THE LAW PERTAINING TO THE STATE AND ITS RELATIONSHIP WITH ITS CITIZENS (18)

CONSTI, INTL LAW, LABOR, TAX

A. CONSTITUTIONAL LAW

i. Basic principles of political law

Separation of powers
- By establishing equilibrium among the three power holders, harmony will result and
power will not be concentrated and tyranny will be avoided. Any system that is violative
of the principle of separation of powers is unconstitutional and void.
- The principle of separation of powers ordains that each of the three government branches
has exclusive cognizance of and is supreme in concerns falling within its own
constitutionally allocated sphere.

Political question doctrine

- A question of which a resolution has been vested by the constitution exclusively in the
people, or in which full discretionary authority has been delegated to a co-equal branch
of the government cannot be decided upon by the Courts.

Justiciable questions
- Deals with matters re: the law and its interpretation, not left to the wisdom of the people.

Checks and balances

- Each branch is supreme within their own sphere.

Fundamental powers of the state

1. Police power
o The inherent and plenary power of the state which enables it to prohibit all that is
hurtful to the comfort, safety, and welfare of society.
o Taxation may be used as an implement of police power. Eminent domain may be
used as an implement to attain the police objective.
o Test of valid exercise:
a. Means purpose test
a. Lawful subject
b. Lawful means
b. Reasonability test
a. Test of reasonability to decide whether it encroaches on the right of an
individual. So long as legitimate means can reasonably lead to create
that end, it is reasonable.
2. Eminent domain
 o The ultimate right of the sovereign power to appropriate, not only the public but
the private property of all citizens within the territorial sovereignty, to public
purpose.
o Requirements:
i. For a particular public purpose
ii. Just compensation be paid to the owner
o Just compensation – is the full and fair equivalent of the property taken from its
owner by the expropriator.
o Determination of just compensation:
i. GR: computed at the time of the filing of the complaint for expropriation.
ii. EXC: At the time of taking, when taking precedes filing of the complaint.
o Judicial function. The executive or legislature may make the initial determination
but when a party claims a violation of the Bill of Rights, no statute, decree, etc can
mandate its own determination shall prevail over the court’s.
o LGC: deposit in order to take.
o Infrastructure: 100% bayran, only for national infrastructure projects.

3. Taxation
o The power by which the state raises revenue to defray the necessary expenses of
the Government. It is the enforced proportional contributions from persons and
property, levied by the State by virtue of its sovereignty, for the support of the
government and for all public needs.
o Lifeblood theory
o Necessity theory
o Judicial review for unconscionable and unjust tax: The power to tax cannot
override constitutional prescriptions.
o Limitations:
i. Uniformity
ii. Tax exemptions
Sovereignty
- The supreme and uncontrollable power inherent in the State by which the state is
governed.
- Two kinds:
o Legal sovereignty – authority which has the power to issue final commands
o Political sovereignty – power behind the legal sovereign, or the sum total of all the
influences that operate upon it.
- Two more kinds:
o Internal sovereignty – the power of the state ot control its domestic or internal
affairs.
o External sovereignty – the power to direct its relations with other states, also
known as independence.

State immunity
- GR: The state cannot be sued.
- EXC: when the state consents to be sued; How:
o Express
1. Through general law
2. Through special law
o Implied
1. When the state performs proprietary functions;
2. When the state commences litigation and becomes vulnerable to
counterclaim;
3. When it would be inequitable for the State to invoke immunity; and
4. In eminent domain cases.

Suits against the state

- Will only prosper if the state gives its express consent.

Judicial Review
- May be granted or withheld as Congress chooses.
- EXC: when the Constitution requires or allows it ie. When there is grave abuse of
discretion.
- Extent of judicial review:
o Questions of Law
o Questions of Fact
o Questions of Discretion
- GR: Findings of fact by an agency are final when supported by substantial evidence.
- EXC:
o When specifically allowed otherwise by law.
o Fraud, error, mistake, or other error of judgment in evaluating the evidence.
o Error in appreciation of pleadings and interpretation of the documentary evidence
o Decision of the agency was rendered by an almost divided agency.
Doctrine of Primary Administrative Jurisdiction
- Courts will not determine a controversy involving a question which is within the
jurisdiction of the administrative tribunal prior to the resolution of that question by the
same, where the question demands the exercise of sound administrative discretion
requiring the special knowledge, experience and service of the administrative tribunal to
determine technical and intricate matters of fact.
- If the determination of the case requires the expertise, specialized skills, and knowledge
of the proper administrative bodies because technical matters or intricate questions of
facts are involved, then relief must first be obtained in an administrative proceeding
before a remedy will be supplied by the courts even though the matter is within the
proper jurisdiction of a court.

Doctrine of Exhaustion of Administrative Remedies

- Where the law states the procedure by which administrative appeal or remedy could be
effected, the same should be followed before recourse to judicial action.
- Judiciary should not entertain suits unless the available administrative remedies have first
been resorted to and the proper authorities have been given an appropriate opportunity
to act and correct their alleged errors.
- EXC:
o Grave abuse of discretion
o Pure questions of law
o No other plain, speedy, and adequate remedy
- Failure to exhaust administrative remedies = DISMISS; waiveable.

