate (Labor Code, Art. 219[h])
collective bargaining units and/or legitimate labor A labor union created by
organizations of their own. The rank and file independent registration;
union and the supervisors’ union operating required to submit names of
Independent
within the same establishment may join the all its members comprising
Union
same federation or national union. at least 20% of all the
employees in the bargaining
The inclusion as union members outside the unit
bargaining unit shall render said employees
automatically removed from the list of LABOR WORKER’S
membership of said union. (Labor Code, Art. 256) ORGANIZATION ASSOCIATION
It exists in whole or in It is organized for the
part for the purpose of mutual aid and
Non-Abridgment of the Right to Self- collective bargaining protection of its
Organization or of dealing with members or for any
It shall be unlawful for any person to restrain, employers legitimate purpose
coerce, discriminate against or unduly interfere concerning terms and other than collective

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conditions of bargaining. (DO No.

employment 40-03). Purpose of Registration
Registration is the operative act that gives rights
Modes of Acquiring Legitimacy for Labor to a labor organization.
Organizations 1. It is clothed with legal personality, once
1. Registration with the Bureau of Labor registered, to claim representational and
Relations (Federation) or with the bargaining rights or to strike or to picket.
Regional Office (Independent Unions); 2. It is a conditional sine qua non for the
2. Chartering or Issuance of a Federation or acquisition of legal personality.
National Union of a Charter Certificate 3. It is a valid exercise of police power
because the activities in which labor
ACQUISITION OF LEGAL PERSONALITY organizations, associations, and unions
Federation, Issuance of the Certificate of workers are engaged affect public
national union, of Registration interest, which should be protected. (PH
trade union Association of Labor Unions v. Secretary
center, of Labor)
independent
union INDEPENDENT CHARTERING
Chapter/ Local/ Limited legal personality to REGISTRATION
Chartered Union file Petition for Certification Obtained by union A duly registered
Election – upon issuance of organizers in an federation/national
Charter Certificate enterprise through union issues a charter
their own accord to a union in an
Additional documents to be enterprise and
submitted: registers the charter
1. Names of the with the regional
chapters’ officers, office of the DOLE
addresses, and Result: Independent Result: Chapter/Local
principal office Union
2. Chapter’s Accorded legal Certificate only limited
constitution and by- personality to petition for
laws certification election;
3. Where the once reported,
chapter’s acquires legal
constitution and by- personality (but loses
laws are the same it once disaffiliated)
as the federation or Application is filed Charter certificate
national union, it with and will be acted issued by federation
shall be indicated. upon by the DOLE or national union is
Regional Office where filed with the Regional
Note: Such legal personality may be questioned the applicant’s Office or BLR within
only through an independent petition for principal office is 30 days after the
cancellation and not by way of collateral attack. located issuance of charter
(Sec. 8, Rule IV of DO 40-03). The proceedings certificate
on a petition for cancellation of registration are 20% minimum No minimum size of
independent of those of a petition for certification membership is membership is
election. (Samma-Likga v. Samma Corporation, required to register an required
G.R. 167141, 2009). independent union

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4. To vote on officers’
Grounds for Cancellation: compensation;
1. Misrepresentation, false statement or 5. To vote on proposed
fraud in connection with the adoption or special assessments
ratification of the constitution and by-laws 6. To be deducted a
or amendments thereto, the minutes of special assessment
ratification, and the list of members who only with the member’s
took part in the ratification; individual written
2. Misrepresentation, false statements or authorization
fraud in connection with the election of The member’s right to be
officers, minutes of the election of informed about:
officers, and the list of voters; 1. The organization’s
RIGHT TO
3. Voluntary dissolution by the members. constitution and by-
INFORMATION
(Art. 247) laws; and
2. The CBA, and about
Requirements for Voluntary Cancellation: labor laws
1. At least 2/3 of its general membership
votes, in a meeting duly called for that Note: Any violation of the above rights and
purpose conditions of membership shall be a ground for
2. Application to cancel registration by the the cancellation of the union registration or
board and attested by the president expulsion of an officer from office, whichever is
appropriate. However, with RA 9481 amending
III. RIGHTS AND CONDITIONS OF and limiting the grounds for cancellation of
MEMBERSHIP registration, this should also be deemed
SUMMARY OF RIGHTS AND CONDITIONS amended.
OF MEMBERSHIP UNDER ART. 250
The member’s right to vote Reporting Violations of Membership
and be voted for, subject to At least 30% of all the members of the union or
POLITICAL
lawful provisions on any member or members specifically concerned
RIGHTS
qualifications and may report such violation to the Bureau (Labor
disqualifications Code, Art. 250)
DELIBERATIVE The member’s right to
AND participate in deliberations However: When the violation directly affects only
DECISION- on major policy questions 1 or 2 members, then only 1 or 2 members would
MAKING and decide them by secret be enough to report such violation (Verceles v.
RIGHTS ballot BLR-DOLE, G.R. No. 152322, 2005)
The member’s rights:
1. Against unauthorized Visitorial Power of DOLE Secretary
collection of The complaint to authorize the DOLE Secretary’s
contributions or or his duly authorized representative’s power to
RIGHTS OVER unauthorized inquire into the financial activities of any labor
MONEY disbursements organization must be supported by at least 20%
MATTERS 2. To require adequate of the Labor Organization’s membership (Labor
records of income and Code, Sec. 289).
expenses;
3. To access to financial Eligibility for Membership
records; Eligibility for membership depends on a union’s
constitution and by-laws. Nonetheless, employee
is already qualified for union membership starting

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on his first day of service. (Labor Code, Art. employees in seasonal industries. (Tancino v.
292[c]) Ferrer-Calleja, G.R. No. 78131, 1988)

An employee’s membership in the union does not

mean coverage in the CBA. Neither does Limitations
coverage in the CBA mean membership in the 1. The labor organization cannot compel
union. employees to become members of their
labor organization if they are already
WHO ARE WHO ARE members of a rival union;
PROHIBITED FROM PROHIBITED FROM 2. The persons mentioned in Art. 250[e]) of
BECOMING BECOMING the Labor Code are prohibited from
MEMBERS OF A OFFICERS OF A becoming a member of a labor
LABOR LABOR organization (Subversives); and
ORGANIZATION ORGANIZATION 3. Religious objectors cannot be compelled
1. Non-Employees 1. Non-Employees or coerced to join labor unions
(Labor Code, Art. (Labor Code, Art. (Victoriano v. Elizalde Rope Worker’s
250[c]); 250[c]); Union, G.R. No. L-25246, 1974)
2. Subversives or 2. Subversives or
those engaged in those engaged in a. NATURE OF RELATIONSHIP
subversive subversive i. Member – Labor Union
activities (Labor activities (Labor The relationship of the union and the member is
Code, Art. Code, Art. fiduciary in nature. The union may be
250[e]); 250[e]); considered the agent of its members for the
3. Persons who purpose of securing for them fair and just wages
have been and good working conditions and is subject to the
convicted of a obligation of giving the members as its principals
crime involving all information relevant to union and labor matters
moral turpitude entrusted to it. (Heirs of Teodolo Cruz v. CIR,
(Labor Code, Art. G.R. No. L-23331-32, 1969)
250[f])
AGENCY RELATIONSHIP INVOLVED
Note: No qualification requirements for AGENT OF
PRINCIPAL AGENT
candidacy to any position shall be imposed other AGENT
than membership in good standing in the labor Local/Cha Federation/Natio
Employees
organization. Union officer must be an employee. pter nal Union

Who are Entitled to Vote ii. Labor Union Federation

Only members of the union can take part in the
election of union officers. (Labor Code, Art.
250[c])
The question however of eligibility to vote may be
determined through the use of the applicable
payroll period and employee's status during the
applicable payroll period. The payroll of the
month next preceding the labor dispute in case
of regular employees and the payroll period at
or near the peak of operations in case of
Affiliate: Independent union affiliated with a
federation or national union (IRR Labor Code,
Sec. 3, Book V, Rule II); OR a chartered local
which was subsequently granted independent
registration but did not disaffiliate from its
federation, reported to the Regional Office and
the Bureau in accordance with Rule III, Sections
6 and 7 of these Rules (Sec. 1[a], Rule I of D.O.
40-03)

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A local union does not owe its existence to the
federation with which it is affiliated. It is a separate
and distinct voluntary association owing its
creation to the will of its members. Mere affiliation
does not divest the local union of its own
personality, neither does it give the mother
federation the license to act independently of the
local union. It only gives rise to a contract of
agency, where the former acts in representation
of the latter. (Insular Hotel Employees v.
Waterfront Insular Hotel, G.R. No. 174040-41,
2010)
(a) Disaffiliation
A right granted to affiliates to disassociate from
the mother union.
Local unions remain the basic units of
association, free to serve their own interests
subject to the restraints imposed by the
constitution and the by-laws of the national
federation, and they are also free to renounce the
affiliation upon the terms laid down in the
agreement which brought about affiliation. To
disaffiliate is a right, but to observe the terms of
affiliation is an obligation.
Note: Disaffiliation is a right corollary to the right
of association granted by the Constitution. The
right to associate necessarily entails the right not
to associate. (Volkschel Labor Union v. BLR,
G.R. No. L-45824, 1985)
Note: Chartered local can disaffiliate from the
federation, but it will lose its legal personality. In
practice, chartered locals file for independent
registration prior to disaffiliation in order for it to
gain new legal personality despite disaffiliation.
When to Disaffiliate
General Rule: A labor union may disaffiliate from
the mother union to form a local or independent
union ONLY during the 60-day freedom period
immediately preceding expiration of CBA.
Freedom Period: The last 60 days of the 5th year
of the CBA. (Labor Code, Art. 265)
Exception: Shift of allegiance of majority. In
such a case, however, the CBA continues to bind
members of the new or disaffiliated and
LABOR LAW
independent union up to the CBA’s expiration
date. (Tanduay Distillery Labor Union v. NLRC,
G.R. No. 75037, 1987)
Individual Member Disaffiliation vs. Union’s
Disaffiliation
Any individual member or any number of
members may disaffiliate from the union during
the “freedom period.” But disaffiliating the union
from its mother union must be supported by the
majority of the members. If done by a minority,
even during the freedom period, the act may
constitute disloyalty. (Villar, et al v. Inciong, G.R.
Nos. L-50283-8, 1983)
Manner of Disaffiliation
An affiliate may disaffiliate from a labor federation
or national union through the members’
determination by secret balloting, after due
deliberation. (Labor Code, Art. 250[d])
Local Union Disaffiliates to Join New
Federation – Allowed
When the local union withdraws from the old
federation to join a new federation, it is merely
exercising its primary right to self-organization for
the effective enhancement and protection of
common interests. In the absence of enforceable
provisions in the federation’s constitution
preventing disaffiliation of a local union, a local
may sever its relationship with its parent.
(Tropical Hut Employees Union-CGW v. Tropical
Hut, G.R. Nos. L-43495-99, 1990)
Note: A local union which has affiliated itself with
a federation is free to sever such affiliation
anytime and such disaffiliation cannot be
considered disloyalty. In the absence of specific
provisions in the federation's constitution
prohibiting disaffiliation or the declaration of
autonomy of a local union, a local may dissociate
with its parent union (MSMG-UWP v. Ramos,
G.R. 113907, 2000)
Limitations to Disaffiliation
Disaffiliation should be in accordance with the
rules and procedures stated in the constitution
and by-laws of the federation. (See Cirtek
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Employees Labor Union-FFW v. Cirtek since no temporary restraining order was issued,
Electronics, G.R. No. 190515, 2011) nothing was legally preventing respondent from
negotiating a new collective bargaining
agreement with petitioners. That it chose to
EFFECTS OF DISAFFILIATION refuse negotiations and instead entered into an
AS TO EXISTING agreement with its employees to essentially
AS TO UNION DUES
CBA waive negotiations for 2007 and 2008 betrays its
The federation will no intention of limiting petitioners' bargaining power.
longer receive the (SONEDCO Workers Free Labor Union v URC,
dues from the G.R. 220383, October 5, 2016)
employer because
without the said The CBA continues Effect of substitutionary doctrine on the
affiliation, the to bind the members Deposed Union’s Personal Undertakings
employer has no link of the new or In case of change of bargaining agent under the
to the mother union. disaffiliated and substitutionary doctrine, the new bargaining
independent union agent is not bound by the personal
The employer’s check- up to the CBA’s undertakings of the deposed union like the “no
off authorization, even expiration date. strike, no lockout” clause in a CBA which is the
if declared irrevocable, (Associated Workers personal undertaking of the bargaining agent
is good only as long Union-PTGWO v. which negotiated it.
as they remain NLRC, G.R. Nos.
members of the union 87266-69, 1990) Summary of Principles: Affiliation /
concerned. (Phil. Disaffiliation
Federation of 1. A local union may affiliate or disaffiliate
Petroleum Workers v. from federation
CIR, G.R. No. L- 2. Affiliation and disaffiliation entail rights
26346, 1971) and obligations
3. Affiliation or disaffiliation is a major issue
(b) Substitutionary Doctrine that can be decided only by a majority of
The employees cannot revoke the validly the members through secret balloting in
executed collective bargaining contract with their a formal meeting duly called for the
employer by the simple expedient of changing purpose
their bargaining agent. The new agent must 4. Between the chapter and the federation,
respect the contract. The employees, through affiliation or disaffiliation is a contractual
their new bargaining agent, cannot renege on the relation.
collective bargaining contract, except to negotiate 5. An affiliation contract cannot absolutely
with management for the shortening hereof. prohibit disaffiliation but may impose
(Azucena Vol. I, 7th ed., p. 209). limitations or restrictions. It may specify
the number or proportion of votes
Note: The case of SONEDCO seems to have needed, or the appropriate period to
made a ruling contrary to Substitutionary disaffiliate.
Doctrine. When the 2002 Collective Bargaining 6. By affiliating or disaffiliating, the local
Agreement expired in December 2006, the Labor union does not dissolve itself nor does it
Secretary's Resolution declaring SONEDCO lose its standing as principal.
Workers Free Labor Union as the bargaining 7. The local union, even a local chapter,
agent of respondent's rank-and-file employees must be a legitimate labor organization –
was already final and executory. Respondent's it must have been duly registered with
initial basis for refusal to bargain had expired, and DOLE, otherwise it is not entitled to the
rights of an LLO.

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Test to determine the constituency of an

Note: The term “local union” refers to an appropriate bargaining unit
independent union, not to a local/chapter. The law fixes no maximum or minimum number
of bargaining units. Union members come from
B. BARGAINING UNIT the CBU and several rival unions can come from
the CBU. The representative is the union, and the
Bargaining Unit group represented is the CBU.
A group of employees sharing mutual interests
within a given employer unit, comprised of all or Fundamental Factors in Determining the
less than all of the entire body of employees in Appropriate Collective Bargaining Unit:
the employer unit or any specific occupational or 1. Will of the Employees
geographical grouping within such employer unit. 2. Substantial Mutual Interests
(D.O. No. 40-03, Sec. 1[d], Rule I, Book V) 3. Prior Collective Bargaining History
4. Similarity of Employment Status
Appropriate Bargaining Unit (ABU) Out of these, the controlling test of grouping is
A group of employees of a given employer mutuality or commonality of interest (San
comprised of all or less than all of the entire body Miguel Corporation v. Laguesma, G.R. 100485,
of employees, which the collective interests of the 1994).
employees, consistent with the equity of the
employer, indicate to be best suited to serve Community of Interests Rule: States that the
reciprocal rights and duties of the parties. (Belyca employees within an appropriate bargaining unit
Corp. v. Calleja, G.R. No. 77395, 1988) must have commonality of collective bargaining
interests in the terms of employment and working
Right of Individual or Group to Present conditions as evidenced by the type of work they
Grievances Not Impaired perform. (San Miguel Foods Inc. v. San Miguel
An individual employee or group of employees Corp. Supervisors and Exempt Union, G.R. No.
shall have the right at any time to present 146206, 2011)
grievances to their employer.
ELEMENTS OF AN APPROPRIATE
Any provision of law to the contrary BARGAINING UNIT
notwithstanding, workers shall have the right, to All or less than all of the
COMPOSITION
participate in the policy and decision-making entire body of employees
processes of the establishment where they are Of employees, i.e. the
employed insofar as said processes will directly collective interest of
EQUITY
affect their rights, benefits and welfare. employees consistent with
the equity of the employer
For this purpose, workers and employers may To serve the reciprocal
form labor-management councils: Provided, rights and duties of the
PURPOSE
that the representatives of the workers in such parties under the CB
labor-management councils shall be elected by at provisions and with law
least the majority of all employees in said
establishment. (Labor Code, Art. 267) Factors in Determining Community of Interest
1. Similarity in the scale and manner of
Note: In establishments where no legitimate labor determining earnings
organization exists, the workers’ representative 2. Similarity in employment benefits, hours of
shall be elected directly by the employees at work and other terms and conditions of
large. (Azucena Vol. I, 7th ed., p.458). employment
3. Similarity in the kinds of work performed

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4. Similarity in the qualifications, skills and
training of the employees
5. Frequency of contact or interchange among
the employees
6. Geographic proximity
7. Continuity or integration of production
process
8. Common supervision and determination of
labor-relations policy
9. History of collective bargaining
10. Desires of the affected employees
11. Extent of union organization (Azucena Vol. I,
7th ed., p. 461).
Globe doctrine: If units in one industry cannot be
determined, the employees can decide how to
organize themselves into units. The best way to
determine such preference is through referendum
or plebiscite. (Kapisanan ng Mga Manggagawa
sa Manila Road Co. v. Yard Crew Union, G.R.
Nos. L-16292-94, 1960)
Geography and Location play a significant role
in determining community of interests if:
1. The separation between the camps and the
different kinds of work in each all militate in
favor of the system of separate bargaining
units;
2. When the problems and interests of the
workers are peculiar in each camp or
department;
3. The system of having one collective
bargaining unit in each camp has operated
satisfactorily in the past. (Benguet
Consolidated v. Bobok Lumberjack
Association, G.R. No. L-11029, 1958)
Prior Collective Bargaining History
The existence of a prior collective bargaining
history is 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, G.R. No. 79526, 1990)
Single or “Employer Unit” Preferred
General Rule: The proliferation of unions in an
employer unit is discouraged as a matter of policy
unless there are compelling reasons which would
LABOR LAW
deny a certain class of employees the right to self-
organization for purposes of collective
bargaining. (Philtranco v. BLR, G.R. No. 85343,
1989)
Exceptions:
1. Supervisory employees who are allowed
to form their own unions apart from the
rank-and-file employees;
2. Where the employees exercise their right
to form unions or associations for
purpose not contrary to law, to self-
organization, and to enter into collective
bargaining negotiations (Barbizon Phil. v.
Nagkakaisang Supervisor ng Barbizon,
G.R. Nos. 113204-05, 1996)
Two Companies with Related Business
General Rule: Two corporations cannot be
treated as a single bargaining unit even if their
businesses are related. (Diatagon Labor
Federation Local v. Ople, G.R. No. L-44493-94,
1980)
Exception: Application of Piercing Doctrine
The cross-linking of the agencies command,
control, and communication systems indicate
their unitary corporate personality. Accordingly,
the veil of corporate fiction should be lifted for the
purpose of allowing the employees of the three
agencies to form a single labor union. (Philippine
Scouts Veterans v. Torres, G.R. No. 92357,
1993)
Spin-Off Corporations
In the case of subsidiaries or corporations formed
out of former divisions of a mother company
following a bona fide reorganization, it is best to
have separate bargaining units for the different
companies. (San Miguel v. Confesor, G.R.
11262, 1996)
Summary: Signification of Determining the
Bargaining Unit
1. In a Certification Election, the voters are the
whole bargaining unit, whether union or non-
union members (Labor Code, Arts. 267);
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2. In a CBA Ratification, the voters are the The Department shall promote the formation of
whole bargaining unit, and not just the union labor-management councils in organized and
members (Labor Code, Art 237); and unorganized councils.
3. In Strike Voting, the voters are the members
of the union, not the whole bargaining unit. Purpose of the Labor-Management Councils
(Labor Code, Art. 278[f]) To enable the workers to participate in policy and
decision-making processes in the
C. BARGAINING REPRESENTATIVE establishment, insofar as said processes will
directly affect their rights, benefits and welfare.
Selection/Designation of an exclusive
bargaining representative Services to be rendered by the Department in
General Rule: The labor organization line with the said policy
designated/selected by the majority of the 1. Conduct awareness campaigns
employees in an ABU shall be the exclusive 2. Assist the parties in setting up labor-
bargaining representative of the employees in management structures, functions and
such unit for the purpose of collective bargaining. procedures
3. Provide process facilitators upon request of
Exceptions: the parties
1. An individual employee or group of 4. Monitor the activities of labor-management
employees shall have the right at any time to structures as may be necessary and conduct
present grievances to their exclusive studies on best practices aimed at promoting
bargaining representative. harmonious labor-management relations.
2. Any provision of law to the contrary
notwithstanding, workers shall have the right SELECTION OF EMPLOYEES’
to participate in policy and decision-making REPRESENTATIVES TO THE COUNCIL
processes of the establishment where they NO LEGITIMATE
ORGANIZED
are employed insofar as said processes will LABOR
ESTABLISHMENT
directly affect their rights, benefits and ORGANIZATION
welfare. Workers and employees may also Nominated by the
By the employees at
form labor management councils for the exclusive bargaining
large.
same purpose. In such case, its representatives
representatives shall be elected by a majority
of all employees in said establishment. 1. DETERMINATION OF REPRESENTATION
(Labor Code, Art. 267) STATUS
Representation is determined through:
Note: A bargaining unit is a group of employees a. SEBA (Sole and Exclusive Bargaining Agent)
sought to be represented by a petitioning union. Certification
Such employees need not be members of a union b. Certification Election
seeking the conduct of a certification election. A c. Run-Off Election
union certified as an exclusive bargaining agent d. Re-run Elections
represents not only its members but also other e. Consent Election
employees who are not union members (Holy
Child Catholic School v. BHCCS-TELI-PIGLAS, a. SEBA CERTIFICATION
G.R. 179146 ,2013). Voluntary recognition was repealed and replaced
by a Request for the Sole and Exclusive
Creation of Labor Management and Other Bargaining Agent Certification (D.O. No. 40-I-15
Councils Series of 2015)

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SEBA Certification may be issued if it is comply within 10 days from notice. Failure to
proved that the following concur: comply is deemed a withdrawal of the request.
1. The bargaining unit is ununionized;
2. The requesting union is the only union in that REQUEST FOR CERTIFICATION
bargaining unit; and UNORGANIZED
UNORGANIZED
3. The CBU majority are members of the union ESTABLISHMENT
ESTABLISHMENT
WITH ONLY 1
WITH MORE
Requesting Union LEGITIMATE LABOR
THAN 1 LLO
Any legitimate labor organization ORGANIZATION (LLO)
The RD shall call a
Where to File conference within 5 work
Regional Office which issued the legitimate labor days for the submission
organization’s certificate of registration or of the following:
certificate of creation of chartered local. 1. The names of the
employees in the
Requirements for Request of SEBA covered bargaining
Certification: The request shall indicate: unit who support the
1. The name and address of the requesting certification, provided
legitimate labor organization that said employees
2. The name and address of the company comprise at least
where it operates majority of the
The RD shall refer
3. The bargaining unit sought to be number of employees
the same to the
represented in the covered
Election Officer for
4. The approximate number of employees bargaining unit; and
the conduct of a
in the bargaining unit; and 2. Certification under
Certification
5. The statement of the existence/non- oath by the president
Election.
existence of other labor of the requesting
organization/CBA union or local that all
6. List of employees who support the documents submitted
certification, numbering at least majority are true and correct
of the CBU. based on his/her
personal knowledge.
The certificate of registration or certification of
creation as duly certified by the president of the If the RD finds the
requesting union or of the federation of the local, requirements complete,
respectively, shall be attached to the request. he/she shall issue during
the conference a
Action on the Request certification as SEBA.
Within 1 day from the submission of the request,
the Regional Director shall: Request for Certification In Organized
1. Determine whether the request is Establishment
compliant with the rules and whether the If the RD finds the establishment organized,
bargaining unit sought to be represented he/she shall refer the same to the Mediator-
is organized or not Arbiter for the determination of the propriety of
2. Request a copy of the payroll for conducting a certification election.
purposes of SEBA certification

If he/she finds it deficient, the Regional Director

shall advise the requesting union or local to

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Effects of Certification
1. Upon the issuance of the certification as
SEBA, the certified union or local shall enjoy
the rights and privileges of an exclusive
bargaining agent of all the employees in the
covered bargaining unit.
2. The certification shall bar the filing of a
petition for certification by any labor
organization for a period of 1 year from the
date of its issuance. Upon expiration of this 1-
year period, any legitimate labor organization
may file a petition for certification election in
the same bargaining unit represented by the
certified labor organization, unless a CBA
between the employer and the certified labor
organization was executed and registered
with the Regional Officer in accordance with
Rule XVII of this rules. (D.O. 40-i-15)
b. CERTIFICATION ELECTION
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.
Conducted by Med-Arbiter of the Bureau of Labor
Relations of the DOLE. (IRR Labor Code, Sec.
1[x], Rule I, Book V)
Purpose
The ascertainment of the wishes of the majority
of the employees in the appropriate bargaining
unit: to be or not to be represented by a labor
organization, and in the affirmative case, by
which particular labor organization. (Reyes v.
Trajano, G.R. No. 84433, 1992)
Whenever there is doubt as to whether a
particular union represents the majority of the
rank-and-file employees, in the absence of a legal
impediment, the holding of a certification election
is the most democratic method of determining the
employees’ choice of their bargaining
representative. It is the appropriate means
whereby controversies and disputes on
representation may be laid to rest, by the
unequivocal vote of the employees themselves.
(Philippine Airlines Employees’ Association
(PALEA) v. Ferrer-Calleja, G.R. No. 76673, 1988)
LABOR LAW
Issues Involved in a Certification Election
1. Proper composition and constituency of the
bargaining unit; and
2. Veracity of membership claims of the
competing unions so as to identify the union
that will serve as the bargaining
representative of the entire bargaining unit
Note: The questions to be resolved in a
Certification Election:
1. Whether the employees want to be
represented
2. By whom should they be represented
Pending Petition for Cancellation of
Registration is not a Bar for a Certification
Election
An order to hold a certification election is proper
despite the pendency of the petition for
cancellation of the registration certificate of the
respondent
union because at that time the union
filed its petition, it still had the legal personality to
perform such act absent an order directing the
cancellation (Legend International Resorts
Limited v. Kilusang Manggagawa ng Legenda,
G.R. 169754, 2006).
Certification Election Union Election
To determine the
exclusive bargaining To elect union officers
agent
All members of the
Only union members
appropriate bargaining
may vote
unit may vote
Note: The process in certification elections
depends upon whether the establishment is
organized or unorganized. The general flow
remains the same, but there are some
differences, as will be discussed below.
IN AN UNORGANIZED ESTABLISHMENT
Unorganized establishment: an establishment
without a bargaining representative.
Who May File
Any legitimate labor organization including
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1. A national union or federation which has Requisites for holding a certification election
already issued a charter certificate to its in an organized establishment (Labor Code,
local/chapter participating in the certification Art. 268):
election or a local/chapter which has been 1. The Med-Arbiter shall automatically order an
issued a charter certificate by the national election by secret ballot when
union or federation. (Labor Code, Art. 269) 2. Verified petition supported by at least 25% of
2. An employer may file a Petition for all the employees in the bargaining unit,
Certification Election when: questioning the majority status of the
a. Requested to bargain collectively; incumbent bargaining agent.
and 3. Filed before the DOLE within the 60-day
b. No bargaining agent nor a registered period before the expiration of the five year
CBA exists in the unit. (Labor Code, representation aspect of the CBA
Art. 270)
Note: The requisite written consent of at least
Requisites for holding a certification election 20% (now 25%) of the workers in the bargaining
in an unorganized establishment (Labor Code, unit applies to certification election only, and not
Art. 269) to motions for intervention. (PAFLU v. Calleja,
Once a petition is filed by a legitimate labor G.R. No. 79347, 1989)
organization, the Med-Arbiter shall automatically
order the conduct of a certification election. When to file
The proper time to file a petition for C.E. depends
When to File on whether the bargaining unit has a CBA or not.
Any time, except within 12 months of a previous
election (if any). If it has no CBA, the petition may be filed anytime
except within 12 months of a previous election (if
IN AN ORGANIZED ESTABLISHMENT any).
Organized establishment: an establishment
with a duly certified bargaining agent and/or an If the bargaining unit has a CBA, the petition can
existing CBA. be filed only within the “freedom period” which is
the last 60 days of the 5th year of the CBA.
Who May File
Any legitimate labor organization, including Comparison of Organized v. Unorganized
1. A national union or federation which has establishments
already issued a charter certificate to its local
ART. 268 ART. 269
chapter participating in the certification
ORGANIZED UN-ORGANIZED
election. (Labor Code, Art. 268) (National
union or federation shall not be required to BARGAINING AGENT
disclose the names of the local/chapter’s Existing None
officers and members, but shall attach to the FREEDOM PERIOD
petition the charter certificate it issued to its Not applicable. Can
No petition for
local/chapter Sec. 1, Rule VIII of D.O. 40-I- file petition anytime,
certification except
15) except within 12
within the 60-day
2. A local chapter which has been issued a months of a previous
freedom period
charter certificate by the national union or election (if any).
federation before the DOLE within the 60-day SUBSTANTIAL SUPPORT RULE
freedom period. (Labor Code, Art. 268) Must be duly
Substantial support
supported by 25% of
rule not applicable
all the members of the

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appropriate bargaining Employer as bystander

unit IN ALL CASES (including when petition for
GRANT OF PETITION FOR CERT. ELECTION certification is filed by employer), the employer’s
Appealable Not Appealable participation shall be limited to:
(Protest may be filed) 1. Being notified or informed of petitions of such
nature; and
REQUIREMENTS FOR VALID CERTIFICATION 2. Submitting the list of employees during the
ELECTION pre-election conference should the Med-
1. The union should be legitimate which means Arbiter act favorably on the petition. (Labor
that it is duly registered and listed in the Code, Art. 271)
registry of legitimate labor unions of the BLR
or that its legal personality has not been However, manifestation of facts that would aid
revoked or cancelled with finality. the Med-Arbiter in expeditiously resolving the
2. In case of organized establishments, the petition may be considered (i.e. existence of
petition for certification election is filed during bars). (D.O. No. 40-I-15)
(and not before or after) the 60-day
freedom period of a duly registered CBA. 
 Note: An employer has no legal standing in a
3. In case of organized establishments, the certification election. He cannot oppose the
petition complied with the 25% written petition or appeal the Med-Arbiter’s orders related
support of the members of the bargaining thereto. (San Miguel Foods Inc.-Cebu B-Meg
unit. 
 Feed Plant v. Laguesma, G.R. No. 116172, 1996)
4. The petition is filed not in violation of any of
An employee has the right to intervene for the
the three (3) bar rules.

protection of his individual right. (D.O. No. 40-F-
03)
COMMON REQUISITES
Probationary employees can vote in a
Where to file the PCE
certification/consent election if the bargaining unit
With the Regional Office which issued the
sought to be represented by the union is the
petitioning union’s certificate of registration or
bargaining unit of all rank-and-file employees,
certificate of creation of chartered local.
without distinction as to regular and non-regular.
1. Where two/more petitions involving the same
All employees in the appropriate bargaining unit,
bargaining unit are filed in one Regional
whether probationary or permanent are entitled to
Office, the same shall be automatically
vote. (National Union of Workers In Hotels,
consolidated with the Med-Arbiter who first
Restaurant and Allied Industries-Manila Pavilion
acquires jurisdiction.
Hotel Chapter v. Secretary of Labor, 2009)
2. Where the petitions are filed in different
Regional Offices, the Regional office in which
Grounds for Denying Petition (R.A. 9481; D.O.
the petition was first filed shall exclude all
No. 40-F-03) (ALCEC-YDS)
others; in which case, the latter shall endorse
1. If the petitioner union does not Appear in two
the petition to the former for consolidation.
successive conferences called by the Med-
3. At the option of the petitioner, a PCE and its
Arbiter, upon showing that the petitioner was
supporting document may also be filed
duly notified.(Non-Appearance)
ONLINE. (DO No. 40-I-15)
2. The petitioner is not Listed in the
The Regional Director or his/her authorized
Department’s registry of legitimate labor
personnel shall be responsible for the posting of
unions or that its legal personality has been
the Notice of Petition for Certification Election.
revoked or cancelled with finality.
(Illegitimacy – Unregistered Union)

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The filing or pendency of any inter/intra-union
dispute and other related labor relations dispute
is not a prejudicial question to any petition for
certification and shall not be a ground for the
dismissal of a petition for certification election or
suspension of proceedings for certification
election. (D.O. No. 40-03, as amended by D.O.
No. 40-F-03, Sec. 2, Rule XI)
Certification election may be ordered despite the
pendency of a ULP charge against a union filed
by the employer (Barrera v. CIR, G.R. No. L-
32853, 1981) or the pendency of a petition to
cancel the union’s registration certificate based
on an alleged illegal strike by the union. (National
Union of Bank Employees v. Minister of Labor,
G.R. No. L-53406, 1981)
3. Failure of a local/chapter or national union or
federation to submit a duly issued Charter
Certificate upon filing of the petition for
certification election. (Illegitimacy – No
Charter)
4. Absence of an Employment relationship
between all the members of the petitioning
union and the establishment where the
proposed bargaining unit is sought to be
represented. (Absence of EER Relationship)
5. The petition was filed before or after the
freedom period of a duly registered collective
bargaining agreement; provided that the 60-
day period based on the original collective
bargaining agreement shall not be affected
by any amendment, extension or renewal of
the collective bargaining agreement;
(Contract Bar)
6. The petition was filed within 1-year from entry
of voluntary recognition or a valid
certification, consent or run-off election and
no appeal on the results of the certification,
consent or run-off election is pending; (1-
Year Bar/Certification Year Bar)
7. A duly certified union has commenced and
sustained negotiations with the employer or
there exists a bargaining deadlock which had
LABOR LAW
been submitted to conciliation or arbitration or
had become the subject of a valid notice of
strike or lockout to which an incumbent or
certified bargaining agent is a party;
(Deadlock Bar/Negotiation Bar)
8. In case of an organized establishment, failure
to submit the 25% Support requirement for
the filing of the petition for certification
election. (Lack of Support)
A certification may be called by the Med-Arbiter
even through the 25% support requirement has
not been complied with. The requirement is
relevant only when it becomes mandatory to
conduct a certification election. In all other
instances, the discretion ought to be exercised in
favor of a petition for certification election.
(California Manufacturing Corp., v. Usec of Labor,
G.R. No. 97020, 1992)
In Summary, the Grounds for Denying Petition
for Certification Election:
1. Non-Appearance
2. Illegitimacy – Unregistered Union
3. Illegitimacy – No Charter
4. No Employee-Employer Relationship
5. Contract Bar
6. 1-Year Bar/Certification Year Bar
7. Negotiation/Deadlock Bar
8. Lack of Support
RULES PROHIBITING THE FILING OF
PCE/BARS TO CERTIFICATION ELECTION
1. CONTRACT BAR RULE
General Rule: The representation status of the
incumbent exclusive bargaining agent which is a
party to a duly registered CBA shall be for a
term of five (5) years from the date of effectivity of
the CBA. No petition questioning the majority
status of the incumbent exclusive bargaining
agent or petition for certification election shall be
filed (Sec. 7, Rule XVII of D.O. 40-03).
Exception: (Freedom period) Arts. 264, 265,
268: Within 60 days before expiration of the 5-
year term of the representational aspect of the
CBA. Note that the 5-year term is not the term of
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the bargaining agent, but the representation
aspect of the CBA.
Note: This freedom period is different from the
sixty day period within which to start negotiations
for a new CBA.
Requisites for Contract-Bar Rule
1. Agreement is existing;
2. Ratified by the union membership;
3. CBA must be registered;
4. It is adequate for it contains substantial terms
and conditions for employment;
5. It encompasses the employees in the
appropriate bargaining unit;
6. It was not prematurely extended; the CBA
was not hastily entered into;
7. It is for a definite period;
8. No schism or mass disaffiliation affects the
contracting union during the lifetime of the
agreement;
9. The contracting union is not defunct; and
10. The contracting union is not company-
dominated
Exceptions: The existence of a CBA will not bar
certification election in the following instances:
1. CBA is not registered
2. CBA deregistered
3. CBA is incomplete in itself
4. CBA where the identity of the representative
is in doubt (Associated Labor Unions v. Hon.
Ferrer-Calleja, G.R. No. 85085, 1989)
5. CBA was hastily entered into, i.e. signed
before the freedom period (Associated Trade
Unions-ATU v. Hon. Noriel, G.R. No. L-
48367, 1979)
6. CBA entered into between the employer and
the union during the pendency for certification
election (Vassar Industries EU v. Estrella,
G.R. No. L-46562, 1978)
Note: SONEDCO Workers Free Labor Union v.
URC, G.R. No. 220383, October 5, 2016
URC-SONEDCO (URC) and PACIWU-TUCP
(UNION 2) then the exclusive bargaining agent
entered into a CBA in 2002 which expires in 2006.
Days after the 2002 Collective Bargaining
Agreement was signed, a certification election
LABOR LAW
was conducted. SONEDCO Workers Free Labor
Union (UNION 1) won and replaced PACIWU-
TUCP as the exclusive bargaining representative.
Union 2 contested the results but the DOLE
certified Union 1 as the new EBA. Despite several
demand letters and CBA proposals, URC refused
to bargain with Union 1.
7. CBA was concluded in violation of an order
enjoining the parties from entering into a CBA
until the issue of representation is resolved
8. Referendum to register an independent union
2. DEADLOCK BAR RULE
Deadlock arises when there is an impasse,
which presupposes reasonable effort at good
faith bargaining which, despite noble intentions,
did not conclude in an agreement between the
parties.
Genuine Deadlock
1. The submission of the deadlock to a 3rd party
conciliator or arbitrator; or
2. The deadlock is the subject of a valid notice
of strike or lockout (National Congress of
Unions in the Sugar Industry v. Trajano, G.R.
No. 67485, 1992)
Petition for certification election cannot be
entertained if:
1. A duly certified union has commenced and
sustained negotiations with the employer in
accordance with Art. 261 within the 1-year
period referred to in Sec. 14.d of the IRR.
2. Before the filing of the petition for certification
election, a bargaining deadlock to which an
incumbent or certified bargaining agent is a
party, had been submitted to conciliation or
arbitration or had become the subject of a
valid notice of strike or lockout.
Requisites:
3. Parties must have negotiated in good faith
4. Deadlock must have been submitted to
voluntary conciliation or arbitration or is
subject of a valid notice of strike / lock-out.
When Deadlock Bar Not Applicable:
Artificial Deadlock: A deadlock prearranged or
preserved by collusion of the employer and the
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majority union. (See Kaisahan ng
Manggagawang Pilipino (KAMPIL-KATIPUNAN)
v. Trajano, G.R. No. 758110, 1991)
5. NEGOTIATION BAR RULE
Negotiation bar rule exists when a union has
already commenced and sustained collective
bargaining negotiations in good faith within the 1-
year period, but there is no CBA yet.
4. ONE-YEAR BAR RULE OR CERTIFICATION
YEAR BAR RULE
No petition for a certification election may be filed
within 1 year from the date of a valid certification,
consent, or run-off election.
Certification year rule will apply even if the “No
union” choice won. Therefore, for one year, no
PCE will be entertained (Samahang
Manggagawa sa Permex v. Secretary, G.R. No.
107792, 1998)
Note: The 12-month prohibition presupposes that
there was an actual conduct of election, i.e.
ballots were cast and there was a counting of
votes. In a case where there was no certification
election conducted precisely because the first
petition was dismissed on the ground that it did
not include all the employees who should be
properly included in the collective bargaining unit,
the certification year bar does not apply. (R
Transport Corp. v. Laguesma, G.R. No. 106830,
1993)
Date of election
Date to be considered is when the election was
conducted; if results are appealed, then the date
when appeal is finally resolved.
Where less than majority of CBU voted
There is a failure of election when less than
majority of the CBU members voted. A failure of
election shall not bar the filing of a motion for the
immediate holding of another certification or
consent election may be filed within 6 months
from date of declaration of the failure of election.
(D.O. No. 40-03, Sec. 18, Rule IX)
LABOR LAW
Note: The last sentence pertains to the re-run
election as provided under D.O. No. 40-I-15.
When Certification Year Bar Rule will NOT
APPLY
1. In a case where there was no certification
election conducted precisely because the
first petition was dismissed on the ground that
it did not include all the employees who
should be properly included in the collective
bargaining unit. (R Transport Corp. v.
Laguesma, G.R. No. 106830, 1993)
2. A failure of election where less than majority
of the CBU members voted. A failure of
election shall not bar the filing of a motion for
the immediate holding of another certification
or consent election may be filed within 6
months from date of declaration of the failure
of election. (D.O. No. 40-03, Sec. 18, Rule IX)
PROTESTS/APPEAL AND OTHER
QUESTIONS ARISING FROM CONDUCT OF
CERTIFICATION ELECTION
The order granting the conduct of a certification
election in an unorganized establishment shall
not be subject to appeal. Any issue arising
therefrom may be raised by means of protest on
the conduct and results of the certification
election.
The order granting the conduct of a certification
election in an organized establishment and the
decision dismissing or denying the petition,
whether in an organized or unorganized
establishment, may be appealed to the Office of
the Secretary within 10 days from receipt thereof.
(Sec. 17, Rule VIII of D.O. 40-03).
PROTEST (Sec. 13, Rule IX, Book V)
Who may file: Any party-in-interest
Ground: On the conduct or mechanics of election
How to protest:
1. Record the protest in the minutes of the
election proceedings; AND 

2. Formalize the protest with specific grounds
and arguments before the Med-Arbiter within
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five (5) days after the close of the election
proceedings
Protests deemed dropped
Protests which are:
1. Not recorded in the minutes; AND
2. Not formalized within the prescribed period
General Reservation to file protest prohibited
Protesting party shall specify the grounds.
Failure to formalize within 5-days cannot be
taken against the union.
The union misrepresented that they were
independent which caused the members to
disaffiliate and form a new union and their protest
was not filed within the 5-day period.
The failure to follow strictly the procedural
technicalities regarding the period for filing their
protest (within the 5-day period) should not be
taken against them. Mere technicalities should
not be allowed to prevail over the welfare of the
workers. What is essential is that they be
accorded an opportunity to determine freely and
intelligently which labor organization shall act on
their behalf. (DHL-URFA-FFW v. BMP, G.R. No.
152094 2004)
ELECTION PROCEEDINGS refer to the period
Included:
1. Starting from the opening to the closing of the
polls
2. Counting, tabulation and consolidation of
votes
Excluded:
1. Period for the final determination of the
challenged votes
2. Canvass
(Sec. 1[p], Rule I of D.O. 40-03).
ELECTION MECHANICS (Rule VIII of D.O. 40-
03).
1. RAFFLE OF THE CASE
Upon the filing of the petition, the Regional
Director or any of his/her authorized
representative shall allow the party filing the
LABOR LAW
petition to personally determine the Med-Arbiter
assigned to the case by means of a raffle (Sec. 5,
Rule VIII of D.O. 40-03).
2. PRELIMINARY CONFERENCE
The Med-Arbiter shall conduct a preliminary
conference and hearing within 10 days from the
receipt of the petition to determine the following:
1. The bargaining unit to be represented;
2. Contending Labor Unions;
3. Possibility of labor unions consent elections;
4. Existence of any of the bars to certification
election; and
5. Such other matters as may be relevant for the
final disposition of the case. (Sec. 10[s], Rule
VIII of D.O. 40-03).
When parties fail to agree to a consent election
during the preliminary conference, hearing/s will
be conducted.
Number of Hearings
The Med-Arbiter may conduct as many hearings
as he/she may deem necessary, but in no case
shall the conduct thereof exceed 15 days from the
date of the scheduled preliminary
conference/hearing, after which time the petition
shall be considered submitted for decision (Sec.
12, Rule VIII of D.O. 40-03)
Failure to Appear Despite Notice
Failure of any party to appear in the hearing/s
when notified or to file its pleadings shall be
deemed a waiver of its right to be hear. (Sec. 12
Rule VIII of D.O. 40-03)
Note: See diagram in the succeeding pages.
3. ORDER/DECISION ON THE PETITION
Within 10 days from the date of the last hearing,
the Med-Arbiter shall issue a formal order
granting or denying the petition.
In organized establishments, no order or
decision shall be issued during the freedom
period.
The order granting the petition shall state the
following:
1. Name of the employer or establishment
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2. Description of the bargaining unit
3. Statement that none of the grounds for
dismissal exists
4. Names of contending labor unions
5. Directive to an unregistered local/chapter or
a federation/national union representing an
unregistered local/chapter to personally
submit to the Election Officer its certificate of
creation at least 5 working days before the
actual conduct of the certification election.
Non-submission of this requirement as
certified by the Election Officer shall
disqualify the local/chapter from participating
in the certification election
6. Directive upon the employer and the
contending union(s) to submit within 10 days
from receipt of the order, the certified list of
employees in the bargaining unit, or where
necessary, the payrolls covering the
members of the bargaining unit of at least 3
months prior to the issuance of the order
(Sec. 14 Rule VIII of D.O. 40-03).
Grounds for Denial of the Petition for
Certification Election:
1. Petitioner is not listed as a LLO or its legal
personality has been revoked
2. Petition was filed outside of the freedom
period
3. Petition was filed within one (1) year from
entry of valid certification/consent or run off
election AND no appeal on the results of the
election is pending
4. Petition was filed in violation of the
negotiation/deadlock bar rule or had become
the subject of a valid notice of strike or lockout
to which an incumbent or CBA is a party
5. In case of organized establishment, failure to
submit the twenty-five percent (25%) support
requirement (Sec. 15, Rule VIII of D.O. 40-
03)
Prohibited Grounds for Denial of Petition
The following must be heard and resolved by the
Regional Director in an independent petition for
cancellation of registration:
1. Validity of petitioning union’s certificate of
registration or its legal personality as a labor
organization
LABOR LAW
2. Validity of registration and execution of CBA
The following issues shall be raised before the
Med-Arbiter during the hearing and in the
pleadings in the petition for certification election
and shall be resolved in the same order:
1. Existence of Employer-Employee
relationship
2. Eligibility or mixture in union membership
(Sec. 14 Rule VIII of D.O. 40-03)
4. APPEAL
Order granting conduct of certification election in
unorganized establishments – NOT appealable
All others – appealable to the DOLE Sec. within
10 days from receipt.
5. PRE-ELECTION CONFERENCE
Within 24 hours from receipt of the assignment for
the conduct of a certification election, the Election
Officer shall cause the issuance of notice of pre-
election conference upon the contending unions
and the employer.
Must be scheduled within 10 days from receipt of
the assignment.
Must be completed within 30 days from the last
hearing.
The employer shall be required to submit the
certified list of employees in the bargaining unit,
or where necessary, the payrolls covering the
members of the bargaining unit at the time of the
filing of the petition.
Importance: The pre-election conference shall
set the mechanics for the election and determine
the following:
1. Date, time and place of the election
2. Not be later than 45 days from the date of the
first pre-election conference
3. On a regular working day
4. Within the employer’s premises, unless
circumstances require otherwise
5. List of eligible and challenged voters
6. Number and location of polling places or
booths and the number of ballots to be
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prepared with appropriate translations, if
necessary
7. Name of watchers or representatives and
their alternates for each of the parties during
election
8. Mechanics and guidelines of the election
(Rule IX of D.O. 40-03)
Effect of failure to appear during the pre-
election conference
1. Considered as a waiver to be present and to
question or object to any of the agreements
reached in said pre-election conference.
2. However, the non-appearing party or the
employer still has the right to be furnished
notices of subsequent pre-election
conferences and to attend the same (Sec. 4,
Rule IX of D.O. 40-03).
Qualification of Voters
1. All employees who are members of the
appropriate bargaining unit 3 MONTHS
PRIOR to the filing of the petition/request
shall be eligible to vote.
2. An employee who has been dismissed from
work but has contested the legality of the
dismissal in a forum of appropriate
jurisdiction at the time of the issuance of the
order for the conduct of a certification election
shall be considered a qualified voter UNLESS
his/her dismissal was declared valid in a final
judgment at the time of the conduct of the
certification election (Sec. 6, Rule IX of D.O.
40-I-15).
Inclusion/Exclusion of Voters
In case of disagreement over the voters’ list or
over the eligibility of voters, all contested voters
shall be allowed to vote, but their votes shall be
segregated and sealed in individual envelopes
with their names.
6. POSTING OF NOTICES OF ELECTION
At least 10 days before the actual date of the
election in 2 most conspicuous places in the
company premises
LABOR LAW
Contents of the Notice
1. Date and time of the election, which is
preferably within the establishment
2. Names of all contending unions
3. The description of the bargaining unit and the
list of eligible and challenged voters
The posting of the list of employees comprising
the bargaining unit shall be done by the DOLE
personnel.
Note: The posting of the notice of election, the
information required to be included therein and
the duration of posting cannot be waived by the
contending unions or the employer (Sec. 7, Rule
IX of D.O. 40-I-15).
Secrecy and Sanctity of the Ballot
The Election Officer and the authorized
representatives of the contending unions shall
before the start of the actual voting, inspect the
polling place, the ballot boxes and the polling
booths.
No device that could record or identify the voter
or otherwise undermine the secrecy and sanctity
of the ballot shall be allowed within the premises,
except those devices brought in by the election
officer.
Any other device found within the premises shall
be confiscated by the election officer and
returned to its owner after the conduct of the
certification election. (Sec. 12, Rule IX of D.O. 40-
I-15)
Preparation of Ballots
The Election Officer shall prepare the ballots in
English and Filipino or the local dialect
The number of ballots should correspond to the
number of voters in the bargaining unit plus a
reasonable number of extra ballots for
contingencies.
All ballots shall be signed at the back by the
Election Officer and an authorized representative
each of the contending unions.
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A party who refuses or fails to sign the ballots
waives its right to do so and the Election Officer
shall enter the fact of refusal or failure and the
reason therefore in the records of the case(Sec.
9, Rule IX of D.O. 40-03).
Challenging of Votes
An authorized representative of any of the
contending unions and employer may challenge
the vote.
The challenge must be raised before vote is
deposited in the ballot box.
Grounds for Challenging Votes
1. No employer-employee relationship between
the voter and the company
2. Voter is not a member of the appropriate
bargaining unit which petitioner seeks to
represent
Procedure in Challenging of Votes
1. The Election Officer shall place the ballot of
the voter who has been properly challenged
during the pre-election conferences in an
envelope.
a. Sealed in the presence of the voter
and the representatives of the
contending unions and employer.
b. Indicate on the envelope the voter’s
name, the union or employer
challenging the voter, and the ground
for the challenge.
c. Envelope shall be signed by the
Election Officer and the
representatives of the contending
unions and employer.
2. The Election Officer shall note all challenges
in the minutes of the election proceedings
and shall have custody of all envelopes
containing the challenged votes.
3. The envelopes shall be opened and the
question of eligibility shall be passed upon by
the mediator-arbiter only if the number of
segregated voters will materially alter the
results of the election (Sec. 11, Rule IX of
D.O. 40-03)
LABOR LAW
Protest
Any party-in-interest may file a protest based on
the conduct or mechanics of the election.
Protests not so raised immediately after the last
ballot cast are deemed waived.
General Reservation to file a protest shall be
prohibited. The protesting party shall specify the
grounds for protest.
Requirements in order that a protest may
prosper:
1. Filed with the representation officer and
made of record in the minutes of the
proceedings before the close of election
proceedings; and
2. Formalized before the Med-Arbiter within 5
days after the close of the election
proceedings.
3. If not recorded in the minutes and formalized
within the prescribed period, the protest shall
be deemed dropped (Sec. 14, Rule IX of D.O.
40-I-15).
Canvassing of Votes
1. Votes shall be counted and tabulated by the
Election Officer in the presence of the
representatives of the contending unions.
2. Each representative is entitled to a copy of
the minutes of the election proceedings and
results of the election.
3. The ballots and the tally sheets shall be:
a. Sealed in an envelope
b. Signed by the Election Officer and
the representatives of the contending
unions
c. Transmitted to the Med-Arbiter,
together with the minutes and results
of the election, within 24 hours from
the completion of the canvass
4. Where the election is conducted in more than
one region, consolidation of results shall be
made within 15 days from the conduct thereof
(Sec. 14, Rule IX of D.O. 40-03).
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7. CONDUCT OF ELECTION AND CANVASS When the winning choice is a local chapter
OF VOTES without a certificate of creation of chartered
1. The election precincts shall open and local
close on the date and time agreed upon The local chapter shall submit its DOLE issued
during the pre-election conference. certificate of creation within five (5) days from the
2. The opening and canvass shall proceed conclusion of election (Sec. 15, Rule IX of D.O.
immediately after the precincts have 40-I-15)
closed
3. Failure of any party or the employer or
his/her/their representative to appear
during the election proceedings shall be
considered a waiver to be present and to
question the conduct thereof (Sec. 15,
Rule IX of D.O. 40-03).

Double Majority Rule

For there to be a certification of a union, the
following must be present:
1. Majority of the bargaining unit must have
voted; AND
2. The winning union must have garnered
majority of the valid votes cast. (National
Union of Workers In Hotels, Restaurant
and Allied Industries-Manila Pavilion
Hotel Chapter v. Secretary of Labor, G.R.
No. 181531, 2009)

Note: An election is valid even without a winning

union. The double majority rule is for certification
of a union, not for validity of the elections. As long
as the majority of the eligible voters voted, the
election is valid.

Note: Spoiled ballots are not reckoned to

determine majority (PAFLU v. BLR, G.R. No. L-
43760, 1976) Valid votes are those not
challenged, damaged, etc.

8. CERTIFICATION OF COLLECTIVE
BARGAINING AGENT
The union which obtained a majority of the valid
votes cast shall be certified as the sole and
exclusive bargaining agent of all the employees
in the appropriate bargaining unit.

Certification must be done within five (5) days

from the day of election provided there was no
protest.

