Reviewer Labor Law Midterm

Labor - It could simply mean physical toil; or a productive work especially physical work done for wages.
Or a work and work relationship referring to any economically productive application of physical, mental
and material resources.

Labor Law – Are law which directly affects employment and governs the relationship between workers,
employees, trade unions and the government.

Social Legislation – Are those laws, rules and regulations that promote welfare to all sectors of society
and provide particular kinds of protections and benefits.

All labor laws are social legislation but not all social legislation are labor laws.

Labor Standards – In the case of Batong Buhay Gold Mines Inc. vs. Dela Serna et. al, the court define
labor standard as a minimum requirement prescribed by existing laws, rules and regulations relating to
wages, hours of work, cost of living allowance and other monetary and welfare benefits including
occupational standard, safety standard, and health standard.

Labor Relations – are those laws, rules and regulation which govern the relationship between the
employees and their employers, promote the right of the employees to self-organization and collective
bargaining, strikes and picketing, penalize labor practice and provide modes for the settlement of labor
disputes such as conciliation, mediation, grievance machinery, voluntary arbitration and compulsory
arbitration.

Social Justice – Calalang vs. Williams:

Social Justice is achieved not through mistaken sympathy towards any group. It must be
founded on the recognition of the necessity of interdependence among the units of the society and its
equal protection should be evenly extended to all groups in accordance to the promotion of health,
comfort and the bringing of the greatest good to the greatest number.

Principle of shared responsibility – Calalang vs. Williams:

The constitution commands the state to promote the principle of shared responsibility between
workers and employers. Although the court has always been guided that the rights of the workers and
promotion of their welfare shall be protected, it cannot be discriminately done to favor one party, be it
labor or management especially if the party concerned has no valid support to its claim.

Rights of the workers guaranteed by the Constitution:

1. Right to self-organization
2. Right to conduct collective bargaining
3. Right to engage in peaceful concerted activities
4. Enjoy security of tenure
5. Right to work under humane conditions
6. Right to receive a living wage
 7. Right to participate in policy and decision-making process affecting their rights and benefits as
may be provided by law.

Declaration of Policy:

Art. 3 of 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 the
workers and employers. The state shall assure the rights of workers to self-organization, collective
bargaining, security of tenure and just and humane conditions of work.

Interdependence – Both sectors need each other, they are interdependent. That means one is inutile
without the other. Hence, the basic policy contemplates to a balance or coordinate rights and interest of
both the worker and employer.

Construction in favor of Labor –

Art. 4 of the Labor Code – All doubts in the implementation and interpretation of the provision of the
code, including its rules and regulations shall be resolved in favor of the worker.

Acuna v. CA – The court ruled that any controversies between a worker and employer such as doubts
arising from evidence or interpretation of agreement and writing shall be construed in favor of the
worker.

Management prerogatives –

I. Right to hire – The management has the prerogative to hire, subject to the following laws:

RA 7610 (Anti-Child Abuse Law) Art. 8, Section 12

A child below 15 may be allowed to be employed provided that:

1.) The child works directly under sole responsibility of his parents or legal guardian and
only members of the employer’s family are employed. Provided, that the
employment will not endanger the child’s life, safety, health and morals.
2.) When the child’s employment in public and entertainment such as theatre,
television, radio and among others is essential. Provided, that the employment
contract was expressly agreed by the child. Provided further, that the employer shall
`ensure the protection, safety, health and morals of the child and he shall
implement a continuing program for training and skill acquisition of the child.

RA 7658 (amended Art. 8, Section 12 of RA 7610)

1. It included that the parent or legal guardian shall provide the child with the
prescribed primary and secondary education.
 RA 9231 (further amended RA 7610)

1. Included new sections on the Art. 8 Section 12 of RA 7610

 Hours of Work of a working child
– A child below 15 may work 20 hrs a week but not more than 4 hrs per
day. They can’t also work between 8 pm to 6 am.
– A 15 years old child but bellow 18 years old shall not work for more
than 8 hrs a day and not more than 40 hrs a week. They can’t also work
between 10 pm to 6 am.
 Income of the child
– His income shall belong to him but it shall be administered by both of
his parent or guardian. And it shall be used primarily for his education
and skills acquisition and secondarily to the needs of the family
provided not more than 20% of child income will be used to the needs
of the family.
 Creation of trust fund to preserve at least 30% of the child’s income.
 Prohibitions against worst forms of child labor such as slavery, prostitution,
pornography, drug trafficking, and any other work that will endanger his
health, safety, and morals.
Included also a prohibition of child to work as models in any advertisement of
alcoholic beverages, tobacco, gambling etc.