Doctrine of Finality of Administrative Action

- Courts will not interfere with the act of an administrative agency before it has reached
finality or it has been completed.

ii. BILL OF RIGHTS

Due Process
- There is a deprivation, and such deprivation is done without proper observance of due
process.
- Two kinds:
o Procedural due process – Refers to the method or manner by which the law is
enforced.
o Substantive due process – requires that the law itself, not merely the procedures
by which the law would be enforced, is fair, reasonable, and just. Two basic rights
of notice and hearing, as well as the guarantee of being heard by an impartial and
competent tribunal. Non-observance of these rights will invalidate the
proceedings.
- When prior notice or hearing may be dispensed with:
o Urgent need for immediate action
 o Tentativeness of administrative action
o Twin rights were offered but were not claimed
- Notice and hearing is required only in judicial or quasi-judicial proceedings.

Void-for-vagueness doctrine
- Should be void because it lacks comprehensible standards so that men of ordinary
intelligence will probably have to guess as to its meaning and differ in its application.
- Repugnant because:
o It violates due process as it fails to afford persons fair notice of the conduct to
avoid; and
o It gives law enforcers unbridled discretion in carrying out provisions and,
therefore, becomes an arbitrary flexing of the government’s muscle.

Equal protection clause

- Requires that all persons or things similarly situated should be treated alike, bot has to
rights conferred and responsibilities imposed.
- Protects against intentional and arbitrary discrimination.
- Valid classification is:
o Based on substantial distinctions;
o Germane to the purpose of law;
o Not limited to existing conditions only;
o Equally applicable to all members of the same class.
- Three levels of scrutiny:
o Rational scrutiny – reasonably relate to the legislative purpose
o Intermediate scrutiny – puts a quasi-suspect class at a disadvantage
o Strict scrutiny – when a legislative classification impermissibly interferes

Searches and seizures

- Right to security of a person – a guarantee of protection of one’s rights by the
government.
- Right to privacy – subjective expectation of privacy. The more open the transmission, the
less privacy one can reasonably expect.
- Court determines if:
o A person has exhibited a reasonable expectation of privacy; and, if so
o Whether that expectation has been violated by unreasonable government
intrusion.
- Mandatory drug testing – unconstitutional. Random drug testing OK.
- EO 420 – national ID system. The right to privacy deos not bar the adoption of reasonable
ID systems by government entities.

Valid Warrantless Searches and Seizures:

1. Search incidental to lawful arrest
2. Search of a moving vehicle
3. Seizure in plain view
 a. The law enforcement officer must have a valid justification for an intrusion, or is
in a position where he can view a particular area;
b. The evidence was inadvertently discovered;
c. The evidence was immediately apparent; and
d. Plain view justified the seizure without further search conducted.
4. Custom search
5. Waiver by the accused; reqs:
a. Right to be waived exists
b. Person waiving has knowledge of such right, actually or constructively
c. He/She has actual intention to relinquish the right
6. Stop and frisk
7. Armed conflict
8. Check points
9. Exigent and emergency circumstances
10. Conduct of Area Target Zone and Saturation Drives
11. Routine Airport Security Procedure

Freedom of expression
- Content-based restrictions – subject to the clear-and-present danger test. Restricts
freedom of speech or of the press based on content is given the strictest scrutiny in light
of its inherent and invasive impact.
- Content-neutral restrictions – need only a substantial governmental interest to support
them. Do not apply clear-and-present danger test. Regulations on the incidents of speech
(time, place, manner).
- Censorship is allowable only under the clearest proof of a clear and present danger of a
substantive evil to public safety, morals, health, or any other legitimate public interest.
- Balancing of interests test
- Dangerous tendency test

Rights during expropriation

- Just compensation
- Due process

iii.COMPOSITION AND POWERS OF THE GOVERNMENT ORGANS

Legislative department
Powers of Congress
1. Legislative Inquiries and Oversight Functions
2. Non-legislative
a) Informing function
b) Power of impeachment
Executive department

Qualifications
1. Natural-born citizen
2. A registered voter
3. Able to read and write
4. At least 40 years of age on the day of the election
5. Resident of the Philippines for at least 10 years immediately preceding such election

Powers of the President

a. General executive and ministrative powers
1. Executive power
2. Power of appointment
3. Power of control
4. Power of supervision
5. Commander-in-chief powers
a. Call out power – lawless violence
b. Suspension of the privilege of the Writ of Habeas Corpus – a) in times of
rebellion or invasion; AND b) when required by public safety
c. Martial law – invasion or rebellion; and when public safety requires it.
6. Power of legislation
a. Veto power
b. Power to declare emergency
c. Integrative power
7. Diplomatic powers
8. Residual power
9. Other powers
a. Power to pardon
b. Power to grant amnesty
c. Borrowing power
d. Budgetary power
10. Informing power
b. Power of appointment
a. Groups of officers whom the president may appoint:
i. With consent of the CA
ii. All other officers of the govt whose appointments are not otherwise
provided by law;
iii. Those whom the president may be authorized by law to appoint;
iv. Officers lower in rank whose appitments Congress may bby law vest in the
Preisdent alone
b. Types of appointment
i. Regular
ii. Ad interim – takes effect immediately, but ceases to be valid:
1. If disapproved by the CA; or
 2. Upon the next adjournment of Congress
- Considered permanent appointments as these take effect immediately
and can no longer be withdrawn by the President.
c. Acting/Temporary appointment. Can be withdrawn/revoked at the pleasure of the
appointing power.
d. Midnight appointments Ban
i. GR: 2 months immediately before the next presidential elections and up to
the end of his term = cannot make appointments.
ii. EXC: when continued vacancies will (a) prejudice public service; or (b)
endanger public safety.
c. Power of control and supervision
a. Doctrine of Qualified Political Agency
b. Power to abolish offices
c. General Supervision over LLGU and Autonomous Regions
d. Emergency Powers
e. Commander-in-chief powers
a. Calling out powers
b. Suspension of the privilege of the Writ of Habeas Corpus
c. Martial Law
f. Executive Clemency
a. Pardon v. Amnesty
g. Diplomatic power
o President ratifies, Senate merely concurs.
h. Powers relative to appropriation measures
i. Delegated powers
j. Residual powers
k. Veto powers
l. Executive privilege

