Notes for BAR 2022: Labor Low and Social Legislation
Compiled by: Sugaree of SKSU
I. GENERAL PRINCIPLES
A. Basic Policy on Labor
Labor Code Declaration of Basic Policy,
Art. 3, LC
a. Afford protection to labor
b. Promote full employment
c. Ensure equal work opportunities
regardless of sex, race or creed and
d. Regulate the relations between
workers and employers.
The State shall assure the rights of workers
to:
a. Self-organization
b. Collective bargaining
Right to self-organization and collective
bargaining:
Ambulant, intermittent and itinerant
workers, self-employed people, rural
workers and those without any definite
employers may form labor organizations
for their mutual aid and protection.
All other employees in the civil service
shall have the right to form associations
for purposes not contrary to law.
Infringement of the right to self-
organization It shall be unlawful for any
person to restrain, coerce, discriminate
against or unduly interfere with employees
and workers in their exercise of the right to
self-organization [Art. 257, LC]
c. Security of tenure
All workers shall be entitled to security of
tenure. [1987 Constitution, Art. XIII, Sec.
3, par. 2]
d. Just and humane conditions at
work
Social Justice: Tilting the scales [Rivera
vs. Genesis Transport Service, Inc., G.R.
No. 215568 (2015)]
Labor laws are meant to implement and
effect social justice. Thus, such
considerations should be taken into
account when dealing with labor cases.
The social justice suppositions underlying
labor laws require that the statutory
grounds justifying termination of
employment should not be read to justify
the view that employees should, in all
cases, be free from any kind of error.
Not every improper act should be taken to
justify the termination of employment. To
infer from a single error that an employee
committed serious misconduct or
besmirched his employer’s trust is grave
abuse of discretion. It is an inference that
is arbitrary and capricious. It is contrary to
the high regard for labor and social justice
enshrined in our Constitution and our labor
laws.
Separation pay as measure of social justice
[PLDT v. NLRC, G.R. No. 80609 (1988)]
The rule embodied in the Labor Code is
that a person dismissed for lawful cause is
not entitled to separation pay.
Exception: Considerations of equity.
Equity has been defined as justice outside
law, being ethical rather than jural and
belonging to the sphere of morals than of
law.
Strictly speaking, however, it is not correct
to say that there is no express justification
for the grant of separation pay to lawfully
dismissed employees other than the
abstract consideration of equity.
Reason: Our Constitution is replete with
positive commands for the promotion of
social justice, and particularly the
protection of the rights of the workers.
B. Construction in favor of Labor
All doubts in the implementation and
interpretation of the provisions of this
Code, including its implementing rules and
regulations, shall be resolved in favor of
labor. [Art. 4, Labor Code]
In case of doubt, all legislation and all
labor contracts shall be construed in favor
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Notes for BAR 2022: Labor Low and Social Legislation
Compiled by: Sugaree of SKSU
of the safety and decent living for the
laborer. [Art. 1702, Civil Code]
Liberal Construction of the Laws
Art. 4 of the Labor Code mandates that all
doubts in the implementation and
interpretation of the provisions thereof
shall be resolved in favor of labor. This is
merely in keeping with the spirit of our
Constitution and laws which lean over
backwards in favor of the working class,
and mandate that every doubt must be
resolved in their favor. [Hocheng
Philippines Corporation v. Farrales, G.R.
No. 211497 (2015)]
Of Labor Contracts
A CBA, as a labor contract within the
contemplation of Art. 1700 of the Civil
Code of the Philippines which governs the
relations between labor and capital, is not
merely contractual in nature but impressed
with public interest, thus, it must yield to
the common good. As such, it must be
construed liberally rather than narrowly
and technically, and the courts must place
a practical and realistic construction upon
it, giving due consideration to the context
in which it is negotiated and purpose
which it is intended to serve. [Cirtek
Employees Labor Union-FFW v. Cirtek
Electronics, G.R. No. 190515 (2010)]
Mutual Obligation
The employer's obligation to give his
workers just compensation and treatment
carries with it the corollary right to expect
from the workers adequate work, diligence
and good conduct. [Judy Philippines, Inc.