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FILING PETITION FOR CERTIFICATION ELECTION

File PETITION for

certification election

RAFFLE
Dispensed with if there is only
one Med-Arbiter

Service of NOTICE of
preliminary conference

PRELIMINARY CONFERENCE
Must be within 10 days from
receipt of petition for
certification election

Parties AGREE on a consent Parties FAIL TO AGREE on a

election consent election

FORWARD RECORDS of HEARINGS

petition to RD / authorized No set #, but must not exceed
representative 15 days from date of
preliminary conference

First PRE-ELECTION
CONFERENCE DECISION
Must be within 10 days from Must be within 10 days from last
date of entry of agreement hearing

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APPEAL OF DECISIONS RE: GRANTING / DENYING CONDUCT OF CERTIFICATION ELECTION

DECISION

UNORGANIZED ORGANIZED
Establishment Establishment

Petition Petition Petition Petition

GRANTED DENIED GRANTED DENIED

File MEMORANDUM OF APPEAL within 10 days from receipt

Unappealable of decision with the REGIONAL DIRECTOR where the petition
originated

REGIONAL DIRECTOR to transmit entire record within 24 hours

from receipt of appeal to OFFICE OF THE SECRETARY OF
LABOR

REPLY
Any party may file a reply within 10 days from receipt of the
Memorandum of Appeal

Decision of the SECRETARY OF LABOR

Secretary shall have 15 days from receipt of the entire records

to decide the appeal
CERTIFICATION ELECTION PROPER
The decision shall be final and executory
within 10 days from receipt by the parties

No motion for reconsideration shall be entertained

The entire records of the case shall be remanded to the

Regional Office for implementation
within 48 hours from notice of receipt of the decision

RECEIPT OF ENTRY OF FINAL JUDGMENT granting conduct of a Certification Election

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Regional Director to cause the RAFFLE of the case to an ELECTION OFFICER

within 24 hours from receipt of notice

Election Officer to cause issuance of NOTICE OF PRE-ELECTION CONFERENCE upon

contending unions and employer w/in 24 hours from receipt of assignment

Posting of notices must be done at least 10 days before election,

in 2 most conspicuous places in the company premises

PRE-ELECTION CONFERENCE

Must be within 10 days from receipt of assignment, and completed within 3 days of first hearing

Failure to appear in pre-election conference is a waiver of the right to question any agreement in pre-
election conference. However, the non-appearing party retains the right to be given notices of
subsequent pre-election conferences.

CERTIFICATION ELECTION
Must not be later than 45 days from date of first pre-election conference

ELECTION PRECINCTS CLOSE

On the date and time agreed upon during the pre-election conference

CANVASS OF VOTES
Opening and canvassing of votes shall begin immediately after the precincts have closed

NOTE: FAILURE OF ELECTIONS

Exists when the votes cast is less than the majority of eligible voters, and there are no material
challenged votes. Another certification or consent election may be held within 6 months.

TRANSMIT RECORDS OF CASE to MED-ARBITER. MED-ARBITER to issue an order

PROCLAIMING THE RESULTS of the Certification Election.

Any of the following conditions must have been present:

[1] No protest was filed, or protest filed but not perfected within the 5-day period for perfection of
protest
[2] No challenge or eligibility issue raised, or even if raised, will not materially change results of
elections

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c. RUN-OFF ELECTIONS
An election between the labor unions receiving
the two (2) highest number of votes in a
certification or consent election with three (3) or
more choices, where such results in none of the
choices (unions or “no union” choice) receiving a
majority of the valid votes cast.
Provided, that the total number of votes for all
contending union is at least fifty (50%) of the
number of votes cast (Sec. 1[uu], Rule I of D.O.
40-03)
Procedure in Run-off Elections
The Election Officer shall motu propio conduct a
run-off election within 10 days from the close of
the election proceedings between the labor
unions receiving the two highest numbers of
votes.
Notice of run-off elections shall be posted by the
Election Officer at least 5 days before the actual
date of run-off election.
Requirements for Run-Off Election
1. A valid election took place because
majority of the CBU members voted
2. There are three or more choices in the
election (including no union)
3. Not one of the choices obtained majority
of the valid votes
4. Total number of votes for all contending
unions is at least 50% of the number of
votes cast.
5. There is no unresolved challenge of voter
or election protest
Note: “No Union” shall not be a choice in the run-
off election (Sec. 1, Rule X of D.O. 40-03)
Abstention refers to a blank or unfilled ballot
validly cast by an eligible voter. It is not
considered as a negative vote but is considered
a valid vote in determining a valid election. (Sec.
1[a], Rule I, D.O. No. 40-I-15).
Spoiled Ballot refers to a ballot that is torn,
defaced, or contains marking which can lead
LABOR LAW
another to clearly identify the voter who casts
such vote (Sec. 1[ww], Rule I, D.O. No. 40-I-15).
Example 1: 100 members in the appropriate
bargaining unit. All members cast their votes.
Election results:
Union A – 24 Union C - 10
Union B – 15 No Union - 5
Total number of votes: 54 valid votes, with the
rest declared spoiled.
Q1: Is the election valid?
Yes, because everyone voted.
Q2: Who won?
None of the three unions won, because not one
received a majority of the valid votes cast.
(Majority is 28 votes)
Q3: Is run-off election a remedy here?
No. The total number of votes for all contending
unions is LESS than 50% of ALL of the number of
votes cast (Unions A, B and C garnered 49 votes,
or at least one vote short of the requirement,
since there are 100 members in the ABU).
Q4: Is a re-run election a remedy here?
No. There is no failure of election and none of the
choices obtained the same number of votes.
(D.O. No. 40-I-15)
Example 2: 200 members in the appropriate
bargaining unit. All members cast their votes.
Election results:
Union A – 40
Union B – 30
Union C - 20
No Union – 80
Spoiled – 30
Total number of votes: 170 valid votes, with 30
spoiled votes.
Step 1: Check for first majority: WoN there was a
Valid Election — 50% +1 of the Bargaining Unit
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Step 2: Check for second majority: WoN a
union/no union won the majority of valid votes
cast — 50% + 1 of VVC
In example 2,
Step 1:
First majority – 50%+1 of the BU = (200*50% +1
) = 101 votes
40+30+20+80+30 = 200 ; There is a valid election
since all 200 members voted, which satisfies the
first majority of 50% + 1 of the BU.
Step 2:
Second majority – 50%+1 of VVC = Run-off Election. The Re-run shall be
((40+30+20+80)*50%+1) = 86
Q1: Is the election valid?
Yes, because everyone voted.
Q2: Who won?
None of the three unions won, because not one
received a majority of the valid votes cast.
(Majority is 86 votes)
Q3: Is run-off election a remedy here?
No. The total number of votes for all contending
unions is LESS than 50% of ALL of the number of
votes cast (Unions A, B and C garnered 90 votes,
or 10 votes short of the requirement, since there
are 200 members in the ABU).
Q4: Is a re-run election a remedy here?
No. There is no failure of election and none of the
choices obtained the same number of votes.
(D.O. No. 40-I-15)
Note: The above given examples are for
illustration purposes only existing as it does in its
most basic and ideal form. Answers may vary
depending on the circumstances.
d. RE-RUN ELECTIONS
Re-Run Election Takes Place in Two
Instances
1. An election conducted to break a tie
between contending unions, including
“no union” and one of the unions.
LABOR LAW
2. If a failure of election has been declared
by the election officer and/or affirmed by
the Med-Arbiter (Sec. 1[tt], Rule I, D.O.
No. 40-I-15)
Situation contemplated
When a Certification, Consent or Run-off Election
results to a tie between 2 choices.
Duty of Election Officer (EO)
1. Immediately notify the parties of a Re-run
Election.
2. Cause the posting of the NOTICE within
5 days from the Certification, Consent or
conducted within 10 days after the
posting. (Sec. 18, Rule IX, D.O. No. 40-I-
15)
When will re-run be conducted
Within ten (10) days after the posting of the
notice.
Declared as winner and certified
Choice who receives the HIGHEST VOTES
CAST.
Note: ‘No Union’ is still included in the Re-run
Elections, since D.O. No. 40-I-15 did not specify
otherwise.
Failure of Election
Where the number of votes cast in a certification
or consent election is less than the majority of the
number of eligible voters and there are no
material challenged votes (Sec. 17, Rule IX of
D.O. 40-03).
A failure of election shall not bar the filing of a
motion for the immediate holding of another
certification or consent election within 6 months
from date of declaration of failure of election (Sec.
19, Rule IX of D.O. 40-03).
Action on motion for the immediate holding of
another certification or consent election
Within 24 hours from receipt of the motion, the
Election Officer shall immediately schedule the
conduct of another certification or consent
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election within 15 days from receipt of the motion
and cause the posting of the notice of certification
election at least 10 days prior to the scheduled
date of election in 2 most conspicuous places in
the establishment. The same guidelines and list
of voters shall be used in the election.
e. CONSENT ELECTIONS
Definition
Election voluntarily agreed upon by the parties,
with or without the intervention of the Department
of Labor and Employment, to determine the issue
of majority representation of all the workers in the
appropriate collective bargaining unit. (IRR Labor
Code, Sec. 1[h], Rule I, Book V)
Note: If done as part of a certification election
case, i.e., with the intervention of the DOLE, a
consent election shall have the same legal effect
as a certification election.
(See Annex G) (Sec. 11, Rule VIII of
D.O. 40-03).
Effects of Consent Election
Where a petition for certification election is filed,
and upon the intercession of the Med-Arbiter, the
parties agreed to hold a consent election, the
results shall constitute a bar to the holding of a
certification election for one year from the holding
of such consent election. Where an appeal has
been filed from the results of the consent election,
the running of the one-year period shall be
suspended until the decision on appeal has
become final and executory.
Where no petition for certification election was
filed but the parties themselves agreed to hold a
consent election with the intercession of the
Regional Office, the results thereof shall
constitute a bar to another petition for certification
election. (Sec. 25 Rule VIII of D.O. 40-03).

Procedure in Consent Elections if Agreed in Summary of the Five Modes of Determining

the Course of Proceeding of Petition for the Exclusive Bargaining Representative
certification Election 1. SEBA There’s only ONE LLO
1. In case the contending unions agree to a CERTIFICATION
consent election, the Med-Arbiter shall 2. CONSENT Election that is based on
not issue a formal order calling for the ELECTIONS the consent of the parties
conduct of certification election, but shall 3. Double Majority Rule
enter the fact of the agreement in the CERTIFICATION - First Majority: Validity of
minutes of the hearing. ELECTIONS Election
2. The minutes of the hearing shall be - Second Majority: Majority
signed by the parties and attested to by of Valid Votes Cast
the Med-Arbiter.
3. The employer may be required to submit Purpose
the certified list of employers in the - WoN the employees want
bargaining unit or where necessary, the to be represented
payrolls at the time of filing of the petition. - If yes, be represented by
(Sec. 2, Rule IX) whom
4. The Med-Arbiter shall, immediately 4. RUN-OFF Part and parcel of
thereafter, forward the records of the ELECTIONS certification elections
petition to the Regional Director or
his/her authorized representative for the Requisites:
determination of the Election Officer by 1. A valid election
the contending unions through raffle. took place because
5. The first pre-election conference shall be majority of the CBU
scheduled within 10 days from the date members voted
of entry consent election agreement.

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2. There are three or
more choices in the
election (including
no union)
3. Not one of the
choices obtained
majority of the valid
votes
4. Total number of
votes for all
contending unions
is at least 50% of
the number of
votes cast.
5. There is no
unresolved
challenge of voter
or election protest.
Note: “No Union” shall not
be a choice in the run-off
election.
5. RE-RUN Part and parcel of
ELECTIONS certification elections
Two Instances:
Break a tie
Failure of Elections
Note: “No Union” is still
included as a choice
D. RIGHTS OF LABOR ORGANIZATIONS
Rights of Legitimate Labor Organizations
1. To act as the representative of its
members for the purpose of collective
bargaining;
2. To be certified as the exclusive
representative of all the employees in an
appropriate bargaining unit for purposes
of collective bargaining;
3. To be furnished by the employer, upon
written request, with its annual audited
financial statements, including the
balance sheet and the profit and loss
statement, within 30 calendar days from
the date of receipt of the request, after
the union has been duly recognized by
the employer or certified as the sole and
LABOR LAW
exclusive bargaining representative of
the employees in the bargaining unit, or
within 60 calendar days before the
expiration of the existing collective
bargaining agreement, or during the
collective bargaining negotiation;
4. To own property, real or personal, for the
use and benefit of the labor organization
and its members;
5. To sue and be sued in its registered
name; and
6. To undertake all other activities designed
to benefit the organization and its
members, including cooperative,
housing, welfare and other projects not
contrary to law. (Labor Code, Art. 251)
Reportorial Requirements to be Submitted to
the BLR by the Legitimate Labor Organization
1. Its constitution and by-laws, or
amendments thereto, the minutes of
ratification, and the list of members who
took part in the ratification of the
constitution and by-laws within thirty (30)
days from adoption or ratification of the
constitution and by-laws or amendments
thereto;
2. Its list of officers, minutes of the election
of officers, and list of voters within thirty
(30) days from election;
3. Its annual financial report within thirty
(30) days after the close of every fiscal
year; and
4. Its list of members at least once a year or
whenever required by the Bureau.
Failure to comply with the above
requirements shall not be a ground for
cancellation of union registration but shall subject
the erring officers or members to suspension,
expulsion from membership, or any appropriate
penalty. (Labor Code, Art. 252)
Requisites for a Valid Special Assessment
(RMI)
1. Authorization by a written Resolution of
the majority of all the members at the
general membership meeting duly called
for that purpose.
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2. Secretary’s record of the Minutes of the
meeting including the list of members
present, votes cast, purpose of the
special assessments and the recipient of
such assessments which must be
attested to by the President
3. Individual written authorization for check-
off duly signed by the employee
concerned to levy such assessments
1. CHECK OFF, ASSESSMENT FEES,
AGENCY FEES
A method of deducting from an employee’s pay at
prescribed period, the amounts due the union for
fees, fines or assessments.
Deductions for union service fee are authorized
by law and do not require individual check-off
authorizations.
Nature and Purpose of Check-Off
All unions are authorized to collect reasonable
membership fees, union dues, assessments, and
fines and other contributions for labor education
and research, mutual death and hospitalization
benefits, welfare fund, strike fund and credit and
cooperative undertakings. (Labor Code, Art. 250)
Requirements Regarding Check-Offs
General Rule: No special assessment, attorney’s
fees, registration fees, or other extraordinary fees
may be checked off from any amount due an
employee without an individual written
authorization duly signed by the employee
(Labor Code, Art. 250[o])
The authorization should specifically state the:
1. Beneficiary of the deduction;
2. Amount; and
3. Purpose
Note: There can be no valid check-off if the
majority of the union members had already
withdrawn their individual authorization. (Palacol
v. Ferrer-Calleja, G.R. No. 85333, 1990)
Exceptions to Written Authorization
Requirement
LABOR LAW
1. For mandatory activities provided under
the Labor Code; and
2. When Non-members of the union avail of
the benefits of the CBA:
a. Said non-members may be
assessed union dues equivalent
to that paid by members; and
b. Only a board resolution
approved by majority of the
members in a general meeting
called for the purpose; and
3. Check-off for union service fees
authorized by law (Radio
Communications of the Philippines, Inc.
v. Sec. of Labor, G.R. No. 77959, 1989)
Agency fees
Dues equivalent to union dues, charged from the
non-union members who are benefited by or
under the CBA.
Requisites for the Imposition of Agency Fees
1. Employee is part of the bargaining unit;
2. He is not a member of the union; and
3. He partook of the benefits of the CBA
(Labor Code, Art. 259[e])
NOTE: No written authorization is required from
the non-union employees in order to effect a valid
check-off. (Del Pilar Academy v. Del Pilar
Academy Employees, G.R. No. 170112, 2008)
Rule on Levy
Article 250, par. (n) of the Labor Code provides
that no special assessment or extraordinary fees
may be levied upon the members of a labor
organization unless authorized by a written
resolution of a majority of all the members at a
general membership meeting duly called for the
purpose. The secretary of the organization shall
record the minutes of the meeting including the
list of all members present, the votes cast, the
purpose of the special assessment or fees and
the recipient of such assessment or fees. The
record shall be attested to by the president.
Rule on Collection
Article 250, par (o) of the Labor Code provides
that other than for mandatory activities under the
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Code, no special assessments, attorney’s fees,
negotiation fees or any other extraordinary fees
may be checked off from any amount due to an
employee without an individual written
authorization duly signed by the employee. The
authorization should specifically state the
amount, purpose and beneficiary of the
deduction.
2. COLLECTIVE BARGAINING
a. DUTY TO BARGAIN COLLECTIVELY
Meaning of the Duty to Bargain Collectively
1. The performance of a mutual (employer and
the exclusive bargaining agent) obligation to
meet and convene,
2. Promptly and expeditiously in good faith
3. 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
4. Executing a contract incorporating such
agreements, if requested by either party.
(Labor Code, Art. 263)
Parties to Collective Bargaining
1. Employer
2. Employees, represented by the exclusive
bargaining agent
The duty to bargain collectively arises only
between the employer and its employee. (Allied
Free Workers Union v. Compania Maritima, G.R.
Nos. L-122951-52, 1967)
Jurisdictional Pre-Conditions of Collective
Bargaining
1. Status of majority representation of the
employees’ representative;
2. Proof of majority representation; and
3. Demand to bargain under Art. 261(a) (Kiok
Loy v. NLRC, G.R. No. 54334, 1986).
Pending Petition for Cancellation of Union
Registration
Pendency of a petition for cancellation of union
registration does NOT preclude collective
bargaining. It shall not suspend the proceedings
LABOR LAW
for certification election nor shall it prevent the
filing of a petition for certification election (Sec. 3,
Rule XI of D.O. 40-03)..
Purpose of Collective Bargaining
Purpose of collective bargaining is the reaching
of an agreement resulting in a contract binding on
the parties; but the failure to reach an agreement
after negotiations have continued for a
reasonable period does not establish a lack of
good faith.
The statutes invite and contemplate a collective
bargaining contract, but they do not compel one.
The duty to bargain does not include the
obligation to reach an agreement (Union of Filipro
Employees v. Nestle Phils., G.R. 158930-31,
2008)
b. COLLECTIVE BARGAINING AGREEMENT
Collective Bargaining Agreement (CBA)
A contract executed upon request of either the
employer or the exclusive bargaining
representative of the employees, incorporating
the agreement reached after negotiations with
respect to the following:
1. Wages;
2. Hours of work; and
3. All other terms and conditions of
employment, including proposals for
adjusting any grievance or questions under
the agreement (Davao Integrated Port
Stevedoring Services v. Abarquez, G.R. No.
102132, 1993)
Note: CBA constitutes the law between the
parties when freely and voluntarily entered into.
The goal of collective bargaining is the making of
agreements that will stabilize business conditions
and fix fair standards of working conditions. (PI
Manufacturing Inc. v. PI Manufacturing
Supervisors and Foremen Associations, G.R. No.
167217, 2008)
Coverage of CBA
It is a well-settled doctrine that the benefits of a
CBA extend to the laborers and employees in the
collective bargaining unit, including those who do
not belong to the chosen bargaining labor
organization. Otherwise, it would be a clear case
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of discrimination (PAL v. PALEA, G.R. 142399,
2008).
Commencement of Bargaining
During Certification Year or within 12 months
after the determination and certification of the
employees’ exclusive bargaining representative
Bargaining Procedure
The parties may agree on the bargaining
procedure. If there is a procedure agreed upon,
the Labor Code Procedure applies
supplementary.
Labor Code Procedure in Collective
Bargaining (Labor Code, Art. 261)
The following procedures shall be observed in
collective bargaining:
1. When a party desires to negotiate an
agreement, it shall serve a written notice
upon the other party with a statement of its
proposals the other party shall make a reply
thereto not later than 10 calendar days from
the receipt of such notice;
2. Should differences arise on the basis of such
notice and reply either party may request for
a conference which shall begin not later than
10 calendar days from the date of request.
3. If the dispute is not settled, the NCMB shall
intervene upon the request of either or both
parties or at its own initiative and immediately
call the parties to conciliation meetings.
The NCMB shall have the power to issue
subpoenas requiring the attendance of the parties
to such meetings. It shall be the duty of the parties
to participate fully and promptly in the conciliation
meetings the NCMB may call.
4. During the conciliation proceedings in the
NCMB, the parties are prohibited from doing
any act which may disrupt or impede the early
settlement of the disputes; and
5. The NCMB shall exert all efforts to settle
disputes amicably and encourage the parties
to submit their case to a voluntary arbitrator.
When There Is No Collective Bargaining
Agreement (Labor Code, Art. 262)
LABOR LAW
In absence of an agreement OR other voluntary
arrangement providing for a more expeditious
manner of collective bargaining, it shall be the
duty of the employer AND the representatives of
the employees to bargain collectively in
accordance with the provisions of this Code.
The duty to bargain collectively where no CBA
exists involves the performance of a mutual
obligation:
1. 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
2. To execute a contract incorporating such
agreements, if requested by either party.
(Labor Code, Art. 263)
Essentially, the duty to bargain in this situation
still requires the performance of the obligation by
the employer and the union to meet, convene and
confer for collective purposes.
Limitations to the Duty to Bargain
The duty to bargain does not compel any party to
agree to a proposal or to make any concession
(Labor Code, Art. 263).
Notes: The provisions of the Code are only
supplementary and not mandatory with regard to
the process of collective bargaining. It is the
policy of the state to promote the primacy of
FREE collective bargaining. (Labor Code, Art.
218[a])
The Code authorizes parties to provide for their
own procedure in CB but it must be more
expeditious than that provided in Art. 261.
If they are unable to agree, they must follow the
Code procedure (i.e. in Art. 261).
Automatic Renewal Clause
At the expiration of the freedom period, the
employer shall continue to recognize the majority
status of the incumbent bargaining agent where
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no petition for certification election is filled. 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. (Labor Code, Art. 264)
Duty to Bargain Collectively when there is a
Collective Bargaining Agreement (Labor Code,
Art. 264)
General Rule: When there is a CBA, the duty to
bargain also means that neither party shall
terminate nor modify such agreement during its
lifetime.
Exception: 60 days before the CBA expires,
either party may notify the other in writing that it
wants to terminate or modify the agreement. The
CBA remains in full force and effect during the 60
day period and until a new agreement is reached.
Registration of Collective Bargaining
Agreements
Where to file
With the Regional Office which issued the
certificate of registration/certificate of creation of
chartered local.
If the certificate of creation of the chartered local
was issued by the Bureau, the agreement shall
be filed with the Regional Office which has
jurisdiction over the place where it principally
operates.
Multi-employer collective bargaining agreements
shall be filed with the Bureau (Sec. 1, Rule XVII
of D.O. 40-03).
When to file
Within 30 days from execution of the CBA.
(Sec. 1, Rule XVII of D.O. 40-03)
Requirements for registration
The application for CBA registration shall be
accompanied by the original and 2 duplicate
copies of the following documents:
1. CBA
LABOR LAW
2. A statement that the CBA was posted in
at least 2 conspicuous places in the
establishment concerned for at least 5
days before its ratification.
3. Statement that the CBA was ratified by
the majority of the employees in the
bargaining unit.
Note: The foregoing documents must be certified
under oath by the representative of the employer
and the labor union. No other document shall be
required in the registration of the CBA (Sec. 2,
Rule XVII of D.O. 40-03).
Procedure for registration
1. The Regional Office or the Bureau shall
act on the applications within 5 days from
receipt of the application.
2. The Regional Office or Bureau may
within 5 days from receipt of the
application,
a. Approve the application and
issue the certificate of
registration or
b. Deny the application for failure to
comply with the requirements.
If the supporting documents are not complete, or
are not verified under oath, the Regional Office or
the Bureau shall notify the applicants in writing of
the requirements needed to complete the
registration.
NOTE: If the applicant fails to complete the
requirements within 10 days from receipt of
notice, application is denied without prejudice.
Denial of Registration; Grounds of Appeal
1. The denial shall be in writing, stating in clear
terms the reason therefore and served upon
the applicant union and employer within 24
hours from issuance.
2. The denial by the Regional Office of the
registration of single enterprise collective
bargaining agreements may be appealed to
the Bureau while the denial by the Bureau of
the registration of multi-employer collective
bargaining agreements may be appealed to
the Office of the Secretary, both within 10
days from receipt of the notice of denial.
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3. The memorandum of appeal is filed with the

Regional Office or the Bureau, as the case
may be.
4. The memorandum of appeal and the entire
records of the application shall be transmitted
to the Bureau or the Office of the Secretary
within 24 hours from receipt of the
memorandum of appeal.
5. Bureau or the Office of the Secretary shall
resolve within the same period and in the
same manner as that prescribed for
inter/intra-union disputes (Sec. 5, Rule XVII
of D.O. 40-03).

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BARGAINING PROCEDURE UNDER THE LABOR CODE
(Labor code, Art. 261)

Serve written notice with statement of

proposals upon the other party.

NOTE: Not more than

10 days from receipt
Reply of other party

NOTE: Only if differences

arise between the
proposals and the reply

CONFERENCE Shall begin not later than

10 calendar days from
date of request
Board shall have the power
to issue subpoenas to
NOTE: Only if
require attendance to such
differences are not
meetings. (Labor code, Art Board shall intervene, call parties settled
261 (c))
to conciliation meetings
It shall be the duty of
Board shall exert all efforts
the parties to
to settle disputes amicably,
participate fully and
encourage parties to submit
promptly in the
case to voluntary arbitrator.
conciliation meetings
(Art 261 (e))

Parties are prohibited from

doing any act which may
disrupt or impede the early
settlement of the disputes.
(Art. 261 (d))

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Mandatory Provisions of the CBA
Matters considered as mandatory subjects of
bargaining
1. Grievance Machinery (Labor Code, Art.
271)
2. Voluntary Arbitration (Labor Code, Art.
274-75)
3. No Strike-No Lockout Clause
4. Labor Management Council (Labor
Code, Art. 267)
5. Union Security Arrangements
6. Economic / Working Conditions
a. Wages and other types of
compensation; including merit
increases;
b. Working hours and working
days, including work shifts;
c. Vacations and holidays;
d. Bonuses;
e. Pensions and retirement plans;
f. Seniority;
g. Transfer;
h. Lay-offs;
i. Employee workloads;
j. Work rules and regulations;
k. Rent of company houses;
l. Family planning;
m. Rates of pay;
n. Mutual observance duties; and
o. Provision against Drug Use in
Workplace (R.A. No. 9165, Sec.
49)
Where the subject of the dispute is a mandatory
bargaining subject, either party may bargain to
an impasse as long as he bargains in good faith.
Where the subject is non-mandatory, a party
may not insist on bargaining to the point of
impasse. His insistence may be construed as
evasion of the duty to bargain.
Valid Stipulation – No Strike No Lockout
A “no strike, no lockout” provision in the CBA is a
valid stipulation, although the clause may be
invoked by an employer only when the strike is
economic in nature or one which is conducted
to force wage or other concessions from the
employer that are not mandated to be granted by
LABOR LAW
the law itself. Such provision CANNOT be used
to assail the legality of a strike which is
grounded on ULP. In this situation, it is not
essential that the ULP act has, in fact, been
committed; it suffices that the striking workers are
shown to have acted honestly on an impression
that the company has committed ULP and the
surrounding circumstances could warrant such
belief in good faith (Panay Electric v. NLRC, G.R.
No. 102672, Oct. 4, 1995); (Malayang Samahan
ng mga Manggagawa sa Greenfield v. Ramos,
G.R. No. 113907, 2000).
In the case of (Nuwhrain-Dusit v. NLRC, G.R. No.
163942, 2008; G.R. No. 166295), the Union’s
concerted violation of the Hotel’s Grooming
Standard by deliberately shaving their heads
which resulted in the disruption of the Hotel’s
operations clearly violated the CBA’s “No Strike,
No Lockout” provision which states that “The
Union agrees that there shall be no strikes,
walkouts, stoppage or slowdown of work, boycott,
or any other form of interference and/or
interruptions with any of the normal operations of
the Hotel during the life of the Agreement”. The
strike arose out of a bargaining deadlock in the
CBA negotiations with the Hotel. The concerted
action is an economic strike upon which the afore-
quoted “no strike/work stoppage and lockout”
prohibition is squarely applicable.
Duration of the CBA
CBA Duration (Labor Code, Art. 265)
Duration: As agreed upon by the parties; Labor
Code provides that there is a duty to renegotiate
not later than 3 years
Refers to the rest of CBA, economic as well as
non-economic other than representational.
CBA Duration for representation aspect
(Labor Code, Art. 265)
Duration: 5 years for representation aspect
Refers to the identity and majority status of the
union that negotiated the CBA as the exclusive
bargaining representative
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Freedom Period
The 60-day period immediately before the date of
expiry of such 5 year-term of the CBA (Art. 265)
No petition questioning the majority status of the
incumbent bargaining agent shall be entertained
and no certification election shall be conducted by
the DOLE outside of the 60-day period
immediately before the date of the expiry of such
five year term of the Collective Bargaining
Agreement. (Labor code, Art. 265) (Contract-Bar
rule)
Rules on Effectivity and Retroactivity of New
CBA
New and First-ever CBA (No previous CBA):
effective on date agreed upon by the parties
With Previous CBA
Effectivity of new CBA entered into within 6
months after the expiration of the old CBA:
retroact to the date following the expiry date. (Art.
265, Labor Code)
Effectivity of new CBA entered into after 6
months following the expiration of the old CBA:
parties shall agree on the date of effectivity
thereof (Art. 265, Labor Code)
Hold Over Principle
The CBA shall be in full force and effect until the
parties reach a new agreement. Until a new CBA
has been executed by and between the parties,
they are duty-bound to keep the status quo and
to continue in full force and effect the terms and
conditions of the existing agreement. (Labor
Code, Art. 253; FAMIT v. CA, G.R. No. 164060,
2007)
The law does not provide for any exception nor
qualification as to which of the economic
provisions of the existing agreement are to retain
force and effect, therefore, it must be understood
as encompassing all the terms and conditions in
the said agreement. (FAMIT v. CA, G.R. No.
164060, 2007)
To rule otherwise would be to create a gap during
which no agreement would govern, from the time
LABOR LAW
the old contract expired to the time a new
agreement shall have been entered into. (New
Pacific Timber & Supply Company Inc. v. NLRC,
G.R. No. 124224, 2000)
Hold over principle shall also govern during the
interregnum between the expiration of the
economic provisions of the CBA and the date of
effectivity of the Arbitral Award. [I]t 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 freedom period and/or until a new
agreement is reached by the parties." Despite the
lapse of the formal effectivity of the CBA the law
still considers the same as continuing in force and
effect until a new CBA shall have been validly
executed.||| (Manila Electric Co. v. Quisumbing,
G.R. No. 127598 (Resolution), 2000.
Arbitral Award
It is true that an arbitral award cannot per se be
categorized as an agreement voluntarily entered
into by the parties because it requires the
interference and imposing power of the State thru
the Secretary of Labor when he assumes
jurisdiction. However, the arbitral award can be
considered as an approximation of a collective
bargaining agreement which would otherwise
have been entered into by the parties. The terms
or periods set forth in Article 253-A pertains
explicitly to a CBA. But there is nothing that would
prevent its application by analogy to an arbitral
award by the Secretary considering the absence
of an applicable law. (Manila Electric Co. v.
Quisumbing, G.R. No. 127598, 2000])
Rules: (Manila Electric Co. v. Quisumbing,
February 2000)
1. CBA arbitral awards granted after 6 months
from the expiration of the last CBA – retroact
to such time agreed upon by both employer
and the employees or their union.
2. Absent such agreement as to retroactivity –
award shall retroact to the first day after the
6-month period following the expiration of the
last day of CBA.
3. In the absence of a CBA, DOLE Secretary’s
determination of the date of retroactivity as
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part of his discretionary powers over arbitral
awards shall control.
On the other hand, when the CBA is only part of
an arbitral award (,) (...) it may be made
retroactive to the date of expiration of the
previous agreement. Therefore, in the absence of
a specific provision of law prohibiting retroactivity
of the effectivity of arbitral awards issued by the
Secretary of Labor pursuant to Art. 263(g) [now
Art. 278 (g)], the latter is deemed vested with
plenary and discretionary powers to determine
the effectivity thereof. (Manila Central Line Corp.
v. Manila Central Line Free Workers Union, G.R.
No. 109383, 1998)
CBA and 3rd Party Applicability
The rule is that unless expressly assumed, labor
contracts such as employment contracts and
CBAs are not enforceable against a transferee of
an enterprise, labor contracts being in personam,
is binding only between the parties. A labor
contract merely creates an action in personam
and does not create any real right which should
be respected by third parties.
As a general rule, there is no law requiring a bona
fide purchaser of the assets of an on-going
concern to absorb in its employ the employees of
the latter. However, although the purchaser of the
assets or enterprise is not legally bound to absorb
in its employ the employees of the seller of such
assets or enterprise, the parties are liable to the
employees if the transaction between the parties
is colored or clothed with bad faith. (Sundowner
Dev’t. Corp. v. Drilon, G.R. No. 82341, 1989)
General Rule: An innocent transferee of a
business establishment has no liability to the
employees of the transferor to continue
employing them. Nor is the transferee liable for
past unfair labor practices of the previous owner.
Exception: When the liability therefore is
assumed by the new employer under the contract
of sale, or when liability arises because of the new
owner's participation in thwarting or defeating the
rights of the employees. The most that the
transferee may do, for reasons of public policy
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and social justice, is to give preference to the
qualified separated employees in the filling of
vacancies in the facilities of the purchaser.
(Manlimos v. NLRC, G.R. No. 113337, 1995)
GRIEVANCE MACHINERY
Establishment of a grievance machinery
The parties to a CBA shall include therein
provisions that will ensure the mutual observance
of its terms and conditions.
They shall establish a machinery for the
adjustment and resolution of grievances arising
from the interpretation or implementation of their
CBA AND those arising from the interpretation or
enforcement of company personnel policies
(Labor Code, Art. 273)
Establishment of Grievance Machinery
(Omnibus Rule Implementing the Labor Code,
Rule XIX, Sec. 1)
1. By provision in the CBA
2. In the absence of applicable provision in the
CBA, a Grievance committee shall be created
within 10 days from the signing of the CBA.
The grievance committee shall be composed of
at least 2 representatives each from the members
of the bargaining unit, designated by the union
and the employer, unless otherwise agreed upon
by the parties.
“Grievance” or “Grieveable Issue”
1. Interpretation or implementation of the CBA
2. Interpretation or enforcement of company
personnel policies
3. Any claim by either party that the other party
is violating any provisions of the CBA or
company personnel 
policies. 

In order to be grieveable, the violations of the
CBA should be ordinary and not gross in
character; otherwise, they shall be considered as
unfair labor practice (ULP).
Gross violation of the CBA is defined as
flagrant and/or malicious refusal by a party
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thereto to comply with the economic
provisions thereof.
Accordingly, violations of a CBA, except those
which are gross in character, shall no longer be
treated as ULP, and shall be resolved as
grievances. (Labor Code, Art. 274)
If what is violated, therefore, is a non-economic
or a political provision of the CBA, the same shall
not be considered as unfair labor practice and
may thus be processed as a grievable issue in
accordance with and following the grievance
machinery laid down in the CBA.
Note: In the case of (Liberal Labor Union v. Phil
Can Co., 1952), the Court declared as illegal the
strike staged by the union for not complying with
the grievance procedure provided in the collective
bargaining agreement ruling that “xxx the main
purpose of the parties in adopting a procedure in
the settlement of their disputed is to prevent a
strike. This procedure must be followed in its
entirety if it is to achieve its objective. xxx strikes
held in violation of the terms contained in the
collective bargaining agreement are illegal,
especially when they provide for conclusive
arbitration clauses.”
In abandoning the grievance proceedings and
stubbornly refusing to avail of the remedies under
the CBA, respondent Union violated the
mandatory provisions of the collective bargaining
agreement. (San Miguel Corporation v. NLRC,
G.R. No. 99266, 1999)
E. UNFAIR LABOR PRACTICE
Any unfair labor practice expressly defined by the
Labor Code. (Labor Code, Art. 219[k])
I. NATURE AND ASPECT
Nature of Unfair Labor Practice
1. Inimical to the legitimate interests of both
labor and management, including their right
to bargain collectively and otherwise deal
with each other in an atmosphere of freedom
and mutual respect;
2. Disrupt industrial peace;
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3. Criminal offenses against the State;
4. Violation of civil rights of both labor and
management;
5. Violate the constitutional right of workers and
employees to self-organization; and
6. Creates unstable labor-management
relations (Labor Code, Art. 258)
Elements of Unfair Labor Practice
1. There is an employer-employee relationship.
2. The act done is expressly defined in the Code
as an unfair labor practice
3. Act complained of as ULP must have
proximate and causal connection with/
violation of:
a. Exercise the right to self-organization
b. Exercise of the right to collective
bargaining (Allied Banking
Corporation v. CA, G.R. No. 144412,
2003)
Note: Employee refers to any person working for
an employer. It includes one whose work has
ceased in connection with any current labor
dispute or because of any unfair labor practice
and one who has been dismissed from work but
the legality of the dismissal is being contested in
a forum of appropriate jurisdiction. (IRR Book V
Rule 1 Sec.1 (r))
Prescription of actions for ULP
The offense prescribes in 1 year. (Labor Code,
Art. 305)
Not every unfair act is an Unfair Labor
Practice
The Court has ruled that prohibited acts refer to
"acts that violate the workers’ right to
organize." Without that element, the acts, even if
unfair, are not ULP. Thus, an employer may only
be held liable for unfair labor practice if it can be
shown that his acts affect in whatever manner the
right of his employees to self-organize. (Bankard
v. NLRC, G.R. 171664, 2013).
ULP therefore, refers only to acts opposed to
workers’ right to organize. When committed by
the employer, it commonly connotes anti –
unionism.
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ASPECTS OF UNFAIR LABOR PRACTICE
CIVIL ASPECT CRIMINAL ASPECT
May include liability Can only be initiated
for damages and may after the finality of
be passed upon by judgment in the labor
the Labor Arbiter case (Labor code, Art.
(Labor code, Art. 258) 258)
NOTE: But judgment in the labor case will not
serve as evidence of ULP in the criminal case.
Jurisdiction of Criminal Charge of ULP
The criminal charge falls under the concurrent
jurisdiction of the MTC or the RTC. Only
substantial evidence is required in the labor case
while proof beyond reasonable doubt is need in
the criminal prosecution. Recovery of civil liability
in the administrative proceedings shall bar
recovery under the Civil Code.
Who can Commit ULP
Both employers and labor organizations can
commit acts of unfair labor practices in collective
bargaining. However, the labor organization must
be the representative of the employees before
any act it does may be considered as a violation
of the duty to bargain collectively. (Labor Code,
Arts. 259[g] and 260[c])
Who are Liable when ULP is committed by
Entities Other than Natural Persons
If the ULP is committed by a labor organization,
the parties liable are the officers, members of
governing boards, representatives or agents or
members of labor associations or organizations
who have actually participated in, authorized or
ratified such acts. [Art 260].
If ULP is committed by the employer corporation,
partnership, association, its officers or agents
who have actually participated in, authorized or
ratified ULP shall be held criminally liable. [Art.
259]
2. ULP BY EMPLOYERS
The Code enumerates the acts or categories of
acts considered as ULP. The enumeration does
not mean an exhaustive listing of ULP incidents.
LABOR LAW
(HSBC Employees Union v. NLRC, G.R. No.
125038, 1997)
WHEN THERE IS NO ULP AND THERE IS
VALID EXERCISE OF MANAGEMENT RIGHTS
When rules are necessary to the proper and
effective business operation
The law on unfair labor practices is not intended
to deprive the employer of his fundamental right
to prescribe and enforce such rules as he
honestly believes to be necessary to the proper,
productive and profitable operation of his
business. (Bankard, Inc. v. NLRC, G.R. No.
171664, 2013)
Management exercised in good faith
So long as a company’s management
prerogatives are exercised in good faith for the
advancement of the employer’s interest and not
for the purpose of defeating or circumventing the
rights of the employees under special laws or
under valid agreements, the Court will uphold
them. (LVN Picture Workers v. LVN, G.R. No. L-
23495, 1970)
The Court has held that management is free to
regulate, according to its own discretion and
judgment, all aspects of employment, including
hiring, work assignments, working methods, time,
place, and manner of work, processes to be
followed, supervision of workers, working
regulations, transfer of employees, work
supervision, lay-off of workers, and discipline,
dismissal and recall of workers. The exercise of
management prerogative, however, is not
absolute as it must be exercised in good faith and
with due regard to the rights of labor. (Royal Plant
Workers Union v. Coca-Cola Bottlers Philippines,
inc, G.R. No. 198783, 2013)
Where the vacation leave is without pay, which
the employer requires employees to take in view
of the economic crisis, is neither malicious,
oppressive nor vindictive, ULP is not committed.
(Philippine Graphic Arts, Inc. v. NLRC, et al., G.R.
No. L-80737, 1988)
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In the absence of showing that the illegal
dismissal was dictated by anti – union motives,
the same does not constitute an unfair labor
practice as would be a valid ground for strike. The
remedy is an action for reinstatement with back
wages and damages. (AHS/ Philippine
Employees Union v. NLRC, G.R. No. 73721 ,
1987)
ACTS NOT CONSIDERED AS ULP
Transfer of Employees when there is No
Interference to Self- Organization.
As a rule, it is the prerogative of the company to
promote, transfer or even demote its employees
to other positions when the interests of the
company reasonably demand it. Unless there are
instances which directly point to interference by
the company with the employees right’s to self –
organization, the transfer of an employee should
be considered within the bounds allowed by law,
e.g. where despite his transfer to a lower position,
his original rank and salary remained
undiminished. (Rubberworld Phils. Inc., et al. v.
NLRC, G.R. No. 75704, 1989)
Voluntary Resignation or Termination of
Employment
Acceptance of a mass voluntary resignation is not
ULP. In a Philippine Airlines case, the courts said
that the pilots’ protest retirement/resignation was
not a concerted activity which was protected by
law. They did not assume the status of strikers.
They cannot, therefore, validly claim that the
company committed unfair labor practice. When
the pilots voluntarily terminated their employment
relationship with the company, they cannot claim
that they were dismissed. (Enriquez v. Zamora,
G.R. No. 51382, 1986).
Differential Treatment of Employees Not
Similarly Situated
Discrimination per se is not unlawful. There can
be no discrimination where the employees
concerned are not similarly situated. The grant by
the employer of profit-sharing benefits to the
employees outside the bargaining unit falls under
the ambit of its managerial prerogative. (Wise
and Co. v. Employees Union, G.R. No. 87672,
1989)
LABOR LAW
DETERMINATION OF VALIDITY OF
EMPLOYER’S ACTS
Involves an appraisal of his motives. Thus, there
must be a measure of reliance on the
administrative agency. It is for the CIR (NLRC
now), in the first instance, to weigh the employer’s
expressed motive in determining the effect on the
employees of management’s otherwise equivocal
act. (Republic Savings Bank v. CIR, G.R. No. L-
20303, 1967)
II. ACTS CONSTITUTING ULP BY
EMPLOYERS
Rundown of Acts Constituting Unfair Labor
Practice of Employers (YIP-C2-D2-V2) (Art.
259)
1. Interference
2. Yellow dog condition
3. Contracting out
4. Company unionism
5. Discrimination for or against union
membership
6. Discrimination because of testimony
7. Violation of duty to bargain
8. Paid negotiation
9. Violation of CBA
FIRST ULP: INTERFERENCE (ART. 259 [A])
To interfere with, restrain or coerce employees
in the exercise of their right to self-organization
TEST
Whether the employer has engaged in conduct
which, it may reasonably be said, tends to
interfere with the free exercise of the employees’
right and that 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
interference that the anti-union conduct of the
employer does have an adverse effect on self-
organization and collective bargaining. (Insular
Life Assurance Co., Ltd. EU v. Insular Life, G.R.
No. L-25291, 1971)
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Totality of Conduct Doctrine
The culpability of employer’s remarks is to be
evaluated on the basis of their implication,
against the background of and in conjunction with
collateral circumstances.
Under this doctrine, an expression which might
be permissibly uttered by one employer, might be
deemed improper when spoken by a more hostile
employer, 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, and consequently actionable as an
unfair labor practice. (Insular Life Assurance Co.,
Ltd., Employees Association-ATU, et al. v. Insular
Life Assurance Co., Ltd., G.R. L-25291, 1971).
ACTS CONSTITUTITNG INTERFERENCE
Threatening Employees
Interference with employee organizational rights
were found where the superintendent of the
employer threatened the employees with cutting
their pay, increasing rent of the company houses,
or closing the plant if they supported the union
and where the employer encouraged the
employees to sign a petition repudiating the
union. [No Citation]
Restriction on Right to Self-Organization
The questioned acts of petitioners, namely: 1)
sponsoring a field trip to Zambales for its
employees, to the exclusion of union members,
before the scheduled certification election; 2) the
active campaign by the sales officer of petitioners
against the union prevailing as a bargaining agent
during the field trip; 3) escorting its employees
after the field trip to the polling center; 4) the
continuous hiring of subcontractors performing
respondents’ functions; 5) assigning union
members to the Cabangan site to work as grass
cutters; and 6) the enforcement of work on a
rotational basis for union members, all reek of
interference on the part of petitioners. Indubitably,
the various acts of petitioners, taken together,
reasonably support an inference that, indeed,
such were all orchestrated to restrict
LABOR LAW
respondents’ free exercise of their right to self–
organization. (T&H Shopfitters Corporation v.
T&H Shopfitters Corporation Union, G.R. No.
191714, 2014).
Discouraging Membership in a Labor
Organization
Refusal over a period of years to give salary
adjustments according to the improved salary
scales in the collective bargaining agreements.
(Benguet Consolidated v. BCI Employees and
Workers Union, G.R. No. L-25471, 1968)
Dismissal of an old employee allegedly for
inefficiency, on account of her having joined a
union and engaging in union activities. (East
Asiatic Co v. CIR, G.R. No. L-17037, 1966)
Dismissal of teachers for fear by the school that
there would be strike the following semester.
(Rizal Memorial Colleges Faculty Union v. NLRC,
G.R. Nos. 59012-13, 1989)
A company’s capital reduction efforts, to
camouflage the fact that it has been making
profits to justify the mass lay-off of its employees
especially union members. (Madrigal & Company
Inc. v. Zamora, G.R. No. L-48237, 1987)
Lockout or Closure Amounting to ULP
A lockout, actual or threatened, as a means of
dissuading the employees from exercising their
rights under the Act is clearly an unfair labor
practice. To hold an employer who actually or
who threatens to lock out his employees guilty of
a violation of this Act, the evidence must establish
that the purpose thereof was to interfere with the
employee’s exercise of their rights
(Azucena Vols. II-A and II-B, 9th ed., 2016, p.
323).
Sale in Bad Faith
Where the sale of a business enterprise is
attended with bad faith, there is no need to
consider the applicability of the rule that labor
contracts being in personam are not enforceable
against the transferee. The latter is in the position
of tortfeasor, having been a party likewise
responsible for the damage inflicted on the
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members of the aggrieved union and therefore
cannot justly escape liability. (Cruz v. PAFLU,
G.R. No. L-26519, 1971)
DOCTRINE OF SUCCESSOR - EMPLOYER
A new company will be treated as a continuation
or successor of the one that closed if the new or
take-over company is engaging in the same
business as the closed company or department,
or is owned by the same people, and the "closure"
is calculated to defeat the worker's organizational
right in which case the closure may be declared a
subterfuge.
This doctrine is just an enforcement of the
piercing the veil of corporate entity. (Azucena
Vols. II-A and II-B, 9th ed., 2016, p. 327).
Factors to Determine Continuity:
1. Retention of control
2. Use of the same plant or factory
3. Use of the same or substantially the same
employees, workers, supervisors or
managers
4. Similar or substantially the same work or
production under similar or substantially the
same working conditions
5. Use of the same machinery and equipment
6. Manufacture of the same products or the
performance of the same services
Doctrine Applicable when the Successor is an
Alter-ego
Absorbing all labor force and necessary
personnel as part of the merging of operations
indicate the intention to continue the employer –
employee relationship of the individual
companies with its employees. This is true where
the transferee was found to be merely an alter
ego of the different merging firms, as in this case.
Thus, the transferee has the obligation not only to
absorb the workers of the dissolved companies
but also to include the length of service earned by
the absorbed employees with their former
employers as well. (Filipinas Port Services v.
NLRC, G.R. No.97237, 1991)
LABOR LAW
Doctrine Not Applicable Where There Is No
Retention of Control
There can be no continuity of the business
operations of the predecessor employer by the
successor employer if the latter has no controlling
interest and the two companies have no privity
and are strangers to each other. Sundowner
Development Corporation v. Drilon, G.R. No.
82341, 1989
SECOND ULP: YELLOW DOG (ART. 259 [B])
To require as a condition of employment that a
person or an employee shall not join a labor
organization or shall withdraw from one to which
he belongs
Yellow Dog Contract: A promise exacted from
workers as a condition of employment that they
are not to belong to, or attempt to foster, a union
during their period of employment (Azucena Vols.
II-A and II-B, 9th ed., 2016, p. 329).
Usual Provisions under Yellow Dog Contract
1. A representation by the employee that he is
not a member of a labor union;
2. A promise by the employee not to join a labor
union; and
3. A promise by the employee that, upon joining
a labor union, he will quit his employment
(Teller, Law Governing Labor Disputes and
Collective Bargaining, pp. 118-119)
THIRD ULP: CONTRACTING OUT (ART. 259
[C])
To contract out services or functions being
performed by union members when such will
interfere with, restrain or coerce employees in the
exercise of their rights to self-organization
Not Guilty when Done as an Exercise of
Business Judgment
An employer is not guilty of an unfair labor
practice in contracting work out for business
reasons such as decline in business, the
inadequacy of his equipment, or the need to
reduce the cost, even if the employer’s estimate
of his cost is based on a projected increase
attributable to unionization.
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It is to be emphasized that contracting out of
services is not illegal per se. It is an exercise of
business judgment or management prerogative.
Absent proof that the management acted in
malicious or arbitrary manner, the Court will not
interfere with the exercise of judgment by an
employer. In this case, bad faith cannot be
attributed to BPI because its actions were
authorized by BSP Circular No. 1388, Series of
1993 issued by the Monetary Bank of BSP. (BPI
Employees Union-Davao City-FUBU v. BPI, G.R.
No. 174912, 2013)
Conditions for a valid outsourcing
1. Motivated by good faith; and
2. Must not have been resorted to
circumvent the law or must not have been
the result of malicious or arbitrary action
(Manila Electric v. Quisumbing, G.R. No.
127598, 1999; Bankard v.NLRC, G.R.
No. 171664, 2013)
Runaway Shop is ULP
When an industrial plant is moved by its owners
from one location to another to escape union
labor regulations or state laws or to discriminate
against employees at the old plant because of
their union activities. Resorting to runaway shop
is ULP.
Where a plant removal is for business reasons
but the relocation is hastened by anti – union
motivation, the early removal is unfair labor
practice. It is immaterial that the relocation is
accompanied by a transfer of title to a new
employer who is an alter ego of the original
employer.
FOURTH ULP: COMPANY DOMINATION OF
UNION (ART. 259 [D])
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
Manifestations of Domination of a Labor
Union
1. Initiation of company union idea.
This may further occur in three styles:
LABOR LAW
a. outright formation by the employer or his
representatives
b. employee formation on outright demand
or influence by employer
c. managerially motivated formation by
employees
2. Financial support to the union.
By defraying the union expenses or paying the
attorney’s fees of the lawyer who drafted the
constitution and by – laws of the union.
3. Employer encouragement and assistance.
Immediately granting the union exclusive
recognition as a bargaining agent without
determining whether the union represents the
majority of employees.
4. Supervisory assistance.
This takes the form of soliciting membership,
permitting union activities during working time or
coercing employees to join the union by threats of
dismissal or demotion. (Philippine American
Cigar & Cigarette Factory Workers Union v.
Philippine American Cigar & Cigarette Mfg. Co.,
G.R. No. L-18364, 1963)
A labor union is company – dominated where it
appears that key officials of the company have
been forcing employees belonging to rival labor
union to join the former under pain of dismissal
should they refuse to do so; that key officials of
the company, as well as its legal counsel, have
attended the election of officers of the former
union; that officers and members of the rival union
were dismissed allegedly pursuant to a
retrenchment policy of the company, after they
had presented demands for the improvement of
the working conditions despite its alleged
retrenchment policy; and that, after dismissal of
the aforesaid officers of the rival labor union, the
company engages the services of new laborers.
(Oceanic Air Products, Inc. v. CIR, GR No. L-
18704, 1963)
Effect of Pendency of ULP Case
While generally, the pendency of ULP case filed
against a labor organization participating in the
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certification election does not stay the holding
thereof (Barrera v. CIR, G.R. No. L-32853, 1981).
Prejudicial Question that Bars Holding of
Certificate Election
However, the pendency of a formal charge of
company domination against one of the unions
which is participating in the certification election
is a prejudicial question that bars the holding
thereof until its final resolution. (Standard
Cigarette v. CIR, G.R. No. L-9908, 1957).
Suspension of CBA
The right to free collective bargaining includes the
right to suspend it. The act of the exclusive
bargaining agent of voluntarily entering into the
CBA with the employer and its act of voluntarily
opting for the 10-year suspension of the CBA both
constitutes as valid exercise of the union’s right to
collective bargaining. The act of sanctioning the
10-year suspension the CBA did not contravene
the "protection to labor" policy of the Constitution.
The agreement afforded full protection to labor;
promoted the shared responsibility between
workers and employers; and the exercised
voluntary modes in settling disputes, including
conciliation to foster industrial peace. (Rivera v.
Espiritu, G.R. No. 135547, January 23, 2002)
FIFTH ULP: DISCRIMINATION (ART. 259 [E])
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. (Labor Code, Art. 259[e])
To Constitute Discrimination, it must be
established that:
1. No reasonable distinction or
classification that can be obtained
between persons belonging to the same
class
2. Persons belonging to the same class
have not been treated alike (Wise and
Co., Inc. v. Wise and Co., Inc Employees
Union, G.R. No. 87672, 1989).
There is discrimination only when one is denied
privileges which are granted to others under
similar conditions and circumstances (Caltex
LABOR LAW
Philippines, Inc. v. Philippine Labor Organization,
G.R. No. L-5206, 1953).
There can be no discrimination if the employees
are not similarly situated. (Great Pacific Life
Employees Union v. Great Pacific Life Assurance
Corporation, G.R. No. 126717, 1999).
Note: To constitute an unfair labor practice, the
discrimination committed by the employer must
be in regard to the hire or tenure of employment
or any term or condition of employment to
encourage or discourage membership in any
labor organization.
The exaction by the Company, from strikers
returning to work, of a promise not to destroy
company property and not to commit acts of
reprisal against the Union members who did not
participate in the strike, cannot be considered as
intended to encourage or discourage Union
membership. Taking the circumstances
surrounding the prescribing of that condition, the
requirement by the Company is actually an act of
self – preservation and designed to inure the
maintenance of peace and order in the Company
premises. (Pagkakaisang Itinataguyod ng mga
Manggagawasa Ang Tibay, et al., G.R. No. L-
22273, 1967)
Discrimination in Bonus Allocation or Salary
Adjustments
There is unfair and unjust discrimination in
granting of salary adjustments where evidence
shows that:
1. The management paid the employees of
the unionized branch;
2. Where salary adjustments were granted
to employees of one of its non –
unionized branches although it was
losing in its operations; and
3. The total salary adjustments given every
ten of its unionized employees would not
even equal the salary adjustments given
one employee in the non – unionized
branch. (Manila Hotel Company v. Pines
Hotel Employees Association (CUGCO)
and CIR, G.R. No. L-30818, 1972)
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Discrimination in Layoff or Dismissal
Even where business conditions justified a layoff
of employees, unfair labor practices in the form of
discriminatory dismissal were found where only
unionists were permanently dismissed while non
– unionists were not.
Discharge due to union activity, a question of
fact
The question of whether an employee was
discharged because of his union activities is
essentially a question of fact as to which the
findings of the court of Industrial Relations are
conclusive and binding if supported by substantial
evidence considering the record as a whole.
(Philippine Metal Foundries, Inc., v. CIR, G.R. No.
L-34948, 1979)
Test of Discrimination
To determine whether or not a discharge is
discriminatory, it is necessary that the underlying
reason for the discharge be established.
The fact that a lawful cause for discharge is
available is not a defense where the employee is
actually discharged because of his union
activities. If the discharge is actually motivated by
a lawful reason, the fact that the employee is
engaged in union activities at the time will not lie
against the employer and prevent him from the
exercise of his business judgment to discharge
an employee for cause. (NLRB v. Ace Comb Co.
342 F. 2 841, as cited in Cainta Catholic School
v. CCSEU, G.R. No. 151021, 2006).
An inference that the discharge of an employee
was motivated by his union activity must be based
upon evidence, direct or circumstantial, not upon
mere suspicion. (NLRB v. South Rambler Co.,
324 F 2d 447).
VALID DISCRIMINATION
Union Security
Union security is a generic term which is applied
to and comprehends closed shop, union shop,
maintenance of membership or any other form of
agreement which imposes upon employees the
LABOR LAW
obligation to acquire or retain union membership
as a condition affecting employment.
It is indeed compulsory union membership whose
objective is to assure continued existence of the
union. In a sense, there is discrimination when
certain employees are obliged to join a particular
union. But if it is discrimination favoring unionism;
it is a valid kind of discrimination. (Azucena,
Everyone’s Labor Code, 2015 ed.)
Nothing in this Code or in any other law shall stop
the parties from requiring membership in a
recognized collective bargaining agent as a
condition for employment, except those
employees who are already members of another
union at the time of the signing of the collective
bargaining agreement. (Labor Code, Art. 259[e])
The law has allowed stipulations for 'union shop'
and 'closed shop' as means of encouraging
workers to join and support the union of their
choice in the protection of their rights and
interests vis-a-vis the employer. (Del Monte
Philippines v. Salvidar, G.R. No. 158620, 2006)
The employer is not guilty of unfair labor practice
if he merely complies in good faith with the
request of the certified union for the dismissal of
employees expelled from the union pursuant to
the union security clause in the collective
bargaining agreement. (Soriano v. Atienza, G.R.
No. 68619, 1989)
TYPES OF UNION SECURITY CLAUSES
1. CLOSED SHOP
Only union members can be hired by the
company and they must remain as union
members to retain employment in the company.
Employees not covered by the closed shop
provision
1. Any employee who at the time the closed
– shop agreement takes effect is a bona
fide member of a religious organization
which prohibits its members from joining
labor unions of religious grounds.
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2. Employees already in service and
already members of a labor union or
unions other than the majority union at
the time the closed – shop agreement
took effect.
3. Confidential employees who are
excluded from the rank and file
bargaining unit.
4. Employees excluded from the closed –
shop by express terms of the agreement.
(BPI v. BPI Employees Union-Davao
Chapter, G.R. No 164301, 2010).
Generally Applicable to Persons to be Hired
or Not Yet Members of Labor Organizations.
In the absence of a manifest intent to the contrary,
closed – shop provisions in a collective
bargaining agreement apply only to persons to be
hired or to employees who are not yet members
of any labor organization and that said provisions
of the agreement are not applicable to those
already in the service at the time of the execution.
Disaffiliation from a labor union is not open to
legal objection since to do so would render
nugatory the right of all employees to self –
organization and to form, join or assist labor
organizations of their own choosing. But a closed
shop is a valid form of union security, and such
provision in a CBA is not a restriction on the right.
Thus, although one is entitled to disaffiliation from
their union to form a new organization of their
own, must, however, suffer the consequences of
their separation from the union under the security
clause of the CBA. (Villar v. Inciong, G.R. No. L-
50283-84, 1983; NAFLU v. Hamilton Distillery
Co., et. al., G.R. No. L-18112, 1962)
2. UNION SHOP
Non-members may be hired, but to retain
employment, they must become union members
after a certain period. The requirement applies to
present and future employees. (Azucena Vol. II-
A, 9th ed., p. 346).
There is union shop when all new regular
employees are required to join the union within a
certain period as a condition for their continued
LABOR LAW
employment. (GMC v. Casio, G.R. No. 149552 ,
2010)
3. MAINTENANCE OF MEMBERSHIP SHOP
There is maintenance of membership shop when
employees, who are union members as of the
effective date of the agreement, or who thereafter
become members, must maintain union
membership as a condition for (their) continued
employment until they are promoted or
transferred out of the bargaining unit or the
agreement is terminated. (GMC v. Casio, G.R.
No. 149552, 2010)
4. AGENCY SHOP
An agreement whereby employees must either
join the union or pay to the union as exclusive
bargaining agent a sum equal to that paid by the
members. (Azucena Vol. II-A, 9th ed., p. 346).
Under the agency – shop clause of a CBA, an
employee is not required to join the union as a
condition of continued employment, but must pay
the union a service fee (usually equivalent to
union dues and initiation fees). Since a union is
required by statute to act as the bargaining
representative of all employees, both union and
non – union, within their bargaining unit, the
justification for the clause is that the nonmember
should contribute towards the cost of collective
bargaining process without supporting it
financially.
5. MODIFIED UNION SHOP
Employees who are not union members at the
time of signing the contract need not join the
union, but all workers hired thereafter must join.
(Azucena Vol. II-A, 9th ed., p. 346).
ENFORCEMENT OF UNION SECURITY
CLAUSE
Requisites
In terminating the employment of an employee by
enforcing the union security clause, the employer
needs only to determine and prove that:
1. The union security clause is applicable
2. The union is requesting for the
enforcement of the union security
provision in the CBA 