Judicial department

Judicial and Bar Council (JBC)

1. CJ as ex-officio chairman
2. SOJ
3. Rep from Congress
4. IBP Rep
5. Professor of Law
6. Retired SC
7. Representative of private sector

Secretary ex-officio: Clerk of court of the SC

Composition of SC:
1. Chief Jutsice and 14 association Justces
2. Divisions of 3, 5, or 7
3. Vacancy is filled within 90 days from occurrence thereof
Jurisdiction
- The authority to hear and decide cases

Iv. Judicial review

1. There must be an actual case or controversy;
2. The person challenging the act must have locus standi;
3. The question of constitutionality must be raised at the earliest opportunity;
4. The issue of constitutionality must be the very lis mota of the case.

v. Supervision of courts

Administrative supervision over lower courts

1. Assign temporarily judges of lower courts to other stations as public interest may require
2. Shall not exceed 6 months without the consent of the judge concerned
3. Order a change of venue or place of trial to avoid a miscarriage of justice
4. Appoint all officials and employees of the judiciary in accordance with the Civil Service
Law
5. Supervision over all courts and the personnel thereof
6. Discipline judges of lower courts or order their dismissal

JBC may add or determine more qualificiations when necessary to the qualifications of lower
court judges (as stated in Constiuttion).

vi. Powers of the Supreme Court

Sits en banc when:

a) Involving constitutionality, application, operation of …
b) Disciplinary
c) Dismissal, disbarment, suspension of judges
d) Not met the votes of the division
e) Modifying or reversing a doctrine of law
f) Validity of Martial Law
g) PET
h) Other cases as stated in RoC

vii. Qualifications, disqualifications, and selection of:

a. The president

1. Natural-born citizen
2. Registered voter
3. Able to read and write
4. At least 40 years of age on the day of the election
5. A resident of the Philippines for at least 10 years immediately preceding

Election
- Congress canvases the votes
- Congress may validly delegate the initial determination of the authenticity and due
execution of the certificates of canvass to a Joint Congressional Committee composed of
members of both houses.

PET
- SC, sitting en banc

President is not eligible for any reelection

- No person who has succeeded as President and has served as such for more than 4 years
shall be qualified for election to the same office at any time.

b. Senate

c. House of Representatives

Partylist system
- Constitutes 20% of the total number of representatives

Sectoral representative
- ½ of the partylist seats shall be allotted to sectoral representatives to be chosen by
appointment or election.
- May either be (a) marginalized or underrepresented, or (b) lacking in well-defined
political constituencies
- Nominees must belong to their respective sectors or have a tack record of advocacy for
their respective secotrs. Majority of the members must belong ot the sector.

Parameters:
1. 20% allocation
2. 2% threshold – 2% of total votes cast
3. Additional seats – received less than 2% of the total votes
4. 3-seat cap – intended to prevent a party from dominating the partylist system

d. Justices and judges

e. Ombudsman

Composition:
1. Ombudsman/Tanodbayan
 2. Overall deputy
3. Deputy for military establishment may be appointed

Qualifications
1. Natural born citizen
2. At least 40 years old
3. Of recognized probity and independence
4. Member of the Philippine bar
5. Must not have been candidate for any elective office in the immediately preceding
election
6. (for ombudsman) Must have been 10 years or more: a judge or engaged in the practice
of law.

Disqualifications
1. Cannot hold any other office or employment during his tenure
2. Cannot engage in the practice of any profession or active management or control of any
business which may be affected by function of his office
3. Cannot be financially interested, directly or indeirectly with any franchise or privilege
granted by the government or any of its subdivisions.

Appointment
- By the president from a lit of at least 6 nominees prepared by the JBC. Vacancies shall be
filled from al ist of 3 nominees, within 3 months .
- No need confirmation
- 7 year terms without reappointment and cannot run in the next election.
- Other ombudsman officials and emploees:
o Appointed by the ombudsman
o In accordance with Civil Service Law

f. Constitutional Commissions

CIVIL SERVICE COMMISSION

Embraces all branches, subdivisions, instrumentalities, and agencies of the Government,

including GOCCs with original charters.

Composition
Chairman
2 Commissioners

Qualifications
1. Natural born citizen
2. At least 35 yo at time of appointment
3. With proven capacity for public administration
4. Must not have been candidates for any elective position in the elction immediately preceding
their appointment.

7 years term of office

Limited to the determination of qulaificatiosn of the candidates for appointments nad plays no
role in the choice of the person to be appointed. Made only according to merit and fitness t obe
determined, as far as practicable, by competitive examination.

Disqualifications
1. No candidate who has lost in any election shall, within 1 year after such election, be
appointed to any office in the Government or any GOCC
2. No elective official shall be elegible for appointment or designation in any capacity to any
public office or position during his tenure.
3. No appointive official shall hold any other office in the government, except when
otherwise allowed by law OR by the primary functions of his position.
4. No officer or employee in the civi l service shall engage directly or indirectly in any
electioneering or partisan political activity.