v NLRC, G.R. No. 111934 (1998)]
C. Burden of Proof and Quantum of
Evidence in Labor Cases
Summary on Burden of Proof
1. Existence of ER-EE Relationship:
Employee
2. Fact of Dismissal: Employee
3. Validity of Dismissal: Employer
EE has burden of proving fact of
employment and of dismissal
Before a case for illegal dismissal can
prosper, an employer-employee
relationship must first be established by
the employee. [Javier v. Fly Ace Corp.,
G.R. No. 192558 (2012)]
The employee must first establish by
substantial evidence the fact of his
dismissal from service. If there is no
dismissal, then there can be no question as
to the legality or illegality thereof. [MZR
Industries v. Colambot, G.R. No. 179001
(2013)]
ER has burden of proving valid dismissal
Unsubstantiated accusations or baseless
conclusions of the employer are
insufficient legal justifications to dismiss
an employee. The unflinching rule in
illegal dismissal cases is that the employer
bears the burden of proof. [Garza v. Coca-
Cola Bottlers Philippines, Inc., G.R. No.
180972 (2014)]
Penalty must be commensurate with
gravity of offense
Not every case of insubordination or
willful disobedience by an employee
reasonably deserves the penalty of
dismissal. The penalty to be imposed on an
erring employee must be commensurate
with the gravity of his offense. [Joel
Montallana v. La Consolacion College
Manila, G.R. No. 208890 (2014)]
D. Legal Basis under the 1987
Constitution, Civil Code and Labor
Code
1. 1987 Constitution
ART. II: Declaration of Principles and
State Policies
SEC. 3, par. 1-2, ART. XIII: Social Justice
and Human Rights (full protection of
labor, full employment, equality
employment opportunities, security of
tenure)
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Notes for BAR 2022: Labor Low and Social Legislation
Compiled by: Sugaree of SKSU
SEC. 3, par. 3-4, ART. XIII: Social Justice
and Human Rights
Labor as Protected Class; Presumption of
Inherent Inequality:
The presumption is that the employer and
the employee are on unequal footing, so
the State has the responsibility to protect
the employee. This presumption, however,
must be taken on a case-to-case basis. In
situations where special qualifications are
required for employment, such as a
Master's degree, prospective employees
are at a better position to bargain with the
employer. Employees with special
qualifications would be on equal footing
with their employers, and thus, would need
a lesser degree of protection from the State
than an ordinary rank-and-file worker.
[Perfecto Pascua v. Bank Wise Inc., G.R.
No. 191460 & 191464 (2018)].
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 [Gagui v.
Dejero, G.R. No. 196036 (2013)]
Due Process [Sec. 1, Art. III, 1987
Constitution]: Under the Labor Code, as
amended, the requirements for the lawful
dismissal of an employee by his employer
are two-fold: the substantive and the
procedural.
Substantive: two requisites must concur:
(1) the dismissal must be for a just or
authorized cause; and (2) the employee
must be afforded an opportunity to be
heard and to defend himself. [Jeffrey
Nacague v. Sulpicio Lines, Inc., G.R. No.
172589 (2010)]
Procedural: 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 Manufacturing v. Millena,
G.R. No. 141380 (2004)]
The Right to Assemble: Sec 4, Art III 1987
Constitution
Right to peaceably assemble and petition
for redress of grievances is, together with
freedom of speech, of expression, and of
the press, a right that enjoys primacy in the
realm of constitutional protection.
[BAYAN, et al. v. Ermita, G.R. No.
169838, (2006)].
Wearing armbands and putting up placards
to express one’s views without violating
the rights of third parties, are legal per se
and even constitutionally protected.
[Bascon v. CA, G.R. No. 144899 (2004)]
The Right to Form Associations [Sec. 8,
Art. III, 1987 Constitution]:
The right to form associations shall not be
impaired except through a valid exercise of
police power. [Bernas, The 1987
Philippine Constitution: A Comprehensive
Reviewer
Non-impairment of Contracts [Sec. 10,
Art. III, 1987 Constitution]:
A law which changes the terms of a legal
contract between parties, either in the time
or mode or performance, or imposes new
conditions, or dispenses with those
expressed, or authorizes for its satisfaction
something different from that provided in
its terms, is a law which impairs the
obligation of a contract and is null and
void. [Clemens v. Nolting, G.R. No. L-
17959 (1922)]
Vis-à-vis the freedom of contract: The
prohibition to impair the obligation of
contracts is not absolute and unqualified.