RA 10361 – it shall be unlawful to employ a person below 15 years of age as domestic worker.

II. Right to Promote – The employer has the management prerogative to promote its
employees.

Echo 2000 vs. Obrero Filipino - The court ruled that for a promotion to occur, there must be
an upward vertical movement of the employee’s rank or position and any increase in salary
is only incidental but never determinative of whether or not a promotion is bestowed upon
an employee.

Further, a promotion is in the nature of a gift or reward, thus, an employee is not bound to
accept a promotion as a valid exercise of his right. Such exercise cannot be considered in
law as insubordination or willful disobedience. Hence, it cannot be the basis of an
employee’s dismissal from service.

III. Right to Demote – The employer has the management prerogative to demote its
employees.

Philippine Wireless Corporation vs. NLRC: The court said that there is no demotion when
there is no reduction in position, rank or salary as a result of a transfer.

Blue Dairy Corporation vs. NLRC: Considering that demotion is like dismissal, also a punitive
action, the employee being demoted should be given a chance to contest the same. A
 transfer
from a position of dignity to a servile or menial job constitutes a demotion of rank.

IV. Right to Transfer – The employer has the management prerogative to transfer its
employees.

Endico vs. Quantum Food Corp.: The court ruled that a transfer of an employee is
considered valid if it is done in a legitimate pursuit of what is the best for the interest of the
business. Provided, that such transfer does not result to demotion in rank nor diminution in
salary, benefits and other privileges of the employee.

V. Right to Discipline – The employer has the management prerogative to discipline its
employees.

Philippine Airlines vs. NLRC: The court ruled that it recognizes the management prerogative
to discipline its employees and to impose appropriate penalties pursuant to company’s rules
and regulations. Provided, that it was not done in abuse of discretion, discrimination and
bad faith nor it will be contrary to justice and fair play.

Limitations to exercise Management Prerogative:

Constitution (Due process and social justice)

Labor Relations (Collective bargaining)

Contracts

ILO Conventions

Company Past Practice –

Perez vs. Comparts – The court ruled that in order to be considered a past company
practice, the giving of the benefits should have been done over a long period of time and
must be shown to have been consistent and deliberate.

Applicability of the Labor Code

The test to determine whether a government-owned or controlled corporation is subject to the

Civil Service Law is the manner of its creation. That means:

Government owned or controlled corporations created by congress with original charter are
subject to the Civil Service Law, while those incorporated under the general Corporation
Law are
covered by the Labor Code.
 Labor laws do not apply with government agencies except on the provision of state insurance
fund of government personnel covered by GSIS.

Labor code may also apply even if there is no employment relationship between the parties such
as when the issue is indirect employer’s liability, illegal recruitment, misuse of POEA license. But
when the issue is about employment benefits, employment relationship is an essential
element.

Article 13 Definition:

Worker – any member of the labor force whether employed or unemployed.

Recruitment and placement - refers to any act of hiring, promising, procuring, transporting,
contracting and among others, of any person for the purpose of employment, either domestic or
abroad and whether for profit or not.

License – it is a document that allows a person or entity to operate a private employment

agency.

Authority - gives a right to a person to engage in recruitment and placement activities.

Recruitment and Placement –

People v. Panis – The court ruled that the number of recruited persons is not an essential
element of the act of recruitment and placement of workers, the law merely lays down a rule
that where a fee is collected in consideration of a promise or offer of employment to two or
more, the person or entity who collected the same shall be deemed to be engaged in
recruitment and placement.

People v. Goce – The court ruled that to prove that the accused was engaged in recruitment and
placement activities, it must be shown that the accused gave the complainant the distinct
impression that he had the power or ability to send the complainant abroad for work, such that
the complainant was convinced to give her money in order to be employed.

Darvin v. CA and People of the Philippines – The court ruled that the lack of evidence to prove
that the accused offered a job to complainant cannot constitute as recruitment and placement
activities. Hence, the exact money given by the complainant to the accused was for the payment
of air fare and US visa and other expenses as indicated on the receipt.

Domestic Employment - means recruitment for local employment, which is being administered by the
Private Recruitment and Placement Agency. As a general rule, a license cannot be transferred to other
persons or entities, and only has validity for two years.