No officer or employee of the civil service shall be removed or suspeneded except for cause
provided by law.

COMELEC

Composition:
A chairman
6 Commissioners

Qualifications
1. Natural born citizens
2. At least 35 years of age
3. Holders of a college degree
4. Not candidates in the immediately preceding election
5. Majority must be members of the Philippine Bar who have been engaged in the practice
of law for 10 years.

COA

Composition
A chairman
2 Commissioners

Qualifications
1. Natural born Filipino citizens
 2. At least 35 years old
3. CPAs with not less than 10 years auditing experience, OR members of the Philippine Bar
with at least 10 years practice of law.

At no time shall all members belong to the same profession.

Disqualifications of all ConCom

1. Cannot hold any other office or employment.
2. Cnnot engage in the practice of any profession
3. Cannot engage in the active management or control of any business which in any way
may be affected by the functions of his office, nor
4. Be financially interested, directly or indirectly, in any contract with or in any franchise or
privilege granted by, the government, its subdivisions, agencies, or instrumentalities,
including GOCCs or their subsidiaries.

The CSC chairman cannot be a member of a government entity that is under the control of the
President without impairing the independence vested in the CSC.

viii. immunity of the president, privileges of senators and members of the House of Rep

Immunity of the President

The president cannot be sued, enjoying as he does immunity from suit. But the validity of his acts
can be tested by an action against other executive officials.

Only the president can invoke immunity from suit, not by any other person on the President’s
behalf nor by a non-sitting president even for acts committed during his or her tenure. This is
waiveable. EXC: Presidential decisions may be questioned before the courts whre there is grave
abuse of discretion or that the President acted without or in excess of jurisdiction. Can also be
sued if the act is one not arising from official conduct.

After tenure, Pres cannot invoke immunity from suit for civil damages arising out of acts done by
him when he was President, which were not performed in the exercise of official duties.

Privilege of Senators and members of the House of Rep

Salaries
Increase in salaries can only take effect upon the expiration of the terms of both hosues who
passed the law increasing said salary. Applies to the benefits a member of congress will attain
upon retirement.

Freedom from arrest

Only while Congress is in session. Offenses punishable by not more than 6 years imprisonment.
Preventive suspension is not a penalty.

Speech and debate clause

No member shall be questioned nor be held liable in any other place for any speech or debate in
the Congress or in any committee thereof.

What is covered? Anything a member of Congress says in line with his legislative functions,
including speeches, utterances, bills signed, votes passed.

Even the Supreme Court canot discipline a lawyer-senator for remarks made against the court,
but it does not hshield said member from the authority fo Congress to discipline its own
members.

ix. Structure of government

x. Process of legislation

p.54 UP BOC

1. Prepartion of the Bill

2. First reading
3. Committee Consideration/action
4. Second reading
5. Third reading
6. Transmittal of the approved bill to the Senate
7. Senate action on approved bill
8. Conference committee
9. Transmittal of the bill to the president
10. Presidential action on the bill
a. Approval
b. Veto
c. Inaction
11. Action on approved bill
12. Action on vetoed bill

A joint resolution is not a bill, and its passage deos not enact the joint resolution into a law.

No bill passed shall become a law unless it has passed three readings on separate days.

xi. Natural resources

The State, being the owner of the natural resources, is accorded the primary power and
responsibility in the exploration, development, and utilization thereof. As such, it may undertake
these activities through four modes:
1. The state may directly undertake such activities;
2. The state may enter into co-production, joint venture, or production-sharing agreements
with Filipino ctiziens or qualified corporations;
3. Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens
4. For the large-scale exploration, development and utilization of minerals, petroleum, and
other mineral oils, the President may enter into agreements with foreign-owned
corporations involving technical or financial assistance subject ot the following
limitations:

xii. Amendment and revision of the Constitution

Amendments
An addition or change within the lines of the original constitution as will effect an improvement,
or better carry out the purpose for which it was framed. A change that adds, reduces, or deletes
without altering the basic principles involved. Affects only the specific provision being amended.

Revisions
A change that alters a basic principle in the constitution. Alters the substantial entirety of the
constitution, such as when the change affects substantial provisions.

Two steps in the amendatory process:

1. Proposal, by
a. Congress, as a Constituent Assembly – vote of ¾ of ALL its members
b. Constitutional Convention – called into existence by 2/3 of ALL members of
Congress (OR) the electorate, in a referendum called for by a majority of all
members of Congress
c. People, through a People’s Initiative – petition of at least 12% of the total number
of registered votes; every legislative district must be represented by at least 3% of
the registered voters therein.
i. No amendment shall be authorized in this manner within 5 years following
the ratification of the 1987 constitution, nor more often than once every 5
years thereafter. ]
ii. Constitutional provision on amendments via peoples’s initiative are not
self-executory.
2. Ratification – deemed ratified by the majority of the votes cast in a plebiscite, held not
earlier than 60 days nor later than 90 days:
a. After approval of the proposal by Congress or the Concon;
b. After certification by the COMELEC of sufficiency of petition of the people.
Judicial review of amendments
The validity of the process is NOT a political question because the Court must review if
constitutional processes were followed.