In spite of the constitutional prohibition
and the fact that both parties are of full age
and competent to contract, it does not
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Notes for BAR 2022: Labor Low and Social Legislation
Compiled by: Sugaree of SKSU
necessarily deprive the State of the power
to interfere where the parties do not stand
upon an equality, or where the public
health demands that one party to the
contract shall be protected against himself.
[Leyte Land Transportation Co. v. Leyte
Farmers & Workers Union, G.R. No. L-
1377 (1948)]
Labor Rights and Protection:
All persons shall have the right to a speedy
disposition of their cases before all
judicial, quasi-judicial, or administrative
bodies. [Sec. 16, Art. III.]
No involuntary servitude in any form shall
exist. [Sec. 18 (2), Art. III.]
Except as a punishment for a crime
whereof the party shall have been duly
convicted. [Sec. 18 (2), Art. III.]
1. Collective Rights of Workers
a. collective bargaining and negotiations
b. peaceful concerted efforts
c. self-organization
2. Individual Rights
a. security of tenure
b. human conditions at work
c. living wage
3. Right to Participate in Decision Making
process affecting workers’ rights
2. Civil Code
Relations between labor and capital The
relations between capital and labor are not
merely contractual. [Art. 1700, CC]
Neither capital nor labor shall:
a. Act oppressively against the other,
or
b. Impair the interest or convenience
of the public [Art. 1701, CC].
No contract which practically amounts to
involuntary servitude, under any guise
whatsoever, shall be valid. [Art. 1702, CC]
Provisions of applicable statutes are
deemed written into the contract. Hence,
the parties are not at liberty to insulate
themselves and their relationships from the
impact of labor laws and regulations by
simply contracting with each other.
[Innodata Philippines, Inc. v. Quejada-
Lopez, G.R. No. 162839 (2006)]
Courts cannot stipulate for the parties or
amend the latter’s agreement, for to do so
would be to alter the real intention of the
contracting parties when the contrary
function of courts is to give force and
effect to the intention of the parties.
[Maynilad Water Supervisors Association
v. Maynilad Water Services, Inc., G.R. No.
198935 (2013)]
3. Labor Code
Art III, Labor Code
The State shall
a. Afford protection to labor,
b. Promote full employment
c. Ensure equal work opportunities
regardless of sex, race or creed, and
d. Regulate the relations between
workers and employers.
The State shall assure the rights of workers
to
a. Self-organization,
b. Collective bargaining,
c. Security of tenure, and
d. Just and humane conditions of
work. [Art. 3]
All rights and benefits granted to workers
under this Code shall, except as may
otherwise be provided herein, apply alike
to all workers, whether agricultural or non-
agricultural. (As amended by Presidential
Decree No. 570-A, November 1, 1974)
[Art. 6]
Tripartism – three parties are engaged in
policy-making Art. 290, Labor Code
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Notes for BAR 2022: Labor Low and Social Legislation
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Overseas Filipino Worker/Migrant Worker

– a person who is to be engaged, is
engaged, or has been engaged in a
II. RECRUITMENT AND remunerated activity:
PLACEMENT OF WORKERS 1. in a state of which he or she is not a
A. Recruitment and Placement citizen, or
(Labor Code and RA 8042, as 2. on board a vessel navigating the
amended by RA 10022) foreign seas other than a
government ship used for military
“Recruitment and placement" refers to any or non-commercial purposes, or
act of: [CETCHUP-R-CPA] 3. on an installation located offshore
1. Canvassing or on the high seas. [Sec. 2 (a), RA
2. Enlisting 8042, as amended]
3. Contracting Overseas Filipino in distress – who has a
4. Transporting medical, psychosocial or legal assistance
5. Utilizing
6. Hiring Deployment of Migrant Workers – the
7. Procuring workers State shall allow the deployment only in
countries where the rights of Filipino
And includes: workers are protected
1. Referrals, act of passing along or
forwarding of an applicant for License - document issued by the
employment after an initial Department of Labor and Employment
interview of a selected applicant (DOLE); Authorize an entity to operate as
for employment to a selected a private employment agency; When a
employer, placement officer or license is given, one is also authorized to
bureau." [Rodolfo v. People, G.R. collect fees
No. 146964 (2006)]
2. Contract services Authority - document issued by the
3. Promising Department of Labor and Employment
4. Advertising for employment, (DOLE); Authorize an entity to operate as
locally or abroad, whether for a private recruitment entity; Does not
profit or not entitle a private recruitment entity to
collect fees.