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3. There is sufficient evidence to support
the union’s decision to expel the
employee from the union; and
4. The employer must comply with due
process:
a. Notify the employees that their
dismissal is being requested by
the union;
b. The employees’ explanations
are heard (Alabang Country Club
v. NLRC, G.R. No 170287, 2008)
Termination Due to Union Security Provision
Termination of employment by virtue of a union
security clause embodied in a CBA is recognized
and accepted in our jurisdiction. This practice
strengthens the union and prevents disunity in the
bargaining unit within the duration of the CBA.
By preventing member disaffiliation with the
threat of expulsion from the union and the
consequent termination of employment, the
authorized bargaining representative gains more
numbers and strengthens its position as against
other unions which may want to claim majority
representation. (Alabang Country Club v. NLRC,
G.R. No. 170287, 2008)
To validly dismiss an employee because of a
union shop or closed-shop provisions, there
should be a clear and unequivocal statement that
loss of good standing in the union would be a
cause for dismissal. (Confederated Sons of
Labor v. Anakan Lumber Co., G.R. No. L-12503,
1960)
Employer Must Conduct Separate
Investigation and Hearing
While company may validly dismiss the
employees expelled under the union security
upon the recommendation by the union, this
dismissal should not be done hastily and
summarily thereby eroding the employees' right
to due process, self-organization and security of
tenure. Even if there are valid grounds to expel
the union officers, due process requires that
these union officers be accorded a separate
hearing by respondent company. (Malayang
Samahan ng Manggagawa sa M. Greenfield v.
Ramos, G.R. No. 113907, 2000)
LABOR LAW
Requirement of Due Process
Substantive and procedural due process
requirements in determining whether or not an
employee was validly terminated must still be
followed even if the termination is based on a
(union security clause) of the CBA.
Further, in order that any CBA-mandated
dismissal may receive the warrant of the courts
and labor tribunals, the causes for dismissal as
provided for in the CBA must satisfy to the
evidentiary threshold of the NLRC and the courts.
(Del Monte v. Saldivar, G.R. No. 158620, 2006)
Obligations and Liabilities
Where the employer dismissed his employees in
the belief in good faith that such dismissal was
required by the (union security provision) of the
collective bargaining agreement with the union,
he may not be ordered to pay back
compensations to such employees although their
dismissal is found to be illegal. (Confederated
Sons of Labor v. Anakan Lumber Co., G.R. No.
L-12503, 1960)
As dictated by fairness, [...] the union shall be
liable to pay their backwages. This is because
management would not have taken the action it
did had it not been for the insistence of the labor
union seeking to give effect to its interpretation of
a closed shop provision. (Guijarno v. CIR, G.R.
Nos. L-28791-93, 1973)
SIXTH ULP: DISCRIMINATION BECAUSE OF
TESTIMONY (ART. 259 [F])
To dismiss, discharge or otherwise prejudice or
discriminate against an employee for having
given or being about to give testimony under this
Code.
Note: This is the only ULP not directly related to
the right to self – organization. The testimony or
proceedings might involve wages, employee’s
benefits disciplinary rules, or organizational
rights, or anything covered by the Labor Code.
What is chargeable as ULP is the employer’s
retaliatory act regardless of the subject of the
employee’s complaint or testimony.
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Unfair labor practice refers to acts that violate the
workers’ right to organize. The prohibited acts are
related to workers' right to self-organization with
the sole exception of Art. [259 (f)]. (Philcom
Employees Union v. Philippine Global
Communication, G.R. 126717, 1999).
SEVENTH ULP: VIOLATION OF THE DUTY TO
BARGAIN (ART. 259 [G])
To violate the duty to bargain collectively as
prescribed by this Code
Both employers and labor organizations can
commit acts of unfair labor practices in collective
bargaining. However, the labor organization must
be the representative of the employees before
any act it does may be considered as a violation
of the duty to bargain collectively. (Labor Code,
Art. 259[g] and 260[c])
Four Forms of Unfair Labor Practice in
Bargaining
1. Failure or Refusal to Meet and Convene
2. Evading the Mandatory Subjects of
Bargaining
3. Bad Faith in Bargaining
4. Gross Violation of the CBA
FIRST FORM: FAILURE OR REFUSAL TO
MEET AND CONVENE
Employer cannot bargain directly with employees
The employer cannot ignore the bargaining agent
and bargain directly with individual employees.
Refusal to make counter-proposals – Effect is
that CBA will be imposed on the union
A company’s refusal to make counter-proposal if
considered in relation to the entire bargaining
process, may indicate bad faith and this is
especially true where the Union’s request for a
counter proposal is left unanswered. (Kiok Loy v.
NLRC, G.R. No. L-54334, 1986; Divine Word
University of Tacloban v. Secretary of Labor, G.R.
No. 91915, 1992)
Failure to reply - ULP
Likewise, in Colegio de San Juan de Letran v.
Association of Employees and Faculty of Letran
LABOR LAW
(G.R. No. 141471, 2000), petitioner-school was
declared to have acted in bad faith because of its
failure to make a timely reply to the proposals
presented by the union. The school merely
offered a feeble excuse that its Board of Trustees
had not yet convened to discuss the matter.
A local union which is not independently
registered cannot exercise the rights and
privileges granted by law to legitimate labor
organizations. The employer cannot be faulted
for refusing to negotiate with the unregistered
chapter. (Abaria, et al v. Metro Cebu Community
Hospital, G.R. No. 154113, 2011)
An employer is guilty of ULP when he directly
discharges his employees to forestall a demand
for collective bargaining, and also indirectly
causes that discharge by selling to a company
that he knows is unwilling to accept his
employees. (Fernando v. Angat Labor Union,
G.R. No. L-17896, 1962)
Acts Not Deemed Refusal to Bargain
1. Adoption of an adamant bargaining
position in good faith, particularly when
the company is operating at a loss;
2. Refusal to bargain over demands for
commission of ULP;
3. Refusal to bargain during period of illegal
strike;
4. Refusal to bargain where there is no
request for bargaining;
5. Union seeks recognition for an
inappropriately large unit
Note: Holding meetings that result in deadlocks,
if done in good faith, does not result in ULP. The
purpose of collective bargaining is the reaching of
an agreement resulting in a contract binding on
the parties but the failure to reach an agreement
after negotiations have continued for a
reasonable period does not establish a lack of
good faith. (Union of Filipro Employees v. Nestle,
G.R. Nos. 158930-31, 2008).
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SECOND FORM: EVADING THE MANDATORY
SUBJECTS OF BARGAINING
Where the subject of the dispute is a mandatory
bargaining subject, either party may bargain to
an impasse as long as he bargains in good faith.
Where the subject is non-mandatory, a party
may not insist on bargaining to the point of
impasse. His insistence may be construed as
evasion of the duty to bargain.
THIRD FORM: BARGAINING IN BAD FAITH
Determination of Good Faith: Question of Fact
Good faith or bad faith is an inference to be drawn
from the facts. There is no per se test of good faith
in bargaining. The test of good-faith bargaining is
not the effect of an employer’s or a union's
actions individually but rather it is the impact of all
such occasions or actions, considered as a
whole, and the inferences fairly drawn therefrom.
(The Hong Kong and Shanghai Banking
Corporation Employees Union v. NLRC, G.R.
125038, 1997).
An employer’s steadfast insistence to exclude a
particular substantive provision from the union’s
proposal is no different from a bargaining
representatives perseverance to include one that
they deem of absolute necessity. (Union of Filipro
Employees v. Nestle-Philippines, G.R. Nos.
158930-31, 2008)
Bargaining in Bad Faith Must Occur While
Bargaining is in Process
With the execution of the CBA, bad faith can no
longer be imputed upon any of the parties thereto.
All provisions in the CBA are supposed to have
been jointly and voluntarily incorporated therein
by the parties. This is not a case where private
respondent exhibited an indifferent attitude
towards collective bargaining because the
negotiations were not the unilateral activity of
petitioner union. The CBA is proof enough that
private respondent exerted “reasonable effort of
good faith bargaining.” (Samahan Ng
Manggagawa sa Top Form Manufacturing-United
Workers of the Philippines v. NLRC, G.R. No.
13856, 1998)
LABOR LAW
A company's refusal to make counter-proposal, if
considered in relation to the entire bargaining
process, may indicate bad faith and this is
especially true where the Union's request for a
counter-proposal is left unanswered."
Considering the facts of that case, the Court
concluded that the company was "unwilling to
negotiate and reach an agreement with the
Union." (Kiok Loy v. NLRC, G.R. 54334, 1986).
Inflexible Demands and Strike Amid
Negotiation – Bad Faith Bargaining
The parties had a total of (5) conferences for
purposes of collective bargaining. The first strike
was staged less than a week after the fourth CBA
conference and without any benefit of any
previous strike notice. Thus, from these stated
facts, it can be inferred that the first strike was
held while the parties were in the process of
negotiating. There is reason to believe that the
first strike was staged only for the purpose of
compelling the respondent companies to accede
to the inflexible demands of the complainant
LAKAS. (Lakas ng Manggagawang Makabayan
v. Marcelo Enterprises, G.R. Nos. L-38258 &
38260, 1982)
Other Examples of Bad Faith Bargaining
Surface Bargaining: A sophisticated pretense in
the form of apparent bargaining does not satisfy
the statutory duty to bargain. The duty is not
discharged by merely meeting together or simply
manifesting a willingness to talk. An employer’s
proposals which could not be offered with any
reasonable expectation that they would be
accepted by the union constitute surface
bargaining. (Standard Chartered Bank
Employees Union (NUBE) v. Confessor, G.R. No
114974, 2004)
Blue Sky Bargaining: The making of
exaggerated or unreasonable proposals in
collective bargaining. (Standard Chartered Bank
Employees Union (NUBE) v. Confessor, G.R. No.
114974, 2004)
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Boulwarism – occurs:
1. When the employer directly bargains with
the employee disregarding the union;
2. The aim was to deal with the union
through the employees, rather than with
the employees through the union;
3. Employer submits its proposals and
adopts a “take it or leave it” stand. (NLRB
v. General Election Co., 418 F. 2d 736
(1970)
FOURTH FORM: GROSS VIOLATION OF THE
CBA
ULP exists in this form when the complaint shows
prima facie the concurrence of two things:
1. There is a gross violation of the CBA;
and
2. The violation pertains to the economic
provisions of the CBA (Silva v. NLRC,
G.R. No. 110226, 1997)
Gross: Refers to a flagrant and/or malicious
refusal by a party to comply with the [economic
provisions] (FASAP v. PAL, G.R. No. 178083,
2008).
Total Disregard of CBA Constitutes ULP
Reference to the economic provisions of the CBA
is not a necessary element of ULP where the
employer in effect totally disregarded the CBA.
(Employees’ Union of Bayer v. Bayer Phil., G.R.
No. 162943, 2010)
An employer should not be allowed to rescind
unilaterally its CBA with the duly certified
bargaining agent it had previously contracted
with, and decide to bargain with a different group
if there is no legitimate reason for doing so and
without first following the proper procedure.
(Employees’ Union of Bayer v. Bayer Phil., G.R.
No. 162943, 2010)
EIGHTH ULP: PAID NEGOTIATION (ART. 259
[H])
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
LABOR LAW
Note: Self – organization and collective
bargaining are treasured rights of the workers.
The law zealously shields them from corruption.
It is a punishable act of ULP for the employer to
pay the union or any of its officers or agents any
negotiation fee or attorney’s fees as part of the
settlement in collective bargaining or any labor
dispute. To do so is not only unlawful. It is
ethically reprehensible. Correspondingly, Art. 260
prohibits union officers or agents from asking for
or accepting such payments. Such act,
furthermore, is a ground for cancellation of union
registration under Art. 247(g). (Azucena Vols. II-
A and II-B, 9th ed., 2016, p. 362).
NINTH ULP: VIOLATION OF THE CBA (ART.
259 [I])
See above discussion on Fourth Form of ULP in
Bargaining.
Note: Under Art. 259, simple violation of the
collective bargaining agreement is no longer
treated as unfair labor practice but as mere
grievance, which should be processed through
the grievance machinery in the CBA. It becomes
an unfair labor practice only when it is gross in
nature, which means that there is flagrant and/or
malicious refusal to comply with the economic
provisions of such agreement by either the
employer or the union.
In the case of Master Union Labor Union v.
NLRC, (G.R. No. 92009, 1993), Master Iron
Works Construction Corporation’s insistence that
the hiring of casual employees is a management
prerogative betrays its attempt to coat with
legality the illicit curtailment of its employees’ right
to work under the terms of the contract of
employment and to a fair implementation of the
CBA.
Relief In ULP Cases
1. Cease and Desist Order
To support a cease and desist order, the record
must show that the restrained misconduct was an
issue in the case; that there was a finding of fact
of said misconduct and such finding was
supported by evidence.
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The Court is not authorized to issue blank cease
and desist orders, but must confine its injunction
orders to specific act or acts which are related to
past misconduct. (Azucena Vols. II-A and II-B, 9th
ed., 2016, p. 363).
2. Affirmative Order
In addition to a cease and desist order, the court
may issue an affirmative order to reinstate the
said employee with back pay from the date of the
discrimination.
The order may usually direct the full
reinstatement of the discharged employees to
their substantially equivalent position without
prejudice to their seniority and other rights and
privileges.
If other laborers have been hired, the affirmative
order shall direct the respondent to dismiss these
hired laborers to make room for the returning
employee. (Azucena Vols. II-A and II-B, 9th ed.,
2016, p. 363).
1. Court may impose the union’s proposed
CBA on the employer. (Kiok Loy v.
NLRC, G.R. No. L-54334, 1986)
2. Strike by union members (Labor code,
Art. 278)
ULP is not subject to compromise
ULP cases are not, in view of the public interest
involved, subject to compromise. (CLLC E.G.
Gochangco Workers Union v. NLRC, G.R. No. L-
67153, 1988)
However: In another decision, the Court
approved a compromise agreement finally
settling an illegal strike case. The agreement in
that case was voluntarily entered into and
represented a reasonable settlement, thus
binding. (see Reformist Union of R.B. Liner v.
NLRC, G.R. No. 120482, 1997)
ULP in a given period should be included in a
single charge
When a labor union accuses an employer of acts
of unfair labor practice allegedly committed
during a given period of time, the charges should
include all acts of unfair labor practice committed
LABOR LAW
against any and all members of the union during
that period. The union should not, upon the
dismissal of the charges first preferred, be
allowed to split its cause of action and harass the
employer with subsequent charges, based upon
acts committed during the same period of time.
(Dionela, et. al. v. CIR et. al., G.R. No. L-18334,
1963)
III. ACTS CONSTITUTING ULP BY
ORGANIZATION
Kinds of ULP by Labor Organizations (Labor
code, Art. 260)
1. To restrain or coerce employees in the
exercise of their right to self –
organization.
2. To attempt to or cause an employer to
discriminate against an employee to
whom membership in the labor
organization was denied or to terminate
an employee on any ground other than
the usual terms and conditions under
which membership or continuation of
membership is made available to other
members.
3. To refuse to bargain collectively with the
employer, if it is the representative of the
employee.
4. To attempt to or cause the employer to
pay money or other things of value, in the
nature of an exaction, for services which
are not performed or not to be performed.
This includes fees for union negotiations.
5. To ask or accept negotiations or
attorney’s fees from employers as part of
the settlement in any dispute.
6. Violation of CBA.
FIRST ULP: RESTRAINT OR COERCION BY
LABOR ORGANIZATION; INTERFERENCE BY
UNION IS NOT ULP (ART. 260 [A])
A labor organization commits ULP when it
restrains or coerces employees in their right to
self – organization. It may interfere in the
employees’ right to self-organization as long as
the interference does not amount to restraint or
coercion.
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Union cannot coerce employees to join a
strike
Similarly, a violation is committed when a union
threatens the employees with bodily harm in
order to force them to strike.
A union violates the law when, in order to restrain
or coerce non-strikers from working during the
strike, it:
1. Assaults or threatens to assault them
2. Threatens them with the loss of their jobs
3. Blocks their ingress to and egress from
the plant
4. Damages non-strikers’ automobiles or
forces them off the highway
5. Physically preventing them from working
6. Sabotages the employer’s property in
their presence, thereby creating an
atmosphere of fear or violence
7. Demonstrates loudly in front of a non-
strikers’ residence with signs and shouts
accusing the non-striker of “scabbing”
8. Holding the non-striker up to ridicule
9. Seeking public condemnation of the non-
striker
Note: Interference, which is ULP with employers,
is not ULP when done by a labor organization
because it is part and parcel of the duties and
functions of a labor organization.
SECOND ULP: UNION-INDUCED
DISCRIMINATION (ART. 260[B])
Three (3) Kinds of Discrimination that the
Union may commit under Art. 260(b)
1. Act of the union to cause or attempt to
cause an employer to discriminate
against an employee, in general,
irrespective of whether he/she is a
member or non-member of the union
2. Discriminatory act of the union against an
employee “with respect to whom
membership in such organization has
been denied.”
3. Discriminatory act of the union against an
employee whose membership therein
has been terminated based “on any
LABOR LAW
ground other than usual terms and
conditions under which membership or
continuation of membership is made
available to other members.”
Arbitrary use of union security clause
The broad rule is that the union has the right to
determine its membership and to prescribe the
conditions for the acquisition and retention
thereof. Consequently, admission to membership
may not be compelled.
This rule, however, is qualified in the case of labor
unions holding a monopoly in the supply of labor,
either in a given locality, or as regards a particular
employer by reason of a closed – shop or similar
agreements. In such case, qualified applicants
may not be barred by unreasonable rules.
Salunga v. CIR (G.R. No. L-22456, 1967)
The Court held that labor unions are not
entitled to arbitrarily exclude qualified
applicants for membership. A closed-shop
provision will not justify the employer in
discharging, as well as a union insisting upon the
discharge of an employee whom it refuses to
admit, without any reasonable ground thereof.
Having been dismissed from service owing to
unfair labor practice on the part of the union,
petitioner is entitled to reinstatement as member
of the union and to his former or substantially
equivalent position in the company, without
prejudice to his seniority and/or rights and
privileges, and with back pay. Union security
clauses are also governed by law and by
principles of justice, fair play, and legality. Union
security clauses cannot be used by union officials
against an employer, much less their own
members, except with a high sense of
responsibility, fairness, prudence and
judiciousness. (Manila Mandarin Employees
Union v. NLRC, G.R. No. 76989, 1987)
THIRD ULP: REFUSAL TO BARGAIN (ART.
260(C))
A union violates its duty to bargain collectively by
entering negotiations with a fixed purpose of not
reaching an agreement or signing a contract.
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a. To pay, or agree to pay any money,

Requisites
1. Union is the duly certified bargaining agent
(Lakas ng Manggagawang Makabayan v.
Marcelo Enterprises, G.R. No. L-38258,
1982)
2. Commits any of the following:
a. Violation of the duty to bargain
collectively
b. Refusal to bargain collectively with
the employer
including the demand for fee for
union negotiations
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
The services contemplated in exchange for the
exaction are not actually performed or will not be
performed (Labor code, Art. 260 (d)).

See above discussion on Forms of ULP in

Collective Bargaining

FOURTH ULP: FEATHERBEDDING AND

MAKE – WORK ARRANGEMENTS (ART. 260
[D])

Featherbedding: Employee practices which

create or spread employment by unnecessarily
maintaining or increasing the number of
employees used, or the amount of time
consumed, to work on a particular job.

In spite of employee assertions that these so-

called featherbedding [or make-work] practices
are directly related to job security, or health and
safety, most courts at common law found these
practices to be economically wasteful and without
any legitimate employee justification. (Cox,
Cases and Materials on labor Law, NY, 1977,
p.919, cited in Azucena Vols. II-A and II-B, 9th
ed., 2016, p. 372).

Note: It may take the form of minimum crew

regulations on the railroad, make – work rules
such as the setting of and prompt destruction of
unneeded bogus type in the newspaper industry,
stand – by pay for musicians when a radio station
broadcasts music from phonograph records or
production ceilings for work on the assembly lines
or at the construction site.

Requisites for featherbedding:

1. Labor organization, its officers, agents or
representatives have caused or attempted to
cause an employer either:

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UNFAIR LABOR PRACTICES OF EMPLOYERS
ORGANIZATIONS
Art. 259
(EMPLOYERS)
To interfere with, restrain or coerce (IRC)
employees in the exercise of their right to self-
organization
To violate a collective bargaining agreement gross
violations only)
To violate the duty to bargain collectively as
prescribed by the Labor Code
To require as a condition of employment that a
person or an employee shall not join a labor
organization or shall withdraw from one
To contract out services or functions being
performed by union members when such will
interfere with, restrain or coerce employees in the
exercise of their rights to self-organization
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
To discriminate in regard to wages, hours of work
and other terms and conditions of employment in
order to encourage or discourage members of any
labor organization
To dismiss, discharge or otherwise discriminate
against an employee for having given or being
about to give testimony under the Labor Code
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
NOTE: Provided that only the officers, members of governing boards, representatives or agents or
members of labor associations or organization who have actually participated in, authorized or ratified unfair
labor practices shall be held criminally liable.
LABOR LAW
v. UNFAIR LABOR PRACTICES OF LABOR
Art. 260
(LABOR ORGANIZATIONS)
To restrain or coerce (RC) employees in the
exercise of their right to self-organization
(However, a labor organization shall have the right
to prescribe its own rules with respect to the
acquisition or retention or membership)
To violate a collective bargaining agreement (gross
violations only)
To violate the duty, or refuse to bargain collectively
with the employer (provided it is the representative
of the employees)
To cause or attempt to cause an employer to
discriminate against an employee, including
discrimination against an employee with respect to
whom membership in such organization has been
denied or to terminate an employee on any ground
other than the usual terms and conditions
To cause or attempt to cause an employer to pay
or deliver or agree to pay or deliver any money or
other things of value, in the nature of an exaction,
for services which are not performed or not to be
performed including demand for fee for union
negotiations (Featherbedding)
To ask for or accept negotiations 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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F. PEACEFUL CONCERTED ACTIVITIES
Concerted Action: An activity undertaken by two
or more employees; by one on behalf of others.
It is the policy of the State to encourage free trade
unionism and free collective bargaining. Workers
shall have the right to engage in concerted
activities for purposes of collective bargaining or
for their mutual benefit and protection. (Labor
Code, Art. 278)
Forms of Concerted Activities (Labor Code,
Art. 278)
1. Strike;
2. Lockout; and
3. Picketing
I. BY LABOR ORGANIZATION
a. STRIKE
Any temporary stoppage of work by the concerted
action of the employees as a result of an industrial
or labor dispute. (Labor code, Art. 219 (o))
Note: The term “strike” has been elucidated to
encompass not only concerted work stoppage,
but also slowdowns, mass leaves, sit downs,
attempts to damage, destroy or sabotage plant
equipment and facilities, and similar activities.
(Toyota Motor Phils. Corp Workers Assoc. v.
NLRC, G.R. Nos. 158798-99, October 19, 2007)
Labor Dispute includes any controversy or
matters concerning terms and conditions of
employment or the association or representation
of persons in negotiations, fixing, maintaining,
changing, or arranging the terms and conditions
of employment, regardless of whether or not the
disputants stand in the proximate relation of
employers and employees (Labor code, Art.
219(l); Gold City Integrated Port Services v.
NLRC, G.R. No. 103560 & 103599, 1995)
Characteristics of a Strike
1. There must be an employer-employee
relationship
2. Existence of a dispute
3. Employment relation is deemed to continue
although in a state of belligerent suspension
LABOR LAW
4. There is temporary work stoppage
5. Work stoppage is done through concerted
action
6. The striking group is a legitimate labor
organization. In case of bargaining deadlock,
it must be the employee’s sole bargaining
representative.
Internal union dispute: Includes all disputes or
grievances arising from any violation of or
disagreement over any provision of the
constitution and by – laws of a union, including
any violation of the rights and conditions of union
membership provided for in this Code (Ilaw at
Buklod ng Manggagawa (IBM) v. NLRC), G.R.
Nos. 81852-53, 1993).
Grounds for Strike or Lockout
1. Unfair Labor Practice (ULP) of the Employer
and the Union
2. Collective Bargaining Deadlock (CBD)
NOTE: Violations of CBA must be gross to be
considered as ULP
Conversion Doctrine: A strike may start as
economic and, as it progresses, becomes ULP,
or vice-versa.
Different Kinds of Strike
1. LEGAL STRIKE – one called for a valid
purpose and conducted through means
allowed by law;
2. ILLEGAL STRIKE – one staged for a
purpose not recognized by law, or if for a valid
purpose, conducted through means not
sanctioned by law, or one that did not follow
the procedural requirements;
3. ECONOMIC STRIKE – one staged by
workers to force wage or other economic
concessions from the employer which he is
not required by law to grant (Consolidated
Labor Association of the Phil. vs. Marsman
and Company, G.R. No. L-17038, 1964);
4. ULP STRIKE – one called to protest against
the employer’s acts of unfair labor practice
enumerated in the Labor Code;
5. SLOWDOWN STRIKE – one staged without
the workers quitting their work but merely
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slackening or by reducing their normal work
output;
6. WILD-CAT STRIKE – one declared and
staged without filing the required notice of
strike and without the majority approval of the
recognized bargaining agent;
7. SIT DOWN STRIKE – one where the workers
stop working but do not leave their place.
Strike-breaker: Any person who obstructs,
impedes, or interferes with by force, violence,
coercion, threats, or intimidation any peaceful
picketing affecting wages, hours or conditions of
work or in the exercise of the right of self-
organization or collective bargaining (Labor
Code, Art. 219(r))
Strike Area: Establishments, warehouses,
depots, plants or offices, including the sites or
premises used as runaway shops, of the
employer struck against, as well as the immediate
vicinity actually used by picketing strikers in
moving to and fro before all points of entrance to
and exit from said establishment (Labor Code,
Art. 219 (s))
Boycott: A combination of many to cause a loss
to one person by causing others, against their will,
to withdraw from him their beneficial business
intercourse through threats that unless others do
so, the many will cause similar loss to him or
them. (31 Am Jur., Sec. 250, p. 956)
Slowdown: A method by which one’s employees,
without seeking a complete stoppage of work,
retard production and distribution in an effort to
compel compliance by the employer with the
labor demands made upon him. (Rothenberg, p.
101)
Unlike other forms of strike, the employees
involved in a slowdown do not walk out of their
jobs to hurt the company. They need only to stop
work or reduce the rate of their work while
generally remaining in their assigned post.
(Fadriquelan v. Monterey Foods Corp., G.R. Nos.
178409 & 178434, 2011)
LABOR LAW
Note: Such slowdown is generally condemned as
inherently illicit and unjustifiable, because while
the employees continue to work and remain at
their positions and accept the wages due them,
they at the same time select what part of their
allocated task they care to perform of their own
volition or refuse openly or secretly to the
employer’s damage, to do other work. They work
on their own terms. But whether or not the
workers’ activity in question—their concerted
adoption of a different work schedule than that
prescribed by management and adhered to for
several years—constitutes a slowdown need not
be gone into. The activity is contrary to RA6727
and the parties’ CBA (Ilaw at Buklod v. NLRC,
G.R. No. 91980, June 27, 1991)
Non-Strikeable Issues (NCMB, Manual of
Procedures in Settlement and Disposition of
Conciliation and Preventive Mediation Cases,
Rule VI, Sec. 6(c)(i); see University of San
Agustin Employees’ Union-FFW v. CA, G.R.
No. 169632, 2006).
1. Labor Standards Cases;
2. Wage Distortion;
3. Inter-Union or Intra-Union Disputes;
4. Physical Re-arrangement of the Office
(Reliance Surety and Insurance Co., v.
NLRC, G.R. Nos. 86917-18, 1991);
5. Execution and Enforcement of Final Orders,
Decisions, Resolutions, or Awards in the
Cases Mentioned in # 6;
6. Cases pending at the DOLE Regional
Offices, BLR, NLRC, DOLE Secretary,
Voluntary and Compulsory Arbitrators, CA,
and SC;
7. Violations of CBA which are resolved via
Grievance Machinery;
8. Company’s Sales Evaluation Policy (GTE
Directories v. Hon. Sanchez, G.R. No. 76219,
1991); and
9. Issues covered by a No-Strike Commitment
in the CBA
Who can declare a strike or lockout
1. Any certified or duly recognized bargaining
representative on the grounds of bargaining
deadlock and ULP;
2. Employer; or
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3. In the absence of #1, any legitimate labor These requirements are mandatory, meaning,
organization in the establishment (only for non-compliance therewith makes the strike
ULP) (IRR Labor Code, Sec. 2, Rule XII, illegal. (Azucena Vol. II-A, 9th ed., p. 594).
Book V)
1. NOTICE OF STRIKE
VALID VERSUS ILLEGAL STRIKES
An Illegal Strike is one which: PPP-MIA WHERE FILED: Regional Branch of the National
1. Is contrary to a specific Prohibition of law, Conciliation and Mediation board, copy furnished
such as strike by employees performing the employer or the union, as the case may be.
governmental functions
2. Violates a specific requirement of law (as to WHEN FILED: At least 30 days, in case of CBD,
Procedure) and at least 15 days, in case of ULP, before the
3. Is declared for an unlawful Purpose, such as intended date of strike.
inducing the employer to commit an unfair
labor practice against nonunion employees WHO FILES NOTICE OF STRIKE
4. Employs unlawful Means in the pursuit of its BARGAINING
ULP
objective, such as widespread terrorism of DEADLOCK
non-strikers ONLY EXCLUSIVE Duly certified
5. Violates an existing Injunction BARGAINING bargaining agent
6. Contrary to an existing Agreement, such as a REPRESENTATIVE
no-strike clause or conclusive arbitration If none, any
clause (Toyota Motor Phil. Workers legitimate labor
Association v. NLRC, G.R. No. 158789, union
2007)
CONTENTS OF NOTICE
FIRST FACTOR: STATUTORY PROHIBITION BARGAINING DEADLOCK ULP
Employees in the public service may not engage Notice shall, as far as Notice shall, as
in strikes. While the Constitution recognizes the practicable, further state the far as
right of government employees to organize, they unresolved issues in the practicable,
are prohibited from staging strikes, bargaining negotiations and state the acts
demonstrations, mass leaves, walk-outs and be accompanied by the complained of
other forms of mass action which will result in written proposals of the and the efforts
temporary stoppage or disruption of public union, the counter-proposals taken to
service. The right of government employees to of the employer and the proof resolve the
organize is limited only tot the formation of unions of a request for conference to dispute
or associations, without including the right to settle the differences. amicably.
strike. (Bangalisan, et al. v. CA, G.R. No. 124687,
1997) NOTE: In case notice does not conform with
requirements of this and foregoing section/s, the
SECOND FACTOR: PROCEDURAL Regional branch of the Board shall inform the
REQUIREMENTS concerned party of such fact. (Club Filipino, Inc.
v. Bautista, G.R. No. 168406, 2015)
PROCEDURAL REQUIREMENTS (Labor Code,
Art. 278) 2. COOLING-OFF PERIOD
1. Notice of Strike BARGAINING
2. Cooling-off Period ULP
DEADLOCK
3. Strike Vote
30 days 15 days
4. Strike Vote Report
5. 7-day strike/lockout ban

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NCMB, upon receipt of the notice of strike and
during the cooling-off period, mediates and
conciliates the parties. The Regional branch of
the Board may, upon agreement of the parties,
treat a notice as a preventive mediation case. It
shall also encourage the parties to submit the
dispute to voluntary arbitration.
In cases of ULP strike, the cooling-off period need
not be observed when union-busting is present.
(Labor Code, Art. 278)
Elements of Union Busting: (Labor code, Art.
278(c))
1. The union officers are being dismissed
2. Those officers are duly elected in
accordance with the union constitution
and by-laws
3. The existence of the union is threatened
3. STRIKE VOTE (Labor code, Art. 278(f))
A strike/lockout vote should be taken by secret
balloting, in meetings or referenda specially
called for the purpose.
The regional branch of the Board may, at its own
initiative or upon request of any affected party,
supervise the conduct of the secret balloting.
NOTE: The requirement of giving notice of the
conduct of a strike vote to the NCMB at least 24
hours before the meeting for the said purpose is
designed to:
a. inform the NCMB of the intent of the
union to conduct a strike vote;
b. give the NCMB ample time to decide on
whether or not there is a need to
supervise the conduct of the strike vote
to prevent any acts of violence and/or
irregularities attendant thereto; and
c. should the NCMB decide on its own
initiative or upon the request of an
interested party including the employer,
to supervise the strike vote, to give it
ample time to prepare for the deployment
of the requisite personnel, including
peace officers if need be.
LABOR LAW
Unless and until the NCMB is notified at least 24
hours of the union's decision to conduct a strike
vote, and the date, place, and time thereof, the
NCMB cannot determine for itself whether to
supervise a strike vote meeting or not and insure
its peaceful and regular conduct. The failure of a
union to comply with the requirement of the giving
of notice to the NCMB at least 24 hours prior to
the holding of a strike vote meeting will render the
subsequent strike staged by the union illegal.
(Capitol Medical Center Inc. v. National Labor
Relations Commission, G.R. No. 147080, 2005)
NUMBER OF VOTES REQUIRED for strike/
lockout: Majority of the total UNION
MEMBERSHIP OR OF THE DIRECTORS OR
PARTNERS, as the case may be.
Strike or lockout vote
1. Approved by majority of total union
membership or by majority of the BOD or
partners
2. By a secret ballot
3. In a meeting called for that purpose
4. STRIKE VOTE REPORT
The result of the strike/lockout vote should be
reported to the NCMB at least 7 days before the
intended strike or lockout, subject to the cooling-
off period. Labor code, Art. 278 (f))
If the strike vote is filed within the cooling-off
period, the 7-day requirement shall be counted
from the day following the expiration of the
cooling-off period. (NCMB’s Primer on Strike,
Picketing and Lockout)
Note: There is no law or Supreme Court decision
that supports this formula.
If the union is being busted, there is no need to
observe the cooling-off period but the unions
must still file a notice of strike, take a strike vote
and submit the strike vote report. What is being
excused in case of union busting is only the
observance of the 15-day cooling-off period.)
(Sec. 7, D.O. 40-G-03, 2010)
No strike or lockout can be declared while a case
is pending involving the same grounds for strike
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or lockout. (Bulletin v. Sanchez, G.R. No. 74425,
1986)
The submission of the report gives assurance
that a strike vote has been taken and that, if the
report concerning it is false, the majority of the
members can take appropriate remedy before it
is too late.' The seven (7)-day waiting period is
intended to give the Department of Labor and
Employment an opportunity to verify whether the
projected strike really carries the imprimatur of
the majority of the union members. The need for
assurance that majority of the union members
support the strike cannot be gainsaid|||
(Lapanday Workers Union v. National Labor
Relations Commission, G.R. Nos. 95494-97,
1995)
Legal and Enforceable Dismissal of
Employees during Conciliation
When the strike notice was filed by the union, the
chain of events which culminated in the
termination of the 14 salespersons’ employment
was already taking place; the series of defiant
refusals by said sales representatives to comply
with GTE’s requirement to submit individual
reports was already in progress. At that time, no
less than 3 of the ultimate 6 direct orders of the
employer for the submission of the reports had
already been disobeyed. The filing of the strike
notice, and the commencement of conciliation
activities by the BLR did not operate to make
GTE’s orders illegal and unenforceable so as to
excuse continued noncompliance therewith.
(GTE Directories v. Sanchez, G.R. No. 76219,
1991)
II. BY THE EMPLOYER
a. LOCKOUT
Temporary refusal of any employer to furnish
work as a result of an industrial or labor dispute
Procedural Requirements in Lockouts: (Same
as those required in Strikes) (Labor Code, Art.
278)
1. Notice of Lockout
2. Cooling-off Period
LABOR LAW
3. Strike/Lockout Vote
4. Strike/Lockout Vote Report
5. 7-day strike/lockout ban
Art. 279 prohibits the employer from doing the
following acts:
1. Declare a lockout without first having
bargained collectively or without first
having filed the notice required or without
the necessary lockout vote first having
been obtained and reported to the DOLE
2. Declare a lockout after assumption of
jurisdiction by the President or the
Secretary or after certification or
submission of the dispute to compulsory
or voluntary arbitration or during the
pendency of cases involving the same
grounds for the strike or lockout
3. Obstruct, impede, or interfere with, by
force, violence, coercion, threats or
intimidation, any peaceful picketing by
employees during any labor controversy
or in the exercise of the right to self-
organization or collective bargaining, or
shall aid or abet such obstruction or
interference.
4. Use or employ any strike-breaker, nor be
employed as a strike-breaker.
Lockouts have been held valid in the following
situations:
1. In anticipation of a threatened strike,
where motivated by economic
considerations
2. In response to unprotected strike or
walkout
3. In response to a whipsaw strike
Lockouts have been held unlawful in the ff.
circumstances:
1. To discourage and dissipate membership
in a labor organization
2. To aid a particular union by preventing
further work of its rival
3. To avoid bargaining
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Procedure for Declaring a Strike or Lockout 3. In case of ULP involving the dismissal of
WHO MAY DECLARE? duly elected union officer/s which may
(Sec. 6, D.O. 40-G-03, 2010) constitute union-busting: union may
STRIKE LOCKOUT take action immediately after the strike
Any legitimate labor vote and the submission of the results of
Employer in
organization or any certified the strike vote to the regional branch of
cases of
or duly recognized the Board
bargaining
bargaining representative in
deadlocks and
cases of bargaining Strike or lockout vote
ULPs
deadlocks and ULPs 1. Approved by majority of total union
membership or by majority of the BOD or
Note: If there is no certified or duly recognized partners
bargaining representative, any legitimate labor 2. By a secret ballot
organization may declare a strike but only on 3. In a meeting called for that purpose
grounds of unfair labor practice.
The regional branch may supervise the conduct
Grounds for Lockout or Strike of the secret balloting at its own initiative or upon
Collective Bargaining Deadlock request of any party.
Unfair Labor Practice
Notice of the meeting must be given at least 24
NOTE: Violations of CBA must be gross to be hours before such meeting, and the results of the
considered as ULP voting must be given at least 7 days before the
intended strike or lockout to the regional branch
Conversion Doctrine: A strike may start as of the Board. This is subject to the cooling-off
economic and, as it progresses, becomes ULP, period. (Labor Code, Art. 278(f))
or vice-versa.
Strike/Lockout Vote Report
When strike or lockout cannot be declared The result of the strike (or lockout voting) should
1. Violations of CBA which are not gross. be reported to the NCMB at least 7 days before
2. Grounds involving inter/intra union the intended strike or lockout, subject to the
disputes. cooling off period. This means that after the strike
3. When there is no notice of strike or vote is taken and the result reported to NCMB,
lockout or without the strike or lockout seven days must pass before the union can
vote. actually commence the strike. This seven-day
4. After assumption of jurisdiction by the reporting period is intended to give the Dept. of
Secretary. Labor and Employment an opportunity to verify
5. After certification or submission of whether the projected strike really carries the
dispute to compulsory or voluntary imprimatur of the majority of the union members.
arbitration or during the pendency of (Lapanday Workers’ Union, et. al. v. NLRC, G.R.
cases involving the same grounds for Nos. 95494-97, September 7, 1995)
strike or lockout.
A strike tagged without the submission of the
When Notice Must be Filed: Cooling – off result of the strike vote is illegal. (Samahan ng
period Manggagawa in Moldex Products, et. al. v.
1. In case of bargaining deadlocks: at least NLRC, et.al., G.R. No. 119467, February 1, 2000)
30 days before the intended date of strike
2. In case of unfair labor practice: at least Contents of the notice of strike or lockout
15 days before the intended date of strike 1. Names and addresses of employer
2. Union involved

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3. Nature of industry to which the employer
belongs
4. Number of union members
5. Workers in the bargaining unit
6. Other relevant data
7. In case of bargaining deadlocks: the
unresolved issues, written proposals of
the union, counter-proposals of the
employer and proof of request for
conference to settle differences
8. In case of unfair labor practice: the acts
complained of, and the efforts taken to
resolve the dispute (Sec 8, D.O. 40-G-03,
Series of 2010)
Note: Board shall inform the concerned party in
case notice does not conform with the
requirements. (Sec 8, D.O. 40-G-03, Series of
2010)
Action on notice of strike or lockout (Sec 9,
D.O. 40-G-03, Series of 2010)
1. Upon receipt of the notice, the regional
branch of the Board shall exert all efforts
at mediation and conciliation to enable
the parties to settle the dispute amicably.
It shall also encourage the parties to
submit the dispute to voluntary
arbitration.
2. The Regional Branch of the Board may,
upon agreement of the parties, treat a
notice as a preventive mediation case. It
shall also encourage the parties to
submit to submit the dispute to voluntary
arbitration.
3. During the proceedings, the parties shall
not do any act which may disrupt or
impede the early settlement of the
dispute. They are obliged, as part of their
duty to bargain collectively in good faith
and to participate fully and promptly in the
conciliation meetings called by the
regional branch of the Board.
4. A notice, upon agreement of the parties,
may be referred to alternative modes of
dispute resolution, including voluntary
arbitration.
LABOR LAW
Procedural Requirements of a Valid Strike or
Lockout
1. Notice of Strike or Lockout
2. Cooling Off Period
3. Notice of meeting for Strike or Lockout
vote at least 24 hours before the conduct
of said meeting
4. Conduct AND results of Strike or Lockout
vote reported
5. 7-day strike ban observed
Preventive Mediation
The regional branch may treat the notice as a
preventive mediation case upon agreement of the
parties.
When labor may strike or when the employer
may lockout its workers
If the dispute remains unsettled after the lapse of
the requisite number of days from the filing of the
notice of strike or lockout and of the results of the
election but the regional branch of the Board shall
continue mediating and conciliating.
Prohibited activities during strikes and
lockouts (Labor Code, Art. 279)
1. Strike or lockout without first having
bargained collectively
2. Strike or lockout without the necessary
vote first having been obtained and
reported to the DOLE.
3. Strike or lockout after DOLE has
assumed jurisdiction or the President or
after certification or submission of
dispute to the compulsory
arbitration/voluntary arbitration or during
the pendency of cases involving the
same grounds for the strike or lockout.
4. Knowingly participating in illegal strike or
knowingly participating in the
commission of illegal acts during a strike
(ground for termination of employment).
5. Obstruct, impede, or interfere with by
force, violence, coercion, threats, or
intimidation any peaceful picketing by
employees during any labor controversy
or shall abet or aid such obstruction or
interference.
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6. Employment or use of any strikebreaker/ the employer return to work and

employed as a strike breaker. shall thereupon the employer
7. Bringing in, introducing, or escorting by re-admit them shall thereupon
any public officer or employee, including upon the signing re-admit them
officers and personnel of the AFP or of the agreement. upon the signing
PNP, or any armed person in any manner of the agreement.
of any individual who seeks to replace
strikers in entering or leaving the III. ASSUMPTION OF JURISDICTION BY
premises of a strike area or work in place SECRETARY OF LABOR AND EMPLOYMENT
of strikers.
8. Commit any act of violence, coercion or Nature
intimidation while engaged in picketing or Art. 278(g) is both an extraordinary and a
obstruct the ingress or egress from the preemptive power to address an extraordinary
employer's premises for lawful purposes situation – a strike or lockout in an industry
or obstruct public thoroughfares (must be indispensable to the national interest. The
pervasive and widespread/consistently secretary of Labor is empowered to:
and deliberately resorted to as a matter 1. Assume jurisdiction over the dispute and
of policy decide it, or
2. Certify the dispute to the NLRC for
IMPROVED OFFER BALLOTING (Labor compulsory arbitration, in which case,
code, Art. 280; Sec 9, D.O. 40-G-03, Series NLRC shall here and decide
of 2010)
IN CASE OF The intent of the law is to give the Labor Secretary
IN CASE OF STRIKE
LOCKOUT full authority to resolve all matters within the
1. Regional branch 1. The regional dispute that gave rise to or which arose out of the
of the Board shall, branch of the strike or lockout; it includes and extends to all
conduct a Board shall also questions and controversies arising from or
referendum by conduct a related to the dispute, including cases over which
secret balloting referendum by the labor arbiter has exclusive jurisdiction.
on the improved secret balloting
offer of the on the reduced The authority of the Secretary to assume
employer. offer of the union. jurisdiction over a labor dispute causing or likely
2. On or before the 2. On or before the to cause a strike or lockout in an industry
30th day of strike. 30th day of the indispensable to national interest includes and
3. At its own lockout. extends to all questions and controversies arising
(regional board) 3. When at least a from such labor dispute. The power is plenary and
initiative or upon majority of the discretionary in nature to enable him to effectively
the request of any board of directors and efficiently dispose of the dispute. (Philcom
affected party. or trustees or the Employees Union v. Philippine Global
4. When at least a partners holding Communications, G.R. No. 144315, 2006)
majority of the the controlling
union members interest in the As held in International Pharmaceuticals, Inc. v.
vote to accept the case of Secretary of Labor, the Labor Secretary has
improved offer, partnership vote jurisdiction over all questions and controversies
the striking to accept the arising from an assumed dispute, including cases
workers shall reduced offer, the over which the labor arbiter has exclusive
immediately workers shall jurisdiction. (G.R. Nos. 92981-83, 1992)
return to work and immediately