B. INTERNATIONAL LAW

Sources of international law

The court, whose function is to decide in accordance with international law such disputes as are
submitted to it, shall apply:
a. International conventions, whether general or particular, establishing rules
expressly recognized by the contesting states;
b. International custom, ass evidence of a general practice accepted as law
c. The general principles of law recognized by civilized nations
d. Judicial decisions and the teachings of the most highly qualified publicists of the
various nations, as subsidiary means for the determination of rules of law.

There is no stare decisis in international law. All decisions of the ICJ are only biding as between
the parties. Therefore, the decisions of the ICj only serve as subsidiary sources of sinternational
law.

Customary international law

a. State practice – consistent and general; requires substantial uniformity; actions of a state
not an individual.
b. Opinio juris – The belief on the part of the states that a particular practice is required by
law, and not because of courtesy or political expediency.

ii. Relationship with domestic law

C. LABOR LAW

i. Basic Principles

Art II, Section 18, Constitution

The State affirms labor as a primary social economic force. It shall protect the rights of workers
and promote their welfare.

Art III, Sec 4

No law shall be passed abridging the right of the people peaceable to assemble and petition the
government for redress of grievances.

Art XIII, Section 3, Constitution

The State shall afford full protection to labor, local and overseas, organized and unorganized, and
promote full employment and equality of employment opportunities for all.

It shall guarantee the rights of all workers

Balancing of interests
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 to due process.

ii. Existence of ER-EE Rship

Four-fold test
1. Selection and engagement of the employer
2. Payment of wages or salaries
3. Exercise of the power of dismissal
4. Exercise of the power to control the employee’s conduct

Control test / Means and method control test

The controlling test. Which means that the employer controls or has reserved the right to control
the employee not only as to the means and methods by which the same is to be accomplished.

Economic Dependency Test (Two-tiered test)

a) Control test – the power of the ER to control the EE with respect to the means and
methods by which the work is to be accomplished.
b) Broader economic reality test – the underlying economic realities of the activity or
relationship.

iii. Termination of Employment

Security of tenure
- Er shall not terminate the services of an EE except for a just cause or when authorized by
law.
- An EE who is unjustly terminated shall be entitled to:
o Reinstatement without loss of seniority rights, and other privileges
o Full backwages
o Other benefits or their monetary equivalent.

Two-fold due process requirement

1. Substantive aspect – the dismissal must be for any of the (a) just causes; or (b) authorized
causes.
2. Procedural aspect – the employee must be accorded both statutory due process and
contractual due process
Just causes
1. Serious Misconduct or willful disobedience.
a. It must be serious and is of such grave and aggravated character;
b. It must relate to the performance of the employee’s duties;
c. It must show that he has become unfit to continue working for the employer.

Willful disobedience or insubordination.

a. The employee’s assailed conduct must have been willful or intentional, the
wilfulness being characterized by a wrongful and perverse attitude; and
b. The order violated must be based on a reasonable and lawful company rule,
regulation, or policy, and made known to the ee and must pertain to the duties
for which he has been engaged to discharge.
2. Gross and habitual neglect of duties.
a. There must be negligence which is gross and/or habitual in character; and
b. It must be work related as would make him unfit to work for his employer.
3. Fraud or willful breach by the employee of the trust reposed in him.
a. There must be an act, omission, or concealment,
b. The act, omission or concealment involves a breach of legal duty, trust, or
confidence justly reposed,
c. It must be committed against the employer or his/her representative; and
d. It must be in connection with the employees’ work.

Willful breach of trust

a. The employee holds a position of trust and confidence;
b. There exists an act justifying the loss of trust and confidence, which means that the
act that betrays the employer’s trust must be real;
c. The employee’s breach of trust must be willful;
d. The act must be in relation to his work which would render him unfit to perform it.

4. Commission of a crime or offense by the employee against the person of his employer or
any immediate member of his family or his duly authorized representative
a. A crime or offense was committed by the employee;
b. It was committed against:
i. His employer
ii. Any immediate member of the employer’s family; or
iii. His employer’s duly authorized representative.
Work relation is not necessary.

5. Abandonment of work
a. The employee must have failed to report for work or must have been absent
without valid or justifiable reason; and
b. There must have been a clear intention on the part of the employee to sever the
ER-EE rship manifested by some overt act.
 6. Other cases analogous to the foregoing.
Such as:
a. Violation of company rules and regulations
b. Theft of property owned by a co-employee
c. Incompetence, inefficiency, or ineptitude
d. Failure to attain work quota
e. Fialure to comply with weight standards of an employer
f. Attitude problem
7. Union officers who knowingly participate in an illegal strike.
8. An employee, union officer, or ordinary member who knowingly participates in the
commission of illegal acts during a strike.
9. Strikers who violate orders, prohibitions and/or injunctions as issued by the DOLE Sec or
NLRC
10. Where violation of the union security agreement in the CBA may result in termination of
his employment.

Two-notice requirement
- Also applies to abandonment of work

Authorized causes
A. Business-related causes
a. Installation of labor-saving device
b. Redundancy
c. Retrenchment
d. Closure or cessation of business operations NOT due to serious business losses or
financial reverses; and
e. Closure or cessation of business operations due to serious business losses and
financial revenues
B. Health-related causes
a. Diseases

Common requisites
1. There is good faith in effecting the termination;
2. The termination is a matter of last resort, there being no other option available to the
employer after resorting to cost-cutting measures;
3. Two separate written notices, served 1 month prior to the intended date of termination,
on both the:
a. Affected employees
b. DOLE
4. Separation pay is paid
5. Fair and reasonable criteria

Unique requisites
Disease
a. An employee is found to be suffering from any disease;
b. His continued employment is prohibited by law or prejudicial to his heatlh, as well
as to the health of his co-employees; and
c. A competent public health authority issues a medical certificate that the disease
is of such nature or at such a stage that it cannot be cured within a period of 6
months even with proper medical treatment.