Provided, That any person or entity which,
in any manner, offers or promises for a fee Private Employment Agency vs Private
employment to two or more persons shall Recruitment Agency
be deemed engaged in recruitment and Private Employment Agency - Any person
placement. [Art. 13 (b), Labor Code] or entity engaged in recruitment and
Number of persons: not essential placement of workers for a fee which is
charged, directly or indirectly, from the
The number of persons dealt with is not an workers or employers or both, License is
essential ingredient of the act of required
recruitment and placement of workers.
Any of the acts mentioned in Art. 13(b) Private Recruitment Entity - Any person or
will constitute recruitment and placement association engaged in the recruitment and
even if only one prospective worker is placement of workers, locally or overseas,
involved. [People v. Panis, supra.] without charging, directly or indirectly,
any fee, Authority is required

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Notes for BAR 2022: Labor Low and Social Legislation
Compiled by: Sugaree of SKSU

Recruitment of Local and Migrant internationally-accepted standards. [Sec. 3,

Workers: Policy of Selective Deployment RA 8042, as amended]
The State shall allow the deployment of POEA Powers and Functions:
overseas Filipino workers only in countries
where the rights of Filipino migrant 1. Regulate private sector
workers are protected. The government participation in the recruitment and
recognizes any of the following as a overseas placement of workers by
guarantee on the part of the receiving setting up a licensing and
country for the protection of the rights of registration system;
overseas Filipino workers: 2. Formulate and implement, in
coordination with appropriate
1. It has existing labor and social laws entities concerned, when necessary,
protecting the rights of workers, a system for promoting and
including migrant workers; monitoring the overseas
2. It is a signatory to and/or a ratifier employment of Filipino workers
of multilateral conventions, taking into consideration their
declarations or resolutions relating welfare and the domestic
to the protection of workers, manpower requirements;
including migrant workers; and 3. Protect the rights of Filipino
3. It has concluded a bilateral workers for overseas employment
agreement or arrangement with the to fair and equitable recruitment
government on the protection of and employment practices and
the rights of overseas Filipino ensure their welfare;
Workers: 4. Exercise original and exclusive
jurisdiction to hear and decide all
Provided, That the receiving country is claims arising out of an employer-
taking positive, concrete measures to employee relationship or by virtue
protect the rights of migrant workers in of any law or contract involving
furtherance of any of the guarantees under Filipino workers for overseas
subparagraphs (a), (b) and (c) hereof. [Sec. employment including the
3, RA 8042, as amended] disciplinary cases; and all pre-
The DFA shall issue certification. employment cases which are
administrative in character
The State shall also allow the deployment involving or arising out of violation
of overseas Filipino workers to vessels or requirement laws, rules and
navigating the foreign seas or to regulations including money claims
installations located offshore or on high arising therefrom or violation of
seas, whose owners/employers are the conditions for issuance of
compliant with international laws and license or authority to recruit
standards that protect the rights of migrant workers. All prohibited
workers. recruitment. activities and practices
The State shall likewise allow the which are penal in character as
deployment of overseas Filipino workers enumerated and defined under and
to companies and contractors with by virtue of existing laws, shall be
international operations: Provided, That prosecuted in the regular courts in
they are compliant with standards, close coordination with the
conditions and requirements, as embodied appropriate Departments and
in the employment contracts prescribed by agencies concerned;
the POEA and in accordance with 5. Maintain a registry of skills for
overseas placement;

6
Notes for BAR 2022: Labor Low and Social Legislation
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6. Recruit and place workers to
service the requirements for trained
and competent Filipino workers by
foreign governments and their
instrumentalities and such other
employers as public interest may
require;
7. Promote the development of skills
and careful selection of Filipino
workers;
8. Undertake overseas market
development activities for
placement of Filipino workers;
9. Secure the best terms and
conditions of employment of
Filipino contract workers and
ensure compliance therewith;
10. Promote and protect the well-being
of Filipino workers overseas;
11. Develop and implement programs
for the effective monitoring of
returning contract workers,
promoting their re-training and
reemployment or their smooth re-
integration into the mainstream of
national economy in coordination
with other government agencies;
12. Institute a system for ensuring fair
and speedy disposition of cases
involving violation or recruitment
rules and regulations as well as
violation of terms and conditions of
overseas employment;
13. Establish a system for speedy and
efficient enforcement of decisions
laid down through the exercise of
its adjudicatory function;
14. Establish and maintain close
relationship and enter into joint
projects with the Department of
Foreign Affairs, Philippine
Tourism Authority, Manila
International Airport Authority,
Department of Justice, Department
of Budget and Management and
other relevant government entities,
in the pursuit of its objectives.