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a. INDUSTRY INDISPENSABLE TO THE
NATIONAL INTEREST
What Constitutes a National Interest Case
The Labor Code vests upon the Secretary of
Labor the discretion to determine what industries
are indispensable to national interest. Thus, upon
the determination of the Secretary of Labor that
such industry is indispensable to the national
interest, it will assume jurisdiction over the labor
dispute of said industry. (Philtread Workers Union
v. Confesor, G.R. No. 117169, 1997).
A Police Power Measure
The assumption of jurisdiction is in the nature of
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. The Secretary of Labor
acts to maintain industrial peace. Thus, his
certification for compulsory arbitration is not
intended to impede the workers' right to strike but
to obtain a speedy settlement of the dispute.
(Philtread Workers Union v. Confesor, G.R. No.
117169, 1997).
What are Considered “National Interest”
Cases
The NLRC vests the President of the Philippines
and the Secretary of Labor almost unlimited
discretion to determine what industries may be
considered as indispensable to the national
interest.
Industries Indispensable to the National
Interest
1. Hospital Sector
2. Electric Power Industry
3. Water Supply Services, to exclude small
water supply such as bottling and refilling
stations
4. Air traffic control
5. Such other industries as maybe
recommended by the National Tripartite
Peace Council (TIPC) (DO No.40-H-13)
Examples of “National Interest” disputes:
1. Nestle Philippines, Inc. is engaged in an
undertaking affected with public interest
being one of the largest manufacturers of
LABOR LAW
food products. (Union of Filipro v. NLRC,
G.R. No. 91025, 1990 )
2. Academic institutions (Philippine School
of Business Administration v. Noriel, G.R.
No. 80648, 1988)
3. A company supplying the sulfate
requirements of MWSS
4. Banking is expressly classified by the
General Banking Law as an industry
indispensable to the national interest.
5. However, the Court ruled that the
production of telephone directories is not
an industry affecting the national interest.
(GTE Directories Corp v. Sanchez, G.R.
No. 76219, 1991)
b. EFFECTS OF ASSUMPTION OF
JURISDICTION
1. On intended or impending strike or
lockout – Automatically enjoined (Labor
code, Art. 278(g))
2. On actual strike or lockout (already taken
place) – all striking or locked-out
employees shall immediately return to
work and the employer shall immediately
resume operations and readmit all
workers under the same terms and
conditions prevailing before the strike or
lockout(Labor code, Art. 278(g))
3. On cases already filed and may be filed
– considered subsumed or absorbed by
assumed or certified case, except where
certification or assumption order states
otherwise (Guagua National Colleges v.
Guagua National Colleges Faculty Labor
Union, G.R. No. 204693, 2016)
4. On other pending cases – Parties are
required to inform their counsels and the
DOLE Secretary/ NLRC Division
concerned of all pending cases that are
related or incident to the
assumed/certified case.(Par 2, Sec. 3(b),
Rule VIII, 2011 NLRC Rules of
Procedure)
Such assumption or certification has the effect of
automatically enjoining the intended or impending
strike or lockout as specified in the assumption or
certification order.
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If one has already taken place at the time of the
assumption or certification, all striking or locked
out employees shall immediately return to work
and the employer shall immediately resume
operations and readmit all workers under the
same terms and conditions prevailing before the
strike or lockout. In such case, the
assumption/certification results to a return-to-
work of all striking workers even if the Secretary
has not issued a Return to Work Order (RTWO).
(Labor code, Art. 278 (g))
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 affairs existing at the
time of the filing of the case. (Overseas Workers’
Welfare Administration v. Chavez, G.R. No.
169802, 2007).
The assumption or certification also has the effect
of regulating the management prerogative of
determining the assignment or movement of EEs.
Thus, in one case, the Court held the layoff of 94
EEs pending the resolution of the dispute illegal
as it was violative of the assumption order.
(Metrolab v. Roldan-Confesor, G.R. No. 108855,
1996)
When May the Secretary Assume Jurisdiction
Over a Case or Certify it to the NLRC
Under the law, when in his opinion there exists a
labor dispute causing or likely to cause a strike or
lockout in an industry indispensable to the
national interest, the Secretary [of Labor] may:
1. Assume jurisdiction over the dispute and
decide it, or
2. Certify the same to the NLRC for
compulsory arbitration
Note: Power of DOLE Secretary to assume
jurisdiction over a labor dispute is limited to
strikes or lockouts adversely affecting the
national interest. (Free Telephone Workers Union
v. Hon. Minister of Labor and Employment, G.R.
L-58184, 1981)
LABOR LAW
Rule on Strikes and Lockouts in Hospitals,
Clinics and Medical Institutions (Labor code,
Article 278 (g) (par.2))
GR: Strikes and lockouts in these institutions
must be avoided
But in case a strike or lockout is staged:
1. It shall be the duty of the striking union or
locking-out employer to provide and
maintain an effective skeletal workforce
of medical/ other health personnel whose
services shall be unhampered and
unrestricted to insure the proper and
adequate protection of life and health of
its patients for the duration of the
strike/lockout
2. DOLE Secretary shall immediately
assume, within 24 hours from knowledge
of the occurrence of the strike/lockout,
jurisdiction over the same or certify it to
NLRC for compulsory arbitration
Assumption of Jurisdiction: Prior Notice Not
Required
The discretion to assume jurisdiction may be
exercise by the Secretary without the necessity of
prior notice or hearing given to any of the parties.
The rationale for his primary assumption of
jurisdiction can justifiably rest on his own
consideration of the exigency of the situation in
relation to the national interests. (Capitol Medical
Center v. Trajano, G.R. No. 155690, 2005).
Return-to-Work-Order (RTWO)
The moment the Secretary of Labor assumes
jurisdiction over a labor dispute in an industry
indispensable to national interest, such
assumption shall have the effect of automatically
enjoining the intended or impending strike. It was
not even necessary for the Secretary of Labor to
issue another order directing a return to work. The
mere issuance of an assumption order by the
Secretary of Labor automatically carries with it a
return-to-work order, even if the directive to return
to work is not expressly stated in the assumption
order. (Steel Corporation of the Philippines v.
SCP Employees Union, G.R. 169829-30, 2008)
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Note:
● It is always part of the assumption OR
certification order even if not expressly
stated.
● RTWO is compulsory in character
Certification to NLRC
“Certified labor disputes” are cases certified [or
referred] to the NLRC for compulsory arbitration
A “national interest” dispute may be certified to
the NLRC even before a strike is declared since
the Labor Code does not require the existence of
a strike, but only of an industrial dispute.
When sitting in a compulsory arbitration certified
to by the DOLE Secretary, the NLRC is not sitting
as a judicial court but as an administrative body
charged with the duty to implement the order of
the Secretary. In such a case, the NLRC does not
have the power to amend the Secretary’s order.
(GSISEA v. CIR, G.R. No. L-18734, 1961)
Effects of Defiance of Assumption or
Certification
Non-compliance with the certification order of the
Secretary shall be considered an illegal act
committed in the course of the strike or lockout,
and shall authorize the NLRC to enforce the same
under pain of immediate disciplinary action,
including loss of employment status or payment
by the locking-out ER of backwages or damages,
even criminal prosecution against the liable
parties.
Defiant Employers
An assumption order was issued. However, the
company laid off employees, one batch after the
order. Company argues that it is in the employer’s
right to manage his business. Any act committed
during the pendency of the dispute that tends to
give rise to further contentious issues or increase
the tensions between the parties should be
considered an act of exacerbation. One must look
at the act itself, not on speculative reactions. A
misplaced recourse is not needed to prove that a
dispute has been exacerbated. (Metrolab
LABOR LAW
Industries v Roldan-Confesor, G.R. 108855,
February 28, 1996)
Defiant Strikers, Whether Officer or Ordinary
Members of the Striking Union, are Deemed
Dismissed
Once DOLE Sec assumes jurisdiction over a
labor dispute or certifies it to NLRC for
compulsory arbitration, such jurisdiction should
not be interfered with by the application of the
application of coercive processes of a strike or
lockout.
Any defiance thereof is a valid ground for the loss
of employment status regardless of whether the
defiant worker is an officer or an ordinary member
of the union Defiance of the assumption order or
a return-to work order by a striking employee,
whether a union officer or a member, is an illegal
act and, therefore, a valid ground for loss of
employment status. (Manila Hotel Employees
Association v. Manila Hotel Corp., G.R. No.
154591, 2007)
Certification to the NLRC makes the continuation
of the strike illegal, provided that the parties are
duly notified of the certification order. Notice is a
prerequisite even if the order states that it is
“immediately executory.”
Refusal to Receive the Assumption of
Jurisdiction Order Amounts to Defiance
Refusal to receive the Assumption of Jurisdiction
Order (AJO) amounts to defiance of the order,
which makes the continuation of the strike an
illegal act, thus subjecting the strikers to possible
termination of employment.
The strikers should resume work immediately
upon receipt or constructive receipt of the order.
A grace period may be given but that is not
required by the law. (Azucena Vol. II-A, 9th ed.,
2016, p. 646)
Effects of Defying the RTWO
The mere issuance of an assumption order
automatically carries with it a return-to-work
order. (Steel Corporation of the Philippines v.
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SCP Employees Union, G.R. Nos. 169829-30,
2008)
From the moment a worker defies a RTWO, he is
deemed to have abandoned his job. (St.
Scholastica's College v. Torres, G.R. No. 100158,
1992)
Those workers who refuse to obey the RTWO are
not entitled to be paid for work not done or to
reinstatement to the positions they have
abandoned by their refusal to return thereto as
ordered. (Asian Transmission Corporation v.
NLRC, G.R. No. 88725, 1989)
Where the RTWO is issued pending the
determination of the legality of the strike, it is not
correct to say that it may be enforced only if the
strike is legal and may be disregarded if the strike
is illegal. Precisely, the purpose of the RTWO is
to maintain the status quo while the determination
is being made. (Union of Filipro Emplees v. Nestle
Philippines, G.R. No. 88710-13, 1990)
Not only union officers but also union members
who defy an RTWO are subject to dismissal.
But to justify the dismissal, the defiance of the
RTWO must be clearly proven. (Batangas
Laguna Tayabas Bus Company v. NLRC, G.R.
No. 101858, 1992)
Thus, the alleged or perceived defiance of the
RTWO does not mean automatic dismissal of the
defying employees. Due process must be
observed. The employees must be given the
chance to explain and prove that there was no
defiance at all. (Azucena Vol. II-A, 9th ed., 2016,
p. 652)
Actual, Not Payroll, Reinstatement
Under the law, “the striking or locked out
employees shall return to work and the employer
shall readmit them.” The Court has interpreted
this to mean, as a general rule, actual, not
payroll, readmission to the EEs’ positions.
(Azucena Vol. II-A, 9th ed., 2016, p. 655)
LABOR LAW
With respect to the Secretary's Order allowing
payroll reinstatement instead of actual
reinstatement for the individual respondents
herein, an amendment to the previous Orders
issued by her office, the same is usually not
allowed. Article 263(g) of the Labor Code
aforementioned states that all workers must
immediately return to work and all employers
must readmit all of them under the same terms
and conditions prevailing before the strike or
lockout. The phrase "under the same terms and
conditions" makes it clear that the norm is actual
reinstatement. This is consistent with the idea
that any work stoppage or slowdown in that
particular industry can be detrimental to the
national interest. (University of Immaculate
Concepcion, Inc. v. Secretary of Labor, G.R. No.
151379, 2005)
Thus, placing the striking employees to
substantially equivalent positions could not be
considered reinstatement “under the same terms
and conditions prevailing before the strike.” The
remedy of payroll reinstatement is nowhere to be
found in the orders of the Secretary of Labor and
hence it should not have been imposed by the
public respondent NLRC. Article 263(g) is one
such limitation provided by law. To the extent that
Art. 263(g) calls for the admission of all workers
under the same terms and conditions prevailing
before the strike. It was error for the NLRC to
order the alternative remedies of payroll
reinstatement or actual reinstatement. However,
the order did not amount to grave abuse of
discretion. Such error is merely an error of
judgment which is not correctible by a special civil
action for certiorari. The NLRC was only trying its
best to work out a satisfactory ad hoc solution to
a festering and serious problem. In the light of our
rulings on the impropriety of the substantially
equivalent academic assignments and the need
to defer the changes of teachers until the end of
the first semester, the payroll reinstatement will
actually minimize the petitioners problems in the
payment of full backwages. (University of Sto.
Tomas v. NLRC, G.R. No. 89920, 1990)
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Appeal of Secretary’s Order
In “national interest” cases, the Secretary’s Order
may be appealed to the Office of the President.
In “non-national interest” cases, the Order may be
appealed via a Petition for Certiorari (Rule 65).
The parties may at any stage withdraw the case
from compulsory arbitration to bring it instead to
a voluntary arbitrator. (Labor code, Art. 278(h).
Arrest and Detention (Labor code, Art. 281)
GR: No Union members or union organizers may
be arrested or detained for union activities without
previous consultation with the Secretary of Labor.
Exception: On grounds of national security and
public peace.
Consequences
Generally, the effects of employment are merely
suspended while on strike, the workers do not
work and do not get paid.
Mere participation of a worker in a lawful strike
shall not be a sufficient ground for termination of
his employment, even if a replacement had been
hired during the strike. (Art.279 (a), Labor Code)
Art. 279 sets out the consequences to union
officers and member for (1) participation in a
strike and (2) commission of illegal acts.
The penalty imposable is not always be
termination but maybe suspension. The Court
used its judicial prerogative in the case of PAL v.
Brillantes, G.R. 119360, 1990, where it found that
both employers and employees contributed to the
volatile atmosphere.
Forfeiture of Reinstatement
The Court has ruled that a striker who failed to
report for work when one had the opportunity to
do so waived his right to reinstatement. (East
Asiatic v. CIR, G.R. L-29068, 1971)
What are Illegal Acts?
1. Violation of Art. 279(e) of the Labor Code
LABOR LAW
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 connection with the
assumption of jurisdiction/certification
order under Art. 278(g) of the Labor Code
This enumeration is not exclusive and may cover
other breaches of existing laws.
a. LIABILITY OF UNION OFFICERS
Any union officer who knowingly participates in
an illegal strike and any union officer who
knowingly participates in the commission of
illegal acts during a strike may be declared to
have lost his employment. (Labor Code, Art.
279[e])
Illegal Acts are:
1. Violation of Art. 279(e) of the Labor Code
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 connection with the
assumption of jurisdiction/certification
order under Art. 278(g) of the Labor Code
(Toyota Motor Phil. Workers Association
v. NLRC, G.R. No. 158789, 2007)
Union officer may not be vicariously held liable for
illegal acts of strikers. The rule is, for an LO
and/or its officer and members to be liable, there
must be proof of actual participation in,
authorization or ratification of, the illegal acts.
Labor Organizations (LOs) are not liable for
unauthorized or unratified acts of its officers. Nor
is it liable for the unlawful acts of its members
which neither its officer nor committees have
directed, aided, or approved.
Shop stewards appointed by the Union, in a shop,
department or plant serves as representative of
the Union, charged with negotiating and
adjustment of grievances of employees with the
supervisor of the employer, is considered an
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officer. Hence, shop stewards were similarly day’s wage for a fair day’s labor" is applicable. If
dismissed from employment in the conduct of an there is no work performed by the employee there
illegal strike. (Santa Rosa Coca-Cola v. Coca- can be no wage or pay unless, of course, the
Cola, G.R. 164302-03, 2007) laborer was able, willing and ready to work but
was illegally locked out, suspended or dismissed
b. LIABILITY OF ORDINARY WORKERS or otherwise illegally prevented from working. For
this exception to apply, it is required that the strike
Any worker who knowingly participates in the be legal, a situation that does not obtain in the
commission of illegal acts during a strike may case at bar (Escario v. NLRC, G.R. No. 160302,
be declared to have lost his employment status. 2010)
(Art. 279(a), Labor Code)
Summary: Consequences of Actions in Strike
The individual strikers committing the illegal acts Participation in Strike
must be identified. Proof beyond reasonable DISMISSABLE?
doubt is not required, only substantial evidence. LEGAL STRIKE ILLEGAL STRIKE
Union Officer
Declaration of Loss of Employment Status No Yes
The law grants the employer the option of Union Member
declaring a union officer who participated in an No No
illegal strikes as having lost his employment.
Filing a petition to declare a strike illegal is not a Commission of Illegal Act in a Strike
pre-requisite for the ER to terminate the DISMISSABLE?
employment of EEs who commit illegal acts in the LEGAL STRIKE ILLEGAL STRIKE
course of the strike. In terminating the employee, Union Officer
the ER must observe due process.
Yes Yes
Union Member
Entitlement to Backwages
Yes Yes
In an economic strike, the strikers are not entitled
to backwages on the principle that a “fair’s day
c. LIABILITY OF EMPLOYERS
wage” accrues only for a “fair day’s labor.”
Any worker whose employment has been
(Heilbronn v. NLU, G.R. L-6454, 1954)
terminated as a consequence of an unlawful
In a ULP strike, if the strike was voluntary, strikers
lockout shall be entitled to reinstatement with full
are not entitled to backwages. In the case of
backwages. (Labor Code, Art. 279[a])
involuntary strike, strikers are entitled to
backwages.
In Pari Delicto
If the employer committed illegal lockout and the
Exception: Voluntary strikers who subsequently
employees staged illegal strike, they are both at
applied for reinstatement but were denied are
fault. The court will restore their respective
entitled to backwages provided the ff. requisites
positions before the strike. The dismissed strikers
concur:
will be reinstated without backwages (Automative
1. The strike was legal
Engine Rebuilders v. Progresibong Unyon ng
2. There was an unconditional offer to
mga Manggagawa sa AER, G.R. No. 16138,
return to work
2011)
3. The strikers were refused reinstatement

Criminal Liability
However, backwages are not granted to
The regular courts shall have jurisdiction over any
employees participating in an illegal strike they do
criminal action under Art. 272 of the Labor Code,
not render work for the employer during the
but subject to the required clearance from DOLE
period of the illegal strike. The principle of a "fair

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on cases arising out of or related to a labor
dispute pursuant to DOJ Circular No. 15 (1982),
and Circular No. 9 (1986)
Injunctions
General Rule: No temporary or permanent
injunction or restraining order in any case
involving or growing out of labor disputes shall be
issued by any court or other entity (Labor Code,
Art. 225 (e) paragraph 1)
Exceptions:
1. Art. 225 (e) – NLRC can enjoin or restrain
an 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 or render ineffectual any
decision in favor of such party
2. Art. 279 – NLRC can enjoin or restrain
the commission of the prohibited acts
under Art. 279.
3. Innocent Bystander Rule – The no-
injunction rule does not apply in cases
where the interests of an innocent
bystander are concerned. Thus, the right
may be regulated at the instance of third
parties or "innocent. bystanders" if it
appears that the inevitable result of its
exercise is to create an impression that a
labor dispute with which they have no
connection or interest exists between
them and the picketing union or
constitute an invasion of their rights. In
one case decided by this Court, we
upheld a trial court's injunction prohibiting
the union from blocking the entrance to a
feed mill located within the compound of
a flour mill with which the union had a
dispute (Liwayway Publications v.
Permanent, G.R. No. L-25003, 1981)
Thus, in a case where the Union declared a strike
against its ER and picketed the premises,
preventing the peaceful passing of other persons
not connected with the ER, the Court upheld the
LABOR LAW
injunction granted by a regular court (not by the
NLRC).
Injunctions by the NLRC
Under Art. 225 (e), the NLRC has the power 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 or render
ineffectual any decision in favor of such party.
Requirements for Injunction to Issue: (Labor
Code, Art. 225 (e))
1. Hearing of testimony of witnesses, with
opportunity for cross-examination, in
support of verified complaint, and
testimony in opposition thereto
2. A finding of fact by the NLRC that: (see
Philippine Association of Free Labor
Unions v. Hon. Tan, G.R. 9115, 1956)
a. Prohibited/unlawful acts will be
committed or have been
committed and will be continued
unless restrained
b. Substantial and irreparable injury
will follow
c. Greater injury will be inflicted
upon complainant by the denial
of relief than will be inflicted upon
defendants by the granting of the
relief
d. Complainant has no adequate
remedy at law
e. The public officers charged with
the duty to protect complainant’s
property are unable or unwilling
to furnish adequate protection
3. Notice of hearing has been served to
a. All persons against whom relief
is sought
b. Local Chief Executive and other
public officers of the
province/city charged with the
duty to protect complainant’s
property
4. Bond in an in an amount to be fixed by
the NLRC
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Conditions for Ex-Parte TRO: (Sec. 14, D.O.

40-G-03, 2010)

A 20-day TRO may be issued ex-parte under the

ff. conditions:
1. Complainant also alleges that, unless a
TRO shall be issued without notice, a
substantial and irreparable injury to his
property will be unavoidable
2. Testimony under oath, sufficient, if
sustained, to justify the issuance of a
TRO after notice and hearing
3. Bond in an amount to be fixed by the
NLRC sufficient to recompense the
improvident/erroneous issuance of such
injunction/TRO
4. TRO shall be effective for no longer than
20 days and shall become void at its
expiration

————- end of topic ————-

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 POST-
EMPLOYMENT
Labor Law
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POST-EMPLOYMENT
TOPIC OUTLINE UNDER THE SYLLABUS
A. EMPLOYER-EMPLOYEE
RELATIONSHIP
I. Tests to determine existence
II. Legitimate subcontracting
as distinguished from labor-only
contracting
III. Kinds of employment
B. TERMINATION BY EMPLOYER
I. Requisites for validity
II. Preventive suspension
III. Illegal dismissal
IV. Money claims arising from
employer-employee relationship
V. When not deemed dismissed;
employee on floating status
C. TERMINATION BY EMPLOYEE
I. With notice to the employer
II. Without notice to the employer
III. Distinguish voluntary resignation
and constructive dismissal
D. RETIREMENT
LABOR LAW
A. EMPLOYER-EMPLOYEE RELATIONSHIP
“Employer” includes any person acting in the
interest of an employer, directly or indirectly. The
term shall not include any labor organization or
any of its officers or agents except when acting
as employer. (Labor Code, Art. 219[e])
“Employee” includes any person in the employ of
an employer. The term shall not be limited to the
employees of a particular employer, unless the
Code so explicitly states. It shall include any
individual whose work has ceased as a result of
or in connection with any current labor dispute or
because of any unfair labor practice if he has not
obtained any other substantially equivalent and
regular employment. (Labor Code, Art. 219[f])
It is axiomatic that the existence of an employer-
employee relationship cannot be negated by
expressly repudiating it in the management
contract and providing therein that the
“employee” is an independent contractor when
the terms of agreement clearly show otherwise.
For, the employment status of a person is defined
and prescribed by law and not by what the parties
say it should be. (Insurance Life Assurance Co. v.
NLRC, GR No. 11930, 1998)
Contractual in nature
The relationship of employer and employee is
contractual in nature. It may be an oral or written
contract. A written contract is not necessary for
the creation and validity of the relationship.
(Compania Maritima v. Ernesta Cabagnot Vda.
De Hio, GR No. L-10675, 1960)
Conditional Employment
An employment contract, like any other contract,
is perfected at the moment the parties come to
agree upon its terms and conditions, and
thereafter, concur in the essential elements
thereof. In Sagun v. ANZ Global Services, the
Court ruled that there was already a perfected
contract of employment when Sagun signed
ANZ's employment offer and agreed to the
terms and conditions that were embodied
therein. Nonetheless, the offer of employment
extended to Sagun contained several
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conditions before he may be deemed an
employee of ANZ. Accordingly, Sagun’s
employment depended on the outcome of his
background check, which partakes of the nature
of a suspensive condition, and hence, renders
the obligation of the would-be employer, i.e., ANZ
in this case, conditional. Jurisprudence states
that when a contract is subject to a suspensive
condition, its effectivity shall take place only if
and when the event which constitutes the
condition happens or is fulfilled. Considering,
however, that Sagun failed to comply with his
obligations, ANZ's obligations as a would-be
employer were held in suspense and thus, had
yet to acquire any obligatory force. (Sagun v. ANZ
Global Services, GR No. 220399, 2016)
Authority of DOLE Secretary to determine
Employer-Employee Relationship (EER)
The DOLE Secretary has the authority to
determine the existence of an employer-
employee relationship. Under Article 128(b) of the
Labor Code, as amended by RA 7330, the DOLE
is fully empowered to make a determination as to
the exercise of an employer- employee
relationship in the exercise of its visitorial and
enforcement power, subject to judicial review, not
review by the NLRC. (People’s Broadcasting
Service v. Secretary of Labor, GR 179652, 2012)
I. TEST TO DETERMINE EXISTENCE
FOUR-FOLD TEST
The existence of an employer-employee
relationship (EER) is ultimately a question of fact.
To ascertain the existence of an employer-
employee relationship, jurisprudence has
invariably adhered to the four-fold test, to wit:
1. Selection and engagement of the
employee (Hiring);
a. Who has the power to select the
employee?
b. Employment relation arises from contract
of hire, express or implied. (Ruga v.
NLRC, G.R. No. L-72654-61, 1990).
LABOR LAW
c. Selection and engagement of the
workers rests with the employers.
2. Payment of wages or salaries
a. Who pays the employee’s wages?
b. The mode of paying the salary or
compensation of a worker does not
preclude existence of employer-
employee relationship.
c. Not a conclusive test since it can be
avoided by the use of subcontracting
agreements or other contracts other than
employment contracts.
d. Payment of compensation by way of
commission does not militate against the
conclusion that EER exists. Under Art. 97
of the Labor Code, "wage" shall mean
"however designated, capable of being
expressed in terms of money, whether
fixed or ascertained on a time, task, price
or commission basis…" (Insular Life
Assurance Co., Ltd. v. NLRC, G.R. No.
119930, 1998)
e. EER not determined by basis of
employee’s compensation. (Labor
Congress v. NLRC, G.R. No. 123938,
1998).
3. Power of dismissal (Firing)
a. Who has the power to dismiss the
employee?
b. Disciplinary power exercised by
employer over the worker and the
corresponding sanction imposed in case
of violation of any of its rules and
regulations
4. Power to control employee’s conduct
(Control Test)
a. Who exercises control over the methods
and results by which the work of the
employee is accomplished?
b. The most important factor is the control
test. This test is premised on whether the
person for whom the services are
performed reserves the right to control
both the end achieved and the manner
and means used to achieve that end.
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(Reyes v. Glaucoma Research
Foundation, Inc.,GR No. 189255, 2015)
c. The control test calls for the existence of
the right to control the manner of doing
the work, not the actual exercise of the
right. (Dy Keh Beng v. Int’l Labor &
Marine Union of the Phil, G.R. No. L-
32245, 1979)
d. There could be no EER where "the
element of control is absent; where a
person who works for another does so
more or less at his own pleasure and is
not subject to definite hours or conditions
of work; and in turn is compensated
according to the result of his efforts and
not the amount thereof, we should not
find that the relationship of employer-
employee exists." (Filipinas Broadcasting
Network, Inc. v. NLRC, G.R. No. 118892,
1998)
Concept of Control over Insurance Agents –
NOT Control in Labor Law
a. The fact that private respondent was required
to solicit business exclusively for petitioner
could hardly be considered as control in labor
jurisprudence. Under Memo Circulars No. 2-
81 and 2-85 issued by the Insurance
Commissioner, insurance agents are barred
from serving more than one insurance
company, in order to protect the public and to
enable insurance companies to exercise
exclusive supervision over their agents in
their solicitation work. Thus, the exclusivity
restriction springs from a regulation issued by
the Insurance Commission, and not from an
intention by petitioner to establish control
over the method and manner by which private
respondent shall accomplish his work. This is
not meant to change the nature of the
relationship between the parties, nor does it
necessarily imbue such relationship with the
quality of control envisioned by the law. (AFP
Mutual Benefit Association v. NLRC, G.R.
No. 102199, 1997)
b. That private respondent was bound by
company policies, memo/circulars, rules and
regulations issued from time to time is also
not indicative of control. With regard to the
LABOR LAW
territorial assignments given to sales agents,
this too cannot be held as indicative of the
exercise of control over an employee. Not
every form of control that a party reserves to
himself over the conduct of the other party in
relation to the services being rendered may
be accorded the effect of establishing an
employer-employee relationship. (AFP
Mutual Benefit Association v. NLRC, G.R.
No. 102199, 1997)
EER between crew members and owners of
fishing vessels
The employer-employee relationship between the
crew members and the owners of the fishing
vessels engaged in deep-sea fishing is merely
suspended during the time the vessels are dry-
docked or undergoing repairs or being loaded
with the necessary provisions for the next fishing
trip. This is premised on the principle that all these
activities i.e., dry-dock, repairs, loading of
necessary provisions, form part of the regular
operation of the company fishing business. (Ruga
v. NLRC, G.R. No.L-72654-61, 1990)
Not every form of control will have the effect
of establishing EER. The line should be drawn
between:
1. Rules that merely serve as guidelines
towards the achievement of mutually desired
results without dictating the means or
methods to be employed in attaining it. These
aim only to promote the result. NO EER
exists.
2. Rules that control or fix the methodology and
bind or restrict the party hired to the use of
such means. This address both the result and
the means used to achieve it and hence, EER
exists (Insular Life Assurance Co, Ltd. v.
NLRC, G.R. No. 84484, 1989)
TWO-TIERED TEST (Francisco Doctrine)
(Francisco v. NLRC, G.R. No. 170087, 2006)
In cases where the control test is insufficient to
determine the relationship between the parties,
the Francisco doctrine adds another test, applied
in conjunction with the control test, called the
economic dependence test.
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(I) FIRST TIER: CONTROL TEST
The putative employer’s power to control the
employee with respect to the means and methods
by which the work is to be accomplished.
(II) SECOND TIER: ECONOMIC REALITY TEST
(ALSO, ECONOMIC DEPENDENCE TEST)
Under this test, the economic realities prevailing
within the activity or between the parties are
examined, taking into consideration the totality of
circumstances surrounding the true nature of the
relationship between the parties. This is resorted
to when there is serious doubt or genuine
confusion as to the relationship of the employee
with the employer.
The proper standard of “economic dependence”
of the employee is whether the worker is
dependent on the alleged employer for his
continued employment in that line of business.
(Orozco v. CA, G. R. No. 155207, 2008)
The 2-tiered test provides a framework of
analysis which would take into consideration the
totality of circumstances surrounding the true
nature of the relationship between the parties. It
is appropriate in a case where there is:
e. No written agreement or terms of
reference to base the relationship on;
and
f. There exists a complexity in the
relationship based on the various
positions and responsibilities given to the
worker over the period of the latter’s
employment.
Thus, the determination of the relationship
between employer and employee depends upon
the circumstances of the whole economic activity,
such as:
1. The extent to which the services performed are
an integral part of the employer’s business;
2. The extent of the worker’s investment in
equipment and facilities;
3. The nature and degree of control exercised by
the employer;
4. The worker’s opportunity for profit and loss;
LABOR LAW
5. The amount of initiative, skill, judgment or
foresight required for the success of the claimed
independent enterprise;
6. The permanency and duration of the
relationship between the worker and the
employer; and
7. The degree of dependency of the worker upon
the employer for his continued employment in
that line of business. (Francisco v. NLRC, G.R.
No. 170087, 2006)
Some Cases Where EER Exists:
a. Jeepney drivers on boundary basis
(Villamaria v. CA, G.R. No. 165881, 2006)
b. Drivers or helpers of salesmen are
employees of the company (Alhambra
Industries v. CIR, G.R. No. L-25984, 1970)
c. Employees of an unregistered association
(Orlando Farm Growers v. NLRC, G.R. No.
129076, 1998)
d. Street-hired kargador (Caurdanetaan Piece
Workers Union v. Laguesman, G.R. No.
113542, 1998)
e. Workers in movie projects (Maraguinot and
Enero v. NLRC and Viva Fils, G.R. No.
113542, 1998)
f. “Talents” (Begino v. ABS-CBN, G.R. No.
199166, 2015)
g. Salaried insurance agent, as distinguished
from registered agents on commission basis
(Great Pacific Life Assurance Corp., v.
Judico, G.R. No. 73887, 1989)
h. Tailors, seamstresses, servers, basters,
plantsadoras paid on piece-rate basis
(Makati Haberdashery v. NLRC, G.R. Nos.
83380-83, 1989)
i. In-house counsel (Hydro Resources
Contractors v. Pagalilauan, G.R. No. 62909,
1989)
j. Security guards, with respect to the security
agency (Agro Commercial Services v. NLRC,
G.R. No. 82823-24, 1989)
Cases where no EER exists:
a. Farm workers are not employees of the sugar
central (Pondoc v. NLRC, G.R. No. 116347,
1996)
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b. Once in the playing court, the referees
exercise their own independent judgment,
based on the rules of the game, as to when
and how a call or decision is to be made. The
very nature of officiating a professional
basketball game undoubtedly calls for
freedom of control (Bernante v. PBA, G.R.
No. 190842, 2011)
c. Healthcare associate - The manner in which
Consulta was to pursue these activities was
not subject to the control of Pamana.
Consulta failed to show that she had to report
for work at definite hours. The amount of time
she devoted to soliciting clients was left
entirely to her discretion. The means and
methods of recruiting and training her sales
associates, as well as the development,
management and maintenance of her sales
division, were left to her sound judgment
(Consulta v. CA, G.R. No 145443, 2005)
d. TV personality – The specific selection and
hiring of Sonza, because of his unique skills,
talent and celebrity status not possessed by
ordinary employees, is a circumstance
indicative, but not conclusive, of an
independent contractual relationship (Sonza
v. ABS-CBN, G.R. No. 138051, 2004)
e. Where the contractor PSI was the one that
selected, engaged, and hired the security
guards, the latter cannot claim that PLDT, the
entity to which they were detailed to, is their
employer (Abella v. PLDT, G.R. No. 159469,
2005)
Importance of determining existence of
employer-employee relationship
Generally, labor standards and conditions apply
only if there is an EER. However, in some
instances, even if there is no EER, the Labor
Code may still be invoked (e.g. indirect
employer’s liability, illegal recruitment, and
misuse of POEA license).
EER is determined by law and not by contract
between the parties (Paguio v. NLRC, G.R. No.
147816, 2003)
LABOR LAW
II. LEGITIMATE CONTRACTING VS. LABOR-
ONLY CONTRACTING
Contracting or Subcontracting refers to an
arrangement whereby a principal agrees to farm
out to a contractor the performance or completion
of a specific job or work within a definite or
predetermined period, regardless of whether
such work is to be performed or completed within
or outside the premises of the principal. (DO 174-
17, Sec. 3(c))
Labor-Only Contracting – An arrangement
where the contractor or subcontractor recruits,
supplies, or places workers to perform a job or
work for a principal, and the elements hereunder:
A. The contractor does not have substantial
capital or the contractor or subcontractor does not
have investments in the form of tools, equipment,
machineries; and the contractor’s or
subcontractor’s employees recruited and placed
are performing activities which are directly related
to the main business operation of the principal; or
B. The contractor or subcontractor does not
exercise the right of control over the work of the
employee (D.O. No. 174-17, Sec. 5)
Test to determine the existence of an
independent contractor
Whether one claiming to be an independent
contractor has contracted to do the work
according to his own methods and without being
subject to the control of the employer, except only
as to the results of the work. (SMC v. Aballa, G.R.
No. 149011, 2005)
An individual can be an independent contractor
for himself. (Sonza v. ABS-CBN, G.R. No.
138051, 2004)
Factors to consider in determining whether
Contractor is carrying on an Independent
Business:
It is not enough to show substantial capitalization
or investment in the form of tools, equipment,
machineries, and work premises, among others,
to be considered as an independent contractor. In
determining the existence of an independent
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contractor relationship, several factors might be comply with laws including the right
considered: requirements as to to self-organization
a. Nature and extent of work unpaid wages and
b. Skill required other labor standards
c. Term and duration of the relationship violations.
d. Right to assign the performance of PERMISSIBLE PROHIBITED
specified pieces of work
e. Control and supervision of the workers (a) ELEMENTS
f. Power of the employer with respect to the
hiring, firing, and payment of workers of Legitimate contracting or subcontracting
the contractor Contracting or subcontracting shall be legitimate
g. Control of the premises if all the following circumstances occur:
h. Duty to supply premises, tools, a. The contractor is engaged in a distinct
appliances, materials, and labor and independent business and
i. Mode, manner, and terms of payment. undertakes to perform the job or work on
(Vinoya v. NLRC, GR No. 126586, 2000) its own responsibility according to its own
method;
Job Contracting v. Labor-Only Contracting b. The contractor or subcontractor has
JOB LABOR-ONLY substantial capital and/or investment;
CONTRACTING CONTRACTING c. The contractor undertakes to perform the
Has sufficient job, work or service on its own
substantial capital Has NO substantial responsibility, according to its own
OR investment in capital OR investment manner and method, and free from
machinery, tools or in the form of control and direction of the principal in all
equipment directly or machinery, tools or matters connected with the performance
intended to be related equipment of the work except as to the results
to the job contracted thereof;
and
Carries an d. The Service Agreement ensures
independent Has no independent compliance with all the rights and
business different business benefits for all of the employees of the
from the employer’s contractor or subcontractor under Labor
Undertakes to laws. (D.O. No. 174-17, Sec. 8)
perform the job under Performs activities
its own account and directly related to the Labor-Only Contracting
responsibility, FREE main business of the Labor only contracting shall refer to an
from the principal’s principal arrangement where the contractor or
control subcontractor recruits, supplies, or places
Principal treated as workers to perform a job or work for a principal,
NO EER except
direct employer of the and the elements hereunder:
when the contractor
person recruited in all a. The contractor does not have substantial
or subcontractor fails
instances (contractor capital; or the contractor or subcontractor
to pay the
is deemed agent of the does not have investments in the form of
employees’ wages.
principal) tools, equipment, machineries; and the
LIMITED liability contractor’s or subcontractor’s
Principal’s liability
(principal solidarily employees recruited and placed are
extends to all rights,
liable with contractor performing activities which are directly
duties and liabilities
or subcontractor only related to the main business operation of
under labor standard
when latter fails to the principal; or

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b. The contractor or subcontractor does not
exercise the right of control over the work
of the employee (D.O. No. 174-17, Sec.
5)
Right to Control
Right reserved to the person for whom the
services of the contractual workers are
performed, to determine not only the end to be
achieved, but also the manner and means to be
used in reaching that end. (D.O. No. 18-A, Sec.
3[i])
Only one of either (i) substantial capital or (ii)
performing activities related to the main
business – is required for Labor-Only
Contracting to exist
Performing activities directly related to the
principal business of the employer is only one of
the two indicators that "labor-only" contracting
exists; the other is lack of substantial capital or
investment. Labor-only contracting exists
when any of the two elements is present.
(Quintanar, et al. v. Coca-Cola, G.R. No. 210565,
2016)
Posting of Bond
An employer or indirect employer may require the
contractor or subcontractor to furnish a bond
equal to the cost of labor under contract, on
condition that the bond will answer for the wages
due the employees should the contractor or
subcontractor, as the case may be, fail to pay the
same. (D.O. No. 174-17, Sec. 3[a], Labor Code,
Art. 108)
Note: Labor-Only Contracting is legally wrong
and prohibited because it is an attempt to evade
the obligations of an employer. If proven, it
amounts to employment avoidance (Convoy
Marketing v. Albia, G.R. No. 194969, 2015)
Substantial Capital
It refers to capital stocks and subscribed
capitalization in the case of corporations, tools,
equipment, implements, machineries, and work
premises, actually and directly used by the
contractor or subcontractor in the performance or
LABOR LAW
completion of the job, work or service contracted
out (D.O. No. 18-02, Sec. 5)
It also refers to paid-up capital stocks/shares of at
least Five Million Pesos (P5,000,000.00) in the
case of corporations, partnerships and
cooperatives; in the case of single proprietorship,
a net worth of at least Five Million Pesos
(P5,000,000.00). (D.O. No. 174-17, Sec. 3, ¶(i))
Capital stocks and subscribed capitalization in
the case of corporations, tools, equipment,
implements, machineries and work premises,
actually and directly used by the contractor or
subcontractor in the performance or completion
of the job, work or service contracted out.
The law does not require both substantial capital
and investment in the form of tools, equipment
and machineries. This is clear from the use of the
conjunction “or.” If the intention was to require the
contractor to prove that he has both capital and
the requisite investment, then the conjunction
“and” should have been used. (New Golden
Builders & Dev’t Corp v. CA, et al., G.R. No.
154715, 2003)
Illicit Forms of Employment Arrangements
The following are declared prohibited for being
contrary to law or public policy:
c. When the principal farms out work to a
"Cabo".

“Cabo” refers to a person or group of persons or
to a labor group which, under the guise of labor
organization, cooperative, or any entity, supplies
workers to an employer, with or without any
monetary or other consideration, whether in the
capacity of agent of the employer or as ostensible
independent contractor. (D.O. No. 174-17, Sec.
3[b])
d. Contracting out of job or work through an
in-house agency.
e. Contracting out of job or work through an
in-house cooperative which merely
supplies workers to the principal.
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f. Contracting out of a job or work by reason b) TRILATERAL RELATIONSHIP

of a strike or lockout whether actual or
imminent.
g. 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 of the Labor Code, as amended
h. Requiring the
contractor's/subcontractor's employees
to perform functions which are currently
being performed by the regular
employees of the principal.
The three parties involved:
i. Requiring the
contractor's/subcontractor's employees a. Contractor / Subcontractor
Any person or entity, including a cooperative,
to sign, as a precondition to employment
engaged in a legitimate contracting or
or continued employment, an antedated
subcontracting arrangement.
resignation letter; a blank payroll; a
waiver of labor standards including
b. Contractor’s Employee
minimum wages and social or welfare
One employed by a contractor or subcontractor to
benefits; or a quitclaim releasing the
perform or complete a job, work or service
principal or contractor from liability as to
pursuant to an arrangement between the latter
payment of future claims; or require the
employee to become member of a and a principal
cooperative.
c. Principal
j. Repeated hiring by the
Any employer who puts out or farms out a job,
contractor/subcontractor of employees
service or work to a contractor or subcontractor
under an employment contract of short
(D.O. No. 174-17, Sec. 3)
duration.
k. Requiring employees under a
Relationships that exist in legitimate
contracting/subcontracting arrangement
contracting or subcontracting:
to sign a contract fixing the period of
a. An employer-employee relationship between
employment to a term shorter than the
term of the Service Agreement, unless the contractor and the employees it engaged
to perform the specific job, work or service
the contract is divisible into phases for
being contracted; and
which substantially different skills are
b. A contractual relationship between the
required and this is made known to the
principal and the contractor as governed by
employee at the time of engagement.
the provisions of the Civil Code. (D.O. No. 18-
l. Such other practices, schemes or
A-11, Sec. 5, ¶ 1)
employment arrangements designed to
circumvent the right of workers to
Governing Laws
security of tenure. (D.O. No. 174-17, Sec.
a. Between the principal and the contractor the
6) major laws applicable to their work
relationship are the Civil Code and pertinent
commercial laws.
b. Between the contractor and his employees
the major laws applicable to their work

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relationship are the Civil Code and special
labor laws.
c. Between the principal and the contractor’s
employees, no employer-employee
relationship exists, because the contractor
himself is the employer. (Azucena, The Labor
Code with Comments and Cases Volume I,
306, 2013)
The law recognizes and resolves this situation in
favor of employees in order to protect their rights
and interests from the coercive acts of the
employer. In fact, the employee who is
constructively dismissed may be allowed to keep
on coming to work. (McMer Corp., Inc. v. NLRC,
G.R. No. 193421, 2014)
It shall include the following terms and
conditions:
a. The specific description of the job,
work or service to be performed by
the employee;
b. The place of work and terms and
conditions of employment, including
a statement of the wage rate
applicable to the individual
employee; and
c. The term or duration of employment
that must be co-extensive with
the Service Agreement or with the
specific phase of work for which the
employee is engaged.

Rights of contractor’s employees b. The contractor shall inform the

All contractor’s/subcontractor’s employees, shall employee of the foregoing
be entitled to security of tenure and all the rights terms and conditions of
and privileges as provided for in the Labor Code, employment in writing on or
as amended, to include the following: before the first day of his/her
a. Safe and healthful working conditions; employment.
b. Labor standards such as but not limited
to service incentive leave, rest days,
overtime pay, holiday pay, 13th month
pay, and separation pay as may be
provided in the Service Agreement or
under the Labor Code;
c. Retirement benefits under the SSS or
retirement plans of the contractor, if
there is any;
d. Social security and welfare benefits; and
e. Self-organization, collective bargaining
and peaceful concerted activities,
including the right to strike. (D.O. No.
174-17, Sec. 10)

Required Contracts
1. Employment contract between the
contractor and its employee.
a. Notwithstanding any oral or
written stipulations to the
contrary, the contract between
the contractor and its employee
shall be governed by the
provisions of Articles 279 and
280 of the Labor Code, as
amended.

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SERVICE AGREEMENT BETWEEN THE PRINCIPAL AND THE CONTRACTOR V. SECURITY

GUARDS
REQUIRED PROVISIONS
DO 174-17: Service Agreement between the DO 150-16: The SSC/PSA and/or the principle shall
principal and the contractor. produce or submit the original copy of the Service
Agreement when directed to do so by the Regional
Director or his/her duly authorized representative.
The Service Agreement shall include the The Service Agreement shall stipulate, among
following: others:
a. The specific description of the job or work a. Specific description of the kind or nature of
being subcontracted, including its term or security job, work, or service being
duration; subcontracted
b. The place or work and terms and b. Place of work and terms and conditions
conditions governing the contracting governing the contracting arrangement
arrangement, to include the agreed which shall include the agreed amount of
amount of the contracted job or work as security services to be rendered and the
well as the standard administrative fee of standard administrative fee of not less than
not less than 10% of the total contract 20% of the total contract cost;
cost. c. Basic equipment to be provided by the
c. A provision on the issuance of bon/s as SSC/PSA (handgun, handheld radio);
defined in Sec. 3(a) renewable every d. Automatic crediting provision which shall
year. (Sec. 11, DO 174-17) immediately give effect to the common
provision in wage orders that prescribed
wage increases and the Service
Agreements shall be deemed amended
accordingly;
e. Provisions which shall ensure that the
principle and the SSC/PSA shall uphold the
rights and provide all benefits of security
guards;
f. Provision on the NFCC of SSC/PSA;
g. Undertaking that the SSC/PSA shall directly
remit monthly employers’ share and
employees’ contribution to SSS, ECC,
PhilHealth, Pag-IBIG;
h. Undertaking that expenses for any training
required by the principal or other
government instrumentalities shall be
shouldered by the principal. (Sec. 4, DO
150-16)

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Note: Administrative fee is different for security
guards which must not be less than 20% of the
total contract cost.
Registration of Contractors and
Subcontractors
Mandatory Registration and Registry of
Legitimate Contractors. Consistent with the
authority of the Secretary of Labor and
Employment to restrict or prohibit the contracting
out of labor to protect the rights of workers, it shall
be mandatory for all persons or entities, including
cooperatives, acting as contractors to register
with the Regional Office of the Department of
Labor and Employment (DOLE) where it
principally operates. (D.O. No. 174-17, Sec. 14)
Validity of Certificate of Registration of
Contractors
The contractor shall be deemed registered only
on the date of issuance of its Certificate of
Registration. The Certificate of Registration shall
be effective for 2 years, unless cancelled after
due process. The same shall be valid in the
region where it is registered.
In case the contractor has Service Agreement or
operates outside the jurisdiction of the RTC
where it is registered, it shall request a duly
authenticated copy of its certificate of registration
from the DOLE Regional Office where it seeks to
operate, together with a copy of its Service
Agreement/s in the area, for purposes of
monitoring compliance with the rules (D.O. No
174-17, Sec. 20)
Note: Failure to register shall give rise to the
presumption that the contractor is engaged in
labor-only contracting. (Aklan v. San Miguel
Corporation, G.R. No. 168537, 2008)
(c) SOLIDARY LIABILITY
Labor Code Provisions on Liability
In the event that the contractor or sub-contractor
fails to pay the wages of his employees in
accordance with this Code, the employer shall be
jointly and severally liable with his contractor or
sub-contractor to such employees to the extent of
LABOR LAW
the work performed under the contract, in the
same manner and extent that he is liable to
employees directly employed by him. (Labor
Code, Art. 106)
Principal as Direct Employer: Finding of
Labor-Only Contracting
There is "labor-only" contracting where the
person supplying workers to an employer does
not have substantial capital or investment in the
form of tools, equipment, machineries, work
premises, among others, and the workers
recruited and placed by such person are
performing activities which are directly related to
the principal business of such employer. In such
cases, the person or intermediary shall be
considered merely as an agent of the employer
who shall be responsible to the workers in the
same manner and extent as if the latter were
directly employed by him. (Labor Code, Art. 106)
In the event that there is a finding that the
contractor or subcontractor is engaged in labor-
only contracting under Section 5 and other illicit
forms of employment arrangements under
Section 6 of these Rules, the principal shall be
deemed the direct employer of the contractor's or
subcontractor's employees. (D.O. No. 174-17,
Sec. 7)
Therefore: The principal shall be deemed an
employer of the contractual employee and shall
be directly liable, in the following cases:
a. Labor-only contracting; and
b. Prohibited contracting arrangements
(Broadway Motors v. NLRC, G.R. No. 78382,
1987)
Principal as Direct Employer: Violations of
Rights of Employees or Required Contracts
A finding of violation of either Sections 10 (Rights
of Contractor’s Employees) or 11 (Required
Contracts) shall render the principal the direct
employer of the employees of the contractor or
subcontractor, pursuant to Art. 109 of the Labor
Code (D.O. No. 147-17, Sec. 12)
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Solidary Liability in Legitimate Contracting:
Violations of the Labor Code and Social
Legislation
In the event of violation of any provision of the
Labor Code, including the failure to pay wages,
there exists a solidary liability on the part of the
principal and the contractor for purposes of
enforcing the provisions of the Labor Code and
other social legislations, to the extent of the work
performed under the employment contract. (D.O.
No. 174-17, Sec. 9)
Every employer or indirect employer shall be held
responsible with his contractor or subcontractor
for any violation of any provision of this Code. For
purposes of determining the extent of their civil
liability under this Chapter, they shall be
considered as direct employers. (Labor Code,
Art. 109)
Note: Principal’s Liability under Art. 109
If the liability is for failure to pay the minimum
wage, or the service incentive leave or other
benefits derived from or provided for by law, the
principal is equally liable with the contractor
If the liability is invested with punitive character,
such as an award for backwages and separation
pay because of an illegal dismissal, the liability
should be solely with the contractor in the
absence of proof that the principal conspired with
the contractor in the commission of the illegal
dismissal (see Meralco v. NLRC, G.R. No.
145402, 2008)
Solidary Liability for Wages and Money
Claims for Performed Under The Contract
In the event that the contractor or subcontractor
fails to pay the wages of his employees in
accordance with this Code, the employer shall be
jointly and severally liable with his contractor or
subcontractor to such employees to the extent of
the work performed under the contract, in the
same manner and extent that he is liable to
employees directly employed by him (Labor
Code, Art. 106)
Should the indirect employer be constrained to
pay the workers, it can recover whatever amount
LABOR LAW
it paid, in accordance with the terms of the service
contract between itself and the contractor
(Rosewood Processing v. NLRC, G.R. Nos.
116476-84, 1998).
The joint and several liability of the contractor and
the principal is mandated by the Labor Code to
assure compliance with the provisions therein
including the minimum wage. The contractor is
made liable by virtue of his status as direct
employer. The principal, on the other hand, is
made the indirect employer of the contractor's
employees to secure payment of their wages
should the contractor be unable to pay them.
Even in the absence of an EER, the law itself
establishes one between the principal and the
employees of the agency for a limited purpose i.e.
in order to ensure that the employees are paid the
wages due them. (Lapanday Agricultural Dev’t
Corp. v. CA, G.R. No. 112139, 2000)
Solidary Liability of Principal and Employer in
cases of Illegal Dismissal
Joint and several with the employer, but with the
right to reimbursement from the employer-
contractor.
Wage differentials only to the extent where the
employee performed the work under the principal
Rule: Principal and contractor are solidarily
liable.
Effect of Termination of Employment
The termination of employment of the
contractor's/subcontractor's employee prior to the
expiration of the Service Agreement shall be
governed by Articles 297, 298 and 299 of the
Labor Code.
In case the termination of employment is caused
by the pre-termination of the Service Agreement
not due to authorized causes under Article 298,
the right of the contractor's/subcontractor's
employee to unpaid wages and other unpaid
benefits including unremitted legal mandatory
contributions, e.g., SSS, PhilHealth, Pag-IBIG,
ECC, shall be borne by the party at fault, without
prejudice to the solidary liability of the parties to
the Service Agreement.
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Where the termination results from the expiration

of the Service Agreement, or from the completion
of the phase of the job or work for which the
employee is engaged, the latter may opt to wait
for re-employment within three (3) months to
resign and transfer to another contractor-
employer.

Failure of the contractor to provide new

employment for the employee shall entitle the
latter to payment of separation bene􏰀ts as may
be provided by law or the Service Agreement,
whichever is higher, without prejudice to his/her
entitlement to completion bonuses or other
emoluments, including retirement bene􏰀ts
whenever applicable. The mere expiration of the
Service Agreement shall not be deemed as a
termination of employment of the
contractor's/subcontractor's employees who are
regular employees of the latter.

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Comparative Table: D.O. No. 18-A-11 vs. D.O. No. 174-17

DOLE D.O. 18-A-11 DOLE D.O. 174-17

Coverage
Expressly includes cooperatives No express inclusion of cooperatives, but should
still be included
Trilateral Relationship
Trilateral Relationship was emphasized. Deleted provision on trilateral relationship.
Principal Contractor Employees

On Contracting and Subcontracting

Recognition of Legitimacy: Legitimate Job Requirements: Permissible Contracting
Contracting Distinct and independent business; own
DOLE-registered manner and method of performance of job
Distinct and independent business; own or work
manner and method in performing job, Substantial capital AND investment (in the
work, service; free from control and form of tools, equipment, machinery and
direction of principal except results supervision)
Substantial capital and/or investment [new] Free from control and/or direction of
Service Agreement (SA) complies with the principal
labor law rights and benefits Service Agreement (SA) complies with
labor law rights and benefits
Substantial Capital
Php3,000,00.00 Php5,000,00.00

Net Financial Contracting Capacity (NFCC)

The formula to determine the financial capacity of No provision on NFCC
the contractor to carry out the job, work or services
sought to be undertaken under a SA.
Co-terminus Employment
Allowed. No co-terminus employment (for regular)
The term or duration of employment that must be Mere expiration of SA shall not be deemed as a
co-extensive with the SA or with the specific phase termination of employment of the contractor’s
of work for which the employee is engaged. employees who are regular employees of the
latter.
Labor-Only Contracting
Prohibited Absolutely Prohibited
Labor-only Contracting Labor-only Contracting
The contractor does not have substantial capital The contractor does not have substantial capital
- or – - or -
The contractor does not have investments in the The contractor does not have investments in the
form of tools, equipment, machinery, work form of tools, equipment, machineries,
premises, among others, supervision, work premises among others,
- and - - and -
The employees recruited and placed are The contractor’s or subcontractor’s employees
performing activities which are usually necessary or recruited and placed are performing activities
desirable to the operation of the company, or which are directly related to the main business
directly related to the main business of the principal operation of the principal.
within a definite or predetermined period,
regardless of whether such job, work or service is
to be performed within or outside the premises of
the principal.