Due Process
Means compliance with BOTH statutory and contractual due process. Constitutional due process
is not applicable.

Twin-notice requirement
Required only in just cause termination, not authorized cause termination EXCEPT on the ground
of disease.

Requires:
i. First written notice
o Contains the specific causes or grounds for termination against him.
o Ask him to submit his written explanation within 5 days from receipt.
o Contains a detailed narration of the facts and circumstances that will serve as the
basis for his charge.
o Specifically mention which company rules are violated or which among the
grounds is being charged against the employee.
ii. Conduct of hearing. Employer should schedule and conduct a hearing or
conference where in the employee will be given the opportunity to:
o Explain and clarify his defenses to the charge/s against him;
o Present evidence in support of his defenses; and
o Rebut the evidence presented against him by the management
EE has the right to counsel but it is neither indispensable nor mandatory. It only becomes
mandatory when the EE requests for counsel and manifests he wants a formal hearing.

iii. Service of second written notice

o After determining the termination is justified, the employer shall serve the
employees a written notice of termination.

Consequences of non-observance of Procedural due process

1. Yes Just/Authorized cause

Yes procedural due process
VALID dismissal
No liability, separation pay only in authorized causes

2. No just/authorized cause
 Yes procedural due process
INVALID dismissal
Reinstatement or separation pay + full backwages

3. No just/authorized cause
No procedural due process
INVALID dismissal
Reinstatement or separation pay + full backwages

4. Yes just/authorized cause

No procedural due process
VALID dismissal
Liable for damages due to procedural infirmity. Separation pay if for authorized cause.

Termination by employee

Resignation
- Voluntary – without just cause
- Involuntary – with just cause.
o Grounds:
1. Serious insult by the ER or his representative on the honor and person of
the EE;
2. Inhuman and unbearable treatment accorded the EE by the ER or his rep;
3. Commission of a crime or offense by the ER or his rep against the person
of the employee or any of his immediate family members;
4. Other causes analogous to any of the foregoing.

Constructive dismissal
TEST: whether a reasonable person in the employee’s position would have felt compelled to give
up his position under the circumstances. It is an act amounting to dismissal.

Retirement
- Who are covered: All EEs in the private sector, regardless of their position, designation,
or status, and irrespective of the method by which their wages are paid.
- Who are not covered: EEs covered by the Civil Service Law, and EEs in retail, service, and
agricultural establishments or operations regularly employing not more than 10 EEs.

When retire?
- Compulsory retirement: 65yo.
- Optional retirement: 60yo AND having served the establishment for at least 5 years.

Amount of retirement pay:

½ month salary for every year of service. ½ month salary is equivalent to 22.5 days:
 - 15 days salary based on the latest salary rate
- Cash equivalent of 5 days SIL
- 1/12 of 13th month pay
- Other benefits agreed to by the ER and EE.

Preventive suspension
Max 30 days. After which, reinstate. Not entitled to wags and other benefits during the 30 days
suspension except when the same is extended beyond the 30 days.

iv. Requirements for valid labor-only contracting

a) Distinct and independent business. The contractor is engaged in a distinct and

independent business and undertakes to perform the job or work on its OWN
responsibility, according to its own manner and method;
b) Substantial capital or investment. The contractor has substantial capital to carry out the
job farmed out by the principal, on his own account, manner and method, investment in
the form of tools, equipment, machinery and supervision;
c) Free from control or direction of the principal. In performing the work farmed out, the
contractor is free from the control and/or direction of the principal in all matters
connected with the performance of the work EXCEPT as to the result thereto; and
d) Compliance with labor laws. The Service Agreement ensures compliance with all the
rights and benefits for all the employees of the contractor under labor laws.

Substantial capital: 5 Million.

There is labor-only contracting when:

a) The contractor does NOT have either substantial capital or investments in the form of
tools, equipment, machineries, supervision, work premises, among others AND the
contractor’s employee’s recruited and placed are performing activities which are directly
related to the main business operation of the principal.

OR

b) The contractor does not exercise the right to control over the performance of the work
of the employee.

Effect of labor-only contracting: The principal and the contractor shall be solidarily liable.

v. Rights of employees and of labor organizations; membership in unions

1. Self-organization
2. Collective bargaining
3. Security of tenure
4. Just and humane conditions of work
Self-organization
Right to form, join, or assist labor organizations of their own choosing for the purpose of
collective bargaining through representatives of their own choosing.

Confidential employee rule

A confidential employee is one who (a) assists or acts in a confidential capacity; and (b) to persons
or officers who formulate, determine, and effectuate management policies, specifically in the
field of labor relations.

Doctrine of necessary implication – a rank and file EE or supervisory EE is elecated to the position
of a managerial employee because of his access to confidential information related to labor
relations. This is the legal basis for ineligibility of a confidential employee to join a union.

Rights and conditions of membership

vi. Management prerogatives

Granted to the employer to regulate every aspect of their business, generally without restraint
in accordance with their own discretion and judgment. This privilege is inherent in the right of
employers to control and manage their enterprise effectively.