Country-Team Approach – all government
officers working in the host country as a
country team under the leadership of the
DFA
POEA Standard Contract Deemed
Integrated in every Employment Contract
While the seafarers and their employers
are governed by their mutual agreements,
the POEA rules and regulations require
that the POEA SEC, which contains the
standard terms and conditions of the
seafarers' employment in foreign ocean-
going vessels, be integrated in every
seafarer's contract. [Wallem Maritime
Services, Inc. v. Tanawan, G.R. No.
160444, (2012)]
POEA Jurisdiction
a. Administrative cases arising out of
violations of rules and regulations
relating to licensing and
registration of recruitment and
employment agencies and entities.
[Sec. 28(a), Omb. Rules
Implementing RA 8042]
b. Disciplinary action cases and other
special cases, involving employers,
principals, contracting partners,
and Filipino migrant workers [Sec.
28(b), Omb. Rules Implementing
RA 8042]
NLRC - Claims arising out of an EREE
relationship or by virtue of any law or
contract involving Filipino workers for
overseas deployment including actual,
moral, and exemplary and other forms of
damage. [Sec. 10, RA 8042]
RTC - Criminal actions arising from illegal
recruitment [Sec. 9, RA 8042]
Regulatory and Visitorial Powers of the
Department of Labor and Employment
Secretary
1. Reports on Employment Status -
Whenever the public interest
requires, the Secretary of Labor
may direct all persons or entities
within the coverage of this Title to
submit a report on the status of
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Notes for BAR 2022: Labor Low and Social Legislation
Compiled by: Sugaree of SKSU
employment, including job
vacancies, details of job
requisitions, separation from jobs,
wages, other terms and conditions
and other employment data. [Art.
33]
2. SOLE’s Regulatory Power: The
SOLE have the power:
a. To restrict and regulate the
recruitment and placement
activities of all agencies
within the coverage of this
Title. [Title 1, Recruitment
and Placement of Workers]
b. To issue orders and
promulgate rules and
regulations to carry out the
objectives and implement
the provisions of this Title.
[Art. 36]
3. SOLE’s visitorial Power - The
SOLE or his duly authorized
representatives may, at any time,
inspect the premises, books of
accounts and records of any person
or entity covered by this Title,
require it to submit reports
regularly on prescribed forms, and
act on violation of any provisions
of this Title. [Art. 37]
SOLE’s arrest and seizure power declared
unconstitutional - After the promulgation
of the 1987 Constitution, only judges may
issue search and arrest warrants. The
Secretary of Labor, not being a judge, may
no longer issue search of arrest warrants.
Article 38(c) of the Labor Code is declared
unconstitutional and of no force or effect.
[Salazar v. Achacoso, G.R. No. 81510,
(1990)]
1. Illegal Recruitment and other
prohibited activities
a. Elements
b. Types of Illegal Recruitment
I. First Main Type: Simple Illegal
Recruitment
a. Illegal Recruitment of Local
Workers
Two Types According to the Kind of
Offender
The following are the types of illegal
recruitment of local workers and the
elements for each type:
1. By a licensee/holder of authority
i. Offender has a valid license
or authority required by law
to enable one to lawfully
engage in the recruitment
and placement of workers;
ii. b. Offender undertakes any
of the prohibited acts under
Art. 34 (Prohibited
Practices)
2. By a non-licensee/non-holder of
authority
i. Offender has no valid
license or authority required
by law to enable one to
lawfully engage in the
recruitment and placement
of workers;
ii. Offender undertakes either
–
a. Any activity within the
meaning of recruitment and
placement under Art. 13(b)
- recruitment and placing
b. Any of the prohibited
practices under Art. 34.