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Labor-only Contracting: 2nd kind Labor-only Contracting: 2nd kind

The contractor does not exercise the right to control
The contractor does not exercise the right to
the performance of the work of employee. control over the performance of the work of the
employee.
Other Prohibitions
Other Prohibitions Other Illicit Forms of Employment Arrangements
(Not done in good faith and legitimate business (Good faith and legitimate business reason no
reason) longer a defense)
1. N/A 1. [new] Contracting through an in-house
cooperative which merely supplies workers to
the principal
2. N/A 2. [new] Practices, schemed or employment
arrangements designed to circumvent
Security of Tenure
3. N/A 3. [new] Contracting out of a job or work by
reason of a strike or lockout whether actual or
imminent
4. Results in termination/reduction of regulars and 4. Not listed
reduction of work hours; or
5. Results in termination/reduction of regulars and
reduction/splitting of bargaining unit
6. Refusal to give provide SA and employment 5. Not listed
contracts in bargaining unit of principal’s
certified bargaining agent to sole and exclusive
bargaining agent
7. Engaging/maintaining by principal of 6. Not listed
subcontracted employees in excess of CBA or
set by Industry Tripartite Council
8. Contracting out of a job/work/service that is 7. Not listed
necessary/ desirable or directly related to the
business/ operation of the principal by reason
of strike/lockout
When Principal May Be Liable
“Duties of the principal,” as “indirect employer.” Principal deemed direct employer when there is
evidence of:
1. Labor-only contracting;
2. Other illicit forms of employment
arrangements;
3. Violation of employee’s rights
4. Violation of required contracts
Non-impairment of existing contracts
Benefits being enjoyed by parties to existing - No provision
contracting arrangements shall not be impaired by
this D.O.
Employment Termination
If caused by pre-termination of SA not due to Same
authorized causes, right to unpaid wages and
benefits borne by party at fault.
Employee may opt for payment of separation Employee may opt to wait for re-employment
benefits as may be provided by law or the SA, within 3 months to resign and transfer to another
without prejudice to his/her entitlement to the employer.
completion [of] bonuses or other emoluments, Failure to provide new employment, employee
including retirement benefits whenever applicable. shall be entitled to separation benefits as may be

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provided by law or the SA, whichever is higher,

without prejudice to entitlement completion of
bonuses or other emoluments, including
retirement benefits whenever applicable.
Separation Benefits
Separation pay is contingent on its inclusion in the If not re-employed after 3-month wait, separation
SA or may apply only in authorized causes outline benefits are given as may be provided by law or
in the Labor Code. the SA.
Certificate of Registration
Registration/Renewal Fee: Php 25,000 Php 100,00
Validity: Three (3) years Two (2) years
DOLE Programs
N/A Mandatory Enrollment to DOLE Programs:
Principal and Contractors/Subcontractors

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Effects of Labor-Only Contracting
A finding by a competent authority of labor-only
contracting shall render the principal jointly and
severally liable with the contractor to the latter’s
employees in the same manner and extent that
the principal is liable to employees directly hired
by him/her as provided in Art. 106 of the Labor
Code, as amended. (D.O. 18-A, Sec. 27, 2011)
A finding of commission of any of the prohibited
activities in Sec. 7 or violation of either Sections
8 or 9 hereof, shall render the principal the direct
employer of the employees of the contractor or
subcontractor. (D.O. 18-A, Sec. 7, 2011)
Department Circular No. 01-17
D.O. 174, Series of 2017, applies only to trilateral
relationship which characterizes contracting or
subcontracting arrangement. It does not
contemplate to cover information technology-
enabled services involving entire or specific
business process.
NOTE: Construction Industry NOT covered by
mandatory registration provision of D.O. 174-17
The DOLE, through its regional offices, shall not
require contractors licensed by PCAB in the
Construction Industry to register under D.O. 18-
A, Series of 2011. Findings of violation/s on labor
standards and occupational health and safety
standards shall be coordinated with PCAB for its
appropriate action, including the possible
cancellation/suspension of the contractor’s
license.
Contractors licensed by PCAB which are
engaged in other contracting or subcontracting
arrangement in addition to, or other than
construction activities shall be required to register
under D.O. No. 174-17
Except for the registration requirements of D.O.
174-17, contracting or subcontracting
arrangements in the private security industry shall
be governed by D.O. No. 150, Series of 2016.
D.O. No. 174-17 applies only to trilateral
relationship which characterizes contracting or
subcontracting arrangement. It does not
contemplate to cover contractual relationships
such as in contract of sale or purchase, contract
of lease, contract of carriage, contract
growing/growership agreement, toll
manufacturing, contract of management,
operation and maintenance and other contracts
LABOR LAW
governed by the Civil Code and other special
laws.
D.O. No. 174-17 does not also cover the
contracting out of job or work to a professional, or
individual with unique skills and talents who
himself or herself performs the job or work for the
principal.
Non-Applicability of DO 174-17 to
BPO/LPO/KPO
1. Business Process Outsourcing
2. Knowledge Process Outsourcing
3. Legal Process Outsourcing
4. IT Infrastructure Outsourcing
5. Application Development
6. Hardware and/or Software Support
7. Medical Transcription
8. Animation Services
9. Back Office Operations/Support
Applicability/Non-Applicability of DO 174-17
to Construction Industry; Coordination with
PCAB-CIAP
Pursuant to PD No. 1746, Series of 1980,
licensing and the exercise of regulatory powers
over the construction industry is lodged with the
Philippine Contractors Accreditation Board
(PCAB) of the Construction Industry Authority of
the Philippines (CIAP)
Applicability/Non-Applicability of DO 174-17
to Private Security Agencies
Except for the registration requirements as
provided for in DO 174-17, contracting or
subcontracting arrangements in the private
security industry shall be governed by DO 15-16
Non-Applicability of DO 174-17 to Other
Contractual Relationships
DO 174-17 applies only to trilateral relationship
which characterizes contracting or subcontracting
arrangement. It does not cover: (governed by CC)
1. Contract of Sale or Purchase
2. Contract of Lease
3. Contract of Carriage
4. Contract of Growing/Growership Agreement
5. Toll Manufacturing
6. Contract of Management, Operation, and
Maintenance
DO 174-17 does not cover the contracting out of
job or work to a professional, or individual with
unique skills and talents who himself performs the
job or work for the principal.
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SPECIAL CASES broken, with respect to the activity in

Working scholars which he is employed (by length of
No EER between students on one hand, and service); or
schools, colleges or universities on the other,
3. When an employee is allowed to work
where:
a. There is written agreement between them after a probationary period (by
under which the former agree to work for the probationary employment) (Labor
latter in exchange for the privilege to study Code, Art. 295, 296)
free of charge
b. Provided, the students are given real Test to determine regular employment
opportunities, including such facilities as may The primary standard of determining regular
be reasonable and necessary to finish their
employment is the reasonable connection
chosen courses under such agreement
between the particular activity performed by
Resident physicians in training the employee to the usual trade or business of
There is EER between resident physicians and the employer. The connection can be
the training hospital UNLESS: determined by considering the nature of work
a. There is a training agreement between them performed and its relation to the scheme of the
b. The training program is duly accredited or particular business or trade in its entirety. The
approved by the appropriate government
repeated and continuing need for the
agency.
performance of the job has been deemed
sufficient evidence of the necessity, if not
III. KINDS OF EMPLOYMENT
indispensability of the activity to the business.
(Lopez v. MWSS, G.R. No. 154472, 2005)
Kinds of Employment
a. Regular
The performance of a job for at least a year is
b. Casual
sufficient evidence of the job’s necessity if not
c. Probationary
indispensability to the business. This is the rule
d. Project
even if its performance is not continuous and
e. Seasonal
merely intermittent. The employment is
f. Fixed-term
considered regular, but only with respect to such
g. Security guards
activity and while such activity exists. (URC v.
h. Floating
Catapang, G.R. No. 164736, 2005).
Despite the distinction between regular and
Ways of attaining regular employment
casual employment, every employee shall be
1. By nature of work
entitled to the same rights and privileges and shall
The employment is deemed regular when the
be subject to the same duties as may be granted
employee has been engaged to perform activities
by law to regular employees during the period of
which are usually necessary or desirable in the
their actual employment.
usual business or trade of the employer. (Labor
Code, Art. 295; Paguio v. NLRC G.R. No.
REGULAR EMPLOYMENT
147816, 2003)
Regular employment is an arrangement where
the employee:
2. By length of service
1. Has been engaged to perform tasks
The casual employee is reckoned as regular
usually necessary or desirable to the
when the employee has rendered at least one (1)
usual trade or business of the
year of service, whether such service is
employer (by nature of work);
continuous or broken, with respect to the activity
2. For casual employees – Has
in which he is employed and his employment shall
rendered at least 1 year of service,
continue while such activity exists. (Labor Code,
whether such service is continuous or
Art. 295; Conti v. NLRC, G.R. No. 119253, 1997)

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3. Work beyond the probationary
employment
The employment is considered regular when the
employee is allowed to work after a probationary
period. (Labor Code, Art. 296)
4. Repeated Hiring
When the "seasonal" workers are continuously
and repeatedly hired to perform the same tasks
or activities for several seasons or even after the
cessation of the season, this length of time may
likewise serve as badge of regular employment.
(Universal Robina Sugar Milling Corporation v.
Acibo, G.R. No. 186439, 2014)
Note: Regular employment does not mean
permanent employment. A regular employee may
be terminated for just and authorized causes.
CASUAL EMPLOYMENT
General Rule: Activity performed is not usually
necessary or desirable in the usual business or
trade of the employer, not project and not
seasonal. Otherwise stated, casual employees
perform activities which are incidental to the
business of the employer.
Exception: If he has rendered at least 1 year of
service, whether such service is continuous or
broken, he is considered a REGULAR employee
with respect to the activity in which he is
employed and his employment shall continue
while such activity exists. (Labor Code, Art. 295)
PROBATIONARY EMPLOYMENT
Probationary employment exists where the
employee, upon his engagement, is made to
undergo a trial period during which the employer
determines his fitness to qualify for regular
employment based on reasonable standards
made known to him at the time of his engagement
(Labor Code, Art. 296)
Period of Probationary Employment
Probationary employment shall not exceed six (6)
months from the date the employee started
working, unless it is covered by an apprenticeship
LABOR LAW
agreement stipulating a longer period. (Labor
Code, Art. 296)
Probationary employee is one who is on trial by
an employer during which the employer
determines whether or not he is qualified for
permanent employment. (International Catholic
Migration Comm. v. NLRC, G. R. No. 72222,
1989)
While the employer observes the fitness,
propriety, and efficiency of a probationer to
ascertain whether he is qualified for permanent
employment, the probationer, on the other hand,
seeks to prove to the employer that he has the
qualifications to meet the reasonable standards
for permanent employment. (Tamson’s
Enterprises, Inc. v. CA, GR No. 192881, 2011)
Probationary employment must have been
expressly agreed upon. If there is no such
agreement, the employment is considered
regular (Sampaguita Auto Transport Corp. v.
NLRC, G.R. No. 197384, 2013)
Duration of Probationary Employment
General Rule: Probationary employment shall
not exceed 6 months from the date the employee
started working (Labor Code, Art. 296)
Probation ends 180 days from the starting date.
(Mitsubishi Motors Corporation v. Chrysler Phils.,
G.R. No. 148738, 2004)
When an employer renews a contract of
employment after the lapse of the six-month
probationary period, the employee thereby
becomes a regular employee. No employer is
allowed to determine indefinitely the fitness of its
employees. (Labor Code, Art. 291, Malicdem v.
Marulas Industrial Corp., GR No. 204406, 2014)
Exceptions:
1. Covered by an apprenticeship agreement
stipulating a longer period (Labor Code, Art.
296)
2. Voluntary agreement of parties (especially
when nature of work requires a longer period)
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(Mariwasa Manufacturing v. Leogardo, G.R.
No. 74246, 1989)
3. The employer gives the employee a second
chance to pass the standards set (Mariwasa
Manufacturing v. Leogardo, G.R. No. 74246,
1989)
4. When a longer period is required and
established by company policy
If not one of the exceptional circumstances above
is proven, the employee whose employment
exceeds 6 months is undoubtedly a regular
employee (San Miguel v. Del Rosario, G.R. No.
168194 & 168693, 2005)
Example: The probationary period set for full
time professors, instructors and teachers is 3
consecutive years of satisfactory service
pursuant to DOLE Manual of Regulations for
Private Schools.
Extension of Probation; Double/Successive
Probation Not Allowed
The employer and employee may extend by
agreement the probationary period of
employment beyond 6 months, but it cannot be
ad infinitum. (Mariwasa Manufacturing v.
Leogardo, G.R. No. 74246, 1989)
The evil sought to be prevented is to discourage
scheming employers from using the system of
double or successive probation to circumvent the
mandate of the law on regularization and make it
easier for them to dismiss their employees
(Holiday Inn Manila v. NLRC, G.R. No. 109114,
1993)
Standards Must Be Made Known to Employee
In all cases of probationary employment, the
employer shall make known to the employee the
standards under which he will qualify as a regular
employee at the time of his engagement. Where
no standards are made known to the employee at
that time, he shall be deemed a regular
employee. (Aberdeen Court, Inc. v. Agustin, G.R.
No. 149371, 2005; IRR Labor Code, Sec. 6[d],
Rule I, Book V)
LABOR LAW
GR: An employer is deemed to have made known
the standards that would qualify a probationary
employee to be a regular employee when it has
exerted reasonable efforts to apprise the
employee of what he is expected to do or
accomplish.
EXCEPTIONS:
a. When the job is self-descriptive in nature
such as in the case of maids, cooks, drivers,
or messengers. (Abbott Laboratories,
Philippines v. Alcaraz, GR No. 192571,
2013)
b. Probationary managerial employee. A
managerial role essentially connotes an
exercise of discretion, the quality of effective
management can only be determined
through subsequent assessment.
c. The case of probationary employees whose
tasks involve the application of discretion
and intellect, such as – to name a few –
lawyers, artists, and journalists (Abbott
Laboratories, Philippines v. Alcaraz, GR No.
192571 MR, 2014)
Termination of Probationary Employment
PERLAS-BERNABE. A probationary employee,
like a regular employee, enjoys security of tenure.
Thus, services of an employee who has been
engaged on probationary basis may be
terminated for any of the following:
1. Just causes
2. Authorized causes
3. When he fails to qualify as a regular
employee in accordance with reasonable
standards made known by the employer to
employee at the time of his engagement.
(Abbott Laboratories, Philippines v. Alcaraz,
GR No. 192571, 2013))
Note: If the termination is for cause, it may be
done anytime during the probation. The employer
need not wait until the probation period is over.
(Carvajal v. Luzon Development Bank, GR No.
186169, 2012)
Limitations to Termination of Probation
6. Must be exercised in accordance with the
specific requirements of the contract;
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7. The dissatisfaction on the employer’s part
must be real and in good faith, not feigned so
as to circumvent the contract or the law; and
8. There must be no unlawful discrimination in
the dismissal (Davao Contractors
Development v. Pasawa, G.R. No. 172174,
2009)
Probationary employee may be dismissed before
end of the probationary period. Termination, to be
valid, must be done before the lapse of the
probationary period. (Pasamba v. NLRC, G.R.
No. 168421, June 8, 2007; Manila Electric
Company v. NLRC, G.R. No. 83751, 1989).
Conversely, once the employer finds the
employee qualified, the employer may extend to
him regular employment even before the end of
the probation (Canagian Opportunities v.
Dalangin, Jr., G.R. No. 172223, 2012)
Due Process Prior to Termination
Probationary employees is entitled to procedural
due process prior to dismissal from service.
Unlike the first and second grounds (see above
enumeration), the third ground does not require
notice and hearing. Due process for the third
ground consists of making the reasonable
standards excepted of the employee during his
probationary period known to him at the time of
his probationary employment. (PDI v. Magtibay,
Jr., G.R. No. 164532, 2007)
Acquisition of Permanent Employment for
Private School Teachers
The legal requirements for acquisition of
permanent employment, are as follows:
9. The teacher is a full-time teacher;
10. The teacher must have rendered three
consecutive years of service; and
11. Such service must have been satisfactory.
(UST v. NLRC G.R. No. 85519, 1990)
PROJECT EMPLOYMENT
One whose employment has been fixed for a
specific project or undertaking, the completion of
which has been determined at the time of
engagement of the employee. (Labor Code, Art.
295)
LABOR LAW
For an employee to be considered project-based,
the employer must show compliance with two (2)
requisites, namely that:
1. The employee was assigned to carry out a
specific project or undertaking; and
2. The duration and scope of which were
specified at the time they were engaged for
such project. (Gadia v. Sykes Asia, Inc., GR
No. 209499, 2015)
Project Employees are NOT Regular
Employees; Exception
General Rule: Project employees are not regular
employees, as their services are needed only
when there are projects to be undertaken.
Exception: Where the employment or project
employees is extended long after the supposed
project has been finished, the employees are
removed from the scope of project employees
and are considered regular employees. (Lao
Construction v. NLRC, G.R. No. 116781, 1997)
When a Project Employee Becomes a Regular
Employee
1. There is continuous re-hiring of project
employees even after the cessation of a
project for the same tasks or nature of tasks;
and
2. The tasks performed by the alleged project
employee are vital, necessary, and
indispensable to the usual business or trade
of the employer (Maraguinot v. NLRC, G.R.
No. 120969, 1998)
Duration of Work
One year duration on the job is pertinent in
deciding whether a casual employee has become
regular or not, but it is not pertinent to a seasonal
or project employee.
“Day Certain” Rule
Project employment does not end on an exact
date, but on the completion of the project.
Termination
As project employees, their termination is
governed by Rule XXIII, Book V of the Omnibus
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Rules Implementing the Labor Code which Mere membership in the work pool does not result
provides that: If the termination is brought about in the workers’ becoming regular employees by
by the completion of the contract or phase reason of that fact alone. (Abesso Construction
thereof, no prior notice is required. and Dev’t Corp., v. Ramirez, G.R. No. 141168,
2006). However, a project employee who is a
This is because completion of work or project member of a work pool may attain regular status
automatically terminates employment, in which as a project employee.
case, the employer is, under the law, only obliged
to render a report to the DOLE on the termination Project Employment vs. Regular Employment
of employment. (Cioco, Jr. v. C.E. Construction PROJECT REGULAR
Corp., GR No. 156748 & 156896, 2015) EMPLOYMENT EMPLOYMENT
The services of Regular employees
Length of time not applicable to the project employees are enjoy security of
construction industry coterminus with tenure and are legally
Generally, length of service provides a fair project or any phase entitled to remain in
yardstick for determining when an employee thereof any may be the service of their
initially hired on a temporary basis becomes a terminated upon the employer and to hold
permanent one, entitled to the security and end or completion of on their work or
benefits of regularization. But this standard will the project or phase position until their
not be fair, if applied to the construction industry, thereof for which they services are
simply because construction firms cannot were hired terminated by any of
guarantee work and funding for its payrolls the modes of
beyond the life of each project. And getting termination of service
projects is not a matter of course. (Uy under the Labor Code
Construction v. Trinidad, G.R. No. 183250, 2010) As to termination, due If termination is for
process complied with just cause, due
Work Pool Principle even if no prior notice process applicable to
Generally, employees may or may not be of termination is Art. 297 applies. If
members of a work pool. A work pool refers to a served due to authorized
group of works from which an employer like a causes, Art. 298 &
construction company deploys or assigns to its 299 followed.
various projects or any phase/s thereof.
Note: A regular employee cannot be at the same
Types of Employees in the Construction time a project employee (Magcalas v. NLRC,
Industry: G.R. No. 100333, 1997)
a. Non-project employees are those
employed without reference to any particular SEASONAL EMPLOYMENT
construction project or phase of a project. Work or services to be performed is seasonal in
Said employees are considered regular nature and the employment is for the duration of
employees; or the season. (Labor Code, Art. 295)
b. Project employees are those employed in
connection with a particular construction Farm workers generally fall under the definition of
project or phase thereof and such seasonal employees. Seasonal employees may
employment is coterminous with each project be considered as regular employees.
or phase of the project to which they are
assigned. (Exodus International Construction Regular seasonal employees are those called to
v. Biscocho, GR No. 166109, 2011)) work from time to time. The nature of their
relationship with the employer is such that during

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the off season, they are temporarily laid off; but
re-employed during the summer season or when
their services may be needed. They are in regular
employment because of the nature of their job,
and not because of the length of time they have
worked. (Gapayao v. Fulo, GR No. 19343, 2013)
Employment Relationship During Off-Season
During off-season, the EER is not severed; the
seasonal employee is merely considered on
leave of absence without pay. Workers who have
performed the same tasks every season for
several years are considered regular employees
for their respective tasks. (Hacienda Fatima v.
National Federation of Sugarcane Workers-Food
and General Trade, G.R. No. 149440, 2003)
When Seasonal Employees Considered as
Regular Employees
1. Where there is a reasonable connection
between the particular activity performed by
the employee in relation to the usual trade or
business of the employer; and
2. When seasonal workers are repeatedly
engaged to perform the same tasks for more
than one season (Zamudio v. NLRC, G.R.
No. 76723, 1990)
One year duration on the job is pertinent in
deciding whether a casual employee has become
regular or not, but it is not pertinent to a seasonal
or project employee. Passage of time does not
make a seasonal worker regular or permanent.
(Mercado v. NLRC, G.R. No. 79869, 1991)
When Seasonal Employees NOT Considered
as Regular Employees
a. Seasonal workers who have worked for
one season only (Hacienda Fatima v.
National Federation of Sugarcane
Workers-Food and General Trade, G.R.
No. 149440, 2003);
b. When seasonal employees are free to
contract their services with other farm
owners (Mercado, Sr. v. NLRC, 2013).
FIXED-TERM EMPLOYMENT
Fixed-term employment was repealed by Labor
Code. But the Civil Code, a general law, allows
LABOR LAW
fixed-term employment. (Brent School, Inc. v.
Zamora, G.R. No. 48494, 1990)
Elements of valid fixed-term employment
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;
2. It satisfactorily appears that the employer and
the employee dealt with each other on more
or less equal terms with no moral dominance
exercised by the former or the latter.
These indications, which must be read together,
make the Brent doctrine applicable only in a few
special cases wherein the employer and
employee are on more or less in equal footing in
entering into the contract.
The reason for this is: when a prospective
employee, on account of special skills or market
forces, is in a position to make demands upon the
prospective employer, such prospective
employee needs less protection than the ordinary
worker. Lesser limitations on the parties’ freedom
of contract are thus required for the protection of
the employee. (Fuji Television Network v.
Espiritu, G.R. Nos. 204944-45, 2014)
General Rule: Fixed-Period Employment is valid
so long as the criteria is complied with.
Exception: Fixed-term employment will not be
considered valid where, from the circumstances,
it is apparent that periods have been imposed to
preclude acquisition of tenurial security by the
employee. (Dumpit-Murillo v. CA, G.R. No.
164652, 2007)
Rules:
a. Notice of termination is not necessary in
fixed-term employment (Pangilinan v.
General Milling Corporation, supra)
b. Employee is deemed regular if the
contract failed to state the specific period
of employment (Poseidon Fishing v.
NLRC, G.R. No. 168052, 2006);
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c. Termination prior to lapse of fixed-term
contract should be for a just or authorized
cause (Anderson v. NLRC, G.R. No.
111212, 1996);
d. Liability for illegal dismissal of fixed-term
employees is only for the salary for
unexpired portion (New Sunrise Metal v.
Pia, G.R. No. 171131, 2007)
Probationary Employment vs. Fixed-Term
Employment
PROBATIONARY FIXED-TERM
EMPLOYMENT EMPLOYMENT
The parties intend to No such intention
make their exists and the
relationship regular relationship
after the lapse of the automatically
period. terminates at the
expiration of the
period.
SECURITY GUARDS
Employment Status
The Security Service Contractor (SSC) or Private
Security Agency (PSA) is the employer of its
security guards and other private security
personnel on duty detail to a principal or client
under a Service Agreement. (Sec. 3.1, DO 150-
16)
Note: Similar to a situation of legitimate
subcontracting.
The three parties involved:
1. SSC/PSA as Contractor / Subcontractor
2. Security Guards as employees of SSC/PSA
3. Principal or client of SSC/PSA - puts out or
farms out a security and/or detective job,
service, or work to a private SSC/PSA.
Probationary Employment
Probationary period of newly-hired security guard
and other private security personnel in the private
security industry shall not exceed six (6) months.
While on probationary status, their services may
be terminated for failure to meet reasonable
standards or criteria made known by the
SSC/PSA at the time of their engagement or for
LABOR LAW
any just case contained in the probationary
contract. (Sec. 3.2, DO 150-16)
Regular Employment
Any security guard or other private security
personnel who is allowed to work after the
probationary period or in the absence of a valid
probationary contract shall be considered a
regular employee. Security guards affected by
repeated hiring-firing-rehiring scheme for short
periods of time, the aggregate duration of which
is at least 6 months, shall be considered a regular
employee. (Sec. 3.3, DO 15016)
Employment Contracts
Notwithstanding and oral or written stipulations to
the contrary, the contract between SSC/PPA and
its security guards shall be governed by
provisions of Art. 294 and 295 of the Labor Code.
The SSC/PSA shall provide his/her security
guards a copy of the employment contract duly
signed by the parties, which shall contain terms
and conditions of employment. (Sec. 5.1, DO
150-16)
Reserved Status
A security guard and other private security
personnel may be placed in a work pool or on
reserved status due to lack of service assignment
after the expiration or termination of the Service
Agreement with the principal where he/she is
assigned, or due to the temporary suspension of
security service operations, or due to valid relief
from the current place of work and there is no
work assignment available.
No security guard and other private security
personnel can be placed in a work pool or on
reserved status in any of the following situations:
1. after expiration of a service contract, if there
are other principals where he/she can be
assigned;
2. as a measure to constructively dismiss the
security guard; and
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3. as an act of retaliation for filing any complaint
against the employer for violation of labor
laws, among others.
If after a period of six (6) months, the SSC/PSA
cannot provide work or give an assignment to the
reserved security guard, the latter can be
separated from service and shall be entitled to
separation pay as described in Subsection 7.5
(m) hereof. An assignment of the security guard
and other private security personnel as a reliever
for less than one-month shall not be considered
as an interruption of the six (6) months period.
(Sec. 10.3, DO 150-16)
Specifically with respect to cases involving
security guards, a relief and transfer order in itself
does not sever employment relationship between
a security guard and his agency. Temporary “off-
detail” or the period of time security guards are
made to wait until they are transferred or
assigned to a new post or client does not
constitute constructive dismissal, so long as such
status does not continue beyond six (6) months.
(Tatel v. JLFP Investigation and Security Agency,
Inc., GR No. 206942, 2015)
The concept of temporary “off-detail” or “floating
status” of security guards employed by private
security agencies – a form of temporary
retrenchment or lay-off – relates to 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. When a security guard
is placed on a floating status, he or she does not
receive any salary or financial benefit provided by
law. (Quillopa v. Quality Guards Services, GR No.
213814, 2015)
Burden of Proof
The onus of proving that there is no post available
to which the security guard can be assigned rests
on the employer. (Nationwide Security and Allied
Services, Inc. v. Valderama, 659 Phil. 362, 2011)
Due to the grim economic consequences to the
security guard in which he does not receive any
salary while in temporary off-detail or floating
status, the employer-security agency should bear
LABOR LAW
the burden of proving that there are no posts
available to which the security guard temporarily
out of work can be assigned. (Pido v. NLRC, 545
Phil 507, 516, 2007)
Management Prerogative
Placing a security guard in temporary off-detail or
floating status is part of management prerogative
of the employer-security agency and does not,
per se, constitute a severance of the employer-
employee relationship. However, such exercise
of management prerogative must be made in
good faith. (Quillopa v. Quality Guards Services,
GR No. 213814, 2015)
B. TERMINATION OF EMPLOYER
The terms and conditions of employment of all
government employees, including employees of
GOCCs, shall be governed by the Civil Service
Law, rules and regulations (Labor Code, Art. 291)
Coverage
General Rule: All establishments and
undertakings, whether for profit or not (Labor
Code, Art. 293)
Exception: Government, its political
subdivisions, including GOCCs without original
charter (IRR Labor Code, Sec. 1, Rule 1, Book VI)
Security of Tenure
It is a constitutionally protected right and applies
to all workers (Phil. Const. art. XIII, Sec. 3)
In cases of regular employment, the employer
shall not terminate the services of an employee
except for a just cause or when authorized by the
provisions of the Labor Code. (Labor Code, Art.
294)
Security of tenure is the constitutional right
granted to the employee, that the employer shall
not terminate the services of the employee except
for just cause or when authorized by law. It
extends to regular (permanent) as well as non-
regular (temporary) employment. (Kiamco v.
NLRC, G.R. No. 129449, 1999)
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I. REQUISITE FOR VALIDITY AND DUE
PROCESS REQUIREMENTS
Note: In September 2015, DOLE issued D.O.
147-15, Amending the IRR of Book VI of the
Labor Code.
1. JUST CAUSES
Grounds:
1. Serious misconduct or Willful Disobedience
by the employee of the lawful orders of his
employer or representative in connection with
his work (work-related)
2. Gross and Habitual neglect by the employee
of his duties
3. Fraud or Willful breach by employee of the
Trust reposed in him by his employer or duly
authorized representative (not mere
suspicion)
4. Commission of a crime or offense by the
employee against the person of his employer
or any immediate member of his family or
duly authorized representative
5. Other analogous cases
SERIOUS MISCONDUCT OR WILLFUL
DISOBEDIENCE (Labor Code, Article 297[a])
Serious Misconduct
Improper or wrong conduct; the transgression of
some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not
mere error in judgment. To be serious within the
meaning and intendment of the law, the
misconduct must be of such grave and
aggravated character and not merely trivial or
unimportant. (Villamor Golf Club v. Pehid, G.R.
No. 166152, 2005)
The charge of drug abuse inside the company’s
premises and during work hours against the
petitioner constitutes serious misconduct.
(Bughaw Jr. v. Treasure Industrial Corporation,
G.R. No. 173151, 2008)
Elements of Serious Misconduct
1. There must be misconduct;
LABOR LAW
2. The misconduct must be of such grave and
aggravated character;
3. Relates to the performance of the employee’s
duties; and
4. A showing that the employee becomes unfit
to continue working for the employer. (D.O.
No. 147-15, Sec. 5.2[a])
Examples
1. Sexual harassment
2. Fighting within company premises;
3. Accusatory and inflammatory language used
by an employee to an employer or superior
(Nissan Motors Phils. v. Angelo, G.R. No.
164181, 2011)
4. Falsification of time records;
5. Gross immorality; and
6. Sexual intercourse inside company premises
and during work hours (Imasen Philippine
Manufacturing Corp v. Alcon, G.R. No.
194884, 2014)
7. Theft of company property
Habitual Infractions
A series of irregularities when put together may
constitute serious misconduct (Gustilo v. Wyeth
Phil., G.R. No. 149629, 2004)
Totality of infractions doctrine
The totality of infractions or the number of
violations committed during the period of
employment shall be considered in determining
the penalty to be imposed upon an erring
employee. Fitness for continued employment
cannot be compartmentalized into tight little
cubicles of aspects of character, conduct and
ability separate and independent of each other.
While it may be true that petitioner was penalized
for his previous infractions, this does not and
should not mean that his employment record
would be wiped clean of his infractions. After all,
the record of an employee is a relevant
consideration in determining the penalty that
should be meted out since an employee's past
misconduct and present behavior must be taken
together in determining the proper imposable
penalty. (Merin v. NLRC, G.R. No. 171790)
Elements of Willful Disobedience
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1. There must be disobedience or
insubordination;
2. The disobedience or insubordination must be
willful or intentional characterized by a
wrongful and perverse attitude;
3. The order violated must be reasonable,
lawful, and made known to the employee;
and
4. The order must pertain to the duties which he
has been engaged to discharge. (D.O. No.
147-15)
GROSS AND HABITUAL NEGLECT (Labor
Code, Article 297[b])
Gross Neglect
An absence of that diligence that an ordinarily
prudent man would use in his own affairs (DOLE
Manual, Sec. 4343.01[27])
Habitual Neglect
Implies repeated failure to perform one’s duties
over a period of time (JGB and Associates, Inc. v.
NLRC, G.R. no. 109390, March 7, 1996)
Elements of Gross and Habitual Neglect:
1. There must be neglect of duty; and
2. The negligence must be both gross and
habitual in character. (D.O. No. 147-15, Sec.
5.2[c])
Exception: Where the negligence was gross,
but not habitual, the SC still dismissed the erring
employee. The SC agreed that the resultant
damage caused by the employee’s negligence
should be considered in the dismissal of the
employee. In this case, the damage went as far
as claiming the life of a child. (School of Holy
Spirit v. Taguim, G.R. No. 165565, 2008)
Note: Actual damage, loss, or injury is not an
essential requisite (DOLE Manual, Sec.
4343.01[2])
Forms of neglect of duty
1. Habitual tardiness and absenteeism;
2. Abandonment of work
a. Failure to report for work or absence without
valid or justifiable reason; and
LABOR LAW
b. Clear intention to sever EER is manifested by
some overt acts (Tamblot Security and General
Services v. Item, G.R. No. 199314, 2015)
Due Process in Abandonment
Twin-Notice Requirement
3. First Notice directing the employee to explain
why he should not be declared as having
abandoned his job;
4. Second Notice to inform him of the employer’s
decision to dismiss him on the ground of
abandonment (Kingsize Manufacturing Corp
v. NLRC, G.R. Nos. 110452,54, 1994)
Notices in abandonment cases must be sent to
the employee’s last known address per record of
the company. The employer need not look for the
employee’s current whereabouts (Agabon v.
NLRC, G.R. No. 158693, 2004)
No hearing is required to validly dismiss an
employee for abandonment (Intertranz Container
Lines v. Bautista, G.R. No. 187693, 2010)
Mere absence or failure to report for work, even
after notice to return, does not necessarily
amount to abandonment. Abandonment is a
matter of intention and cannot lightly be
presumed from certain equivocal acts. The
operative act is still the employee’s ultimate act of
putting an end to his employment (Jordan v.
Grandeur Security and Services, G.R. No.
206716, 2014)
Abandonment vis-à-vis Illegal Dismissal
General Rule: Abandonment inconsistent with
the immediate filing of a complaint for illegal
dismissal Tamblot Security v. Item, G.R. No.
199314, 2015)
Exception: The above rule has no application
where the complainant does not pray for
reinstatement and asks for separation pay
instead (Jo v. NLRC, G.R. No. 121605, 2000)
Poor performance
Previous infractions by the employee should have
been acted upon appropriately by the employer
before terminating the former.
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As a general concept, “poor performance” is
equivalent to inefficiency and incompetence in
the performance of official duties. An
unsatisfactory rating can be just cause for
dismissal only if it amounts to gross and habitual
neglect of duties. Thus, the fact that an
employee’s performance is found to be poor and
unsatisfactory does not necessarily mean that the
employee is grossly and habitually negligent of
his duties. (Universal Staffing Inc. v. NLRC, G.R.
No. 177576, 2008)
Gross negligence includes gross inefficiency
Article 290 of the Labor Code provides that one
of the just causes for terminating an employment
is the employee's gross and habitual neglect of
his duties. This cause includes gross inefficiency,
negligence and carelessness (Century Iron
Works, Inc. v. Bañas, G.R. No. 184116, 2013)
FRAUD OR WILLFUL BREACH OF TRUST
(Labor Code, Article 297[b])
Elements of Fraud or Willful Breach of Trust
1. There must be an act, omission, or
concealment;
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
4. It must be in connection with the employees’
work. (D.O. No. 147-15, Sec. 5.2[d])
Elements of Loss of Confidence
1. There must be an act, omission or
concealment;
2. The act, omission or concealment justifies the
loss of trust and confidence of the employer
to the employee;
3. The employee concerned must be holding a
position of trust and confidence;
4. The loss of trust and confidence should not
be simulated;
5. It should not be used as a subterfuge for
causes which are improper, illegal, or
unjustified; and
LABOR LAW
6. It must be genuine and not a mere
afterthought to justify an earlier action taken
in bad faith. (D.O. No. 147-15, Sec. 5.2[e])
Loss of trust and confidence to be a valid cause
for dismissal must be based on a willful breach of
trust and founded on clearly established facts.
The basis for the dismissal must be clearly and
convincingly established but proof beyond
reasonable doubt is not necessary. (Prudential
Guarantee and Assurance Employee Labor
Union v. NLRC, G.R. No. 185335, 2012)
Guidelines for the application of the doctrine
of loss of confidence
a. Loss of confidence should not be simulated;
b. It should not be used as a subterfuge for
causes which are improper, illegal or
unjustified;
c. It may not be arbitrarily asserted in the face
of overwhelming evidence to the contrary;
and
d. It must be genuine, not a mere afterthought
to justify earlier action taken in bad faith
(Coca-Cola Bottlers, Phils. Inc. v. Kapisanan
ng Malayang Manggagawa sa Coca-Cola,
G.R. No. 148205, 2005)
The breach must be related to the performance of
the employee’s function. (Enriquez v. BPI, G.R.
No. 172812, 2008)
When an employee accepts a promotion to a
managerial position or to an office requiring full
trust and confidence, she gives up some of the
rigid guarantees available to ordinary workers
infractions which is committed by others would be
overlooked or condoned or penalties mitigated
may be visited with more sever disciplinary
action. (Tirazona v. CA, G.R. No. 169712, 2008)
Positions of trust and confidence
Managerial employees: Those vested with the
powers or prerogatives to lay down management
policies and to hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline employees
or effectively recommend such managerial
actions.
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Fiduciary Rank and file: Those who in the sufficient. (Nicolas v. NLRC, G.R. No. 113948,
normal and routine exercise of their functions, 1996)
regularly handle significant amounts of money or
property. Examples are cashiers, auditors, Immediate Members of the Family
property custodians, etc. (Prudential Guarantee 1. Between husband and wife;
and Assurance Employee Labor Union v. NLRC, 2. Between parents and children;
G.R. No. 185335, 2012) 3. Among other ascendants and descendants;
4. Among brothers and sisters, whether of the
MANAGERIAL FIDUCIARY RANK- full or half-blood (see Family Code, Art. 150)
AND-FILE
Mere existence of a Proof of involvement Acquittal in criminal case arising from
basis for the belief of in the alleged events misconduct
employee’s guilt in question required; Notwithstanding petitioner’s acquittal in the
(Grand Asian mere uncorroborated criminal case for qualified theft, the company had
Shipping Lines v. assertions and adequately established the basis for the
Galvez, G.R. No. accusations are not company’s loss of confidence as a just cause to
178184, 2014) enough (Etcuban v. terminate. As opposed to the "proof beyond
Employment for a Sulpicio Lines, G.R. reasonable doubt" standard of evidence required
long time is counted No. 148410, 2005) in criminal cases, labor suits require only
against the employee substantial evidence to prove the validity of the
(Salvador v. dismissal (Paulino v. NLRC, G.R. No. 176184,
Philippine Mining 2012)
Service Corp., G.R.
No. 148766, 2003) Past Infractions Rule
Previous offenses may be used as justification for
Confidential employees are those charged with dismissal from work only if the past infractions are
custody and protection of employer’s property like related to the subsequent offense upon which the
a cashier (this is different from the “confidential basis of termination is decreed. (Salas v. Aboitiz
employees” in labor relations) One Inc., G.R. No. 178236, 2008)

COMMISSION OF A CRIME OR OFFENSE: ANALOGOUS CASES (Labor Code, Article

(Labor Code, Article 297[d])
Commission of a crime or offense
Refers to an offense by the employee against the
person of his employer or any immediate member
of his family or his duly authorized representative.
Elements
1. There must be an act or omission punishable/
prohibited by law; and
2. The act or omission must be voluntary and/or
willful on the part of the employees. (D.O. No.
147-15, Sec. 5.2[f])
Conviction or prosecution of the employee is not
necessary. A criminal case need not be actually
filed. Commission of acts constituting a crime is
297[e])
Requisites
1. There must be an act or omission similar to
those specified just causes;
2. The act or omission must be voluntary and/or
willful on the part of the employees (D.O. No.
147-15, Sec. 5.2[g])
Analogous Cases must be due to the voluntary
and/or willful act or omission of the employee.
(Cosmos Bottling Corp. v. Fermin, G.R. No.
193676, 2012)
D.O. No. 147-15 (new qualification)
No act or omission shall be considered as
analogous cause unless expressly specified in
the company rules and regulations or
policies.

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Analogous Cases must be due to the voluntary
and/or willful act or omission of the employee.
(Cosmos Bottling Corp. v. Fermin, G. R. No.
193676, 2012)
Examples
1. Abandonment
2. Violation of safety rules
3. Gross inefficiency
4. Wrongful acts of employee against the
company
5. Violation of code of discipline
6. Failure to heed an order not to join an illegal
picket
7. Immorality
8. Sexual harassment
Change of Ownership
A mere change in the equity composition of a
corporation is neither a just nor an authorized
cause that would legally permit the dismissal of
the corporation's employees en masse. (SME
Bank, Inc. v. De Guzman, G.R. No. 184517,
2013)
Other Just Causes under other Labor Code
provisions
1. Union officers who, with knowledge,
participate in an illegal strike.
2. Any employee who commits an illegal act
during a strike
3. Strikers who violate orders, prohibitions or
injunctions issued by the NLRC, the
Secretary of Labor and Employment or the
President
4. Violation of union security clause in the CBA
Doctrine of Incompatibility
Where the employee has done something that is
contrary or incompatible with the faithful
performance of his duties, his employer has a just
cause for terminating his employment. (Manila
Chauffer’s League v. Bachrach Motor, G.R. No.
L-47138, 1940)
Immorality
Disgraceful or immoral conduct can be used as a
basis for termination of employment (Santos, Jr.
v. NLRC, G.R. No. 115795, 1998)
LABOR LAW
The act of engaging in extramarital affairs was
specifically provided for by the cooperative’s
Personnel Policy as one of the grounds for
termination of employment and said act raised
concerns to the cooperative as the Board
received numerous complaints and petitions from
the cooperative members themselves asking for
the removal of Bandiola because of his immoral
conduct, hence, immorality (extramarital affair)
justified terminating the employment by the
employer (Alilem Credit Cooperative v. Bandiola,
Jr., G.R. No. 173489, 2013)
Pregnancy out of wedlock
When the law speaks of immoral or, necessarily,
disgraceful conduct, it pertains to public and
secular morality; it refers to those conducts which
are proscribed because they are detrimental to
conditions upon which depend the existence and
progress of human society.
To stress, pre-marital sexual relations between
two consenting adults who have no impediment
to marry each other, and, consequently,
conceiving a child out of wedlock, gauged from a
purely public and secular view of morality, does
not amount to a disgraceful or immoral conduct.
(Leus v. St. Scholastica, G.R. No. 187226, 2015)
Valid Dismissal Because of Application of
Union Security Clause
Union security clauses in the collective
bargaining agreements, if freely and voluntarily
entered into, are valid and binding. Thus, the
dismissal of an employee by the company
pursuant to a labor union’s demand in
accordance with a union security agreement
does not constitute unfair labor practice.
(Malayang Samahan ng mga Manggagawa sa M.
Greenfield v. Ramos, G.R. No. 113907, 2000;
Villar v. Inciong, G.R. No. L-50283-84, 1983
Although a union security clause in a CBA may
be validly enforced and dismissal pursuant
thereto may likewise be valid, this does not erode
the fundamental requirement of due process. The
reason behind the enforcement of union security
clauses which is the sanctity and inviolability of
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contracts cannot override one’s right to due
process. (MSMG-UWP v. Ramos, G.R. No.
113907, 2000)
Where the employer compelled the employee to
go on forced leave upon recommendation of the
union for alleged violation by the employee of the
closed–shop agreement, the NLRC correctly
ordered the reinstatement of the employee and
directed the union to pay the wages and fringe
benefits which employees failed to receive as a
result of her forced leave and to pay attorney’s
fees. (Manila Mandarin Employees Union v.
NLRC, G.R. No. 76989,, 1987)
Where the employer dismissed his employees in
the belief in good faith that such dismissal was
required by the closed – shop provisions of the
collective bargaining contract with the union, he
may not be ordered to pay back compensation to
such employees although their dismissal is found
to be illegal. (Confederated Sons of Labor v.
Anakan Lumber, G.R. No. L-12503, 1960)
Bona Fide Occupational Qualification (BFOQ)
General Rule: Where the job itself necessarily
requires a particular qualification, then the job
applicant or worker who does not possess it may
be disqualified on that basis and such will not be
considered unlawful discrimination.
Exception: To justify a BFOQ, the employer
must prove that:
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 (Star Paper
Corporation, et. al. vs. Simbol, et. al., G.R.
No. 164774, 2006).
The Supreme Court had upheld the dismissal of
a cabin crew member for being unable to trim
down his weight. The Court classified such weight
standards as a BFOQ, which is defined as the
employment qualifications imposed by an
employer such as sex, religion, or national origin
LABOR LAW
as a limiting factor in performing a certain job. In
the instant case, PAL is a common carrier and
from the nature of its business and for reasons of
public policy, it is bound to observe extraordinary
diligence for the safety of the passengers it
transports. A BFOQ on weight standards in this
case was deemed to be necessary and justified
given the normal operations of PAL. (Armando
Yragsuegi v. PAL, GR 168081, 2008)
2. AUTHORIZED CAUSES
Grounds: (RRLCD)
1. Redundancy
2. Retrenchment to prevent losses
3. Introduction of Labor-saving devices
4. Cessation or Closure of Operation of the
Establishment or Undertaking
5. Disease
REDUNDANCY
Redundancy exists where the services of an
employee are in excess of what is reasonably
demanded by the actual requirements of the
enterprise. (Wiltshire File Co. Inc. v. NLRC, G. R.
No. 82249, 1991)
A position has become superfluous as an
outcome of a number of factors such as over
hiring of workers, decreased volume of business,
dropping of a particular product line or service
activity previously manufactured or undertaken
by the enterprise (thus it only requires superfluity
not duplication of work (Asian Alcohol Corp. v.
NLRC, G. R. No. 131108, 1999)
Elements of Redundancy
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 the enterprise to operate in
an economical and efficient manner;
3. There must be good faith in abolishing
redundant positions;
4. There must be fair and reasonable criteria in
selecting the employees to be terminated;
and
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5. 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. (DO 147-
15)
Requisites for Implementation of a Valid
Redundancy Program
1. A written notice served on both the
employees and the DOLE at least one
month prior to the intended date of
retrenchment
2. Payment of separation pay equivalent to
at least one month pay or at least one
month pay for every year of service,
whichever is higher
3. Good faith in abolishing the redundant
positions
4. Fair and reasonable criteria in
ascertaining what positions are to be
declared redundant and accordingly
abolished. (Lopez Sugar Corporation v.
Franco, G.R. No. 148195, 2005)
Proof of good faith and fair and reasonable
criteria to substantiate redundancy
1. New staffing pattern;
2. Feasibility studies / proposal on the
viability of the newly created positions;
3. Job description; and
4. Approval by the management of the
restructuring (General Milling
Corporation v. Violeta L. Viajar, G.R.
No. 181738, 2013)
RETRENCHMENT
Retrenchment is one of the economic grounds
resorted to by an employer to terminate
employment primarily to avoid or minimize
business losses. (Azucena, The Labor Code with
Comments and Cases Volume II-B, 884, 2016)
Elements of Retrenchment or Downsizing
1. The retrenchment must be reasonably
necessary and likely to prevent business
losses;
LABOR LAW
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 sufficient and convincing evidence
such as financial statements (audited by an
independent firm) over a span of several
years OR a some reasonable period of time,
and not merely the actual year of business
loss;
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; and
5. There must be fair and reasonable criteria in
ascertaining who would be dismissed and
who would be retained among the
employees, such as status, efficiency,
seniority, physical fitness, age, and financial
hardship for certain workers. (D.O. No. 147-
15, Sec. 5.4[c])
“To Prevent Losses”; Proof Required
The phrase “to prevent losses” means that
retrenchment or termination from the service of
some employees is authorized to be undertaken
by the employer sometime before the losses
anticipated are actually sustained or realized.
Actual losses need not set in prior to
retrenchment (Cajucom VII v. TPI Phil. Cement
Corp., G.R. No. 149090, 2005)
The employer bears the burden of proving the
existence of the imminence of substantial losses
with clear and satisfactory evidence that there are
legitimate business reasons justifying a
retrenchment. (Mount Carmel Employees Union
v. Mount Carmel College, G.R. No. 187261,
2014)
Two kinds of losses to justify retrenchment
1. Incurred losses which are substantial,
serious, actual and real; and
2. Expected losses – which are reasonably
imminent. (Sanoh Fulton Phils. Inc. v.
Bernardo & Tagohoy, G.R. No. 187214,
2013)
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Due Process Requirements of the
Retrenchment Program:
1. The retrenchment is necessary to prevent or
minimize losses and such losses are proven;
2. Written notice is given to the employees and
the Department of Labor and Employment at
least one month before the intended date of
retrenchment;
3. Payment of separation pay equivalent to at
least one month pay or at least ½ month pay for
every year of service, whichever is higher;
4. The employer exercise its prerogative to
retrench employees in good faith for the
advancement of its interest; and
5. Fair and reasonable criteria in ascertaining
who will be dismissed or retained. (Azucena, The
Labor Code with Comments and Cases Volume
II-B, 886-887, 2016)
Difference between redundancy and
retrenchment
Redundancy the position of the employee has
become superfluous even if the business does
not suffer from financial problems.
Retrenchment always linked with losses; a
cost-cutting measure made necessary by
business reverses.
(Azucena, The Labor Code with Comments and
Cases Volume II-B, 893, 2016)
“Last In, First Out” Rule (LIFO)
When there are two or more employees
occupying the same position in the company
affected by the retrenchment program, the last
one employed will necessarily be the first to go
(Maya Farms Employees Organization v. NLRC,
G.R. No. 106256, 1994)
However: No law mandates LIFO. A host of
relevant factors come into play in determining
cost-efficient measures in choosing the
employees who will be retained or separated to
save the company from closing chop. In
determining these issues, management has to
enjoy a pre-eminent role. (Asian Alcohol Corp. v.
NLRC, G.R. No. 131108, 1999)
LABOR LAW
In case of installation of labor-saving devices,
redundancy and retrenchment, the LIFO rule
shall apply, except when an employee volunteers
to be separated from employment (D.O. No. 147-
15, Sec. 5.4)
Hobson’s Choice
No choice at all; a choice between accepted what
is offered or having nothing at all.
In Asufrin, Jr. v. San Miguel Corp. (G.R. No.
156658, 2004), the employees were given the
choice either to voluntarily retire, be retrenched
witout benefits, or be dismissed without receiving
any benefit at all.
INSTALLATION OF LABOR-SAVING DEVICE
This refers to the installation of machinery to
effect economy and efficiency in the employer’s
method of production (Edge Apparel, Inc. v.
NLRC, G.R. No. 121314, 1998)
Elements of a valid termination based on
installation of labor-saving devices
1. There must be introduction of machinery,
equipment or other devices;
2. The introduction must be done in good faith;
3. The purpose for such introduction must be
valid such as to save on cost, enhance
efficiency and other justifiable economic
reasons; 

4. There is no other option available to the
employer than the introduction of machinery,
equipment or device and the consequent
termination of employment of those affected
thereby; and
5. There must be fair and reasonable criteria in
selecting employees to be terminated. (DO
147-15)
Due Process Requirements for Termination
Due to Installation of Labor-Saving Device
1. The employer served a written notice both to
the employees and to the DOLE at least 30
days prior to the intended date of termination;
and
2. The employer pays the employees
separation pay equivalent to one month pay
or at least one month pay for every year of
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service, whichever is higher, a fraction of at
least six months being considered as one
whole year. (Labor Code, Art. 298)
CLOSURE OR CESSATION OF OPERATION
OF THE ESTABLISHMENT OR
UNDERTAKINGS
Closure of business is the reversal of fortune of
the employer whereby there is a complete
cessation of business operations and/or an actual
locking-up of the doors of establishment, usually
due to financial losses. Closure of business as an
authorized cause for termination of employment
aims to prevent further financial drain upon an
employer who cannot pay anymore his
employees since business has already stopped.
(J.A.T. General Services v. NLRC, G.R. No.
148340, 2004)
Elements of Closure or Cessation of
Operation
1. There must be a decision to close or cease
operation of the enterprise by the
management;
2. The decision was made in good faith; and
3. There is no other opinion available to the
employer except to close or cease
operations. (DO 147-15)
Due Process Requirements for Termination
Due to Closure or Cessation of Operation
1. Service of written notice to the
employees and to the DOLE at least one
month before the intended date thereof;
2. The cessation of or withdrawal from
business operations must be bona fide in
character; and
3. Payment to the employees of termination
pay amounting to at least one-half (1/2)
month pay for each year of service, or
one month pay, whichever is higher.
(Azucena, The Labor Code with
Comments and Cases Volume II-B, 903,
2016)
Closure Not Due to Losses
In cases of closure not due to losses, it must NOT
be in BAD FAITH. (Azucena, The Labor Code
LABOR LAW
with Comments and Cases Volume II-B, 902,
2016)
Guidelines in Closure
1. Closure or cessation of operations of
establishment or undertaking may either be
partial or total.
2. Closure or cessation of operations of
establishment or undertaking may or may not
be due to serious business losses or financial
reverses. However, in both instances, proof
must be shown that:
(a) It was done in good faith to advance the
employer's interest and not for the
purpose of defeating or circumventing the
rights of employees under the law or a
valid agreement; and
(b) A written notice on the affected
employees and the DOLE is served at
least one month before the intended date
of termination of employment.
3. The employer can lawfully close shop even if
not due to serious business losses or financial
reverses but separation pay, which is
equivalent to at least one month pay as
provided for by the Labor Code as amended,
must be given to all the affected employees.
4. If the closure or cessation of operations of
establishment or undertaking is due to serious
business losses or financial reverses, the
employer must prove such allegation in order
to avoid the payment of separation pay.
Otherwise, the affected employees are
entitled to separation pay.
5. The burden of proving compliance with all the
above-stated falls upon the employer. (Manila
Polo Club Employees’ Union v. Manila Polo
Club, Inc., G.R. No. 172846, 2013)
Closure of Department
The closure of a department or division of a
company constitutes retrenchment by, and not
closure of, the company itself. (Waterfront Cebu
City Hotel v. Jimenez, G.R. No. 174214, 2012)
(Note: There are decisions that consider partial
closure as a valid cause.)
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Retrenchment vs. Redundancy vs. Closure

RETRENCHMENT REDUNDANCY CLOSURE
Reduction of personnel The service of an Employee is The reversal of the fortune of the
usually due to poor financial in excess of what is required employer whereby there is a complete
returns so as to cut down on by an enterprise cessation of business operations and/or
costs of operations in terms of actual locking-up of the doors of the
salaries and wages establishment, usually due to financial
losses
Resorted to primarily to avoid To save production costs Aims to prevent further financial drain
or minimize business losses upon the Employer
Employee is entitled to Employee is entitled to In case of closure of business not due
separation pay of 1 month separation pay of 1 month to serious business losses, the
pay or 1/2 month pay per year pay or 1 month pay per year employer pays the employees
of service, whichever is of service, whichever is terminated separation pay of 1 month
higher higher pay or 1/2 month pay per year of
service, whichever is higher

Computation of Separation Pay

Computation of Separation Pay
Installation of labor-saving devices 1 month pay or 1 month pay for every year of service
Redundancy whichever is higher.