Limits to management prerogative

1. Good faith
2. Without grave abuse of discretion
3. Law
4. Collective bargaining
5. Equity and/or substantial justice

Discipline

Proportionality rule – the penalty to be imposed should be commensurate to the offense

committed.

Transfer of employees

Can be considered constructive dismissal when:

1) The transfer is unreasonable, inconvenient, or prejudicial to the employee;
2) The transfer involves a demotion in rank or diminution of salaries, benefits, and other
privileges; and
3) The employer performs a clear acts of discrimination, insensibility, or disdain towards the
employee, which forecloses any choice by the latter except to forego his continued
employment.
There is a valid transfer when:
1. It is reasonable or has a sound purpose
2. It is not inconvenient to the EE
3. Not prejudicial to the EE
4. Not involve a demotion of rank or status or a diminution of EE’s salary and other benefits
5. Not motivated by discrimination towards EE
6. Must not be made in bad faith

Bona Fide Occupational Qualifications (BFOQ)

The employer has the prerogative to impose certain qualifications based on such criteria such as
race, sex, age, national origin, civil or marital status, physical appearance and the like.

Star Paper test:

1. The employment qualification is reasonably related to the essential operation of the job
involved;
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.

Test of reasonableness of the company policy – it reflects an inherent quality reasonably

necessary for satisfactory job performance.

vii. Illegal recruitment

Who may commit illegal recruitment?

1. By non-licensee or non-holder of authority; or
a. Grounds: Had they possessed the license or authority, their commission of any of
the foregoing acts such as canvassing, enlisting, contracting, transporting,
utilizing, hiring, etc. would have been valid and not illegal recruitment.
2. By ANY person, regardless of whether a non-licensee etc.
a. See Chan.

Recuirtment and placement

- 2+ persons who, in consideration of a fee, offer, or promise of employment, is…

Elements of illegal recruitment

1. Simple illegal recruitment
2. When committed by a syndicate
3. When committed in large scale

Simple illegal recruitment

a) The offender has no valid license or authority required by law to enable one to lawfully
engage in recruitment and placement of workers; and
b) He undertakes any activity within the meaning of recruitment and placement or any
prohibited practices under Art 34 of the Labor Code.
When a form of economic sabotage? When committed by a syndicate or large scale.

viii. Remedies

TAXATION LAW

i. Basic principles of taxation in the Constitution

The inherent power of the State to impose burdens on its subjects within its jurisdiction for the
purpose of raising revenues to carry out the legitimate objects of the government subject to
inherent and constitutional limitations.

Lifeblood doctrine
Taxes are the lifeblood of the State. No State can exist without means to pay its expenses.

Necessity theory
Governmental existence is a necessity and performance of governmental functions redound to
the people’s benefit.

There can be no injunction in the collection of taxes.

EXC: Equitable recoupment (which is not applicable in the Philippines). CTA or SC stops it because
it may jeopardize the government.

Taxes cannot be subject of compensation.

EXC: When the debt is due and demandable and has been appropriated.

Symbiotic relationship
Citizens must pay their taxes. Government must protect and support its citizens.

Benefits received principle

Taxpayer receives benefits from taxes through the protection the State affords to him or her.
From the protection he or she gets arises his or her obligation to support the government through
payment of taxes.

Vs. police power

If purpose is regulation = police power.
If purpose is revenue raising = taxation.

Basic principles of a sound tax system:

1. Fiscal adequacy – the sources of tax revenue should coincide with, and approximate the
needs of government expenditures.
 2. Administrative feasibility – refers to the ease of collecting taxes and that tax laws are
enforced uniformly.
3. Theoretical justice – taxes are imposed based on the individual’s capacity to pay. If does
not follow this, it will make the tax unconstitutional.

Estoppel does not lie against the State in the collection of taxes. The government is not bound by
the errors, mistakes, and the negligence committed by its agents.

Inherent and constitutional limitations in taxation

1. Public purpose
2. Exemption of the government
3. Non-delegation of the power to tax
- GR: Power to tax cannot be delegated
- EXC: Delegation to:
i. LGUs
ii. President
iii. Admin agencies
4. International comity
5. Territorial jurisdiction
- People can only be taxed within a country’s territorial jurisdiction.

Constitutional limitations

No person can be imprisoned for non-paument of poll tax.

Congress cannot deprive or impair the jurisdiction of the SC nor can it add to the appellate
jurisdiction of the SC without its advice and concurrence.

No law impairing the obligation of contracts shall be passed. When is there impairment? When
its terms or conditions are changed by law or a party without the consent of the other.

GR: tax exemptions can be withdrawn by government at any time.

EXC: when the exemption pertains to the nature of a contract.

ii. Income tax

Income is anything that flows to the wealth of the person other than mere return of capital.

A tax on all yearly profits arising from property, professions, trades, or offices or as a tax on a
person’s income, emoluments, profits and the like.
Kinds of income tax
1. Net income tax system (NIT) – in 12 months taxable period, whether using calendar or fiscal
year, put together the items of gross income and authorized deductions as stated by law.
When you deduct the authorized deductions, you come up with the taxable net income and
multiply by the rates.
2. Witholding tax – a tax at the source. Two kinds:
a. Creditable withholding tax
b. Final withholding tax
3. Gross income tax – no authorized deductions. Multiply immediately to tax rate.
4. 8% tax – applicable only if you’re SEP/SEI, provided yoru gross receipts do not exceed 3M.
5. Other types of income taxes that we apply on the individual or corp.