[Art. 34 and 38]
Profit Immaterial
Recruitment may be "for profit or not." It
is the lack of the necessary license or
authority, and not the fact of payment, that
renders recruitment illegal. [Sharp v.
Espanol, G.R. No. 155903 (2007)]
b. Illegal Recruitment of Migrant Workers
“Illegal Recruitment” Defined
Any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring,
or procuring workers and includes
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Notes for BAR 2022: Labor Low and Social Legislation
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referring, contract services, promising or It must be shown that the accused gave
advertising for employment abroad, complainants the distinct impression that
whether for profit or not, when undertaken she had the power or ability to send them
by a non-licensee or non-holder of abroad for work such that the latter were
authority contemplated under Art. 13(f), convinced to part with their money in
P.D. No. 442 or LC. [Sec. 5, R.A. No. order to be employed. [People v. Ochoa,
10022] G.R. No. 173792 (2011)]
Two Types According to Offense Lack of Receipts Not Fatal
(Elements)
Mere failure of the complainant to present
1. Undertakes any recruitment written receipts for money paid for acts
activity defined in Art. 13(b), LC constituting recruitment activities is not
without a valid license/authority fatal to the prosecution, provided payment
can be proved by clear and convincing
Note: Can only be committed by one who testimonies of credible witnesses. [People
has no valid license or authority to engage v. Alvarez, G.R. 142981 (2002)]
in recruitment and placement
II. Second Main Type: Illegal
2. Commits any of the prohibited acts Recruitment as Economic Sabotage
in Sec. 6, R.A. No. 8042, as
amended by R.A. 10022 Two Types according to Qualifying
a. Note: Immaterial whether Circumstance
an offender is a holder or a
non-holder of a license or Illegal recruitment is considered economic
authority sabotage when attended by the ff.
qualifying circumstances:
Contract Substitution = Illegal
Recruitment 1. By a syndicate - carried out by a
group of 3 or more persons
The reduced salaries and employment conspiring and confederating with
period in the new employment contract one another;
contradicted the POEA-approved 2. In large scale - committed against 3
employment contract. By this act of or more persons individually or as
contract substitution, respondents a group. [Art. 38(b), LC; Sec. 6 of
committed a prohibited practice; R.A. No. 8042 as amended]
consequently, engaged in illegal
recruitment. [PERT/CPM Manpower Note re: In Large Scale – 3+ complainants
Exponent Co. v. Vinuya, G.R. No. 197528 must be in a single case “Committed
(2012)] against 3 or more persons individually or
as a group” must be understood as
Possible Liability of Employee referring to the number of complainants in
each case; otherwise, prosecutions for
Even the employee of a company engaged single crimes of illegal recruitment can be
in illegal recruitment can be held liable cumulated to make it in large scale .
(along with the employer) as a principal [People v. Reyes, G.R. No. 105204
once it is shown that he had actively and (1995)].
consciously participated in the illegal
recruitment. [People v. Bayker, G.R. No. Number of victims must be alleged The
170192 (2016)] information for illegal recruitment done in
large scale must allege the number of
Accused must give the impression of victims. [People v. Fernandez, 725 SCRA
ability to send complainant abroad for 152 (2014)]
work

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Notes for BAR 2022: Labor Low and Social Legislation
Compiled by: Sugaree of SKSU

a. For Local Workers 2. Offender undertakes either:

(Elements) i. Any of the "recruitment and
placement" activities
By A Syndicate defined in Art. 13(b)
1. Offender undertakes either: ii. Any of the prohibited
i. Any activity within the practices under Sec. 6 of
meaning of "recruitment R.A. No. 8042
and placement" defined 3. Illegal recruitment is carried out by
under Art. 13(b) a group of 3 or more persons
ii. Any of the prohibited conspiring and/or confederating
practices under Art. 34 with one another in carrying out
2. Offender has no valid license or any unlawful or illegal transaction,
authority required by law to enable enterprise or scheme. [People v.