Retrenchment to prevent losses 1 month pay or at least 1/2 month pay for every year of
service whichever is higher.
Closures or cessation of operations of
establishments or undertaking NOT due to
serious business losses or financial reverses

Disease
Closures or cessation of operations due to No separation pay
serious business losses or financial reverses

Note: A fraction of at least 6 months is considered 1 year

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TEMPORARY CLOSURE / BONA FIDE
SUSPENSION OF OPERATIONS (Labor Code,
Art. 301)
A bona fide suspension of business operations
for not more than 6 months does not terminate
employment.
After 6 months, the employee may be recalled to
work or be permanently laid off. (SKM Art Craft
Corp v. Bauca, G.R. No. 171282, 183484, 2013)
An employer may validly suspend operations for
at most 6 months. Not accepting the workers back
to work after the 6-month period is equivalent to
termination, which should be for cause and with
proper procedure. (Manila Mining Corp. v. Amor,
G.R. No. 182800, 2015)
Floating Status
It is legal, such as in the case of security guards
who have no assignment.
In security agency parlance, being placed “off
duty” or on ‘floating” status means “waiting to be
posted.”
Such a status should not exceed six months; if it
does, it amounts to a dismissal. (Agro
Commercial Services v. NLRC, G.R. No. 82823-
24, 1989)
AILMENT OR DISEASE
Substantive Elements of Due Process for
Termination Due to Ailment or Disease
1. An employee has been found to be suffering
from any disease, whether contagious or not;
2. His continued employment is prohibited by law
or prejudicial to his health, or to the health of his
co-employees;
3. A competent public health authority certifies
that the disease is of such nature or at such a
stage that it cannot be cured within a period of six
months even with proper medical treatment; and
4. Payment of separation pay equivalent to at
least one month salary or to one-half month
salary for every year of service, whichever is
greater, a fraction of at least six months being
considered as one whole year.
LABOR LAW
Prior Certification From Competent Public
Authority
The burden falls upon the employer to establish
these requisites, and in the absence of such
certification, the dismissal must necessarily be
declared illegal.
It is only where there is a prior certification from a
competent public authority that the disease
afflicting the employee sought to be dismissed is
of such nature or at such stage that it cannot be
cured within 6 months even with proper medical
treatment that the latter could be validly
terminated from his job (Crayons Processing,
Inc., v. Pula, G.R. No. 167727, 2007)
DUE PROCESS
Subject to the constitutional right of workers to
security of tenure and their right to be protected
against dismissal except for a just and authorized
cause and without prejudice to the requirement of
notice under Art. 283 of this Code,
The employer shall furnish the worker whose
employment is sought to be terminated:
1. A written notice containing a statement of the
causes for termination,
2. And shall afford the latter ample opportunity
to be heard and to defend himself with the
assistance of his representative if he so
desires, in accordance with company rules
and regulations promulgated pursuant to
guidelines set by the Department of Labor
and Employment. (Labor Code, Art. 292[b])
Note: Employee may have a counsel but it is not
indispensable.
Requisites for Valid Dismissal
1. Substantive Due Process: The dismissal
must be for cause; and
2. Procedural Due Process: The employee
must be afforded an opportunity to be heard
and defend himself (Fujitsu Computer
Products v.CA, G.R. No. 158232, 2005)
Employer may not substitute the required prior
notice & opportunity to be heard with the mere
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payment of 30 days' salary. (PNB v. Cabansag, just and authorized causes. (Tolentino v. PLDT,
G.R. No. 157010, 2005) G.R. No. 160404, 2005)

Right to counsel a) TWIN-NOTICE REQUIREMENT

Guaranteed by the 1987 Constitution to any
person under investigation, be the proceeding
administrative, civil, and criminal. (Salaw v.
NLRC, G.R. No. 90786, 1991)
Burden of Proof
In illegal dismissal cases, the onus of proving that
the employee was not dismissed or, if dismissed,
that the dismissal was not illegal, rests on the
employer, failure to discharge which would mean
that the dismissal is not justified and, therefore,
illegal. (Macasero v. Southern Industrial Gases
Philippines, G.R. No. 178524, 2009)
The employer has the burden of proving that a
dismissed worker has been served two notices:
1. First written notice: served on the employee
specifying the ground or grounds for
termination, and giving said employee
reasonable opportunity within which to
explain his side. 

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


Degree of proof First 1. Contain specific causes or

In labor cases, substantial evidence is required Notice grounds for termination as
and it is such relevant evidence as a reasonable provided under Art. 297 and
mind might accept as adequate to support a company policies, if any;
conclusion. (Andrada v. Agemar Manning 2. Contain a detailed narration of
Agency, G.R. No. 194758, 2012) the facts and circumstances that
will serve as basis for the charge
Guiding Principles on Notice and Hearing in against the employee. (general
Termination/Dismissal cases description of the charge will not
Any decision taken by the employer shall be suffice); and
without prejudice to the right of the worker to 3. Contain a directive that the
contest the validity or legality of his dismissal by employee is given the
filing a complaint with the regional branch of the opportunity to submit his written
NLRC. explanation within the
reasonable period of FIVE (5)
The burden of proving that the termination was for CALENDAR DAYS from receipt
a valid or authorized cause shall rest with the of the notice:
employer. a. to enable him to prepare
adequately for his
The Secretary of the Department of Labor and defense;
Employment may suspend the effects of the b. to study the accusation
termination pending resolution of the dispute in against him; 

the event of a prima facie finding by the
c. to consult a union official
appropriate official of the DOLE before whom
or lawyer; 

such dispute is pending that the termination may
d. to gather data and
cause a serious labor dispute or is in
evidence; and 

implementation of a mass lay-off.
e. to decide on the
In cases of dismissal, employer has the burden of defenses he will raise
proof to show that the dismissal falls under the against the complaint.
(DO 147-15)

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Second After determining that termination of DOLE

Notice employment is justified, the Hearing or
employer shall serve the employees opportunity to be At least 1 month prior
a written notice of termination heard to effectivity of the
indicating that: separation
1. all circumstances involving the Second Notice of the
charge/s against the employee decision to dismiss
have been considered; and 

2. grounds have been established Requisites for Notice in Authorized Causes
to justify the severance of his 1. Notice is not needed when Employee
employment. 
 consented to the retrenchment or voluntarily
applied for one (Int’l Hardware v. NLRC, G.R.
An employee may be dismissed only if the No. 80770, 1989)
grounds mentioned in the pre-dismissal notice 2. Notice must be individual, and not collective
were the ones cited for the termination of (Shoppers Gain Supermart v. NLRC, G.R. No.
employment. (Erector Advertising Sign Group, 110731, 1996)
Inc. v. Cloma, G.R. No. 167218, 2010) 3. Voluntary Arbitration satisfies notice
requirement for authorized causes (Revidad
b) HEARING; AMPLE OPPORTUNITY TO BE v. NLRC, G.R. No. 111105, 1995)
HEARD
Consequences for Non-Compliance of
Guiding principles in hearing requirement Procedural Due Process
1. "Ample opportunity to be heard" means 1. Just or Authorized Cause Exists + Due
any meaningful opportunity (verbal or written) Process
given to the employee to answer the charges (a) Valid Dismissal
against him and submit evidence in support of (b) Employer is not liable; but pays
his defense, whether in a hearing, conference separation pay only in authorized causes.
or some other fair, just and reasonable way. 2. Just or Authorized Cause + No Due
2. A formal hearing or conference becomes Process
mandatory only when requested by the (a) Valid Dismissal
employee in writing or substantial evidentiary (b) Employer is liable for damages due to
disputes exist or a company rule or practice procedural infirmities.
requires it, or when similar circumstances (c) Employer pays separation pay if for
justify it. authorized causes.
3. The "ample opportunity to be heard" standard 3. No Just or Authorized Cause + Due
in the Labor Code prevails over the "hearing Process
or conference" requirement in the (a) Illegal Dismissal
implementing rules and regulations (Perez v. (b) Employer is liable to reinstate employee
PT&T, G.R. No. 152048, 2009) or pay separation pay.
(c) If reinstatement is not possible, pay full
Procedural Requirements in Termination backwages, combined with separation
Cases (Just Cause and Authorized Cause) pay. Note: Payment of backwages is an
AUTHORIZED independent remedy, in addition to either
JUST CAUSES reinstatement or separation pay.
CAUSES
First Notice Notice to the following: 4. No Just or Authorized Cause + No Due
specifying the Process
grounds for which Employee; and (a) Illegal Dismissal
dismissal is sought (b) Employer is liable to reinstate employee
or pay separation pay.

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(c) If reinstatement is not possible, pay full
backwages, combined with separation
pay. Note: Payment of backwages is an
independent remedy, in addition to either
reinstatement or separation pay.
RELIEFS FROM ILLEGAL DISMISSAL
An employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss of
seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his
other benefits or their monetary equivalent
computed from the time his compensation was
withheld from him up to the time of his actual
reinstatement. (Labor Code, Art. 294)
1. Backwages + Reinstatement without loss of
seniority rights, OR
2. Backwages + Separation Pay, if
reinstatement impossible, or not ordered, in
view of the application of the strained
relations doctrine.
NOTE: Where reinstatement is ordered, but the
position is already filled up, the dismissed
employee must still be reinstated if it is still
possible.
REINSTATEMENT
Reinstatement means the restoration to a state
or condition from which one had been removed or
separated. The person reinstated assumes the
position he had occupied prior to his dismissal. It
presupposes that the previous position from
which one had been removed still exists, or that
there is an unfilled position which is substantially
equivalent or of similar nature as the one
previously occupied by the employee. (Pfizer,
Inc., et al. v. Velasco, G.R. No. 177467, 2011)
General Rule: Reinstatement and backwages
are awarded
Exceptions:
1. Separation pay
2. Closure of business (Retuya v. Hon.
Dumarpa, G.R. No. 148848, 2003)
3. Economic Business Conditions (Union of
Supervisors v. Secretary of Labor, G.R. No. L-
39889, 1981)
LABOR LAW
4. Employee’s unsuitability (Divine Word High
School v. NLRC, G.R. No 72207, 1986)
5. Employee’s retirement / overage (New Phil.
Skylanders v. Dekila, G.R. No. 199547, 2012)
6. Antipathy and antagonism (Wensha Spa
Center v. Yung, G.R. No. 185122, 2010)
7. Job with a totally different nature (DUP Sound
Phils. v. CA, G.R. No. 168317, 2011)
8. Long passage of time
9. Inimical to the employer’s interest
10. Supervening facts have transpired which
make execution unjust or inequitable, to an
increasing extent (Emeritus Security v. Dailig,
G.R. No. 204761, 2014)
Prescriptive Period
Bring action for reinstatement within 4 years from
the time of dismissal. (Civil Code, Art. 1146)
i. Reinstatement pending appeal
Note: The decision of the Labor Arbiter reinstating
a dismissed or separated employee shall
immediately be executory, even pending appeal.
The employee shall either be admitted back to
work under the same terms and conditions
prevailing prior to his dismissal or separation or,
at the option of the employer, merely reinstated in
the payroll. The posting of a bond by the employer
shall not stay the execution for reinstatement
provided herein. (Labor Code, Art. 223)
Two options given to employers
1. Actual Reinstatement
- Restoration of an illegally dismissed
employee to the position s/he had
occupied prior to the illegal dismissal.
2. Payroll Reinstatement
- The employer, instead of physically
reinstating the employee to his former or
substantially equivalent position,
chooses to reinstate the employee in the
payroll only by paying him wages and
other benefits without however allowing
or requiring him to actually report for
work.
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Obligation to Reinstate – Order of 3. Separation pay in lieu of reinstatement where

Reinstatement reinstatement is not feasible; and
If the order of reinstatement of the Labor Arbiter 4. Separation pay as a benefit in the CBA or
is reversed on appeal, it is obligatory on the part company policy
of the employer to reinstate and pay the wages of
the dismissed employee during the period of First Kind: Statutory separation pay
appeal until reversal by the higher court. The The employer has a statutory obligation in cases
Labor Arbiter's order of reinstatement is of legal termination due to authorized causes.
immediately executory and the employer has to
either re-admit them to work under the same CAUSE SEPARATION PAY
terms and conditions prevailing prior to their Introduction of labor- Separation pay of 1
dismissal, or to reinstate them in the payroll, and saving devices, month pay or 1 month
that failing to exercise the options in the redundancy pay per year of
alternative, employer must pay the employee's service, whichever is
salaries. (Magana v. Medicard Philipppines, G.R. higher
No. 174833) Retrenchment orSeparation pay of 1
closure or cessation month pay or ½
No obligation to refund salaries and wages of operations NOT month pay per year of
during pendency of the appeal due to serious service, whichever is
An employee cannot be compelled to reimburse business losses; higher
the salaries and wages he received during the Disease
pendency of his appeal, notwithstanding the Retrenchment or None
reversal by the NLRC of the LA's order of closure or cessation
reinstatement. (College of Immaculate of operations due to
Conception v. NLRC, G.R. No. 167563, 2010) serious business
losses
Note: Rule XI, Sec. 14 of the 2011 NLRC Rules Note: A fraction of at least 6 months is considered
of Procedure provide for restitution of amounts 1 year
paid pursuant to execution of awards during
pendency of the appeal. However, it expressly Second Kind: Separation pay as financial
disallows restitution of wages paid due to assistance
reinstatement pending appeal. Separation pay may be awarded, in the name of
compassionate justice, to an employee dismissed
SEPARATION PAY for a “just cause”, except in the following:
Reinstatement and separation pay – exclusive 1. Serious misconduct; or
remedies 2. Other offenses reflecting on his moral
Payment of separation pay and reinstatement are character (PLDT v. NLRC, G.R. No. 80609,
exclusive remedies. The payment of separation 1988)
pay replaces the legal consequences of
reinstatement to an employee who was illegally However: In the Toyota case, the Supreme Court
dismissed. (Bank Rural Bank v. De Guzman, ruled that if the dismissal is based on any of the
G.R. No. 170940, 2013) just causes in Art. 297 of the Labor Code – No
financial assistance can be granted, except
Kinds of separation pay perhaps under “analogous causes.” (Toyota
1. Statutory separation pay, in authorized Motor Phil. Corp. Workers Ass’n. v. NLRC, G.R.
causes (Labor Code, Arts. 288-299) No. 158786, 2007)
2. Separation pay as financial assistance (found
in the next section)

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But note: In the International School case, the
Supreme Court granted “separation pay” of ½
month per year of service while upholding the
teacher’s dismissal on the ground of “gross
inefficiency” resulting from the lack of skills,
thereby failing to meet the standards of the
employer of the school. (International School v.
International School Alliance, 2014)
No financial assistance to dismissed strikers.
Third Kind: Separation Pay in Lieu of
Reinstatement
One month salary per year of service.
This happens only in cases where:
1. Doctrine of Strained Relations applies, but
only applicable to confidential and managerial
employees only; or
2. When reinstatement would only exacerbate
the tension and strained relations between the
parties. (Quijano v. Mercury, G.R. No.
126561, 1998)
3. The position has been abolished (applies to
both managerial and rank and file)
Note: Moral and exemplary damages may also
be awarded.
Computation of separation pay
SP as a statutory requirement is computed by
integrating the basic salary with regular
allowances employee has been receiving
(Planters Products v. NLRC, G.R. No. 78524,
1989); allowances include transportation and
emergency living allowances (Santos v. NLRC,
G.R. No. 76721, 1987)
Commissions included in separation pay;
exception to inclusion
Inasmuch as the words "wages", "pay" and
"salary" have the same meaning, and
commission is included in the definition of "wage",
the logical conclusion, therefore, is, in the
computation of the separation pay of petitioners,
their salary base should include also their earned
sales commissions. (Songco v. NLRC, G.R. Nos.
50999-51000, 1990)
LABOR LAW
Commissions given to a managerial employee
who did not perform actual business transactions
to earn the commission shall not be included in
the salary for purposes of computing separation
pay. (Phil. Duplicators v. NLRC, G.R. No. 11068,
1995)
BACKWAGES
Backwages are earnings lost by a worker due to
his illegal dismissal; a form of relief that restores
the income lost by reason of such unlawful
dismissal; it is not private compensation or
damages; nor is it a redress of a private right but,
rather, in the nature of a command to the
employer to make a public reparation for illegally
dismissing an employee. (St. Theresa's School of
Novaliches Foundation v. NLRC, G.R. No.
122955, 1998)
Backwages and reinstatement are two reliefs that
should be given to an illegally dismissed
employee. They are separate and distinct from
each other. (Aurora Land Projects v. NLRC, G.R.
No. 114733, 1997)
Failure to order backwages
A “plain error” which may be rectified, even if
employee did not bring an appeal regarding the
matter (Aurora Land Projects v. NLRC, G.R. No.
114733, 1997)
Full backwages
Full backwages means exactly that, i.e., without
deducting from backwages the earnings derived
elsewhere by the concerned employee during the
period of his illegal dismissal. (Bustamante v.
NLRC, G.R. No. 111651, 1996)
Awards including salary differentials are not
allowed (Insular Life Assurance Co., v. NLRC,
G.R. No. L-74191, 1987)
Emergency cost of living allowances (ECOLA),
transportation allowances, and 13th month pay
should be included. (Paramount Vinyl Product
Corp. v. NLRC, G.R No. 81200, 1990)
The effects of extraordinary inflation are not to be
applied without an official declaration by
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competent authorities (Lantion v. NLRC, G.R. No.
82028, 1990)
Limited Backwages
General Rule: Illegally dismissed employee is
entitled to full backwages
Exceptions:
1. The Court awarded limited backwages
where the employee was illegally
dismissed but the employer was found
to be in good faith. (San Miguel
Corporation v. Javate, Jr., G.R. No. L-
54244, 1992)
2. Delay of the employee in filing the case
for illegal dismissal (Mercury Drug Co.,
v. CIR, G.R. No. L-23357, 1974) Note:
as long as the action has not
prescribed, full backwages must be
given.
Deduction of earnings elsewhere rule
There is no deduction from backwages the
earnings which the employee has derived from
another employment during the time of his illegal
dismissal (Bustamante v. NLRC, G.R. No.
111651, 1996)
Note: The Bustamante doctrine must be read in
light of R.A. No. 6715 (21 March 1989). Prior to
that date, backwages are limited to three years
without deduction or qualification (Azucena, The
Labor Code with Comments and Cases Volume
II, 918, 2013)
Components of the amount of backwages
(Azucena, The Labor Code with Comments and
Cases Volume II-B, 976, 2016)
1. Salaries at the wage rate level at the time of
dismissal, not current wage level.
2. Allowances or other benefits regularly granted
th
Example: ECOLA, 13 month pay, fringe
benefits, transportation allowances, holiday pay,
SIL, VL, just share in service charges, and any
other regular allowances or benefits or their
monetary equivalents
LABOR LAW
Reinstatement; payment of backwages
An order of reinstatement by the labor arbiter is
not the same as actual reinstatement of a
dismissed or separated employee. Thus, until
employer actually reinstates, their obligation to
the illegally dismissed employee, insofar as
accrued backwages and other benefits are
concerned, continues to accumulate.
It is only when the illegally dismissed employee
receives the separation pay (in case of strained
relations) that it could be claimed with certainty
that the EER has formally ceased thereby
precluding the possibility of reinstatement. In the
meantime, the illegally dismissed employee’s
entitlement to backwages, 13 th month pay, and
other benefits subsists. Until the payment of
separation pay is carried out, the employer
should not be allowed to remain unpunished for
the delay, if not outright refusal, to immediately
execute the reinstatement aspect of the labor
arbiter’s decision.
Further, the employer cannot refuse to reinstate
the illegally dismissed employee by claiming that
the latter had already found a job elsewhere.
Minimum wage earners are left with no choice
after they are illegally dismissed from their
employment, but to seek new employment in
order to earn a decent living. Surely, we could not
fault them for their perseverance in looking for
and eventually securing new employment
opportunities instead of remaining idle and
awaiting the outcome of the case. (Triad Security
& Allied Services, Inc, et al. v Ortega, G.R. No.
160871, 2006)
Computation of backwages
Backwages is computed from the time of illegal
dismissal up to time of actual reinstatement.
Salary rate to be used is the salary rate at the
time of dismissal. general salary increases are
not part of backwages as these are not
allowances or benefits. To extend the coverage
of an allowance or a benefit to include salary
increases would be to strain both the imagination
of the Court and the language of law. (Equitable
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Banking v Sadac, G.R. No. 164772, June 8, 2. The Benefits of the OFW and corresponding
2006) monetary amounts which he is giving up for
the compromised amount
If reinstatement is no longer possible, backwages 3. A statement that the quitclaim and its nature
should be computed from the time the employee and consequences have been Explained to
was terminated until the finality of the decision, him in a language or dialect he understands
finding the dismissal unlawful. (Bustamante v. 4. A statement that the quitclaim has been
NLRC, G.R. No. 111651, 1996) signed knowingly and voluntarily and consent
was without Threat or other undue influence
Reliefs of local workers vs. migrant workers 5. Signed by two (2) witnesses who can attest
Art. 279, LC Sec. 10, RA 8042 to the execution
(LOCAL WORKERS) (MIGRANT 6. Subscribed and sworn to
WORKERS) (EDI-Staffbuilders International, Inc. vs. National
Reinstatement Full reimbursement of Labor Relations Commission, 537 SCRA 409,
his placement fee with 2007)
interest of 12% per
annum No Separation Pay in resignation; Exceptions;
Full backwages from Salaries for the Waivers and Quitclaims, when valid
the time his unexpired portion of General Rule: Separation pay need not be paid
compensation was his employment to an employee who voluntarily resigns.
withheld from him up contract.
to the time of his However: An employer who agrees to expend
actual reinstatement such benefit as an incident of the resignation
should not be allowed to renege in the
QUITCLAIMS performance of such commitment.
After a valid compromise has been entered into,
a quitclaim usually follows. In this document, the Not all waivers and quitclaims are invalid as
employee waives or releases the employer from against public policy. If the agreement was
any claims he may have against him by reason of voluntarily entered into and represented a
his employment. These are normally frowned reasonable settlement, it is binding on the parties
upon because the employer and employee stand and may not later be disowned, simply because
on unequal footing. Hence, if the one signing the of a change of mind. (Candido Alfaro v. CA, et al.,
quitclaim does not need protection, it is usually G.R. No. 140812, 2001)
held to be valid.
EMPLOYER’S INDEMNITY
Requisites for a valid quitclaim (L-FEN)
1. Lack of fraud or deceit Prior to 1989 (Pre-Wenphil)
2. Entered into Freely and voluntarily • Dismissal is Illegal
3. Trade-off is Equitable and credible • Employer’s liability: Reinstatement plus
4. Not contrary to law, public order, public policy, Backwages
morals, good customs, nor prejudicial to a third
person with a right recognized by law (Goodrich February 1989 – 1999 (Wenphil Doctrine)
Manufacturing Corp. v. Ativo, G.R. No. 188002, • Dismissal is Valid
2010) • Employer’s liability: Pay indemnity

Requisites for a valid quitclaim of an OFW January 2000 – October 2004 (Serrano
(FB-TESS) Doctrine)
1. Fixed amount as full and final compensation • Dismissal is Ineffectual

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• Employer’s liability: Full backwages up to
reinstatement / finality of decision
November 2004 – Present (Agabon Doctrine)
• Dismissal is valid
• Employer’s liability: Nominal damages
Jaka Food v. Pacot, G.R. No. 151378, 2005
If the dismissal is based on a just cause but the
employer failed to comply with the notice
requirement, the sanction to be imposed upon
him should be tempered because the dismissal
process was, in effect, initiated by an act
imputable to the employee.
If the dismissal is based on an authorized cause
but the employer failed to comply with the notice
requirement, the sanction should be stiffer
because the dismissal was initiated by the
employer’s exercise of management prerogative.
Industrial Timber v. Ababan, G.R. No. 164518,
2006 (Distinction of Authorized Causes)
If the authorized cause that terminates
employment arises from losses, the penalty to the
employer who disregarded due process may be
lighter than if the authorized cause has no relation
to losses.
HSBC Employees Union v. NLRC, G.R. No.
156635, 2016
A dismissal lacking in valid cause or valid
procedure is “illegal.” In a dismissal based on just
or authorized cause, but effected without due
process, the employee remains dismissed, but
the employer must pay nominal damages.
II. PREVENTIVE SUSPENSION
Preventive suspension is a disciplinary
measure for the protection of the company's
property pending investigation of any alleged
malfeasance or misfeasance committed by the
employee. The employer may place the worker
concerned under preventive suspension if his
continued employment poses a serious and
imminent threat to the life or property of the
employer or of his co- workers. However, when it
is determined that there is no sufficient basis to
LABOR LAW
justify an employee's preventive suspension, the
latter is entitled to the payment of salaries during
the time of preventive suspension. (Gatbonton v.
NLRC, G.R. No. 146779, 2009)
Duration of preventive suspension
No preventive suspension shall last longer than
thirty (30) days.
Upon the expiry of such period, the employer
shall thereafter
1. Reinstate the worker in his former or in a
substantially equivalent position or
2. The employer may extend the period of
suspension provided that during the period of
extension, he pays the wages and other
benefits due to the worker (IRR Labor Code,
Sec. 9, Rule XXIII, Book V)
Preventive Suspension as a Protective
Measure vs. Suspension as a Penalty
Preventive suspension is not a penalty in itself. It
is merely a measure of precaution so that the
employee who is charged may be separated, for
obvious reasons, from the scene of his alleged
misfeasance while the same is being
investigated.
While [preventive suspension] may be imposed
on a respondent during the investigation of the
charges against him, [suspension] is the penalty
which may only be meted upon him at the
termination of the investigation or the final
disposition of the case. (PAL v. NLRC, G.R. No.
114307, 1998)
Notice requirement not complied with by mere
issuance of suspension order
Suspension orders are not enough to meet the
notice requirement necessary in termination.
These do not give the employee ample warning
that he may be terminated for his infractions, only
that he is being suspended for them. The notice
must sufficiently apprise the employee of the
instances or for which he is to be terminated, and
he must not have already been punished for
these (ex. with suspension) (Erector v. NLRC,
G.R. No. 167218, 2010)
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C. TERMINATION BY EMPLOYEE
Termination by employee may be split into
(Labor Code, Art. 300):
WITH NOTICE: Termination without Just
Cause
1. At least 1month prior notice
2. Acceptance by the employer is necessary
3. Employee may be held liable for damages for
failure to give notice
WITHOUT NOTICE: Termination with Just
Cause
1. Grounds
a. Serious insult on the honor and person of
employee by the employer or his
representative
b. Inhumane and unbearable treatment
accorded to the employee
c. Commission of a crime against person of
the employee or any of the immediate
members of his family
d. Other causes analogous to the foregoing
2. Notice not necessary when resignation is with
just cause.
RESIGNATION VERSUS CONSTRUCTIVE
DISMISSAL
Resignation
Resignation is the voluntary act of an employee
who finds himself in a situation where he believes
that personal reasons cannot be sacrificed in
favor of the exigency of the service, such that he
has no other choice but to disassociate himself
from his employment. (Cervantes v. PAL
Maritime Corp., G.R. No. 175209, 2013)
To constitute a resignation, it must be
unconditional and with the intent to operate as
such. There must be an intention to relinquish a
portion of the term of office accompanied by an
act of relinquishment. (Azcor Manufacturing Inc.
v. NLRC, G.R. No. 117963, 1999)
Resignation is inconsistent with the filing of a
complaint for illegal dismissal. (Blue Angel
LABOR LAW
Manpower and Security Services Inc. v Court of
Appeals, G.R. No. 161196 2008)
The rule requiring an employee to stay or
complete the 30-day period prior to the effectivity
of his resignation becomes discretionary on the
part of management as an employee who intends
to resign may be allowed a shorter period before
his resignation becomes effective. (Hechanova
Bugay Vilchez Lawyers v. Matorre, G.R. No.
198261 2013)
Stipulations providing that either party may
terminate a contract even without cause are
legitimate if exercised in good faith. Thus, while
either party has the right to terminate the contract
at will, it cannot not act purposely to injure the
other. The monetary award provided in Section
10 of R.A. 8042 applies only to an illegally
dismissed overseas contract worker or a worker
dismissed from overseas employment without
just, valid or authorized cause as defined by law
or contract. It finds no application to cases in
which the OFW was not illegally dismissed.
(GBMLT Manpower Services vs Malinao, G.R.
No. 189262, 2015)
Constructive Dismissal
1. No formal dismissal
2. The employee is placed in a situation by the
employer such that his continued
employment has become UNBEARABLE
Forced resignation.
Constructive dismissal exists when an act of
clear discrimination, insensibility or disdain on the
part of the employer has become so unbearable
as to leave an employee with no choice but to
forego continued employment.
Constructive dismissal occurs when:
1. Continued employment is rendered
impossible or unreasonable, resulting in an
involuntary resignation
2. Demotion in rank or diminution in pay
3. Forced resignation to make it appear that no
termination by the employer was done
(Leonardo v. NLRC, G.R. No. 125303, June
16, 2000)
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Test of Constructive dismissal: whether or not
a reasonable person in the employee’s position
would feel the need to give up his position
Note: Abandonment is incompatible with
constructive dismissal.
It is the inherent prerogative of an employer to
transfer and reassign its employees to meet the
requirements of its business. Be that as it may,
the prerogative of the management to transfer its
employees must be exercised without grave
abuse of discretion. The exercise of the
prerogative should not defeat an employee's right
to security of tenure. The employer’s privilege to
transfer its employees to different workstations
cannot be used as a subterfuge to rid itself of an
undesirable worker. (Veterans Security Agency v.
Vargas, G.R. No. 159293, 2005)
Instances of Constructive Dismissal
1. There may be constructive dismissal if an act
of an employer becomes so unbearable on
the part of the employee that it could foreclose
any choice by him except to forego his
continued employment (Hyatt Taxi Services v.
Catinoy, G.R. No. 143204, 2001)
2. Continued employment is rendered
impossible or unreasonable, resulting in an
involuntary resignation;
3. Demotion in rank or diminution in pay;
4. Forced resignation to make it appear that no
termination by the employer was done;
(Leonardo v. NLRC, G.R. No. 125303, 2000)
5. After the 30-day period of preventive
suspension, the employee must be reinstated
to his former position because suspension
beyond this maximum period amounts to
constructive dismissal (Hyatt Taxi Services v.
Catinoy, supra);
6. Floating status of a security guard if it lasts for
more than 6 months (Emeritus Security and
Maintenance Systems v. Dailig, G.R. No.
204761, 2014)
Note: It is manifestly unfair and unacceptable to
declare the mere lapse of the six-month period of
floating status as a case of constructive dismissal
LABOR LAW
without looking into the peculiar circumstances
that resulted in the security guard’s failure to
assume another post (Exocet Security and Allies
Services Corp v. Serrano, G.R. no. 198538,
2014)
Jurisprudence: Resignation
Forced resignation must be substantiated by
more than mere threats and allegations.
(Mandapat v. AddForce Personnel Services, Inc.,
G.R. No. 180285, 2010)
A threat to sue the employee will not amount to
forced resignation, as this is a legal act which
will be decided by a competent authority.
(Callanta v. NLRC, G.R. No. 105083, 1993)
A choice between investigation and resignation is
not illegal. (Belaunzaran v. NLRC, G.R. 120038,
1996)
An employee who tenders her voluntary
resignation, accepts separation pay and benefits
cannot claim constructive dismissal. (Concrete
Aggregates v. NLRC, G.R. No. 82458, 1989)
An employee may be considered constructively
dismissed and at the same time legally
dismissed, as when a complaint for sexual abuse
is proven in the NLRC. This will amount to a
termination with just cause but without due
process (see the Agabon doctrine above).
(Formantes v. Duncan Pharmaceuticals Inc.,
G.R. No. 170661, 2009)
D. RETIREMENT
The result of a bilateral act of the parties, a
voluntary agreement between the employer and
the employee whereby the latter, after reaching a
certain age agrees to sever his or her
employment with the former. (Jaculbe v. Siliman
University, G.R. No. 156934, 2007)
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Retroactive Effect of Retirement Laws
1. The claimant for retirement benefits was still
in the employ of the employer at the time the
statute took effect; and
2. The claimant had complied with the
requirements for eligibility for such retirement
benefits under the statute (URC v. Caballeda,
G.R. No. 156644, 2008)
Eligibility
General Rule: All employees in the private
sector, regardless of their position, designation,
or status, and irrespective of the method by which
their wages are paid (IRR R.A. No. 7641, Sec. 1)
Exceptions:
1. Employees covered by the Civil Service Law;
2. Domestic Helpers and Persons in the
Personal Service of Another; and
3. Employees in Retail, Service, and Agricultural
Establishments or Operations Regularly
Employing Not More Than 10 Employees
(IRR R.A. No. 7641, Sec. 2)
Exclusions from coverage
R.A. No. 7641, "The Retirement Pay Law," only
applies in a situation where:
1. There is no collective bargaining agreement
or other applicable employment contract
providing for retirement benefits for an
employee; or
2. There is a collective bargaining agreement or
other applicable employment contract
providing for retirement benefits for an
employee, but it is below the requirements set
for by law.
The reason for the first situation is to prevent the
absurd situation where an employee, who is
otherwise deserving, is denied retirement
benefits by the nefarious scheme of employers in
not providing for retirement benefits for their
employees. The reason for the second situation
is expressed in the Latin maxim pacta private juri
public derogare non possunt. Private contracts
cannot derogate from the public law. (Oxales vs
Unilab, G.R. No. 152991, 2008)
LABOR LAW
Age of retirement
Optional retirement: In the absence of a
retirement plan or other applicable agreement
providing for retirement benefits of employees in
an establishment, an employee may retire upon
reaching the age of 60 or more if he has served
for at least 5 years in said establishment.
Compulsory retirement: In the absence of a
retirement plan or other applicable agreement
providing for retirement benefits of EEs in an
establishment, an EE shall be retired at the age
of 65 years. (IRR R.A. No. 7641, Sec. 4)
May the optional and compulsory retirement
ages be lowered?
1. Written policy – such as in the CBA
(Pantranco North Express v. NLRC & U.
Suniga, G.R. No. 95940, 1996); or
2. Assented to by the employees (Jaculbe v.
Silliman University, G.R. No. 156934, 2007)
Nature of employees’ assent
The employees’ assent may be evidenced by
silence. (Obusan v. PNB, G.R. No. 181178, 2010)
However, in another case, the Supreme Court
ruled that acceptance by the employees of an
early retirement age option must be explicit,
voluntary, free, and uncompelled. (Cercado v.
Uniprom, Inc., G.R. No. 188154, 2010)
Note: Obusan was decided by the Supreme
Court in division on July 26, 2010, while Cercado
was decided also in division on October 13, 2010.
Extension of Service of Retiree
The matter of extension of service of such
employee or official is addressed to the sound
discretion of the employer. (UST Faculty Union v.
NLRC, G.R. No. 89885, 1990)
Retirement Age for Underground and Surface
Mine Workers
For underground and surface mine workers, the
optional retirement age is 50, while the
mandatory retirement age is now 60. (R.A. No.
10757, Sec. 2)
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Amount of Retirement Pay
The minimum retirement pay shall be equivalent
to one-half (1/2) month salary for every year of
service, a fraction of at least six (6) months being
considered as one whole year.
For the purpose of computing retirement pay,
“one-half month salary” shall include all of the
following:
1. Fifteen (15) days salary based on the latest
salary rate;
2. Cash equivalent of five (5) days of service
incentive leave; 

3. One-twelfth (1/12) of the 13th month pay.
(1/12 x 365/12 = .083 x 30.41 = 2.52 days) 
 contribute to a retirement fund pursuant to the
Total: 22.5 days
Thus, “one-half month salary” is equivalent to
22.5 days. (Capitol Wireless, Inc. vs Sec.
Confessor, G.R. No. 117174, 1996; Rogelio
Reyes v. NLRC, G.R. No. 160233, 2007)
Other benefits may be included in the
computation of the retirement pay upon
agreement of the ER and the EE or if provided in
the CBA.
Retirement pay under RA 7641 vis-à-vis
retirement benefits under SSS and GSIS laws
RA 7641 mandates payment of retirement
benefits. All private sector employees regardless
of their position, designation or status and
irrespective of the method by which their wages
are paid are entitled to retirement benefits upon
compulsory retirement at the age of sixty-five (65)
or upon optional retirement at sixty (60) or more
but not 65. The minimum retirement pay due
covered employees shall be equivalent to one-
half month salary for every year of service, a
fraction of at least six (6) months being
considered as one whole year. The benefits
under this law are other than those granted by
the SSS or the GSIS.
LABOR LAW
Retirement Benefits under a CBA or
Applicable Contract
Any employee may retire or be retired by his/her
employer upon reaching the age established in
the CBA or other applicable agreement/contract
and shall receive the retirement benefits granted
therein; provided, however, that such retirement
benefits shall not be less than the retirement pay
required under R.A. No. 7641, and provided
further that if such retirement benefits under the
agreement are less, the employer shall pay the
difference.
Where both the employer and the employee
applicable agreement, the employer’s total
contributions and the accrued interest thereof
should not be less than the total retirement
benefits to which the employee would have been
entitled had there been no such retirement
benefits’ fund. If such total portion from the
employer is less, the employer shall pay the
deficiency.
Retirement Benefits of Workers Who Are Paid
By Results
For covered workers who are paid by result and
do not have a fixed monthly salary rate, the basis
for the determination of the salary for 15 days
shall be their average daily salary (ADS). The
ADS is derived by dividing the total salary or
earning for the last 12 months reckoned from the
date of retirement by the number of actual
working days in that particular period, provided
that the determination of rates of payment by
results are in accordance with established
regulations. (Rules Implementing R.A. No. 7641,
Sec. 5.3)
Retirement Benefit of Part-Time Workers
Part-time workers are also entitled to retirement
pay of “one-month salary” for every year of
service under RA 7641 after satisfying the
following conditions precedent for optional
retirement:
1. There is no retirement plan between the
employer and the employee; and
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2. The employee should have reached the age
of 60 years, and should have rendered at least
5 years of service with the employer.
The components of retirement benefit of part-
time workers may likewise be computed at least
in proportion to the salary and related benefits
due them. (DOLE Handbook on Workers’
Statutory Monetary Benefits, 2014 ed.)
Taxability
General Rule: Any provision of law to the
contrary notwithstanding, the retirement benefits
received by officials and employees of private
firms, whether individual or corporate, in
accordance with a reasonable private benefit plan
maintained by the employer shall be exempt from
all taxes and shall not be liable to attachment,
garnishment, levy or seizure by or under any legal
or equitable process whatsoever (Intercontinental
Broadcasting Corp. (IBC) v. Amorilla, G.R. No.
162775, 2006)
Exception: Except to pay a debt of the official or
employee concerned to the private benefit plan or
that arising from liability imposed in a criminal
action.
Additional conditions
1. The benefit plan must be approved by the
Bureau of Internal Revenue;
2. The retiring official or employee has been in
the service of the same employer for at least
ten (10) years and is not less than fifty years
of age at the time of his retirement;
3. The retirement benefits shall be availed of by
an official or employee only once; and, 
 the employer. (Aquino v. NLRC & Otis Elevator,
4. In case of separation of an official or
employee from the service of the employer
due to death, sickness or other physical
disability or for any cause beyond the control
of the said official or employee, any amount
received by him or by his heirs from the
employer as a consequence of such
separation shall likewise be exempt as
hereinabove provided. 
 Benefit
LABOR LAW
Reasonable private benefit plan
A pension, gratuity, stock bonus or profit sharing
plan maintained by an employer for the benefit of
some or all of his officials and employees,
wherein contributions are made by such
employer or officials and employees, or both, for
the purpose of distributing to such officials and
employees the earnings and principal of the fund
thus accumulated, and wherein it is provided in
said plan that at no time shall any part of the
corpus or income of the fund be used for, or be
diverted to, any purpose other than for the
exclusive benefit of the said officials and
employees.
Retirement Benefits and Separation Pay May
be Simultaneously Granted; When Not
Granted
Yes. (University of the East v. UE Faculty
Association, G.R. No. 74007, 1987)
Separation pay is required in the cases
enumerated in Articles [298] and [299] of the
Labor Code. It is a statutory right designed to
provide the employee with the wherewithal during
the period that he is looking for another
employment.
Retirement benefits, where not mandated by
law, may be granted by agreement of the
employees and their employer or as a voluntary
act on the part of the employer. Retirement
benefits are intended to help the employee enjoy
the remaining years of his life, lessening the
burden of worrying for his financial support, and
are a form of reward for his loyalty and service to
G.R. No. 87653, 1992)
However: Company policy or CBA may make
separation pay and retirement benefits mutually
exclusive. (Aquino v. NLRC & Otis Elevator, G.R.
No. 87653, 1992)
Gratuity Pay distinguished from Retirement
Gratuity Pay is paid to the beneficiary for the past
services or favor rendered purely out of the
generosity of the giver or grantor. Gratuity,
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therefore, is not intended to pay a worker for

actual services rendered or for actual
performance. It is a money benefit or bounty
given to the worker, the purpose of which is to
reward employees who have rendered
satisfactory service to the company.
Retirement Benefits are intended to help the
employee enjoy the remaining years of his life,
releasing him from the burden of worrying for his
financial support, and are a form of reward for his
loyalty to the employer. (Sta. Catalina College v.
NLRC and Tercero, G.R. No. 144483, 2003)

———— end of topic ————

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MANAGEMENT
PREROGATIVE
Labor Law
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MANAGEMENT PREROGATIVE
TOPIC OUTLINE UNDER THE SYLLABUS
A. DISCIPLINE
B. TRANSFER OR EMPLOYEES
C. PRODUCTIVITY STANDARDS
D. BONUS
E. CHANGE OF WORKING HOURS
F. BONA FIDE OCCUPATIONAL
QUALIFICATIONS
G. POST-EMPLOYMENT RESTRICTIONS
H. MARRIAGE BETWEEN EMPLOYEES
OF COMPETITOR-EMPLOYERS
LABOR LAW
Overview of Management Prerogative
The law in protecting the rights of the employees
authorizes neither oppression nor self-destruction
of the employer. It should be made clear that
when the law tilts the scale of justice in favor of
labor, it is but a recognition of the inherent
economic inequality between labor and
management. Never should the scale be so tilted
if the result is an injustice to the employer.
(Panuncillo v. CAP, G.R. No. 161305, 2007)
General Rule: An employer is free to regulate,
according to his own discretion and judgment, all
aspects of employment, including 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, work
supervision, lay-off of workers and the discipline,
dismissal and recall of workers (Peckson v.
Robinson’s Supermarket Corporation, G.R. No.
198534, 2013)
Limits to Management Prerogative
1. Good Faith
So long as a company’s management
prerogatives are exercised in good faith for the
advancement of the employer’s interest and not
for the purpose of defeating or circumventing the
rights of the employees under special laws or
under valid agreements, this Court will uphold
them. Even as the law is solicitous of the welfare
of the employees, it must also protect the right of
an employer to exercise what are clearly
management prerogatives. The free will of
management to conduct its own business affairs
to achieve its purpose cannot be denied.
(Ymbong v. ABS-CBN, G.R. No. 184885, 2012)
2. Grave abuse of discretion
The managerial prerogative to transfer personnel
must be exercised without grave abuse of
discretion, bearing in mind the basic elements of
justice and fair play. Having the right should not
be confused with the manner in which the right is
exercised. (Tinio v. CA, G.R. No. 171764, 2007)
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3. Law
A pharmaceutical company defended its
termination of rank and file employees during a
bargaining deadlock, as an exercise of
management prerogative. This was after the
Labor Secretary had assumed jurisdiction over
the dispute and enjoined the parties from “any
acts which might exacerbate the situation.”
The Court disagreed with the company’s defense,
stating that the privilege is not absolute but
subject to limitations imposed by law. In this case,
it is limited by Sec. 236(g), which gives the
Secretary the power to assume jurisdiction and
resolve labor disputes involving industries
indispensable to national interest.
The company’s management prerogatives are
not being unjustly curtailed but duly tempered by
the limitations set by law, taking into account its
special character and the particular
circumstances in the case at bench. (Metrolab
Industries, Inc. v. Roldan-Confesor, G.R. No.
108855, 2013)
4. Collective Bargaining
The CBA provisions agreed upon by the
Company and the Union delimit the free exercise
of management prerogative. The parties in a CBA
may establish such stipulations, clauses, terms
and conditions as they may deem convenient
provided these are not contrary to law, morals,
good customs, public order or public policy.
Where the CBA is clear and unambiguous, it
becomes the law between the parties and
compliance therewith is mandated by the express
policy of the law. (Goya v. Goya Employees
Union-FFW, G.R. No. 170054, 2013)
5. Equity and/or Substantial Justice
The Court recognized the inherent right of the
employer to discipline its employees but it should
still ensure that the employer exercises the
prerogative to discipline humanely and
considerately, and that the sanction imposed is
commensurate to the offense involved and to the
degree of the infraction. The discipline exacted by
the employer should further consider the
employee’s length of service and the number of
LABOR LAW
infractions during his employment. (Dongon v.
Rapid Movers and Forwarders Co., G.R. No.
163431, 2013)
The exercise of management prerogatives is not
unlimited. A line must be drawn between
management prerogatives regarding business
operations per se and those which affect the
rights of employees. In treating the latter,
management should see to it that its employees
are at least properly informed of its decisions and
modes of action. (PAL v. NLRC, G.R. No. 85985,
1993)
The law on unfair labor practices is not intended
to deprive the employer of his fundamental right
to prescribe and enforce such rules as long as it
is not exercised in violation of the Act and its
several prohibitions.
Where, however, an employer does violate the
Act and is found guilty of the commission of an
unfair labor practice, it is no excuse that his
conduct was unintentional and innocent.
A. DISCIPLINE
Management has the prerogative to discipline its
employees and to impose appropriate penalties
on erring workers, pursuant to company rules and
regulations (Artificio v. NLRC, G.R. No. 172988,
2010)
Although the right of employers to shape their
own work force, is recognized, this management
prerogative must not curtail the basic right of
employees to security of tenure. (Alert Security
Investigation Agency v. Saidali Pasawilan, G.R.
No. 182397 (2011)
B. TRANSFER OF EMPLOYEE
An employee’s right to security of tenure does not
give him such a vested right in his position as
would deprive the company of its prerogative to
change his assignment or transfer him where he
will be most useful.
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The employer has the right to transfer or assign
employees from one area of operation to another,
or one office to another or in pursuit of its
legitimate business interest, Provided there is no
demotion in rank or diminution of salary, benefits
and other privileges and not motivated by
discrimination or made in bad faith, or effected as
a form of punishment or demotion without
sufficient cause. (Westin Phil. Plaza Hotel v.
NLRC, G.R. No. 121621, 1999)
When the transfer is not unreasonable, or
inconvenient, or prejudicial to the employee, and
it does not involve a demotion in rank or
diminution of salaries, benefits, and other
privileges, the employee may not complain that it
amounts to a constructive dismissal. (Bisig ng
Manggagawa sa TRYCO v. NLRC, G.R. No.
151309, 2008)
It is management prerogative for employers to
transfer employees on just and valid grounds
such as genuine business necessity. (William
Barroga v. Data Center College of the
Philippines, G.R. No. 174158, 2011)
Re-assignments made by management pending
investigation of irregularities allegedly committed
by an employee fall within the ambit of
management prerogative. The purpose of
reassignments is no different from that of
preventive suspension which management could
validly impose as a disciplinary measure for the
protection of the company's property pending
investigation of any alleged malfeasance or
misfeasance committed by the employee. (Ruiz
v. v. Wendel Osaka Realty, G.R. No. 189082,
2012)
In cases of a transfer of an employee, the
employer is charged with the burden of proving
that its conduct and action are for valid and
legitimate grounds such as genuine business
necessity and that the transfer is not
unreasonable, inconvenient or prejudicial to the
employee. If the employer cannot overcome this
burden of proof, the employee’s transfer shall be
tantamount to unlawful constructive dismissal.
LABOR LAW
(Jonathan Morales v. Harbor Centre Port
Terminal, G.R. No. 174208, 2012)
C. PRODUCTIVITY STANDARDS
The employer has the right to demote and
transfer an employee who has failed to observe
proper diligence in his work and incurred habitual
tardiness and absences and indolence in his
assigned work. (Petrophil Corporation v. NLRC,
G.R. No. L-64048, 1986)
As a general concept, “poor performance” is
equivalent to inefficiency and incompetence in
the performance of official duties. Under Art. 282
of the Labor Code, an unsatisfactory rating can
be a just cause for dismissal only if it amounts to
gross and habitual neglect of duties. Thus, the
fact that an employee’s performance is found to
be poor or unsatisfactory does not necessarily
mean that the employee is grossly and habitually
negligent of his duties. Gross negligence implies
a want or absence of or failure to exercise slight
care of diligence, or the entire absence of care. It
evinces a thoughtless disregard of consequences
without exerting any effort to avoid them.
(Universal Staffing Services, Inc. vs. NLRC, G.R.
No. 177576, 2008)
The imposition of productivity standards is an
allowable exercise of company rights. An
employer is entitled to impose productivity
standards for its workers and non-compliance
may be visited with a penalty even more severe
than demotion. (Leonardo v. NLRC, G.R. No.
125303, 2000)
D. BONUS
The granting of bonus is a management
prerogative, something given in addition to what
is ordinarily received by or strictly due the
recipient. (Producers Bank of the Philippines v.
NLRC, G.R. No. 100701, 2001)
There is unfair and unjust discrimination in the
granting of salary adjustments where the
evidence shows that
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1. The management paid the employees
of the unionized branch;
2. Salary adjustments were granted to
employees of one of its non - unionized
branches although it was losing in its
operations; and
3. The total salary adjustments given
every ten of its unionized employees
would not even equal to the salary
adjustments given to one employee in
the non – unionized branch. (Manila
Hotel Company v. Pines Hotel
Employees Association(CUGCO) and
CIR, G.R. No. L-30818, 1972)
Bonus in the CBA
Generally, a bonus is not a demandable and
enforceable obligation. For a bonus to be
enforceable, it must have been promised by the
employer and expressly agreed upon by the
parties. Given that the bonus in this case is
integrated in the CBA, the same partakes the
nature of a demandable obligation. Verily, by
virtue of its incorporation in the CBA, the
Christmas bonus due to respondent Association
has become more than just an act of generosity
on the part of the petitioner but a contractual
obligation it has undertaken. (Lepanto Ceramics
v. Lepanto Ceramics Employees Association,
G.R. No. 180866, March 2, 2010)
A bonus, however, becomes a demandable or
enforceable obligation when it is made part of the
wage or salary or compensation of the employee.
In the case at bench, it is indubitable that ETPI
and ETEU agreed on the inclusion of a provision
for the grant of 14th, 15th and 16th month
bonuses in the 1998-2001 CBA Side Agreement.
(Eastern Telecoms v. Eastern Telecoms
Employees Union, February 8, 2012)
E. CHANGE OF WORKING HOURS
Management retains the prerogative, whenever
exigencies of the service so require, to change
the working hours of its employees. So long as
such prerogative is exercised in good faith for the
LABOR LAW
advancement of the employer’s interest and not
for the purpose of defeating or circumventing the
rights of the employees under special laws or
under valid agreements, this Court will uphold
such exercise. (Sime Darby Pilipinas, Inc. v.
NLRC, G.R. No. 119205, 1998)
Except as limited by special laws, an employer is
free to regulate, according to his own discretion
and judgment, all aspects of employment,
including 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, work supervision, lay-off of workers
and discipline, dismissal and recall of workers.
(San Miguel Brewery v. Ople, G.R. No. L-53515,
1989)
F. BONA FIDE OCCUPATIONAL
QUALIFICATIONS
Employment in particular jobs may not be limited
to persons of a particular sex, religion, or national
origin UNLESS, the employer can show that sex,
religion, or national origin is an actual qualification
for performing the job. The qualification is called
a bona fide occupational qualification (BFOQ).
BFOQ is valid "provided it reflects an inherent
quality reasonably necessary for satisfactory job
performance."
Weight standards of PAL show its effort to comply
with the exacting obligations imposed upon it by
law by virtue of being a common carrier. On board
an aircraft, the body weight and size of a cabin
attendant are important factors to consider in
case of emergency. The job of a cabin attendant
during emergencies is to speedily get the
passengers out of the aircraft safely. Being
overweight necessarily impedes mobility. Indeed,
in an emergency situation, seconds are what
cabin attendants are dealing with, not minutes.
Hence, separation from service for failure to meet
weight standards of PAL is justified. (Yrasuegi v.
PAL, G.R. No. 168081)
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G. POST-EMPLOYMENT RESTRICTIONS
A post-retirement competitive employment
restriction is designed to protect the employer
against competition by former employees who
may retire and obtain retirement or pension
benefits and, at the same time, engage in
competitive employment. (Rivera v. Solidbank,
G.R. No. 163269, 2006)
Petitioner retired under the Special Retirement
Program and received P963,619.28 from
respondent. However, petitioner is not
proscribed, by waiver or estoppel, from assailing
the post-retirement competitive employment ban
since under Article 1409 of the New Civil Code,
those contracts whose cause, object or purpose
is contrary to law, morals, good customs, public
order or public policy are inexistent or void from
the beginning. Estoppel cannot give validity to an
act that is prohibited by law or to one that is
against public policy. (Rivera v. Solidbank, G.R.
No. 163269, 2006)
Respondent, as employer, is burdened to
establish that a restrictive covenant barring an
employee from accepting a competitive
employment after retirement or resignation is not
unreasonable or oppressive, or not an undue or
unreasonable restraint of trade, thus,
unenforceable for being repugnant to public
policy. (Rivera v. Solidbank, G.R. No. 163269,
2006)
Two principal grounds on which the doctrine
is founded that a contract in restraint of trade
is void as against public policy.
1. The injury to the public by being deprived of
the restricted party’s industry; and
2. The injury to the party himself by being
precluded from pursuing his occupation, and
thus being prevented from supporting himself
and his family.
In cases where an employee assails a contract
containing a provision prohibiting him or her from
accepting competitive employment as against
public policy, the employer has to adduce
evidence to prove that the restriction is
LABOR LAW
reasonable and not greater than necessary to
protect the employer’s legitimate business
interests. The restraint may not be unduly harsh
or oppressive in curtailing the employee’s
legitimate efforts to earn a livelihood and must be
reasonable in light of sound public policy.
In determining whether the contract is
reasonable or not, the trial court should
consider the following factors:
1. Whether the covenant protects a legitimate
business interest of the employer;
2. Whether the covenant creates an undue
burden on the employee;
3. Whether the covenant is injurious to the
public welfare;
4. Whether the time and territorial limitations
contained in the covenant are reasonable;
and
5. Whether the restraint is reasonable from the
standpoint of public policy. (Rivera v.
Solidbank Corporation, G.R. No. 163269,
2006)
H. MARRIAGE BETWEEN EMPLOYEES OF
COMPETITOR-EMPLOYERS
It is unlawful for an employer to require as a
condition of employment or continuation of
employment that:
1. A woman employee shall not get married, or
2. To stipulate expressly or tacitly that upon
getting married a woman employee shall be
deemed resigned or separated; or
3. To actually dismiss, discharge, discriminate
or otherwise prejudice a woman employee
merely by reason of her marriage. (Labor
Code, Art. 136)
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. (Philippine
Telegraph and Telephone Company v. NLRC,
G.R. No. 118978, 1997)
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The following policies were struck down as invalid
for violating the standard of reasonableness
which is being followed in our jurisdiction, called
the “Reasonable Business Necessity Rule”: 
 termination
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. 
 families. Indeed, it goes against normal and
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.” (Star
Paper Corp. v. Simbol, Comia and
Estrella, G.R. No. 164774, 2006)
In this case, the prohibition against marriage
embodied in the following stipulation in the
employment contract was held valid: 
 ———— end of topic ————
“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.”
Prohibition against Pregnancy
Respondents were constructively dismissed.
Hence, their termination was illegal. The
of respondents' employment
happened when they were pregnant and
expecting to incur costs on account of child
delivery and infant rearing. Pregnancy is a time
when they need employment to sustain their
reasonable human behavior to abandon one's
livelihood in a time of great financial need. It is
clear that respondents intended to remain
employed with Saudia. All they did was avail of
their maternity leaves. Evidently, the very nature
of a maternity leave means that a pregnant
employee will not report for work only temporarily
and that she will resume the performance of her
duties as soon as the leave allowance expires.
(Saudia v. Rebesencio, G.R. No. 198587,
January 14, 2015)

SC 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. (Duncan
Ass’n of Detailman-PTGWO v. Glaxo Welcome
Philippines, G.R. No. 162994, 2004)

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 JURISDICTION
AND REMEDIES
Labor Law
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JURISDICTION AND REMEDIES
A. LABOR ARBITER
I. Jurisdiction of the Labor Arbiter
as distinguished from the
Regional Director
II. Requirements to perfect appeal
to National Labor Relations
Commission
III. Reinstatement and/or execution
pending appeal
B. NATIONAL LABOR RELATIONS
COMMISSION
C. COURT OF APPEALS
D. SUPREME COURT
E. BUREAU OF LABOR RELATIONS
F. NATIONAL CONCILIATION AND
MEDIATION BOARD
I. Jurisdiction
II. Conciliation as distinguished
from mediation
III. Preventive mediation
G. DEPARTMENT OF LABOR AND
EMPLOYMENT REGIONAL
DIRECTORS
I. Jurisdiction
II. Recovery and adjudicatory
power
H. DEPARTMENT OF LABOR AND
EMPLOYMENT SECRETARY
I. Jurisdiction
II. Visitorial and enforcement
powers
III. Power to suspend effects of
termination
IV. Remedies
I. VOLUNTARY ARBITRATOR
I. Jurisdiction
II. Remedies
J. PRESCRIPTION OF ACTIONS
I. Money claims
II. Illegal dismissal
III. Unfair labor practice
IV. Offenses under the Labor Code
V. Illegal recruitment
A. LABOR ARBITER
I. JURISDICTION OF THE LABOR ARBITER
AS DISTINGUISHED FROM THE REGIONAL
DIRECTOR
In order that the causes of action under Art.
224(a) may prosper (and inferentially, in order
that a LA can exercise jurisdiction over cases
thereon), an indispensable precondition must be
met – the prior existence of an EER between the
parties. (Palomado v. NLRC, (G.R. No. 96520,
1996)
A money claim arising from employer-employee
relations, except SSS, ECC/Medicare claims, is
within the jurisdiction of:
Labor Arbiter Regional Director
Claim, regardless of Money claim is not
amount, is accompanied by
accompanied with a reinstatement AND
claim of
reinstatement; or Claim does not
exceed P5,000
Claim exceeds (Labor Code, Art.
P5,000, whether or 129)
not there is a claim
for reinstatement. 