A licensed private recruitment and placement agency may charge a worker a placement fee
which shall not exceed 20% of the worker’s first month basic salary, which is chargeable after
 the actual commencement of employment. They may also charge it to employer which shall not
exceed 20% of the worker’s annual salary, but it shall not be deducted from the worker’s salary.

A licensed private recruitment and placement agency may charge a worker a placement fee
which shall not exceed 20% of the worker’s first month basic salary, which is chargeable after
the actual commencement of employment. They may also charge it to employer which shall not
exceed 20% of the worker’s annual salary, but it shall not be deducted from the worker’s salary.

The transportation expenses of the worker from the place of origin to the place of work shall be
charged against the employer and cannot be deducted to the worker’s salary.

New Kasambahay Law, RA 10361: Whether the domestic worker was hired through a
private recruitment agency or a third person, no share or finder’s fee shall be charged
against the domestic worker.

Creation of Public employment service office (PESO) in capital towns, cities and other strategic
areas. They are intended to serve as employment service and information center.

Qualifications: The applicant for license to operate a private employment agency must be:

1. For single proprietorship, the applicant must be a resident Filipino Citizen and a minimum
net worth of 1 million pesos.
For partnership or corporation, at least 75% of the authorized capital stock must be owned
and controlled by resident Filipino Citizens and a minimum paid-up capital of 1 million pesos
and that 75% of which must be owned by resident Filipino citizens.

Disqualifications: The applicant for license to operate a private employment agency is disqualified if:

1. Those who are convicted or have pending cases with probable cause for illegal recruitment,
trafficking in persons, anti-child labor law violation or crimes involving moral turpitude.
2. Those applicants whose licenses have been previously revoked or cancelled by the DOLE.
3. Cooperatives under Cooperative act.
4. Law enforcers and any official and employee of the DOLE.
5. Those who have current or existing private employment agency license.
6. Those who have licensed but engaged in job contracting or subcontracting activities.
(Means that the principal contract a job or service to the contractor through its contractor’s
workers, violated labor-only contracting, where the contractor is a mere agent of the
principal not laborer.)
7. They are also disqualified if the applicants are technical-vocational institutions or other
training institutions.

Also, the creation of Philippine Overseas Employment Administration (POEA) which absorbed or
consolidated the functions of Bureau of Employment Services, Overseas Employment Development
Board (OEDB, Art. 17) and the National Seaman Board (NSB, Art. 20)
Prohibited Practices/Illegal recruitment (Art. 38)

Illegal recruitment - any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or
procuring workers for employment, locally or abroad, whether for profit or not when
undertaken by a non-license or non-holder of authority.

Prohibited practices (14) whether a license or authority holder or not.

1. To charge or accept fee which is greater than the amount prescribed by the secretary of
labor or to make the worker pay for his loan which is greater than what he actually received.
2. To furnish or publish any false notice in relation to recruitment or employment.
3. To give false info, document or testimony or any other misrepresentation for the purpose of
securing a license or authority.
4. To induce or attempt to induce a worker to quit from his job in order to offer him another,
unless the purpose is to liberate the worker from oppressive terms and conditions of his
employment.
5. To influence or attempt to influence any person or entity not to employ any worker.
6. To engage in recruitment and placement of workers on the jobs which are harmful to public
health, morality or dignity of the country.
7. To obstruct or attempt to obstruct inspection by the secretary of labor or his duly authorized
representative.
8. To fail to submit reports required by the Secretary of labor such as status of employment,
vacancies, remittance and among others.
9. To alter the employment contract to the prejudice of the worker which was approved by
and verified by the DOLE from the time of signing up to the time of its expiration, without
approval of the DOLE.
10. For an officer or agent of agency to become a member of the board of any corporation
engaged in travel agency.
11. To withhold or deny travel documents of the applicant workers for monetary or financial
consideration other than those authorized by the code.
12. Failure to deploy the worker without valid reason.
13. Failure to reimburse the expenses of the worker if the deployment does not take place.
14. To allow a non-filipino citizen to head or manage a licensed recruitment agency.

Elements:

To prove the illegal recruitment the following elements must concur:

1. It must be shown that the accused, without being duly authorized by law, gave the worker the
distinct impression that he had the power or ability to send them abroad for work.
2. That there must be at least a promise or offer of an employment.
Economic Sabotage- Illegal recruitment is considered as economic sabotage if it is committed by a group
of three or more persons conspiring with one another (syndicate), or when it is committed against three
or more persons (large scale).