Double taxation
Taxing the same property twice when it should be taxed only once. Something not favored but is
permissible, provided some other consituttional requirement is not thereby violated.

1. Strict sense (Direct duplicate taxation)

1. Same property or subject matter
2. Same purpose
3. Same taxing authority
4. Same territory, jurisdiction or taxing district
5. Same taxing period
6. Same kind or character of tax

2. Broad sense (Indirect duplicate taxation)

If any of the elements for direct duplicate taxation is absent.

Table on the kinds of taxpayers

Only RC is taxed on sources within and without the Philippines. NRC, RA, NRAETB and NRANETB
are taxed only on sources within the Philippines.

A – all income
B – passive income
C – Capital gains on sales of shares of stock
D – Capital gains on sales of real property

B, C, D – taxed only within the Philippines

A – everything else; includes those without the Philippines

Only DC is taxed within the Philippines. RFC and NRFC is taxed only in sources within the
Philippines.
NRA
C. ETB
D. NETB

Indicators of situation of an alien:

1) 180-day period: aggregate period of not more than 180 days, alien is automatic NRA ETB.
2) Prinicple of habituality – alien regularly enters into commercial transactions in the
Phlippines regardless of period of stay.
3) Branch – he puts up a branch of his business in the Ph
4) Appointment of agents
5) Hiring of employees

Expats (Sec 20, C D E) – special kinds of NRA NETB – 15%

Employees of:
a) Offshore banking units in Ph
b) Oil petrol service contracts in Ph
c) Multinational companies in Ph
are considered NETB.

Systems of taxation
1. Schedular – income classified differently and subjected to different tax rates.
2. Global – all income is grouped regardless of classification and subject them to one tax
rate. Only one return is filed.
3. Semi-schedular and Semi-global – a mix of both systems.

Ordinary assets (Sec 39)

1. Stocks in trade of the taxpayer or other property of a kind which would properly be
included in the inventory of the taxpayer if on hand at the close of the taxable year;
2. Property held by the taxpayer primarily for sale to customers in the ordinary course of his
trade or business;
3. Property used in the trade or business, of a character which is subject to the allowance
for depreciation;
4. Real property used in trade or business of the taxpayer.

Capital assets
E. That which is not ordinary asset.

TAXABLE INCOME
Sec 31. The pertinent items of gross income specified in the code, less the deductions, if any,
authorized for such types of income by this Code or other special laws.

Gross income – all income derived from whatever source.

What it includes: CGGIRRDAPPP
1. Compensation
2. Gross income
3. Gains from property
4. Interest
5. Rents
6. Royalties
7. Dividends
8. Annuities
9. Pension
10. Prizes and winnings
11. Partner’s Distributive share

What it excludes: LAGCRIM

1. Life insurance
2. Amount received by insured
3. Gifts, bequeaths, and benefits
4. Compensation from injuries
5. Retirement benefits
6. Income exempt under treaty
7. Miscellaneous items

Situs of income

Compensation – where the services are rendered.

Business – place of business.

Property
(personal) – place of sale.
(real) – where property is located.

Interest – residence of the debtor.

Rent – where property being rented is located.

Royalties – place where intangible is used.

Dividends
(issued by domestic corp) – within PH.
(issued by foreign corp) – within PH.
BUT if 3 yaers before the dividend was given, the foreign corp’s profit in the Ph is LESS THAN 50%
of the total income, only a portion is treated as income within.

Allowable deductions
Sec 34 ExInTaLoBaChaRePenDepDep
1. Expenses
2. Interests
3. Taxes
4. Loss
5. Bad debts
6. Charitable contributions
7. Research and development
8. Pensions
9. Deprectiation
10. Depletion

Exemption v. Deduction

Kinds of deductions:
1. Itemized deduction
a. ExInTaLoBaChaRePenDepDep
2. Optional standard deduction (OSD)
b. Deduct maximum of 40% from gross income (no need itemized deduction)

Accounting periods
1. Calendar year – any 12 month period ending on December 31.
2. Fiscal year – any 12 month period ending in another period other than December 31.
Available only to corporations. Individuals only have the calendar year and always file by April 15.

Family home

Gross general partnership

A partnership established exclusively for the exercise of the common profession of the partners
and no part of its income is derived from trade or business. Liable for income tax only in their
separate and individual capacities.
GCP – any other partnership.

Tax arbitrage rule (33%)

Tax benefit rule

Transfer for insufficient consideration

If insufficient consideration, considered a donor’s tax (except if in the ordinary course of
business).

Remedies

Instgances when not requiring PAN:

 1. Involves excise taxes
2. Wrong mathematical computation
3. Involves discrepancy of withholding taxes

Denial of due process if wala nasunod ang process. Bawal i-rearrange. The FAN is not a valid FAN.

Prescription

Until when can the BIR issue the FAN?

1. In good faith
2. Fraudulent/bad faith = 10 yrs forom the discovery of the filing of fraudulent return
3. No return filed = 10 years
4. Waiver
a. In writing
b. The signature of the taxpayer is indicated on the face of the waiver
c. The date and signature of execution must appear on the face of the waiver.
d. The signature of the BIR officer and the date of acceptance by the BIR officer must
likewise be indicated on the face of the waiver.
e. Duly noted – 3 copies – taxpayer, records of the case, BIR.

In case of failure of compliance, the waiver is NOT a valid waiver ,ad the right of the BIR to execute
the FAN is not extended.

Periods of collection
FAN – 3 yrs or 20 years or within the period provided in a valid waiver.