Jurisdiction over Contested Cases Forwarded
from Regional Director to Labor Arbiter
5. The employer contests the findings of the
labor regulations officer and raises issues
thereon;
6. In order to resolve such issues, there is a
need to examine evidentiary matters; and
7. Such matters are not verifiable in the normal
course of inspection.
If all requisites are present, the labor standard
case falls under the exception clause under Art.
128(b), and the RD will need to endorse the case
to the appropriate LA (Ex-Bataans Veterans
Security Agency v. Secretary, G.R. No. 162396,
2007)

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JURISDICTION OF THE LABOR ARBITER
(1) ULP (PRIORITY, RESOLVED WITHIN 30
CALENDAR DAYS FROM SUBMISSION FOR
DECISION)
The LA has jurisdiction over the civil aspect of
ULP. The criminal aspect is lodged with the
regular courts. (Labor Code, Art. 258)
Violations of the CBA are not ULP unless the
same are gross violations. (Labor Code, Art. 274)
The test of whether an employer has interfered
with and coerced employees within the meaning
of Art. 259 (a) is whether the employer has
engaged in conduct which it may reasonably be
said tends to interfere with the free exercise of an
employee’s rights, and it is not necessary that
there be direct evidence that any employee was
in fact intimidated or coerced by statements of
threats of the employer if there is a reasonable
inference that anti-union conduct of the employer
does not have an adverse effect on self-
organization and collective bargaining.
(Francisco Labor Laws, 1956, Vol. II p 323)
(2) TERMINATION DISPUTES
Resolving Questions of Jurisdiction Between
Labor Arbiter and Voluntary Arbitrator
General Rule: Complaints for illegal dismissal
are within the original and exclusive jurisdiction of
the LA.
Exception: The parties may submit the question
of termination to voluntary arbitration but this
must be expressed in unequivocal language in
their CBA. (Ace Navigation Co. v. Fernandez,
G.R. No. 197309, 2012)
Termination of Corporate Officers
The LA has jurisdiction over the termination of
corporate employees.
The RTC acting as a Special Commercial Court
has jurisdiction over termination of corporate
officers.
LABOR LAW
A person is a corporate officer if:
(a) The creation of the position is under the
corporation’s charter or specifically
mentioned in the by-laws as a corporate
officer position; and
(b) The election of the officer is by the
directors or stockholders.
The better policy in determining which body has
jurisdiction over a case would be to consider not
only the status or relationship of the parties but
also the nature of the question that is the subject
of their controversy. (Matling v. Coros, G.R. No.
157802, 2010)
However: In Prudential Bank v. Reyes (G.R. No.
141093, 2001), it was held that an employee who
rose from the ranks is a regular employee and not
a mere corporate officer.
(3) CLAIMS FOR WAGES, RATES OF PAY,
HOURS OF WORK AND OTHER TERMS AND
CONDITIONS OF EMPLOYMENT – IF
ACCOMPANIED WITH A CLAIM FOR
REINSTATEMENT
The LA has jurisdiction to award not only the
reliefs provided by labor laws, but also damages
governed by the Civil Code. The employee need
only include his claim for damages in the illegal
dismissal suit filed with the LA. (Kawachi v. Del
Quero, G.R. No. 163738, 2007)
(4) CLAIMS FOR ACTUAL, MORAL,
EXEMPLARY AND OTHER FORMS OF
DAMAGES ARISING FROM EER
(5) CASES ARISING FROM PROHIBITED
ACTIVITIES DURING STRIKES, INCLUDING
QUESTIONS INVOLVING THE LEGALITY OF
STRIKES AND LOCKOUTS
LA vs. DOLE Secretary/NLRC Jurisdiction
General Rule: LA has jurisdiction (NCMB Primer
on Strike, Picketing, and Lockout, No. 22)
Exception: In labor disputes involving industries
indispensable to the national interest, the DOLE
Secretary (if there is an assumption of
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jurisdiction) or NLRC (if certified by the Secretary)
has jurisdiction.
Industries Indispensable to the National
Interest
(c) Hospital sector;
(d) Electric power industry;
(e) Water supply services, to exclude small
water supply services such as bottling
and refilling stations;
(f) Air traffic control; and
(g) Such other industries as may be
recommended by the National Tripartite
Industrial Peace Council.
(6) ALL OTHER CLAIMS ARISING FROM EER
INVOLVING AN AMOUNT EXCEEDING P,5000
REGARDLESS OF WHETHER ACCOMPANIED
BY A CLAIM FOR REINSTATEMENT EXCEPT
CLAIMS FOR ECC, SSS, MEDICARE, &
MATERNITY BENEFITS
Monetary claims arising from EER which do not
exceed Php5,000 fall within the jurisdiction of the
DOLE Regional Director. (LC, Art. 129)
NOTE: A kasambahay’s claim, regardless of the
amount, falls within the jurisdiction of the DOLE
Regional Office, and not the NLRC. (Batas
Kasambahay, Sec. 37)
Art. 306 provides that “all money claims arising
from EER shall be filed within 3 years from the
time the cause of action accrued, before the labor
arbiter.
But this prescriptive period is subject to
interruption through:
1. Filing of an action;
2. Written extrajudicial demand;
3. Written acknowledgement of indebtedness.
(IBC v. Panganiban, G.R. No. 151407, 2007)
A judgment in the form of a wage order for money
claims which has become final and executory
prescribes in 10 years, pursuant to Art. 1144 of
the Civil Code on prescription of judgments. (JK
Mercado & Sons v. Sto Tomas, G.R. No. 158084,
2008)
LABOR LAW
DOLE certification that all mandatory wage
increases and other monetary benefits were all
complied with by the employer is not sufficient
proof to conclude payment of the monetary
claims of the employee, especially if the
certification was issued based only on documents
submitted by the employer. (Dansart Security v.
Bagoy, G.R. No. 168495, 2010)
(7) WAGE DISTORTION CASES IN
UNORGANIZED ESTABLISHMENTS
Note: In Organized Establishments: The
Voluntary Arbitrator (VA) has jurisdiction
(8) ALL MONETARY CLAIMS OF OFWS
ARISING FROM EER 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 (RA 8042)
For the LA to have jurisdiction over money claims
of OFWs, a EER is not necessary, as the article
also refers to “law” or “contract.” (see Santiago v.
C.F. Sharp, G.R. No. 162419, 2007)
In order for the LA to assume jurisdiction over the
money claim, the OFC must have a certification
from the POEA (PNB v. Cabansag, G.R. No.
157010, 2005)
(9) ENFORCEMENT OF COMPROMISE
AGREEMENTS WHEN THERE IS NON-
COMPLIANCE BY ANY OF THE PARTIES
PURSUANT TO ART. 233 OF THE CODE (SEC.
1, RULE V, 2005 NLRC RULES)
Cooperatives
Termination of members of cooperatives is not
cognizable by the LA (members are not
employees)
LA has jurisdiction over illegal dismissal cases
involving employees of cooperatives
LA Does NOT Have Jurisdiction Over
1. Intra-corporate disputes
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2. Cases involving corporate officers (because
they are not employees);
3. Cases involving GOCCs with original
charters;
4. Cases involving entities immune from suit
(except when the entity performs proprietary
functions);
5. Local water districts (since they are quasi-
public corporations);
6. Actions based on tort;
7. Claim of a seaman for damages is under torts
(regular court has jurisdiction). (Tolosa v.
NLRC, G.R. No. 149578, 2003)
Money Claims: LA vs. VA’s Jurisdiction
8. Money claims arose from EER; and
9. Money claims arose from law or contracts
other than a CBA 
 NOTE: There is no appeal from the decision of
NOTE: EER is a jurisdictional requisite, absent of
which, the NLRC has no jurisdiction to hear and
decide the case. (Hawaiian-Philippine Company
v. Gulmatico, G.R. No. 106231, 1994)
MONEY CLAIMS
MONEY CLAIMS ARISE FROM EER
NOT ARISING BUT BY VIRTUE OF
FROM EER IMPLEMENTATION
OF CBA
Regular Courts have Voluntary Arbitrator
jurisdiction has jurisdiction
“Exclusive and Original” Jurisdiction subject
to Articles 274 and 275
Note: Subject to Assumption of Jurisdiction
A case under Art 224 may be lodged with the VA.
The policy of the law is to give primacy to
voluntary modes of settling dispute.
For the VA to have jurisdiction over a subject
matter under the LA’s jurisdiction (such as
termination disputes), the parties must express
this in unequivocal language in their CBA. (see
Ace Navigation Co. v. Fernandez, G.R. No.
197309, 2012)
LABOR LAW
Appeal of LA’s Decision
Appeal from the decision of the LA is brought by
ordinary appeal to the NLRC within 10 calendar
days from receipt of the decision. (Vir-jen
Shipping and Marine Services v. NLRC, G.R. No.
58011-12, 1982)
The 10-day period is reckoned from receipt by
counsel of the final decision, order or award. This
applies to both appeals from the LA to NLRC and
NLRC to CA. (Sy. v. Fairland Knitcraft, G.R. No.
182915, 2011)
This 10-day period is both mandatory and
jurisdictional in nature. (Charter Chemical &
Coating Corp v. Tan, G.R. No. 163891, 2009)
the NLRC. The only way to elevate the case to
the CA is by way of special civil action of
certiorari under Rule 65, Rules of Court.
From the ruling of the CA, it may be elevated to
the SC by petition for review on certiorari under
Rule 45 of the Rules of Civil Procedure. (St.
Martin Funeral Home v. NLRC, et al., G.R. No.
130866, 1998)
Grounds
1. Prima facie evidence of abuse of discretion on
the part of LA;
2. The decision, order or award was secured
through fraud or coercion including graft and
corruption;
3. Pure questions of law; and
4. Raised serious errors in the findings of facts
which could cause grave or irreparable
damage or injury to the appellant.
Additional Requirement: In case of judgment
involving a monetary award, employer (appellant)
may perfect the appeal of the LA’s decision only
upon the posting of a cash or surety bond
issued by a reputable bonding company duly
accredited by the NLRC in the amount equivalent
to the monetary award in the judgment appealed
from.
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Effect of self-executing order of reinstatement
on back wages
The law intends the award of backwages and
similar benefits to accumulate past the date of the
LA’s decision until the dismissed employee is
actually reinstated. (Siemens Philippines v.
Domingo, G.R. No. 150488, 2008)
However, if reinstatement is no longer possible,
backwages shall be computed from the time of
illegal dismissal until the date the decision
becomes final. (Javellana v. Belen, G.R. No.
181913 and 182158, 2010)
Note: If there was implementation of
reinstatement pending appeal, either through
actual or payroll reinstatement, and the employee
received his/her salary for the period of such
reinstatement, the said amount received shall be
deducted from the total amount of backwages
due the employee, assuming the final decision of
the case awarded backwages to the employee.
An employee who was dismissed on the ground
of AWOL due to incarceration, is entitled to
reinstatement and under the principle of “no work,
no pay”, his full backwages shall only commence
from the time he is refused work after acquittal.
(Standard Electric v. Standard Electric
employees Union, G.R. No. 166111, 2005)
Note: In contrast, the Supreme Court ruled in
Tomas Claudio Memorial College that an
employee’s imprisonment will not affect
entitlement to backwages. The award of
backwages is not conditioned on the employee's
ability or inability to, in the interim, earn any
income. (Tomas Claudio Memorial College v. CA,
G.R. 152568, February 16, 2004)
Determination of Employer’s Liability After
Finality of the Case
After finality of the case, the records will have to
be remanded to the LA to determine the actual
liability of the employer to each and every
employee. Both parties will have a chance to
submit further proof and argument in support of
their respective proposed computations.
LABOR LAW
For the guidance of the LA, as well as the parties,
jurisprudence had laid down the following
yardsticks in the computation of the final amount
of liability:
1. Employees who have been re – employed
without loss of seniority rights shall be paid
backwages but only up to actual
reinstatement;
2. Employees who have been re – employed as
new hires shall be restored their seniority and
other preferential rights. However, their
backwages shall be computed only to date of
actual re-hiring;
3. Employees who shall have reached
compulsory age of retirement shall receive
backwages up to their retirement only. The
same is true as regards the heirs of those who
have passed away;
4. Employees who have not been reemployed
plus those who have executed quitclaims and
received separation pay of financial
assistance shall be reinstated without loss of
seniority rights and paid full backwages, after
deduction of whatever amounts already
received; and
5. Employees who had obtained substantially
equivalent or even more lucrative
employment elsewhere in 1998 or thereafter
are deemed to have severed their
employment with their previous employer,
and shall be entitled to full backwages from
the date of their retrenchment only up to the
date they found gainful employment
elsewhere. (FASAP v. PAL, G.R. No. 172013,
October 2, 2009)
II. REQUIREMENTS TO PERFECT APPEAL
TO NATIONAL LABOR RELATIONS
COMMISSION
Requisites
1. Filed within the reglementary period;
2. Memorandum of Appeal under oath;
3. Appeal fee;
4. Cash, property, or surety bond, if judgment
involves monetary award; and
5. Proof of service to the adverse party.
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Procedure
1. File Memorandum of Appeal within 10
calendar days, counted from receipt of
decision;
2. Other party can file an Answer within 10
calendar days from receipt of Memorandum
of Appeal;
3. NLRC decides within 20 calendar years;
4. NLRC decision becomes final and executory
10 days after it is rendered. (subject to MR)
Failure to Serve Copy of Memorandum of
Appeal Not Jurisdictional
The mere failure of a party to serve his
Memorandum of Appeal upon the opposing party
does not bar the NLRC from giving due course to
an appeal. Such failure is only treated as a formal
lapse, an excusable neglect, and, hence, not a
jurisdictional defect warranting the dismissal of an
appeal. Instead, the NLRC should require the
appellant to provide the opposing party copies of
the notice of appeal and memorandum of appeal.
(J. PB: Fernandez v. Botica Claudio, G.R. No.
205870, 2014)
Execution of Decision Pending Appeal
General Rule: The NLRC Rules provides that the
perfection of an appeal shall stay execution of the
decision of the LA.
Exception: Execution of decisions reinstating
dismissed employees dismissed employees in
labor cases pending appeal.
In the case of Aris, Inc. v. NLRC the Supreme
Court explained that the reason for such
exception is the compassionate policy on labor
and workingman. The State is mandated to afford
full protection to labor. If in ordinary civil actions
execution of judgment pending appeal is
authorized for reasons the determination of which
is merely left to the discretion of the judge, the
Court saw no reason to withhold it in cases of
decisions reinstating dismissed employees. In
such cases, the poor employees had been
deprived of their only source of livelihood.
(Pacios, et. al. v. Tahanang Walang Hagdan,
G.R. No. 229579, 2017).
LABOR LAW
Appeal by Employer Involving Monetary
Award
A bond equivalent to monetary award should be
posted within the 10-day period for filing of
appeal.
If no bond is filed, appeal is not perfected. (see
Catubay v. NLRC, G.R. No. 119289, 2000)
Remedy in case of failure to post bond, remedy is
to file a motion to dismiss.
No monetary award, no appeal bond required
If LA’s decision does not provide for a
computation of the monetary award, no appeal
bond is required to be filed.
Justifications for Non-Posting of Bond
1. No monetary award (Aba v. NLRC, G.R. No.
122627, 1999);
2. Monetary award is not specified in the
decision (Orozco v. CA, G.R. No. 155207,
2005);
3. In case of conflict between body and fallo of
the decision, the latter should prevail
(Mendoza Jr. v. San Miguel Foods, G.R. No.
158684, 2005)
Motion to Reduce Bond
General Rule: Motion to reduce bond does not
toll the running of the period to perfect appeal.
Exception: See below (McBurnie v. Ganzon,
G.R. Nos. 178034 & 178117, 2013)
McBurnie v. Ganzon Guidelines in Reduction
of Appeal Bond
1. The filing of a motion to reduce appeal bond
shall be entertained by the NLRC subject to
the following conditions:
(a) There is meritorious ground; and
(b) A bond in a reasonable amount is posted;
2. For purposes of compliance with the second
condition – bond in reasonable amount – a
motion shall be accompanied by the posting
of a provisional cash or surety bond
equivalent to (10%) of the monetary award
subject of the appeal, exclusive of damages
and attorney's fees;
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3. 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;
4. 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
5. 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
10 days from notice of the NLRC order within
which to perfect the appeal by posting the
required appeal bond.
NOTE: A substantial monetary award, even if it
runs into millions, does not necessarily give the
employer-appellant a ‘meritorious case’ and does
not automatically warrant a reduction of the
appeal bond. (Calabash Garments v. NLRC, G.R.
No. 110827, 1996)
Examples of Meritorious Grounds
1. Fundamental consideration of substantial
justice;
2. Prevention of miscarriage of justice or of
unjust enrichment; or
3. Special circumstances of the case combined
with its legal merits and the amount and issue
involved (Garcia v. KJ Commercial, G.R. No.
196830, 2012)
10% Appeal Bond is Provisional
The 10% requirement in McBurnie pertains to the
reasonable amount which the NLRC would
accept as the minimum of the bond that should
accompany the motion to reduce bond in order to
suspend the period to perfect an appeal under the
NLRC rules. The 10% is based on the judgment
award and should in no case be construed as the
minimum amount of bond to be posted in order to
perfect appeal. There is no room for a different
interpretation when McBurnie made it clear that
the percentage of bond set is provisional. (Sara
Lee v. Macatlang, G.R. No. 180147, 2015)
LABOR LAW
Enforcement
Any law enforcement agency may be deputized
by the DOLE Secretary or the NLRC.
Issuance of writ of execution on a judgment within
5 years from date it becomes final and executory
motu proprio or in motion of any interested party.
III. REINSTATEMENT AND/OR EXECUTION
PENDING APPEAL
If reinstatement is ordered in an illegal
dismissal case, it is immediately executory
even pending appeal. This means that the
perfection of an appeal shall stay the execution of
the decision of the LA except execution of the
reinstatement pending appeal.
Self – executing with no need for a writ of
execution – only applicable to order issued by
Labor Arbiter.
Writ of execution required when reinstatement is
ordered by NLRC on appeal, or subsequently by
the CA or SC, as the case may be.
Either admitted back to work under the same
terms and conditions prevailing prior to his
dismissal or separation or merely reinstated in the
payroll (at the option of the employer, i.e.
confidential employee, but the choice must be
communicated to the employee by the employer)
Posting of a bond shall not stay the execution of
reinstatement.
The unjustified refusal of the employer to
reinstate an illegally dismissed employee entitles
the employee to payment of his salaries.
Reinstatement Pending Appeal (Art. 229) vs.
Order of Reinstatement (Art. 294)
ART. 229 ART. 294
Order of The order of
reinstatement by the reinstatement
LA is immediately presupposes the
executory pending award thereof is
appeal. pursuant to a final and
executory judgment,
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It is similar to a return- and not while the case Exclusive Appellate Jurisdiction
to-work order. for illegal dismissal is 1. All cases decided by the LAs, including
pending on appeal. contempt cases;
Issued by the LA Issued by the NLRC, 2. Cases decided by the DOLE Regional
CA, or SC Directors or his duly authorized hearing
Generally, no need for Requires the officers involving recovery of wages, simple
the issuance of a writ issuance of a writ of money claims and other benefits not
of execution. execution. exceeding P5,000 and not accompanied by a
claim for reinstatement.
Jurisprudence
If despite several writs of execution, the employer Jurisdiction to Determine EER
still refuses to reinstate the employee, the remedy The NLRC has jurisdiction to determine,
is not the grant of additional backwages to serve preliminarily, the parties’ rights over a property,
as damages but to file a motion to cite the when it is necessary to determine an issue related
employer for contempt. (Christian Literature to rights or claims arising from a EER (Milan v.
Crusade v. NLRC, G.R. No. 79106, 1989) NLRC, G.R. No. 202961, 2015)

An order for reinstatement entitles an employee
to receive his accrued backwages 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. (Garcia v. Philippine Airlines, Inc., G.R.
No.164856, 2009)
B. NATIONAL LABOR RELATIONS
COMMISSION
Original Jurisdiction
1. 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;
2. Injunction in strikes or lockouts under Art.
279;
3. Certified labor dispute causing or likely to
cause a strike or lockout in an industry
indispensable to the national interest, certified
to it by the DOLE Secretary for compulsory
arbitration;
4. Contempt cases; and
5. Petition to annul or modify the order or
resolution of the LA;
Jurisdiction to hear cases over company-
owned property
Both the LA and the NLRC have jurisdiction to
hear cases over company-owned property
although the LA has primary jurisdiction.
In Yupangco Cotton vs. CA (G.R. 126322, 2002),
the Court held a third party whose property has
been levied upon by a sheriff to enforce a
decision against a judgment debtor is afforded
with several alternative remedies to protect its
interests. The third party may avail himself of
alternative remedies cumulatively, and one will
not preclude the third party from availing himself
of the other alternative remedies in the event he
failed in the remedy first availed of.
Thus, a third party may avail himself of the
following alternative remedies:
(a) File a third party claim with the sheriff of
the Labor Arbiter, and
(b) If the third party claim is denied, the third
party may appeal the denial to the NLRC.
Even if a third party claim was denied, a third
party may still file a proper action with a
competent court to recover ownership of the
property illegally seized by the sheriff.

Ocular Inspection by LA & NLRC at any time

during working hours

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The Chairman, any Commissioner, LA, or their
duly authorized representatives, may at any time
during work hours, conduct ocular inspection.
(2011 NLRC Rules of Procedure, Rule X, Sec. 5)
Injunction from the NLRC is NOT the proper
remedy against employee dismissal
The NLRC’s power to issue an injunction
originates from a ‘labor dispute’ before the LA.
(PAL v. NLRC, G.R. No. 120567, 1998)
Prohibited Second Motions
Sec. 15 of the NLRC RULES OF PROCEDURE
prohibits a party from questioning a decision,
resolution, or order, twice. However, a decision
substantially reversing a determination in a prior
decision is a discrete decision from the earlier
one. Where a tribunal renders a decision
substantially reversing itself on a matter, a motion
for reconsideration seeking reconsideration of
this reversal, for the first time, is not a prohibited
second motion for reconsideration. (Cristobal v.
Philippine Airlines, Inc., G.R. No. 201622, 2017.)
C. COURT OF APPEALS
RULE 65, RULES OF COURT
Section 1. Petition for certiorari. — When any
tribunal, board or officer exercising judicial or
quasi-judicial functions has acted without or in
excess its or his jurisdiction, or with grave
abuse of discretion amounting to lack or
excess of jurisdiction, and there is no appeal,
or any plain, speedy, and adequate remedy in
the ordinary course of law, a person aggrieved
thereby may file a verified petition in the proper
court, alleging the facts with certainty and
praying that judgment be rendered annulling or
modifying the proceedings of such tribunal,
board or officer, and granting such incidental
reliefs as law and justice may require.
General Rule
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.
1. The DOLE Secretary;
2. The NLRC; and
LABOR LAW
3. 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).
Exception
Decisions, orders or awards issued by the VA or
panel of VAs which may be elevated to the CA
by way of an ordinary appeal under a Rule 43
petition for review.
Requisites before filing a Petition for Review
under Rule 65
A Motion for Reconsideration must have been
filed before the DOLE Secretary, NLRC, or BLR
Director, as the case may be. This is mandatory
and jurisdictional.
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. PWU- AGLO (G.R. No.
180962, 2014).
Failure to file a motion for reconsideration within
the 10-day reglementary period prior to the filing
of a petition for certiorari renders the NLRC
decision final and executory. (J. PB: Michelin Asia
Pacific Application Support System v. Ortiz, G.R.
No. 189861, 2014)
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.
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.
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NOTE: A second motion for reconsideration is
prohibited under the NLRC Rules. (G.R. No.
189861, 2014)
When Filing of a Motion for Reconsideration
Not Necessary
Q: A labor dispute between X and Y was pending
before the NLRC. The NLRC ruled partly in favor
of Y. Dissatisfied with the decision, Y filed a
motion for reconsideration which was denied. In
the denial, the NLRC stated that “No further
motion of similar import shall be entertained.”
Without filing a motion for reconsideration, X filed
a petition for certiorari before the CA. Was the
action taken by X proper?
A: Yes. The resolution explicitly warned the
litigating parties that the NLRC shall no longer
entertain any further motions for reconsideration.
This circumstance gave X the impression that
moving for reconsideration before the NLRC
would only be an exercise in futility in light of the
tribunal's aforesaid warning. (Genpact Services
v. Santos-Falceso, G.R. No. 227695, 2017)
When Appeal Bond May Be Reduced
While the posting of a cash or surety bond is
indispensable to the perfection of an appeal in
cases involving monetary awards from the
decision of the LA, the Rules of Procedure of the
NLRC nonetheless allows the reduction of the
bond upon a showing of:
(a) The existence of a meritorious ground for
reduction, and
(b) The posting of a bond in a reasonable
amount in relation to the monetary award.
(Philippine Touristers, Inc. and/or
Alejandro R. Yague, Jr. v. Mas Transit
Workers Union-Anglo-Kmu and its
members, G.R. No. 201237, 2014).
Simultaneous filing of the motion to reduce
bond and the posting of the reduced amounts
to substantial compliance with Art. 223
While the bond requirement on appeals involving
a monetary award has been relaxed in certain
cases, this can only be done where there was
substantial compliance with the rules or where
the appellants, at the very least, exhibited
LABOR LAW
willingness to pay by posting a partial bond.
(Magdala Multipurpose v. KMLMS, G.R. 191138-
39, 2011).
LA, NLRC, or CA MAY validly award attorney’s
fees in favor of a complainant even if not
claimed or proven in the proceeding.
The provision on attorney’s fees in Article 111
envisions a situation where there is a judicial or
administrative proceeding for recovery of wages.
Upon the termination of the proceedings, the law
allows a deduction for attorney’s fees of 10% from
the total amount due to the winning party.
(Vengco v. Trajano, G.R. No. 74453, 1989).
Hence, even if there is no claim and proof,
attorney’s fees not more than 10% of the amount
entitled may be awarded. The court has also a
liberty of decreasing it if the questions involved in
the litigation are neither novel nor difficult. (D.M.
Consunji v. NLRC, G.R. No. 71459, 1986).
D. SUPREME COURT
RULE 45, RULES OF COURT
Section 1. Filing of petition with Supreme
Court. — A party desiring to appeal by
certiorari from a judgment or final order or
resolution of the Court of Appeals, the
Sandiganbayan, the Regional Trial Court or
other courts whenever authorized by law, may
file with the Supreme Court a verified petition
for review on certiorari. The petition shall raise
only questions of law which must be distinctly
set forth.
All references in the amended Section 9 of B.P.
No. 129 to supposed appeals from the NLRC to
the Supreme Court are interpreted and hereby
declared to mean and refer to petitions for
certiorari under Rule 65.
Consequently, all such petitions should hence
forth be initially filed in the Court of Appeals in
strict observance of the doctrine on the hierarchy
of courts as the appropriate forum for the relief
desired. (St. Martin Funeral Home vs. NLRC,
1998)
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Appeal of BLR’s Decision

Appeal from CA to SC should be under Rule 45 1. Denial of application for registration of a union
(Petition for Review on Certiorari) and not Rule 65 (a) Denial by the Regional Office, appeal to
(Special Civil Action for Certiorari). (Sea Power the BLR
Shipping Enterprises, Inc. vs. CA, 2001) (b) Denial is originally made by the BLR,
appeal may be had to the DOLE
E. BUREAU OF LABOR RELATIONS Secretary
Jurisdiction of BLR 2. Cancellation of registration of a union
1. Inter-union and intra-union conflicts (a) Cancellation by the Regional Office,
2. All disputes, grievances or problems arising appeal to the BLR.
from or affecting labor-management relations (b) Cancellation by the BLR in a petition filed
in all workplaces EXCEPT those arising from directly, appeal to DOLE Secretary by
the implementation or interpretation of the ordinary appeal
CBA which shall be the subject of grievance 3. Decision of the BLR rendered in its original
procedure and/or voluntary arbitration jurisdiction may be appealed to the DOLE
Secretary whose decision thereon may only
Original Appellate be elevated to the CA by way of certiorari
Cases involving Cases involving under Rule 65.
Federations and independent unions 4. Decision of the BLR rendered in its appellate
National Unions and local chapters jurisdiction may not be appealed to the DOLE
Note: these cases fall Secretary but may be elevated directly to the
within the original CA by way of certiorari under Rule 65. (Abbott
jurisdiction of the Laboratories Philippines, Inc. v. Abbott
Regional Office Laboratories Employees Union, et al., G.R.
(Labor Relations No. 131374, 2000)
Division)
Note: Unlike the NLRC which is explicitly vested
Mode of review with the jurisdiction over claims for actual, moral,
Original Appellate exemplary and other forms of damages, the BLR
jurisdiction jurisdiction is not specifically empowered to adjudicate
claims of such nature arising from intra-union or
Decision is
inter-union disputes. (Mariño, Jr., et. al. v.
immediately
Gamilla, et. al.,G.R. No. 132400, January 31,
executory upon
2005)
issuance of entry of
Appeal to DOLE
final judgment; can
Secretary Power to Issue Subpoena
be reviewed by the
When relevant to a labor dispute under its
CA in a petition for
jurisdiction either at the request of any interested
certiorari under Rule
party or at its own initiative
65.
Within 10 days to the
Compromise Agreements
DOLE Secretary
If voluntarily agreed upon by the parties with the
Grounds:
assistance of the BLR or the regional office of
Grave abuse of
DOLE are final and binding upon the parties
discretion

The only time NLRC or any courts can assume

Gross incompetence
jurisdiction over issues involved therein:
1. In case of non-compliance thereof

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2. If there is prima facie evidence that the Appeal of POEA Decision to NLRC w/in 10
settlement was obtained through fraud, calendar days in cases of:
misrepresentation or coercion 3. Violation of overseas employment contracts.
4. Disciplinary cases filed against overseas
As long as the agreement is voluntarily entered contract workers.
into and has a reasonable award, it is valid.
F. NATIONAL CONCILIATION AND
It must be approved by the LA (NLRC Rules). MEDIATION BOARD
Jurisdiction of the NCMB
At the DOLE Secretary’s level, the Secretary 1. Conciliation
must approve. 2. Mediation
3. Voluntary arbitration cases
On appeal, the NLRC must approve the
agreement. Conciliation as distinguished from Mediation
Conciliation – Mediation refers to the process of
An offer to settle is not proof that something is due dispute management conducted by a Conciliator
to the employee. – Mediator with the end in view of facilitating
amicable settlement of the labor dispute. (NCMB
Art. 233 of the Labor Code states that any Manual of Procedures Rule III, Section 1, (4))
compromise settlement, including those involving
labor standard laws, voluntarily agreed upon by Conciliation Preventive
the parties with the assistance of the Bureau or Case Mediation Case
the Regional Office of the Department of Labor Refers to actual Refers to the
shall be final and binding upon the parties. existing labor dispute potential labor
subject of a notice of disputes which are
Note: The assistance of the BLR or the regional strike or lockout and the subject of a
office of the DOLE in the execution of a cases of actual strike formal or informal
compromise settlement is a basic requirement. or lockout. (NCMB request for
Without it, there can be no valid compromise Manual of conciliation and
settlement. Mere appearance before BLR or the Procedures Rule III, mediation assistance
regional office of the DOLE to file the already Section 1, (3)) sought by either or
executed compromise settlement is not the both parties or upon
“assistance” required by the law. (Mindoro the initiative of the
Lumber and Hardware v. Eduardo D. Bacay, et. NCMB to avoid the
al., G.R. No. 158753, 2005) occurrence of actual
labor disputes.
Jurisdiction of the POEA (NCMB Manual of
1. Cancellation/Suspension of License of Procedures Rule III,
Authority to recruit of Recruitment Agencies Section 1, (20))
(until phase out within 5 years as provided in
RA 8042) Organized Unorganized
2. Disciplinary Action against OFWs Establishment With Establishments And
(a) Appeal to Secretary of DOLE within 10 CBA Without CBA
calendar days from the Submit issue before
cancellation/revocation/supervision of Submit the issue
the grievance
license or authority before NCMB for
machinery. If
conciliation. If not
unresolved, refer to
fruitful in 10 days,
voluntary arbitration.

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refer to NLRC for
arbitration.
Privileged Communication
Information and statements made at conciliation
meetings shall NOT be used as evidence in the
NLRC. Conciliators and similar officials shall not
testify in any court or body regarding any matters
taken up at conciliation proceeding conducted by
them.
Preventive Mediation
NCMB Manual of Procedures Section 1, (24),
refers to Preventive Mediation cases as labor
disputes which are the subject of a formal or
informal request for conciliation and mediation
assistance sought by either or both parties or
upon the initiative of the NCMB.
Only a certified or duly recognized bargaining
agent may file a notice or request for preventive
mediation.
NCMB has no jurisdiction to entertain any notice
filed by the federation in behalf of individual union
members of its local. (Insular Hotel Employees
Union-NFL v. Waterfront Insular Hotel Davao,
G.R. No. 174040-41, 2010)
G. DEPARTMENT OF LABOR AND
EMPLOYMENT REGIONAL DIRECTORS
Jurisdiction of DOLE RDs
1. Visitorial power. (Art. 128, Labor Code)
2. Simple Money Claims not exceeding Php
5,000. (Art. 129, Labor Code)
Recovery and Adjudicatory Power -
Requisites for RD to Decide Small Money
Claims
1. Claim is presented by an employee, or a
person employed in domestic or household
service, or employer;
2. The claim arises from an EER;
3. The claimant does not seek reinstatement;
and
4. The aggregate money claim of each claimant
does not exceed PhP 5,000
LABOR LAW
Notes: In the absence of any of the above
requisites, the LA will have jurisdiction over the
case, pursuant to ART. 224.
The claimant need not be an employee at the time
the complaint has been filed; it is enough that the
claim arises from employment
Appeal from the RD’s Decision
The Complainant may appeal to the NLRC within
5 calendar days from a receipt of a copy of the
Regional Director’s decision / resolution.
H. DEPARTMENT OF LABOR AND
EMPLOYMENT SECRETARY
I. JURISDICTION
Jurisdiction of the SOLE
If the BLR Director inhibits himself in a case falling
under the jurisdiction of the BLR, can be appealed
to the SOLE. Additionally, the ff matters are under
the SOLE’s jurisdiction:
1. Art. 128 (a) – Jurisdiction over inspections &
investigations (can also be exercised by the
RD)
2. Art. 128 (b) – Compliance orders for labor
standards, where EER still exists
(a) XPN: If ER contests the findings of the
labor employment & enforcement officer
& raises issues supported by
documentary proofs which were not
considered in the course of inspection
(then the case will be with LA)
(b) NOTE: This power is often exercised
through RD (see RD cases)
(c) There is no ceiling for the amount in this
case.
3. Jurisdiction over work stoppage orders when
non-compliance with the law or IRRs poses
grave & imminent danger to health & safety or
workers in the workplace
(a) Within 24 hours: Hearing to decide if
suspension order should be lifted
(b) If violation is ER’s fault: ER will pay wages
during stoppage period
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4. Jurisdiction of SOLE for strikes or lockouts
that involve national interest cases (SOLE
may assume jurisdiction or certify) –
regardless of decision, CA.
5. Appeals from BLR decisions, where BLR
exercises original jurisdiction.
II. VISITORIAL AND ENFORCEMENT
POWERS
Visitorial Power
Power of the Secretary of Labor or his duly
authorized representative, including labor
regulation officers to:
1. Have access to employer’s records and
premises at any time of the day or night
whenever work is being undertaken therein
2. Right to copy records
3. To question any employee
4. Investigate any fact, condition, or matter
which may be necessary to determine
violations or which may be necessary to aid in
enforcement of the Labor Code or any labor
law or order
Enforcement Power
Power of the Secretary of Labor or his duly
authorized representative, including labor
regulation officers to:
1. Issue compliance orders to give effect to labor
legislation based on the findings of
employment and enforcement officers or
industrial safety engineers made in the course
of inspection
2. 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
the latter case, the case will have to be
forwarded to a Labor Arbiter
3. Order Work Stoppage / Suspension of
Operations when non-compliance with the
law or IRR poses grave or imminent danger to
the health and safety of the workers in the
workplace
LABOR LAW
4. Conduct hearings within 24 hours to
determine whether:
(a) An order for stoppage of work /
suspension of operations shall be lifted or
not; and
(b) Employee shall pay the employees
concerned their salary in case the
violation is attributable to his fault
Note: EER must still exist at the time of the
initiation of the action for the Secretary or his
authorized representative to exercise
Enforcement Power
When Enforcement Power Cannot be Used
1. Case does not arise from exercise of visitorial
power
2. When EER ceased to exist at the time of
inspection
3. If employer contests finding of the labor officer
and such contestable issue is not verifiable in
the normal course of inspection
Compliance Order
Must observe due process in administrative
proceedings:
(a) Alleged violator must first be heard and
given adequate opportunity to present
evidence on his behalf.
(b) Evidence presented duly considered
before any decision reached.
(c) Decision is based on substantial
evidence.
(d) Decision based on evidence presented in
the hearing, or at least contained in the
record and disclosed to the parties.
(e) Decision should explain the issues
involved and the reasons for the decisions
rendered.
Appeal
If order issued by duly authorized representative
of DOLE Secretary – appeal to the latter
If order involves monetary award – an appeal by
the employer may be perfected upon only upon
posting of CASH or SURETY bond in the amount
equivalent to the monetary award in the order
appealed from
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authorized rep (may authorized hearing

Stoppage of Work/Suspension of Operations or may not be RD) officer of the DOLE
The Secretary may order stoppage of work OR Mode of Appeal
suspension of any unit or department where non- Appealable to the Appealable to the
compliance with the law or implementing rules DOLE Secretary NLRC
and regulations poses grave and imminent
danger to the health and safety of workers in the Before the DOLE may exercise its power under
workplace. Art. 128, two important things must be resolved:
4. Does the employer – employee relationship
Within 24 hours – a hearing shall be conducted to still exist, or alternatively, was there ever an
determine whether an order for the stoppage of employer – employee relationship to speak of;
work or suspension of operations shall be lifted and
5. Are there violations of the Labor Code or any
If violation is attributable to fault of the employer, of the labor laws?
he shall pay the employees concerned their
salaries or wages during the period of such Note: The existence of EER is a statutory
stoppage of work or suspension of operations. prerequisite to a limitation on the power of the
Secretary of Labor, on which the legislative
Comparison: Enforcement Power under Art. branch is entitled to impose.
128 vs. Adjudicatory Power under Art. 129
ART. 128 ART. 129 Art. 128’s grant of visitorial and enforcement
Nature / Subject of Proceedings powers is for the purpose of determining
Inspection of violations of, and enforcing, the Labor Code and
establishments and any labor law, wage order, or rules and
issuance of Adjudication of regulations. If there is no employer-employee
compliance orders monetary claims relationship in the first place, the duty of the
with labor standards, (labor standards) employer to adhere to labor standards with
wage orders, or other respect to the non-employees is questionable.
labor laws
Who Initiates Claims? DOLE can Determine, Prima Facie, the
Any interested party Existence of an EER
The DOLE Secretary
initiates the case If there is a prima facie showing of the absence of
or Regional Director
through a sworn employer-employee relationship, the Secretary is
acts motu propio
complaint precluded from exercising the visitorial and
Workers Involved enforcement powers. (People’s Broadcasting v.
Present or past Secretary of Labor, G.R. No. 179652, May 8,
Employees must still employees at the 2009)
be in the service time the complaint is
(hence, there is an filed, provided that Under Art. 128(b) of the Labor Code, as amended
existing EER) there is no demand by RA 7730, the DOLE is fully empowered to
for reinstatement make a determination as to the existence of an
Jurisdictional Limits employer-employee relationship in the exercise
No maximum Maximum of P5,000 of its visitorial and enforcement power, subject to
monetary limit per complainant judicial review, not review by the NLRC.
Officers Designated
DOLE Secretary or Regional Director If a complaint is brought before the DOLE to give
any of his duly (RD) or any duly effect to the labor standards provisions of the
Labor Code or other labor legislation, and there is

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a finding by the DOLE that there is an existing
employer-employee relationship, the DOLE
exercises jurisdiction to the exclusion of the
NLRC.
If the DOLE finds that there is no employer-
employee relationship, the jurisdiction is properly
with the NLRC.
If a complaint is filed with the DOLE, and it is
accompanied by a claim for reinstatement, the
jurisdiction is properly with the Labor Arbiter,
under Art. 217(3) of the Labor Code, which
provides that the Labor Arbiter has original and
exclusive jurisdiction over those cases involving
wages, rates of pay, hours of work, and other
terms and conditions of employment, if
accompanied by a claim for reinstatement.
If a complaint is filed with the NLRC, and there is
still an existing EER, the jurisdiction is properly
with the DOLE.
The findings of the DOLE, however, may still be
questioned through a petition for certiorari under
Rule 65 of the Rules of Court. (People’s
Broadcasting v. Secretary of Labor, G.R. No.
179652, 2012)
Unlawful Activities
1. For any person or entity to obstruct, impede,
delay or otherwise render ineffective the
orders of the Sec. or his authorized
representatives issued pursuant to the
authority under Art. 128.
2. No inferior court shall issue temporary or
permanent injunction or restraining order or
otherwise assume jurisdiction over any case
involving the enforcement orders.
III. POWER TO SUSPEND EFFECTS OF
TERMINATION
Miscellaneous Provisions
The Secretary of Labor and Employment may
suspend the effects of the termination pending
resolution of the dispute in the event of a prima
facie finding by the appropriate official of the
LABOR LAW
Department of Labor and Employment before
whom such dispute is pending that the
termination may cause a serious labor dispute or
is in implementation of a mass lay-off. (Labor
Code, Art. 292[b])
Conditions under which Secretary of Labor or
his duly authorized representative MAY
inquire into the financial activities of
legitimate labor organizations
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 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
60-day freedom period nor within the 30 days
immediately preceding the date of election of
union officials. (Labor Code, Art. 289)
SOLE generally has NO jurisdiction over
appeals
In The Heritage Hotel vs. National Union of
Workers (G.R. 178296, 2011), the Supreme
Court ruled that jurisdiction remained with the
BLR despite the BLR Director's inhibition.
“When the DOLE Secretary resolved the appeal,
she merely stepped into the shoes of the BLR
Director and performed a function that the latter
could not himself perform.”
SOLE has the power to give arbitral awards in
the exercise of his authority to assume
jurisdiction over labor dispute
The arbitral award given by the Secretary of
Labor can be considered as an approximation of
a collective bargaining agreement. While the
award cannot per se be categorized as an
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agreement between the parties (because of the
Secretary's interference), it still has the force and
effect of a valid contract obligation between the
parties, as is stated in (Cirtek Employees vs.
Cirtek Electronics, G.R. 190515, 2011).
IV. REMEDIES
Remedy where no EER exists
Where no employer-employee relation exists
between the parties and no issue is involved
which may be resolved by reference to the Labor
Code, other labor statutes, or any collective
bargaining agreement, it is the RTC that has
jurisdiction.
The RTC has jurisdiction over the claim of an
independent contractor to adjust the
contractor’s fee. (Urbanes v. Secretary of Labor,
G.R. No. 122791, 2003)
I. VOLUNTARY ARBITRATOR
I. JURISDICTION
JURISDICTION (ART. 274)
1. Grievances arising from the implementation
or interpretation of CBAs
2. Arising from interpretation or enforcement of
company personnel policies
3. Wage distortion issues arising from the
application of any wage orders in organized
establishments
4. Arising from interpretation and
implementation of the productivity incentive
programs under RA 6971
5. Any other labor disputes upon agreement by
the parties.
NOTE: The parties may choose to submit the
dispute to voluntary arbitration proceedings
before or at stage of the compulsory arbitration
proceedings.
Issues/ controversies which may be the
subject of voluntary arbitration
1. Article 261 of the Labor Code provides that VA
shall have original and exclusive jurisdiction
over unresolved grievances arising from the
LABOR LAW
interpretation or implementation of the CBA
and those arising from the interpretation or
enforcement of company personnel policies
2. Violations of the CBA which are not gross in
character if not resolved through the
grievance machinery. 

3. All other labor disputes including ULP and
bargaining deadlock upon agreement of the
parties (Labor Code, Art. 262)
Submission agreement
Note: It is mandatory for parties to refer their
controversy to a grievance machinery and
voluntary arbitrators for the adjustment or
resolution of grievances arising from the
interpretation or implementation of their CBA and
those arising from the interpretation or
enforcement of company personnel policies.
(Sanyo Philippines Workers Union-PSSLU v.
Canizares, G.R. No. 101619, 1992)
A VA is confined to the interpretation and
application of the CBA. He does not sit to
dispense his own brand of industrial justice and
his award is legitimate only insofar as it draws its
essence form the CBA.
While the VA is confined to the interpretation and
the application of the CBA in resolving the issue/s
submitted for its resolution, he is not expected to
merely rely on the cold and cryptic words on the
face of the CBA. He is mandated to discover the
intentions of the parties and gaps may likewise be
filled by reference to the practices of the industry,
such that the parties’ contemporaneous and
subsequent acts should be considered. (Veloso,
Labor Reviewer, pp 415-416 (2011))
A dispute settled through voluntary
arbitration IS NOT inconsistent with Article
217 of the Labor Code
The SC in The University of Immaculate
Concepcion vs. NLRC (G.R. 181146, 2011),
stated that Article 262 provides of an exception,
and “for the exception to apply, there must be
agreement between the parties clearly conferring
jurisdiction to the voluntary arbitrator. Such
agreement may be stipulated in a collective
bargaining agreement. However, in the absence
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of a collective bargaining agreement, it is enough
that there is evidence on record showing the
parties have agreed to resort to voluntary
arbitration.”
Effect of failure to resort to barangay
conciliation to the labor case
Labor disputes are the exception to PD 1508.
Under Art. 226 of the Labor Code, motions to
dismiss before the LA are only allowed on
grounds of lack of jurisdiction, improper venue
and bar by prior judgment or prescription. Hence,
failure to resort to barangay conciliation is not a
valid ground to defeat the labor case.
II. REMEDIES
VA or panel of VAs 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;
 By filing a motion for execution and serving a writ
(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.
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.
Rule 43, §1, Rules of Court.
The decision of a Voluntary Arbitrator or panel
of Voluntary Arbitrators is appealable by
ordinary appeal under Rule 43 of the Rules of
Civil Procedure directly to the Court of
Appeals.
Appeal of VA’s Decision
Appealable by ordinary appeal under Rule 43 of
the Rules of Civil Procedure directly to the CA.
From the CA, the case may be elevated to the SC
by way of ordinary appeal under the same Rule
45. (Luzon Development Bank v. Association of
LABOR LAW
Luzon Development Bank Employees, et al., G.R.
No. 120319, 1995)
Instances when an order of execution may be
appealed
1. When execution becomes impossible or
unjust, it may be modified or altered on appeal
to harmonize the same with justice and the
facts (Torres vs. NLRC, G.R. No. 107014,
2000). 

2. Supervening events may warrant modification
in the execution of judgment, as when
reinstatement is no longer possible because
the position was abolished as a cost-cutting
measure due to losses. (Abalos vs. Philex
Mining Corp, G.R. 140374, 2002).
3. Where the writ is found defective, exceeds or
varies the award and/or is irregularly issued.
(DBP v. Union Bank, G.R. No. 155838, 2004)
Execution of a labor judgment which on
appeal, had become final and executory
of execution to be served by the sheriff or such
law enforcement agency as may be deputized by
the DOLE or NLRC. It may also be issued motu
propio by the Labor Arbiter. (Labor Code, Arts.
223 & 224)
J. PRESCRIPTION OF ACTIONS
All money claims arising
from employer – employee
relations accruing during
the effectivity of this Code
MONEY
shall be filed within 3 years
CLAIMS
from the time the cause of
action accrued; otherwise
they shall be forever
barred.
An action for reinstatement
prescribes in 4 years, for
the injury to the
ILLEGAL employee’s rights as
DISMISSAL provided under Art. 1146
of the Civil Code. (Callanta
v. Carnation Philippines,
G.R. No. 70615, 1986)
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1 year from accrual of
ULP
such unfair labor practice.
Simple illegal recruitment –
ILLEGAL 5 years
RECRUITMENT Economic sabotage – 20
years
General Rule: 3 years from
the time the cause of
action accrued
OFFENSES
UNDER THE
Exception: ULP cases
LABOR CODE
prescribe within 1 year
from accrual of such unfair
labor practice
A complaint or petition for
audit or examination of
funds and books of
accounts prescribes within
three (3) years:
from the date of
submission of the annual
financial report to the
DOLE; or
from the date the same
ACTIONS
should have been
INVOLVING
submitted as required by
UNION FUNDS
law, whichever comes
earlier.
This provision on the
prescriptive period applies
only to a legitimate labor
organization which has
submitted the financial
report required under the
Labor Code.
Illegal recruitment cases
shall prescribe in five (5)
years
ILLEGAL
RECRUIT
Illegal recruitment cases
MENT
involving economic
sabotage shall prescribe in
twenty (20) years.
LABOR LAW
SUMMARY OF PROCEDURE: LABOR CASES
The rules of evidence prevailing in courts of law
or equity shall not be controlling.
It is the spirit and intention of this Code which
shall be used as reasonable means to ascertain
the facts in each case, without regard to
technicalities of law and procedure all in the
interest of due process.
Parties may be represented by legal counsel but
it shall be the duty of the Chairman, any presiding
Commissioner or any labor arbiter to exercise
complete control of the proceedings at all stages.
General Rule: The only way to acquire
jurisdiction is to serve summons.
Exception: Voluntary appearance of the lawyer
amounts to voluntary submission to the
jurisdiction of the LA. (Santos v. NLRC, G.R No.
101699, 1996)
Failure to implead a substitute party is not a fatal
defect. (Chu v. Pasajo, 2003)
Payment of docket fees is not required in labor
standards claims under Art. 292(d).
Except: In case of bargaining deadlock, the fees
are shared by the parties.
Sec. 3, Rule V of the NLRC Rules allows parties
to submit position papers with attachments and
they can be made basis of the LA’s decision.
Holding of trial on the merits is discretionary on
the part of the LA.
Due process in Art. 292(b), termination disputes
end line is hearing with representative of own
choice
Due process in Art. 227 opportunity to be heard
It is wrong to apply opportunity be heard in due
process under Art. 292(b).
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Verification and Certification of Non-Forum
Shopping are required BUT Art. 227 can be
invoked.
NLRC Rules provide that before deciding, LA
must inform parties that the case has been
submitted for decision. If this is not complied with,
decision is still valid because of Art. 227.
filed out of time under the interest of justice
rule (esp. if the appellants are the employees)
15. Doctrine of supervening event (i.e. closure of
company) requires payment of separation
pay and full backwages up to the time of the
closure of the company.

Art. 218(c) cannot be invoked to support a faulty

decision of the LA. The provision refers to a
power of the NLRC and not the LA.