Under RA 10022 the following are additional prohibited acts:

1. To grant loan to an overseas filipino worker with interest exceeding 8%.

2. Impose a compulsory arrangement where the filipino overseas worker is required to avail a loan
only from specifically designated institutions, persons or entities.
3. Impose a compulsory arrangement where the Filipino overseas worker is required to undergo
health examinations only from specifically designated institutions, persons or entities.
4. Impose a compulsory arrangement where the filipino overseas worker is required to undergo
training, seminar or schooling only from specifically designated institutions, persons or entities.
5. Refuse to renegotiate a loan by an overseas filipino worker after the latter’s employment has
been prematurely terminated without his fault.
6. For a recruitment agency to engage in any kind of recruitment activity while suspended.
7. For a recruitment agency or foreign employer to deduct the payment of insurance fees or any
insurance related charges to the worker’s salary.

Persons criminally liable

People vs. Chowdury – The court ruled that an employee of a company or corporation engaged
in illegal recruitment may be held liable as principial together with his employer, if it is shown
that he actively and consciously participated in illegal recruitment.

Furter, the persons criminally liable for illegal recruitment are the principals, accomplices and
accessories, and in case of juridical persons, it is the officers having control, management or
direction of the business shall be liable.

Penalty

Any person guilty of illegal recruitment: Imprisonment of not less than 12 years and 1 day but
not more than 20 years.

Person guilty of illegal recruitment constituting economic sabotage: Life imprisonment and
maximum penalty if recruited is less than 18
and
committed by a non-license or non-holder of authority.

Any person guilty of any prohibited acts: Imprisonment of not less than 6 years and 1 day but
not more than 12 years. If the offender is alien, he shall be
deported without further proceedings.

Revocation of license or registration of the recruitment agency.

Venue
 Criminal cases arising from illegal recruitment shall be filed with the RTC where the crime was
committed or where the offended actually resides at the time of its commission.

Prescriptive Periods

Illegal recruitment shall prescribe in five years. However, illegal recruitment constituting
economic sabotage shall prescribe in twenty years.

Who may initiate complaints

The victims of illegal recruitment.

Overseas Recruitment

POEA powers and functions:

Regulatory: To regulate private sector participation in the recruitment and overseas placement
of workers through its licensing and registration of recruitment agencies.

Adjudicatory: To hear and decide cases involving violations of rules and regulations on licensing
of recruitment agencies or entities and exercise disciplinary action against a worker for breach
of discipline. Hence, it can revoke licenses, close recruitment and manning agencies and blacklist
erring agencies.

Overseas Workers Welfare Administration (OWWA)

OWWA shall undertake the repatriation of workers in cases of war, epidemics, disasters or
calamities and other similar events without prejudice to reimbursement by the
responsible principal or recruitment agency. However, in cases where the principal or
recruitment agency cannot be identified, all cost for repatriation shall be borne by the
OWWA.

POEA and NLRC Jurisdiction

POEA – adjudicatory functions

NLRC – all claims arising from an employee-employer relationship by virtue of any law or
contract.

Ban on Direct Hiring

Art. 18 – Direct hiring of foreign employer in an overseas recruitment is not allowed except by
the members of diplomatic corps, international organizations or other employers may be
allowed by the Department of Labor and Employment or when the worker is able to secure
contracts on his own effort.
Mandatory Remittance (Art. 22)

- An OFW cannot refuse to remit his earnings to his dependents. Such is prohibited under the
law which considers mandatory for all Filipino workers abroad to remit a portion of their
foreign exchange earnings to their families, dependents, or beneficiaries in the country in
accordance with the rules and regulation prescribed by the Secretary of Labor.

Travel agencies are prohibited to recruit (Art. 26)

- The application should not be approved for the simple reason that the law categorically
declares that travel agencies and sales agencies of airline companies are prohibited from
engaging in the business of recruitment and placement of workers for overseas
employment, whether for profit or not. It is immaterial that its purpose is not for profit but
to help filipinos find employment abroad.

Employment of Non-residents aliens

General rule: No alien may be employed in a nationalized industry such as educational

institutions, mass media and public utilities.

Any alien seeking employment and any domestic or foreign employer who desires to engage in
alien employment in the Philippines shall obtain an employment permit from the DOLE.

The employment permit may only be issued after a determination of the non-availability of a
person in the Philippines who is competent, able and willing for the same employment.