Summary
1. Decision of the Voluntary Arbitrator – appeal
to CA under Rule 43 (Luzon Dev’t Bank)
2. Decision of the DOLE and other attached
agencies (including NLRC) should be brought
to the CA under Rule 65 (St. Martin Funeral
Homes)
3. Decision of the DOLE Secretary – certiorari to
the CA under Rule 65 (NAFLU v. Laguesma)
4. Order of the Med-Arbiter GRANTING the
Petition for CE in an UNORGANIZED
establishment – not appealable under DO 40-
03 (2003). Thus, the recourse is certiorari
under Rule 65.
5. Decisions of the BLR in its appellate
jurisdiction – CA, certiorari under Rule 65.
(UST Faculty Union v. Bitonio, G.R. No.
131235, 1999)
6. Certiorari is not a substitute for lost appeal.
7. 10 days to perfect appeal by filing a
Memorandum of Appeal from LA to NLRC;
but 5 days from RD to NLRC
8. Property bond is now allowed. (UERM-
Memorial Medical Center v. NLRC, G.R. No.
110419, 1997)
9. Appeal bond must be strictly complied with.
10. NLRC cannot resuscitate a lost appeal.
11. Only 1 MR is allowed.
12. LA cannot entertain an MR or a petition for
relief of judgment. After the decision has
become final and executory, the writ of
execution is NOT appealable.
13. To stay writ of execution, ask for an injunction
under Art. 218 (e).
14. Period to appeal cannot be extended BUT in
a number of cases, SC entertained appeals

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JURISDICTION TABLE
DOLE REGIONAL
LABOR ARIBTER NLRC COURT OF APPEALS SUPREME COURT
DIRECTORS
1. ULP 1. Visitorial power. (Art. ORIGINAL JURISDICTION VIA RULE 65 Appeal from CA to
2. Termination disputes 128, Labor Code) 1. Injunction in ordinary The only mode by which a SC should be under
3. Claims for wages, rates of 2. Simple Money Claims labor disputes to enjoin labor case decided by any of Rule 45 (Petition for
pay, hours of work and not exceeding Php or restrain any actual or the following labor Review on
other terms and conditions 5,000. (Art. 129, Labor threatened commission authorities/tribunals may reach Certiorari) and not
of employment – if Code) of any or all prohibited or the Court of Appeals is through Rule 65 (Special
accompanied with a claim 3. Violation of the unlawful acts or to a Rule 65 petition for certiorari. Civil Action for
for reinstatement constitution & by – require the performance 1. DOLE Secretary; Certiorari). (Sea
4. Claims for actual, moral, laws and rights & of a particular act in any 2. Commission (NLRC); and Power Shipping
exemplary and other conditions labor dispute which, if not 3. Director of the Bureau of Enterprises, Inc. vs.
forms of damages arising membership. restrained or performed Labor Relations (BLR) in CA, 2001)
from employer-employee 4. Inter-union and intra- forthwith , may cause cases decided by him in his
relationship union disputes grave or irreparable appellate jurisdiction (as
5. Cases arising from involving independent damage to any party distinguished from those he
prohibited activities during unions and chartered 2. Injunctions in strikes or decides in his original
strikes, including locals. lockouts under Art. 279 jurisdiction which are
questions involving the 3. Certified labor dispute appealable to the DOLE
legality of strikes and casing or likely to cause Secretary).
lockouts a strike or lockout in an
6. All other claims arising industry indispensable to EXCEPTION: RULE 43
from employer – the national interest, Decisions, orders or awards
employee relationship certified to it by the issued by the Voluntary
involving an amount DOLE Secretary for Arbitrator or panel of
exceeding P5000 compulsory arbitration Voluntary Arbitrators
regardless of whether EXCLUSIVE APPELLATE
accompanied by a claim JURISDICTION
for reinstatement except 1. All cases decided by the
claims for ECC, SSS, LAs, including contempt
Medicare, & maternity cases
benefits 2. Cases decided by the
7. Wage distortion cases in DOLE Regional
unorganized Directors or his duly
establishments authorized hearing
8. All monetary claims of officers involving
OFWs arising from EER or recovery of wages,
by virtue of any law or simple money claims
contract involving Filipino and other benefits not

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workers for overseas exceeding Php 5,000

deployment, including and not accompanied by
claims for actual, moral, a claim for
exemplary and other reinstatement.
forms of damages (RA
8042)
9. Enforcement of
compromise agreements
when there is non-
compliance by any of the
parties pursuant to Art.
233 of the Code (Sec. 1,
Rule V, 2005 NLRC
Rules)

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NATIONAL
BUREAU OF LABOR CONCILIATION VOLUNTARY
DOLE SECRETARY
RELATIONS AND MEDIATION ARBITRATORS
BOARD
1. Inter-union and intra-union 1. Conciliation Art. 128. Visitorial and Enforcement Power. 1. Grievances arising
conflicts 2. Mediation Power of the Sec. of Labor or his duly authorized from the
2. All disputes, grievances or 3. Voluntary representative, including labor regulation officers to: implementation or
problems arising from or arbitration 1. Have access to employer’s records and premises at interpretation of CBAs
affecting labor-management any time of the day or night whenever work is being Note: Grievances must be
relations in all workplaces undertaken therein processed through
EXCEPT those arising from 2. Right to copy records grievance machinery; only
the implementation or 3. To question any employee unresolved grievances go
interpretation of the CBA 4. Investigate any fact, condition, or matter which may be to the VA.
which shall be the subject of necessary to determine violations or which may be 2. Arising from
grievance procedure and/or necessary to aid in enforcement of the Labor Code or interpretation or
voluntary arbitration any labor law or order enforcement of
3. Complaint involving 5. Issue compliance orders to give effect to labor company personnel
federations, national unions, legislation based on the findings of employment and policies
industry unions, its officers or enforcement officers or industrial safety engineers 3. Wage distortion issues
member organizations made in the course of inspection arising from the
4. Appellate jurisdiction over 6. Issue writs of execution to the appropriate authority for application of any
inter/intra union disputes the enforcement of their orders, EXCEPT in cases wage orders in
involving company level where the employer contests the findings of the labor organized
unions, originally decided by employment and enforcement officer and raises issues establishments
Regional Office. supported by documentary proofs which were not 4. Arising from
considered in the course of inspection – in the latter interpretation and
case, the case will have to be forwarded to a Labor implementation of the
Arbiter productivity incentive
programs under RA
6971
5. Any other labor
disputes upon
agreement by the
parties.

————- end of topic ————-

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ISSUANCES
Labor Law
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ISSUANCES
TOPIC OUTLINE UNDER THE SYLLABUS
A. Exec. Order No. 126 Reorganization
Act of the Ministry of Labor and
Employment
B. DOLE Advisory No. 2, s. 2009
Guidelines on the Adoption of Flexible
Work Arrangements
C. DOLE Order No. 150, s. 2016 Revised
Guidelines Governing the
Employment and Working Conditions
of Security Guards and other Private
Security Personnel in the Private
Security Industry
D. POEA Memorandum Circular No. 010-
10 Amended Standard Terms and
Conditions Governing the Overseas
Employment of Filipino Seafarers On-
Board Ocean-Going Ships | Revised
National Conciliation and Mediation
Board Manual of Procedures for
Conciliation and Preventive Mediation
Cases 2017 Edition
LABOR LAW
A. REORGANIZATION ACT OF THE
MINISTRY OF LABOR [E.O 126]
MANDATES AND OBJECTIVES [POAM]
Primary policy, programming, coordinating and
administrative entity of the Executive Branch in
the field of labor and employment responsible for:
1. Promotion of gainful employment
opportunities
2. Optimization of the development and
utilization of the country's manpower
resources;
3. Advancement of workers' welfare by
providing for just and humane working
conditions and terms of employment;
4. Maintenance of industrial peace by
promoting harmonious, equitable, and
stable employment relations that assure
equal protection for the rights of all
concerned parties. [Sec 4, EO 126]
POWERS AND FUNCTIONS [MIWWIO-SEL]
Formulation and Recommendation
1. Formulate and recommend Policies, plans
and programs for manpower development,
training, allocation, and utilization;
2. Formulate general guidelines concerning
wage and income policy;
3. Recommend necessary adjustments in wage
structures with a view to developing a wage
system that is consistent with national
economic and social development plans;
Protection and Promotion of Welfare
1. Provide for safe, decent, humane and
improved working conditions and
environment for all workers, particularly
women and young workers;
2. Protect and promote the interest of every
citizen desiring to work locally or overseas by
securing for him the most equitable terms and
conditions of employment, and by providing
social and welfare services;
3. Uphold the right of workers and employers to
organize and to promote free collective
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bargaining as the foundation of the labor
relations system;
4. Provide and ensure the fair and expeditious
settlement and disposition of labor and
industrial disputes through collective
bargaining, grievance machinery,
conciliation, mediation, voluntary arbitration,
compulsory arbitration as may be provided by
law, and other modes that may be voluntarily
agreed upon by the parties concerned
Regulation
1. Regulate the employment of aliens,
including the establishment of a registration
and/or work permit system for such aliens;
2. Maintain harmonious, equitable and stable
labor relations system that is supportive of
the national economic policies and programs;
[Sec 5 EO 127]
KEY PERSONNEL
Minister of Labor and Employment
○ Where the authority and responsibility for
the exercise of the mandate, powers and
functions of the Ministry is vested.
○ Appointed by the President
○ Exercises supervision and Control over
the Ministry
○ Powers and Functions of the Minister
a. Advise the President on matters
pertaining to labor and employment;
b. Formulate and issue policies, rules,
regulations and issuances
necessary to carry out Ministry,
labor and employment policies,
plans, programs and projects;
c. Provide overall direction,
supervision, and control over all
offices under the Ministry to ensure
effective and efficient
implementation of its policies, plans,
programs and projects;
d. Coordinate with other government
and non-government groups to
carry out the mandate of the
Ministry;
LABOR LAW
e. Evaluate the policy, plans,
programs and project
accomplishment of the Ministry;
f. Prepare reports for the President
and for the public;
g. Delegate authority for the
performance of any function to
officers and employees of the
Ministry;
h. Exercise such other powers and
functions as may be provided by law
or assigned by the President.
Deputy Ministers
There should not be more than four (4) deputy
ministers who are appointed by the President
upon the recommendation of the Minister
Powers and Functions [COASAL]
1. Coordinate the programs and projects of
the Ministry for efficient and effective
administration;
2. Oversee the operational activities of the
Ministry;
3. Advise and assist the Minister in the
formulation and implementation of the
Ministry's policies, plans, programs and
projects;
4. Serve as deputy for the Minister;
5. Perform, when so designated, the power
and functions of the Minister, during the
latter's absence or incapacity; and
6. Perform such other functions as may be
provided by law or assigned by the
Minister to promote the efficiency and
effectiveness in the delivery of public
services.
Note: They Shall not be assigned
primarily administrative responsibilities.
Assistant Ministers
There should not be more than four (4) assistant
ministers who are appointed by the President
upon the recommendation of the Minister
Powers and Functions
1. Assist the Minister and the Deputy
Ministers in the formulation,
determination and implementation of
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laws, policies, programs and projects on improvement and internal control matters.
labor [Sec 14]
2. Oversee day-to-day operations and 5. Legal Service. Relates to provision of
constituent units of the Ministry informative and clarificatory opinions on labor
laws, rules and regulations for uniform
ORGANIZATIONAL STRUCTURE interpretation; answering of legal queries and
assistance to the OSG in suits involving the
Ministry of Labor
ministry or its officers acting in their official
capacity. [Sec 15]
Office of the
Office of the
Staff Bureaus 6. International Labor Affairs Service.
Deputy and Services and Regional
Assistant Ministers
Minister
Offices Relates to the monitoring the observance
and implementation of all obligations,
Planning Local Employment; courtesies, and facilities required by
international labor affairs and related
Administrative
Women and Young international labor standards and
Workers
agreements. It also serves for technical
cooperation, programs and activities with
Human Resource
Rural Workers
Development
other countries and international
institutions [Sec 16]
FInancial Bureau of Labor
Management Relations

7. Information and Publications Service.

Legal Service
Responsible for promoting
rapport and understanding between the
Ministry and the public through the
International Labor
Affairs development of public relations programs
and the dissemination of accurate
Information and
Publications and updated information [Sec 17, EO
126]

SERVICES BUREAUS
1. Planning Service. Relates to planning, 1. Bureau of Local Employment;
programming, project development and 2. Bureau of Women and Young Workers;
evaluation, and the development and 3. Bureau of Rural Workers;
implementation of a management information 4. Bureau of Labor Relations
system.[Sec 11] 5. Bureau of Working Conditions.
2. Administrative Service. Relates to to [Sec 18, EO 126]
records, management, supplies, equipment, 6. Bureau of Labor and Employment
collections, disbursements, building Statistics [Sec 21, EO 126]
administration and maintenance, security
and custodial work [Sec 12] ATTACHED AGENCIES
3. Human Resource Development Service. 1. National Wages Council;
Relates to the provision of available training, 2. Philippine Overseas Employment
education and development opportunities Administration [POEA]
needed to upgrade the levels of competence 3. Employees Compensation Commission
and productivity of managers and personnel. which is hereby reorganized to include
[Sec 13] the Executive Director of the ECC as an
4. Financial Management Service. Relates to ex-officio member of the Commission;
budgetary financial, management 4. The National Manpower and Youth
Council;

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5. The National Labor Relations B. GUIDELINES ON THE ADOPTION OF

Commission; FLEXIBLE WORK ARRANGEMENTS [DOLE
6. The Welfare Fund for Overseas Workers' ADVISORY No. 2, s. 2009]
Administration which is hereby renamed
as the Overseas Workers' Welfare PURPOSE
Administration; This Advisory is being issued to assist and guide
7. Maritime Training Council; and employers and employees in the implementation
8. National Maritime Polytechnic of various flexible work arrangements as one of
[Sec 19, EO 126] the coping mechanisms and remedial measures
9. National Conciliation and Mediation in times of economic difficulties and national
Board. emergencies.
To absorb the conciliation, mediation and
voluntary arbitration functions of the Anchored on a voluntary basis and conditions
Bureau of Labor Relations [Sec 22, EO mutually acceptable to both the employer and the
126] employees, it is recognized as beneficial in terms
10. National Productivity Commission of reduction of business costs and helps in saving
Transferred from the National Economic jobs while maintaining competitiveness and
Development Authority for the productivity in industries.
productivity promotion and
enhancement, education and training, CONCEPT
coordination/monitoring, funding and Flexible work arrangements refer to alternative
the conduct of special and policy studies arrangements or schedules other than the
[Sec 23, EO 126] traditional or standard work hours, workdays and
workweek.
REGIONAL OFFICES
Ministry is authorized to establish, operate and FLEXIBLE WORK ARRANGEMENTS
maintain such ministry-wide Regional Offices in
- Normal workweek is
each of the administrative regions of the country,
reduced to less than six (6)
insofar as necessary for the following purposes:
days
1. Implement laws, policies, plans, programs,
BUT the total number of
projects, rules and regulations of the Ministry;
work hours of 48 hours per
2. Provide economical, efficient and effective
week shall remain.
service to the people;
- Normal workday is
3. Coordinate with regional offices of other
increased to more than
ministries and agencies; Compressed
eight hours
4. Coordinate with local government units; and Workweek
BUT not to exceed twelve
5. Perform such other functions as may be
(12) hours, without
provided by law or assigned by the Minister.
corresponding overtime
premium.
Prohibition Against Re-organizational
- The concept can be
Change.
adjusted accordingly
No change in the reorganization herein
depending on the normal
prescribed shall be valid except upon prior
workweek of the company.
approval of the President for the purpose of
promoting efficiency and Normal workdays per week
effectiveness in the delivery of public services Reduction of are reduced
[Sec 26, EO 126] Workdays BUT should not last for more
than six months.

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Employees are rotated or
Rotation of alternately provided work
Workers within the workweek.
Employees are required to go
on leave for several days or
Forced Leave weeks utilizing their leave
credits if there are any.
Work schedule is
not continuous
Broken-time
BUT the work-hours within the
schedule
day or week remain.
Employees agree to avail the
holidays at some other days
6.Flexi-holidays PROVIDED there is no
schedule diminution of existing benefits
as a result of such
arrangement.
Under these flexible work arrangements, the
employers and the employees are
encouraged to:
1. EXPLORE alternative schemes under any
agreement and company policy or practice in
order to cushion AND
2. MITIGATE the effect of the loss of income of
the employees.
ADMINISTRATION OF FLEXIBLE WORK
ARRANGEMENTS
The parties to the flexible work schemes shall be
primarily responsible for its administration
In case of differences of interpretation, the
following guidelines shall be observed:
1. The differences shall be treated as
grievances under the applicable
grievance mechanism of the company.
2. If there is no grievance mechanism or if
this mechanism is inadequate, the
grievance shall be referred to the
Regional Office which has jurisdiction
over the workplace for appropriate
conciliation.
3. To facilitate the resolution of grievances,
employers are required to keep and
maintain, as part of their records, the
LABOR LAW
documentary requirements providing that
the flexible work arrangement was
voluntarily adopted.
NOTICE REQUIREMENT
Employer to notify the Department. Prior to its
implementation, the employer shall notify the
Department through the Regional Office which
has jurisdiction over the workplace of the
adoption of any of the above flexible work
arrangements.
RO ocular visit. The Regional Office shall
conduct an ocular visit to validate whether the
adoption of the flexible work arrangements is in
accordance with this issuance.
C. DOLE ORDER NO. 150, S. 2016 REVISED
GUIDELINES GOVERNING THE
EMPLOYMENT AND WORKING CONDITIONS
OF SECURITY GUARDS AND OTHER
PRIVATE SECURITY PERSONNEL IN THE
PRIVATE SECURITY INDUSTRY
Coverage
All private security, detective, investigative
agencies or operators, their principals or clients,
and all companies employing security guards and
other private security personnel
EMPLOYMENT STATUS
Employer - Employee Relationship
The Security Service Contractor (SSC) / Private
Security Agency (PSA) is the employer of the
security guards of private security personnel on
duty detail to a principal or client under a Service
Agreement.
Probationary Employment
Period shall not exceed six (6) months within
which services may be terminated for
1. Failure to meet reasonable standards or
criteria made known to the security
guards/ personnel at the time of their
engagement or
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2. Just cause contained in the probationary
contract. [DOLE D.O. 150-16, Sec 3.2]
Regular Employment
Security Guards or Private Security Personnel:
1. Allowed to work after the probationary
period
2. Considered a regular employee in the
absence of a valid probationary contract
3. Affected by repeated hiring-firing-rehiring
scheme for short periods of time, the
aggregate duration of which is at least six
(6) months [DOLE D.O. 150-16, Sec 3.3]
SERVICE AGREEMENT
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. [DOLE D.O.
150-16, Sec 2(j)]
Stipulations
1. specific description of the kind or nature
of security job, work, or service being
subcontracted;
2. place of work and terms and conditions
of the arrangement and shall include the
agreed amount of the security services to
be rendered and the standard
administrative fee of not less than twenty
percent (20%) of the total contract cost;
3. Basic equipment to be provided by the
SSC/PSA which shall be as follows:
a. For every two (2) security guards and
other private security personnel, one
(1) handgun; but in no case shall a
security guard be posted without a
firearm, unless required otherwise by
the client; and
b. One (1) handheld radio; provided
that, if the principal requires more
than these basic equipment, it shall
be shouldered by the principal.
4. An "automatic crediting provision" giving
immediate effect to wage orders that
prescribed increases in wage rates and
other wage-related benefits shall be
LABOR LAW
borne by the principals or clients of the
SSC/PSAs and the Service Agreements
shall be deemed amended accordingly;
5. Provisions to ensure that the rights and
the benefits of the security guards/
personnel under the Labor Code, as
amended, and other existing laws,shall
be upheld; and a violation of which will
render the service contractor ineligible to
participate in any bidding and the
principal ineligible to engage the services
of such SSC/PSA;
6. A provision on the NFCC of the
SSC/PSA, which must be equal to the
total contract cost per month, provided
that posting of the corresponding bond
shall be required only when the NFCC is
less than the total contract cost;
7. An undertaking that the SSC/PSA shall
directly remit monthly the employers'
share and employees' contribution to the
SSS, ECC, PhilHealth, and Pag-IBIG;
and
8. An undertaking that the expenses for any
training required by the principal or other
government instrumentalities, in addition
to those required by the PNP shall be
shouldered by the principal.
EMPLOYMENT CONTRACTS
Status of Employment
Notwithstanding any oral or written stipulations to
the contrary, the contract between the SSC/PSA
and its
security guards and other private security
personnel shall be governed by the provisions of
Articles 294 of the Labor Code.
Duty Detail Order
A written order/schedule/assignment issued to a
security guard and other private security
personnel by a superior officer, usually the private
security agency or branch manager or operation's
officer, for the performance of security and/or
detective service duty/ies.
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It shall contain the following:
1. Name, address, and telephone number
of agency;
2. Issue serial number and date of the Duty
Detail Order;
3. Complete name and designation of
grantee;
4. Purpose;
5. Inclusive dates of detail;
6. Firearms description and license
number;
7. Authorized uniform to be used;
8. Other specific instructions or remarks;
and
9. Signature and designation of issuing
officer.
[DOLE D.O. 150-16, Sec 5]
RIGHTS OF ALL SECURITY GUARDS AND
OTHER PRIVATE SECURITY PERSONNEL
1. Safe and healthful working conditions;
2. Labor standards such as but not limited
to service incentive
3. Leave, premium pay, overtime pay,
holiday pay, night shift differential, 13th
month pay, and separation pay as may
be provided in the Service Agreement or
under the Labor Code, as amended;
4. Retirement benefits and retirement plans
of the security service contractor, if any;
5. Social security and welfare benefits;
6. Right to self-organization and collective
bargaining, subject to the provisions of
existing laws; and
7. Security of tenure.[DOLE D.O. 150-16,
Sec 6]
TERMS AND CONDITIONS OF EMPLOYMENT
1. Requirements for Pre-employment
and Continued Employment.
Security guards/ personnel should be
duly licensed and must have passed the
physical and neuro-psychiatric
examination and drug test required by
the PNP for pre-employment and for
continued employment.
LABOR LAW
Expenses for these examinations and
test shall be shouldered by the security
guards. Any additional test may be
required at the expense of the requesting
party.
2. Obligations of Government Agencies
To comply with all labor standards and to
require the submission, among other
requirements and as part of the bid, an
undertaking from the SSC/PSA to pay
their security guards and other private
security personnel the prescribed
benefits.
3. Entitlement to Minimum Wage.
Unless a higher minimum wage is agreed
upon by the parties, the Security guards/
personnel shall be entitled to receive a
salary of not less than the minimum wage
rate prescribed for non-agricultural sector
or industry in the region where he/she is
assigned, regardless of the nature of
business of the principal.
4. Transfer of Assignment
In case of transfer, the wage rate most
favorable to the security guards/
personnel shall apply. Thus, transfer of
security guards and other private security
personnel to areas outside the region of
the domicile or head office of the
SSC/PSA shall not result in reduction of
the wage rate being enjoyed by the
security guards and other private security
personnel prior to such transfer.
Transfer to an area or region with higher
wage rate shall render the higher rate the
applicable wage rate for the transferred
security guards and other private security
personnel
5. Statutory Benefits
[DOLE D.O. 150-16, Sec 7]
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Pay
Benefit Particulars
Basic Salary All work days + 12 Regular
holidays
Additional 100% of MW for
work on a regular holiday
Allowance As prescribed by Regional
Wage Order
Premium 30% DR: special /rest days
Pay 50% DR: coinciding rest and
special days;
Overtime 25% HR: ordinary days
Pay In 30% HR: regular holidays,
Excess of 8 special days and rest days;
Hours
Night shift 10% HR: work rendered from
differential 10p.m. and 6a.m. of the
following day
13th month 1/12 of the total basic
pay salary earned within a cessation
calendar year;
Separation Either ½ month or 1 month
Pay pay per year year of service
Retirement Granted under RA No. 7641
Pay which shall be billable
monthly to the principal or
client of the SSC/PSA.
NOTE: HR: Hourly Rate; DR Daily Rate
Separation Pay.
One-half (1/2)-month pay per year of service,
but
guaranteed to one (1) month pay if separation
is due to:
1. Retrenchment or reduction of personnel
effected by management to prevent
serious losses;
2. Closure or cessation of operation of an
establishment not due to serious losses
or financial reverses;
3. Illness or disease not curable within a
period of six (6) months and continued
employment is prohibited by law or
LABOR LAW
prejudicial to the employee's health or
that of his/her co-employees; or
4. Lack of service assignment for a
continuous period of six (6) months.
One (1) month pay per year of service if
separation is due to:
1. Installation of labor-saving device, such
as replacement of employees by
equipment/machinery;
2. Redundancy, as when the position has
been found to be a surplusage or
unnecessary in the operation of the
agency;
3. Impossible reinstatement of the
employee to his/her former position or to
a substantially equivalent position for
reasons not attributable to the fault of the
employer, as when the reinstatement
ordered by a competent authority cannot
be implemented due to closure or
of operations of the
establishment/security service
contractor, or the position to which the
employee is to be reinstated no longer
exists and there is no substantially
equivalent position to which he/she can
be assigned; or
4. Lack of service assignment by reason of
age.
Retirement Pay
Retirement pay granted under Republic Act No.
7641 which shall be billable monthly to the
principal or client of the SSC/PSA.
● Retirement Fund.
The fund shall be administered and
maintained by a trust company bank,
investment house, pre-need company, or
corporation duly authorized to perform
trust function exclusively for collective
investment or re-investment of certain
money received in its capacity as trustee,
or similar arrangement as may be agreed
upon in accordance with law.
● Retirement Plan
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A retirement plan may be established for
the payment of the retirement benefit.
From this a Retirement Trust Fund (RTF)
shall be created out of contributions from
the principal.
5. Other benefits granted by law, individual
or collective agreement, or company
policy or practice
DEDUCTIONS FROM SALARY

Leaves General Rule. No deduction shall be made

from the salary of the security guards and other
TYPE OF PARTICULARS
private security personnel,
LEAVE

Incentive For Every year of Service Exceptions

Leave which may be availed of 1. SSS contribution;
5 Days during days of absence; 2. Pag-IBIG contribution;
Convertible into Cash 3. PhilHealth contribution;
4. Withholding tax from income, provided a
Maternity Due to inability to work due to proper withholding tax receipt is issued
Leave childbirth or miscarriage up to 5. Union dues, if authorized in writing;
4 miscarriages or deliveries 6. Agency fees
● Collected from non-members of the
Paternity Granted after delivery w/o bargaining agent but accept benefits
Leave prejudice to employer’s policy under the collective bargaining
7 Days of allowing employees to avail agreement (CBA);
of benefit before or after 7. Other deduction
delivery. ● authorized in writing by the security
guard/personnel for payment to a
Granted for the first 4 third person AND
deliveries including ● the employer agrees to do so,
miscarriages of the lawful wife provided that the employer does not
receive any pecuniary benefit,
Leaves For qualified victim-female directly or indirectly, from the
for VAWC security guards / personnel transaction.
victims under RA No. 9262
10 Days These deductions should be reflected in the
payroll by the SSC/PSA.
Special With Full Pay based on gross
Leave monthly compensation Limitations on Deductions
Not more following surgery caused by Bond for Firearms.
than 2 gynecological disorders, ● In cases a bond is required for the use of
months firearms and other paraphernalia, it may
only be imposed once.
Other Benefits ● The bond should not be more than five
1. Benefits under the Employees percent (5%) of the amount of the firearm
Compensation Program ● The said cash bond, less the cost of
2. PhilHealth benefits damage or loss of firearms or
3. Social Security benefits paraphernalia due to the fault of the
4. Safe and healthful working conditions as security guard, shall be refunded to the
provided in the Occupational Safety and security guards and other private security
Health Standards personnel within fifteen (15) calendar
days from severance of employment.

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Reimbursement of loss or damage on tools, or adjustments borne The immediate recourse

materials, or equipment supplied after the execution of of security guards
Allowed in private security agencies as a the service /personnel for payment of
recognized and reasonable industry practice agreement. wage increase before
given the nature of the service or business. litigation is with their
Provided, the following conditions must be employer, the SSC/PSA
observed:
When SC/PSA is the principal shall be
found to be engaged jointly and solidarily liable
1. Employee concerned is clearly shown to be
in labor-only with it in the same manner
responsible for the loss or damage;
contracting, that the principal is liable
2. Employee is given reasonable opportunity to
to employees directly
show cause why the deduction should not be
hired by him/her.
made;
3. Amount of such deduction is fair and SSC/PSA is found to principal shall be the
reasonable and shall not exceed the actual be an in-house direct employer of the
loss or damage; and agency security guards and/or
4. Deduction does not exceed 20% of the other private security
employee's wages in a week. personnel deployed with
5. For Cash Deposit it.
a. maximum amount shall not exceed When a violation of Principal deemed
the employee's one (1) month basic the relevant solidarily liable with the
salary provisions of the SSC/PSA to the extent of
b. may be deducted in an amount which Labor Code accrued wage and wage-
shall not exceed 20% of the related benefits that the
employee's wages in a week. SSC/PSA may owe in the
c. full amount of cash deposit deducted following instances:
shall be returned to the employee 1. When the certificate
within ten (10) days from his/her of registration of the
separation from the service. SSC/PSA is
cancelled, revoked, or
LIABILITY AND RESPONSIBILITIES OF not renewed by the
SECURITY SERVICE CONTRACTORS (SSC) competent authority;
/PRIVATE SECURITY AGENCIES AND 2. When the contract
PRINCIPALS (PSA) between the principal
and the SSC/PSA is
Solidary Liability. pre-terminated for
The SSC/PSA and its principal or client shall reasons not
be jointly and solidarity liable with each other in attributable to the fault
any of the following circumstances: of the latter.

CIRCUMSTANCE IMPLICATION RIGHT TO SECURITY OF TENURE AND DUE

When the SSC/PSA Principal is solidarily liable PROCESS
fails to pay the wages to the extent of the work
of its security guards / performed under the Generally.
personnel Service Agreement Security guards and other private security
personnel shall enjoy security of tenure in their
When the principal SSC/ PSA is solidarily
employment as provided by law.
fails to pay the liable.
prescribed increases

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Their services can only be terminated for just or
authorized causes after due process.
Requirements of Due Process to Secure
Tenure
Termination of employment based on just
causes as defined in Article 297 of the Labor
Code
1. Two written notices served on the
employee shall be in accordance with the
following
The first written notice should contain:
a. specific causes or grounds for
termination;
b. Detailed narration of the facts
and circumstances
c. The company rule, if any, that is
violated and/or the ground under
Article 297 that is being charged
d. A directive that the security
guard and other private security
personnel is given an opportunity
to submit a written explanation
within five (5) calendar days from
receipt of the first written notice.
[DOLE D.O. 150-16, Sec 10.1]
Note: Notices shall be served on the security
guard and private security personnel's last
known address.
2. Ample opportunity to be heard and to
defend himself/herself with the
assistance of his/her representative if
he/she so desires
● "Ample opportunity to be heard"
means any meaningful
opportunity (verbal or written)
given to answer the charges
against him/her and submit
evidence in support of his/her
defense, whether in a hearing,
conference, or some other fair,
just, and reasonable way.
LABOR LAW
● A formal hearing or conference
becomes mandatory only
a. when requested by the
security guard / personnel
in writing;
b. substantial evidentiary
disputes exist;
c. a company rule or practice
requires it; or
d. when similar circumstances
justify it.
[DOLE D.O. 150-16, Sec
10.1]
3. After determining that termination of
employment is justified, the SSC/PSA
shall serve the security guard and other
private security personnel a second
written notice, the notice of termination,
indicating that:
a. All circumstances have been
considered; and
b. the grounds have been
established to justify the
severance of his/her
employment.
[DOLE D.O. 150-16, Sec 10.1]
Termination for just cause as stated in Article 297
(formerly 282) of the Labor Code, as renumbered,
does not entitle the security guard and other
private security personnel to separation pay,
unless otherwise provided in the employer's
policy, individual contract, or collective
agreement. [DOLE D.O. 150-16, Sec 10.1]
Termination of employment based on
authorized causes as defined in Articles 298
and 299 of the Labor Code.
Due process shall be deemed complied with upon
service of a written notice to
● the security guard /personnel AND
● the appropriate DOLE Regional Office at
least thirty (30) days before the effectivity
of the termination, specifying the
ground(s) for termination. [DOLE D.O.
150-16, Sec 10.1]
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Termination brought about by the completion
of the contract
No prior notice is required. [DOLE D.O. 150-16,
Sec 10.1]
Termination brought about by the failure to
meet reasonable standards during the
probationary period.
A written notice served upon the security guard
and other private security personnel within a
reasonable time prior to the expiration of the
probationary period is sufficient.
Note: The reasonable standards should be made
known to the security guard and other private
security personnel at the time of employment,
[DOLE D.O. 150-16, Sec 10.1]
The termination prior to the expiration of the
Service Agreement
The termination shall be governed by Articles
297, 298, and 299
When not due to any authorized cause under
Article 298 , the right of the security guard/
personnel to accrued and unpaid wages and
other wage-related benefits, including unremitted
legal mandatory contributions such as SSS,
PhilHealth, Pag-IBIG, and ECC, shall be borne
by the party at fault, without prejudice to the
solidary liability of the parties to the Service
Agreement. [DOLE D.O. 150-16, Sec 10.1]
Report of Dismissal, Termination or
Retirement The SSC/PSA shall submit a monthly
report of all dismissal or termination, including
retirement, effected during the month to the
DOLE Regional Office having jurisdiction over its
main or branch office using the prescribed form.
All information gathered shall be used by the
DOLE for policy and statistical purposes. [DOLE
D.O. 150-16, Sec 10.2]
Reserved Status
A security guard / personnel may be placed in a
work pool or on reserved status due to the
following:
LABOR LAW
1. lack of service assignment after the
expiration or termination of the Service
Agreement
2. temporary suspension of security service
operations,
3. valid relief from the current place of work
and there is no work assignment
available.
No security guard and other private security
personnel can be placed in a work pool or on
reserved status in any of the following situations:
1. after expiration of a service contract, if
there are other principals where he/she
can be assigned;
2. as a measure to constructively dismiss
the security guard; and
3. as an act of retaliation for filing any
complaint against the employer for
violation of labor laws, among others.
If after a period of six (6) months, the SSC/PSA
cannot provide work or give an assignment to the
reserved security guard, the latter can be
separated from service and shall be entitled to
separation pay
Assignment as a reliever for less than one-month
shall not be considered as an interruption of the
six (6) months period. [DOLE D.O. 150-16, Sec
10.3]
Retaliatory Measures
It shall be unlawful for the principal, SSC/PSA, or
any party privy to the Service Agreement to
refuse to pay or reduce the wages and benefits,
and discharge or in any manner discriminate
against any security guard/ personnel who has
filed any complaint or instituted any proceeding
on wages, labor standards violation, or has
testified or is about to testify in such proceedings.
[DOLE D.O. 150-16, Sec 10.4]
Preventive Suspension.
Security guards and other private security
personnel may be preventively suspended if their
continued employment poses a serious and
imminent threat to life or property of the
SSC/PSA, its principal, or the coworkers of
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security guards and other private security

personnel.

No preventive suspension shall last longer than

thirty (30) days. The SSC/PSA shall thereafter
reinstate the security guard and other private
security personnel to his/her former position or it
may extend the period of suspension, provided
that during the period of extension, the SSC/PSA
shall pay the wages and other benefits due the
security guard and other private
security personnel [DOLE D.O. 150-16, Sec 10.5]

Note: this is subject to the Constitutional and

statutory rights of the security guard/ personnel to
security of tenure and due process.

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D. AMENDED STANDARD TERMS AND CONDITIONS GOVERNING THE OVERSEAS

EMPLOYMENT OF FILIPINO SEAFARERS ON-BOARD OCEAN-GOING SHIPS [POEA Memorandum
Circular No. 010-10]

DUTIES [Sec. 1]
Of the Principal/ Employer/ Master
Of the Seafarer:
/Company:
FC2 - ODOP
FEG-SC-PRO3
FAITHFULLY COMPLY with the stipulated terms FAITHFULLY COMPLY with and observe the terms and
and conditions of this contract Particularly conditions of this contract,
1. prompt payment of wages, ● Violation: subject to disciplinary action pursuant to
2. remittance of allotment and Section 33 of this contract.
3. expeditious settlement of valid claims of the
seafarer
EXTEND COVERAGE to the seafarers under the Abide by the CODE OF DISCIPLINE (POEA rules) and
SSS, PhilHealth, ECC and Pag-IBIG Fund regulations governing overseas contract workers and
● Unless multilateral or bilateral agreements the CODE OF ETHICS FOR SEAFARERS.
with other countries provide otherwise
Operate a GRIEVANCE MACHINERY provided OBEY THE LAWFUL COMMANDS of the Master or any
in this contract and ensure its free access at all person who shall lawfully succeed him and to comply
times by the seafarer. with the company policy.
Provide a SEAWORTHY SHIP for the seafarer Be DILIGENT in his duties relating to the ship, its stores
and take all reasonable precautions to prevent and cargo, whether on board, in boats or ashore.
accident and injury to the crew.
Observe the CODE OF ETHICS for Seafarers To conduct himself at all times in an ORDERLY AND
and conduct himself in the traditional decorum of RESPECTFUL manner towards persons on official
a master. business with the ship.
PROVIDE a workplace conducive for the To take PERSONAL RESPONSIBILITY for his health
PROMOTION and while onboard by practicing a healthy lifestyle.
PROTECTION of the health of the seafarers in
accordance with the ILO Maritime Labor
Convention, 2006.

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COMMENCEMENT OF CONTRACT [Sec. 2]
Commencement. Starts upon actual departure
of the seafarer from the Philippine airport or
seaport in the point of hire and with a POEA
approved contract.
● It shall be effective until the seafarer's
date of arrival at the point of hire upon
termination of his employment.
Duration. Period of employment shall be for a
period mutually agreed upon by the seafarer and
the employer BUT not to exceed 12 months.
● Any extension of the contract shall be
subject to mutual consent of both parties
WAGES [Sec. 6]
All seafarers shall be paid for their work regularly
and in full in accordance with this contract.
When? Monthly wages shall be paid NOT LATER
THAN 15 days of the succeeding month from the
date of commencement of the contract until the
date of arrival at point of hire upon termination of
their employment
Monthly account. Seafarers shall be given a
monthly account of the payments due and the
amounts paid to them, including wages,
additional payments and the rate of exchange
used.
Final Wage Account. Upon his discharge, the
seafarer shall be given a written account of his
final wages reflecting all deductions therefrom.
Where a seafarer is landed in an emergency, the
written account of his wages shall be given to him
not later than one month from disembarkation.
[Sec. 9]
Certificate of Employment. Upon the seafarer’s
request, he shall be provided by his principal/
employer/master/company his certificate of
employment or service record without any
charge. [Sec. 9]
HOURS OF WORK [Sec. 10]
The seafarer shall perform not more than forty-
eight (48) hours of regular work a week. Regular
working hours for the seafarer shall be eight (8)
LABOR LAW
hours in every 24 hours, midnight to midnight,
Monday to Sunday.
The normal practice is to observe the eight (8)
regular working hours during the following
periods:
1. The DAY WORKER - from 0600 hours to
1800 hours.
2. The STEWARD PERSONNEL - from
0500 hours to 2000 hours.
3. Those ON SEA WATCH - staggering of
working hours will be at the master's
discretion.
NOTE: The hours of works shall be determined
and prescribed by the master, PROVIDED that
it conforms with:
1. the customary international practices and
standards and
2. as prescribed in the normal practice as
enumerated above.
OVERTIME & HOLIDAYS [Sec. 11]
The seafarer shall be compensated for all work
performed in excess of the regular eight (8) hours
as prescribed above.
A. Compute overtime work
● A fraction of the first hour worked shall be
considered as one full hour.
● After the first hour overtime, any work
performed which is
○ less than thirty (30) minutes shall
be considered as half an hour
and
○ more than thirty (30) minutes
shall be considered one full
hour.
B. Overtime work may be compensated at the
following rates:
1. OPEN OVERTIME
Not less than 125% x basic hourly rate
(208) regular working
hours per month
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2. GUARANTEED OR FIXED OVERTIME

D. EMERGENCY DUTY
Not less than 30% x basic monthly salary
The master of a ship may:

NOTE: 1. REQUIRE a seafarer to perform any

● Fixed rate overtime includes overtime hours of work necessary for the
work performed on Sundays and immediate safety of the ship, persons on
holidays BUT shall not exceed (105) board or cargo, for the purpose of giving
hours a month. assistance to other ships or persons in
● Overtime work for officers shall be distress at sea, or to conduct fire, boat, or
computed based on the fixed overtime emergency drill.
rate. 2. SUSPEND the schedule of hours of
● For ratings, overtime work shall be work or hours of rest and require a
based on guaranteed or open overtime seafarer to perform any hours of work
rate, as mutually agreed upon by the necessary until the normal situation has
contracting parties. been restored or the drill has been
○ For ratings paid on completed.
guaranteed overtime, overtime
work in excess of 105 hours a As soon as practicable after the normal situation
month for ratings shall be further has been restored or the drill has been
compensated by their hourly completed, the master shall ensure that any
overtime rate. seafarer who have performed work in a
scheduled rest period are provided with an
C. HOLIDAYS adequate period of rest.
Any hours of work or duty including hours of
watchkeeping performed by the seafarer on LEAVE PAY [Sec. 12]
designated rest days and holidays shall be paid The seafarer's leave pay shall be in accordance
rest day or holiday pay. with the number of days leave per month as
agreed upon.
The following shall be considered as holidays ● Days leave SHALL NOT BE LESS
at sea and in port. THAN four and a half days (4 1/2) for
New Year's Day January 1 each month of service and pro-rated.
● Leave pay shall be settled onboard or
Maundy Thursday movable date
settled within two weeks after arrival of
Good Friday movable date the seafarer at the point of hire.
Araw ng Kagitingan April 9
(Bataan & Corregidor Shore leave. The seafarer shall be allowed shore
Day) leave:
Labor Day May 1 1. when practicable,
2. upon the consent of the master or his
Independence Day June 12
deputy,
National Heroes Day Last Sunday of August 3. taking into consideration the operations
All Saints Day November 1 and safety of the ship. [Sec. 13]
Bonifacio Day November 30
TRANSFER CLAUSE [Sec. 15]
Christmas Day December 25 The seafarer agrees to be transferred at any port
Rizal Day December 30 to any ship owned or operated, manned or
managed by the same employer, PROVIDED
THAT:

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1. it is ACCREDITED to the same manning
agent and
2. that the position of the seafarer and the
rate of his wages and terms of service are
in NO WAY INFERIOR and
3. the total period of employment SHALL
NOT EXCEED that originally agreed
upon.
GRIEVANCE MACHINERY [Sec. 16]
If the seafarer considers himself aggrieved,
he shall make his complaint in accordance
with the following procedures:
1. Approach the head of the Department.
The seafarer shall first approach the
head of the Department in which he is
assigned to explain his grievance.
2. Make grievance in writing and choose
time for hearing. The seafarer shall
make his grievance in writing and in an
orderly manner and shall choose a time
when his complaint or grievance can be
properly heard.
3. Seek assistance. The seafarer may also
seek the assistance of the highest
ranking Filipino seafarer on board.
4. Dealing with the complaint. The
Department head shall deal with the
complaint or grievance
● Where solution is not possible at
his level, refer the complaint or
grievance to the Master who
shall handle the case personally.
5. Appeal. If no satisfactory result is
achieved, the seafarer concerned may
appeal to the management of the
company or with a Philippine Overseas
Labor Office or consular officer overseas.
● The master shall afford such
facilities necessary to enable the
seafarer to transmit his appeal.
NOTE:
● Documentation. For the protection of
both parties, the seafarer may have the
grievance procedure and all actions or
decisions agreed upon be properly
documented.
LABOR LAW
● If employment is covered by a CBA, he
shall elevate any unsatisfactory
resolution of his grievance to voluntary
arbitration as agreed upon under the
CBA.
● If employment is NOT covered by a
CBA, he may elevate his complaint to
the Maritime Industry Labor Arbitration
Council (MILA) prior to any other forum.
The foregoing procedures shall be without
prejudice to:
1. other modes of voluntary settlement of
disputes
2. to the jurisdiction of the POEA and NLRC
over any unresolved complaints arising
out of shipboard employment.
DISCIPLINARY PROCEDURES [Sec. 17]
The Master shall comply with the following
disciplinary procedures against an erring
seafarer:
The Master shall:
A. Written notice. Furnish the seafarer with
a written notice containing the following:
1. Grounds for the charges as listed
in Sec. 33 of this Contract or
analogous act constituting the
same.
2. Date, time and place for a formal
investigation.
B. Investigation. Conduct the investigation
or hearing, giving the seafarer the
opportunity to explain or defend himself
against the charges.
● Procedures must be duly
documented and entered into the
ship’s logbook.
C. Issuance of written notice of penalty. If
after the investigation or hearing and he
is convinced that imposition or a penalty
is justified, he shall issue a written notice
of penalty and the reasons for it to the
seafarer, with copies furnished to the
Philippine agent.
D. If there is a clear and existing danger
to the safety of the crew or the ship, a
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dismissal for Dismissal for just cause

may be effected by the Master without
furnishing the seafarer with a notice of
dismissal.
● The Master shall send a
complete report to the manning
agency.

TERMINATION OF EMPLOYMENT [Sec. 18]

The employment of the seafarer shall cease or
is terminated when:
A. Completion of contractual service.
Happens when the seafarer:
1. Completes his period of contractual
service aboard the ship
2. Signs-off from the ship and
3. Arrives at the point of hire.

B. Deemed terminated effective upon arrival

at the point of hire for any of the following
reasons:
1. When the seafarer signs-off and is
disembarked for medical reasons
pursuant to Sec 20 (A) [5] of this
Contract.
2. When the seafarer signs-off due to
shipwreck, ship's sale, lay-up of
ship, discontinuance of voyage or
change of ship principal.
3. When the seafarer, in writing,
voluntarily resigns and signs off
prior to expiration of contract.
4. When the seafarer is discharged for
just cause.

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REPATRIATION [Sec. 19]

Situation/Condition Seafarer’s Entitlement/Liabilities:
The seafarer shall continue his
If the ship is
service on board until the ship's
outside the
arrival at a convenient port and/or Earned wages and benefits as provided in his
Philippines upon
after arrival of the replacement crew contract.
the expiration of
PROVIDED that the continuance
the contract
shall NOT exceed (3) months.
1. Earned wages
2. Earned leave pay and
3. Basic wages for the unserved portion of
Unserved portion is not more
the contract
than (1) month
UNLESS within 60 days from
the seafarer may be repatriated from
disembarkation, he is rehired at the
such port.
If the ship arrives same rate or position, he is not entitled
at a convenient to basic wages for the unserved portion
port before the
expiration of the 1. Earned wages + leave pay + basic wages
contract 2. Leave pay for the entire contract period
Unserved portion is more than (1) 3. Termination pay equal to (1) month of his
month but less than (3) months basic pay
the seafarer may be repatriated from
such port PROVIDED:
a. original contract period is at least (9) months
b. shall not apply to dismissal for cause.
The seafarer may be repatriated to
the Philippines via sea or air or as
may otherwise be directed by his
employer.
He shall be provided with:
if discharged at a
1. accommodation and food,
port abroad for If discharged for any JUST
2. allowances and
any reason CAUSE:
3. medical treatment, if necessary,
Employer has the right to recover
the costs of replacement and
repatriation from the seafarer's
wages and other earnings.
1. Earned wages and
2. Basic wages
- FROM date of signing off UNTIL arrival
at the point of hire
If discharged as EXCEPT
directed by the when the discharge is in accordance with the
employer above or for disciplinary reasons.
If the seafarer delays or makes a 1. Earned wages and
detour or proceeds to a 2. Basic wage
destination other than through - Calculated based on the original

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the travel itinerary arranged by scheduled date of arrival at the point of

the employer hire
Employment will be deemed
terminated at the time the seafarer All other liabilities of the company in this event shall
signs off the ship and all additional cease at the time the seafarer is terminated.
expenses shall be to the seafarer's
account. Any illness, injury or death sustained by the
seafarer, due to the above shall be considered
non-work related and shall not be compensated
He shall be liable for:
1. His repatriation cost
2. Transportation cost of his replacement
If seafarer requests for early termination of his contract
- In case of compassionate grounds,
employer may assume this transportation
cost

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COMPENSATION AND BENEFITS [Sec. 20]

In case of permanent total or partial disability
A. For Injuries or Illness of the seafarer caused by either injury or
illness - the seafarer shall be compensated in
The liabilities of the employer when the accordance with the schedule of benefits
seafarer suffers work related injury or illness enumerated in Sec. 32 of his Contract.
during the term of his contract are as follows: ● Computation shall be governed by the
rates and the rules of compensation
Employer shall continue to pay applicable at the time the illness or
Wages the seafarer his wages during disease was contracted.
the time he is on board ● The disability shall be based solely on the
disability gradings provided under Sec.
If the injury or illness requires
32 of this Contract
medical and/or dental
treatment in a foreign port -
B. For Death
employer is liable at FULL
COST
Medical In case of work-related death
attention cost If after repatriation, the ● Employer shall pay his beneficiaries the
seafarer still requires medical Philippine currency equivalent to the
attention - he shall be so amount of
PROVIDED AT COST to the 1. (US$50,000) and
employer until such time he is 2. (US$7,000) to each child under
declared fit the age of twenty-one (21)
Sickness BUT not exceeding four (4)
Allowance children.
Equivalent to his basic wage
*Period within ● If death is caused by warlike activity
computed from the time he
which seafarer while sailing within a declared war zone
signed off until he is declared
is entitled shall or war risk area, the compensation
fit to work.
not exceed 120 payable shall be DOUBLED.
days.
In case treatment of the Other employer’s liabilities when seafarer
Reimbursemen dies as result of work-related injury or illness
seafarer is on an outpatient
t of the during the term of employment
basis as determined by the
medicine costs Pay the deceased's beneficiary
company-designated Outstanding
prescribed by all outstanding obligations due
physician, the company shall obligations
the company- the seafarer
approve the appropriate mode
designated
of transportation and Transport the EXCEPT if the death occurred
physician.
accommodation. remains and in a port where local
personal government laws or regulations
In case a seafarer is disembarked from the effects of the do not permit the transport of
ship for medical reasons - the employer shall seafarer such remains
bear the FULL COST OF REPATRIATION in the Pay the beneficiaries of the
event the seafarer is declared Burial seafarer the Philippine currency
1. fit for repatriation, or expenses equivalent to the amount of
2. fit to work but the employer is unable to (US$1,000) for burial expenses
find employment for the seafarer on
Subsistence Grant to the seafarer who is
board his former ship or another ship of
allowance involved in a case or litigation
the employer.

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for the protection of his rights in area, the agreement shall be properly appended
a foreign country, a to the Contract for verification and approval by the
subsistence allowance of at POEA.
least (US$100) per month for a ● The seafarer shall comply with the
maximum of (6) months. agreement or shall bear his cost of
repatriation when he opts not to sail into
When a seafarer is hospitalized
a war or war-risk trading area.
and has been confined for at
least (7) consecutive days, the
Compassionat If a war or warlike operations should arise
employer shall pay for the
e Visit during the term of this Contract in any country
transportation cost of the family
within the ship's trading area, the seafarer may
member or requested
sail with the ship within and out of the trading area
individual.
if required by the Master.

NOTE:
● Benefits mentioned above shall be
separate and distinct from, and will be
in addition to whatever benefits which the
seafarer is entitled to under Philippine
laws.
● 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.
● A seafarer who knowingly conceals a
pre-existing illness or condition shall
be liable for misrepresentation and shall
be disqualified from any compensation
and benefits

WAR AND WARLIKE OPERATIONS

ALLOWANCE. [Sec. 21]

Premium pay. The seafarer when sailing within

a war-risk trading area shall be entitled to such
premium pay as the POEA may determine
through appropriate periodic issuances.
● POEA is the sole authority to determine
whether the ship is within a war risk
trading area.

If a seafarer binds himself in writing to sail

into an area declared a war or war-risk trading

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TERMINATION [Secs. 22, 23, 24, 25, 26]

SITUATION EMPLOYER ENTITLEMENTS

Termination 1. Earned wages
In case of termination of employment of the
Due to 2. Medical examination to determine
seafarer before the expiration of the term of
Shipwreck and his fitness to work
his contract due to shipwreck, actual or
Ship's 3. Repatriation
constructive total loss or foundering of the
Foundering 4. Termination pay = (1) month basic
ship
[Sec. 22] wage
1. Earned wages
2. Repatriation
3. Termination pay = (1) month basic
Termination wage
Due to Sale of Where the ship is sold, laid up, or the voyage
Ship, Lay-Up or is discontinued necessitating the termination UNLESS arrangements have been made
Discontinuance of employment before the date indicated in for the seafarer to join another ship
of Voyage. [Sec. the Contract, belonging to the same principal to
23] complete his contract, seafarer is entitled
only to:
1. Basic wages until the date of
joining the other ship
If the ship's unseaworthiness necessitates
Termination the termination of employment before the 1. Earned wages
Due to date indicated in the Contract 2. Repatriation
Unseaworthines 3. Termination pay = (1) month basic
s [Sec. 24] *seafarer shall not be forced to sail with the wage
ship
Termination
Due to
If the seafarer is terminated and/or
Regulation 1/4,
repatriated as a result of port state control
Control
procedures/actions in compliance with 1. Earned wages and benefits
Procedures of
Regulation 1/4 of the 1978 STCW 2. Repatriation
the 1978 STCW
Convention, as amended, his termination
Convention, as
shall be considered valid
Amended [Sec.
25]
1. Earned wages
Where there is a change of Principal of the
2. Repatriation
ship necessitating the pre-termination of
3. Termination pay = (1) month basic
employment of the seafarer
wage
Change of
Principal [Sec. 1. Basic wage
26] FROM the date of his
In case arrangements have been made for
disembarkation from his former
the seafarer to directly join another ship of the
ship
same Principal to complete his contract
UNTIL the date of his joining the
new ship

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DISPUTE SETTLEMENT PROCEDURES [Sec.

29]
In cases of claims and disputes arising from this
employment
1. If the parties covered by a collective
bargaining agreement - they shall
submit the claim or dispute to the original
and exclusive jurisdiction of the voluntary
arbitrator or panel of voluntary arbitrators
2. If the parties are NOT covered by a
collective bargaining agreement, they
may at their option submit the claim or
dispute to either
a. the original and exclusive
jurisdiction of the (NLRC), or to
b. the original and exclusive
jurisdiction of the voluntary
arbitrator or panel of arbitrators.

(POEA) shall exercise original and exclusive

jurisdiction to hear and decide disciplinary
action on cases,
1. which are administrative in character,
2. involving or arising out of violations of
recruitment laws, rules and regulations
3. involving employers, principals,
contracting partners and Filipino
seafarers.

PRESCRIPTION OF ACTION. [Sec. 30]

All claims arising from this contract shall be made
within THREE (3) YEARS from the date the cause
of action arises

APPLICABLE LAW [Sec. 31]

Any unresolved dispute, claim or grievance
arising out of or in connection with this contract
including the annexes thereof, shall be governed
by the laws of
1. the Republic of the Philippines,
2. international conventions, treaties and
covenants to which the Philippines is a
signatory.

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