one to lawfully engage in Sison, G.R. No. 187160 (2017)]
recruitment and placement of In Large Scale
workers
3. Illegal recruitment is committed by 1. Offender undertook any
a group of 3 or more persons recruitment activity as defined
conspiring or confederating with under Sec. 6 of R.A. No. 8042
one another. [People v. Gallo, G.R. 2. Offender did not have the license
No. 187730 (2010)] or the authority to lawfully engage
in the recruitment of workers
In Large Scale 3. Offender committed the same
1. Offender Undertakes either: against 3 or more persons
i. Any activity within the individually or as a group. [People
meaning of "recruitment v. De los Reyes, G.R. No. 198795
and placement" defined (2017)]
under Art. 13(b) c. Illegal Recruitment vs Estafa
ii. Any of the prohibited
practices under Art. 34 Conviction for Illegal Recruitment NOT a
2. Offender has not complied with the Bar to Conviction for Estafa and Vice
guidelines issued by the SOLE, versa
particularly with respect to the
securing of license or an authority A person who commits illegal recruitment
to recruit and deploy workers, may be charged and convicted separately
either locally or overseas of illegal recruitment under the LC and
3. Offender commits the unlawful estafa under Art. 315(2a), RPC. The
acts against 3 or more persons offense of illegal recruitment is malum
individually or as a group [Art. 38 prohibitum where the criminal intent of the
(b)] accused is not necessary for conviction,
while estafa is malum in se where the
b. For Migrant Workers criminal intent of the accused is crucial for
(Elements) conviction. Conviction for offenses under
the LC does not bar conviction for
By a Syndicate offenses punishable by other laws.
Conversely, conviction for estafa does not
1. Offender does not have the valid bar a conviction for illegal recruitment.
license or authority required by law One's acquittal of the crime of estafa will
to engage in recruitment and not necessarily result in his acquittal of the
placement of workers crime of illegal recruitment in large scale,

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and vice versa. [People v. Ochoa, G.R. No.
173792 (2011); People v. Ocden, G.R. No.
173198 (2011)]
As such, the filing of criminal cases for
both does not constitute double jeopardy.
In illegal recruitment, profit is immaterial;
on the other hand, a conviction for estafa
requires a clear showing that the offended
party parted with his money or property
upon the offender’s false pretenses, and
suffered damage thereby. The two are then
completely different and distinct crimes.
[People v. Melissa Chua, G.R. No. 187052
(2012)]
2. Liability of Local Recruitment Agency
and Foreign Employer
a. Solidary Liability
If the offender is a corporation,
partnership, association or entity, the
penalty shall be imposed upon the officer
or officers responsible for the violation.
I. Illegal Recruitment of Local
Workers
In every case, conviction carries with it:
1. Automatic revocation of
license/authority and all permits
and privileges granted under this
Title
2. Forfeiture of cash and surety bonds
in favor of POEA or the Regional
Department with jurisdiction over
the place where the agency or
branch office is located
3. For aliens, in addition to the
penalties herein prescribed,
deportation without further
proceedings. [Art. 39 (3)]
II. Illegal Recruitment of Migrant
Workers:
In every case, conviction carries with it:
1. Automatic revocation of license or
registration of the
recruitment/manning agency,
lending institutions, training school
or medical clinic.
2. For aliens, in addition to the
penalties herein prescribed,
deportation without further
proceedings.
Employees of a company or corporation
engaged in illegal recruitment may be held
liable as PRINCIPAL, together with his
employer if it is shown that he actively and
consciously participated in illegal
recruitment. [People v. Sagayaga, GR
143726 (2004)]
Two-Jurisdiction Rule: A criminal action
arising from illegal recruitment of migrant
workers shall be filed with the RTC of the
province or city:
1. Where offense was committed, or
2. Where the offended party actually
resides at the time of the
commission of the offense. [Sec. 9,
RA 8042]
Provided, the court where such action is
first filed acquires jurisdiction to the
exclusion of other courts. [Sec. 6, Rule IV,
Omnibus Rules implementing RA 8042, as
amended]
II. Foreign Employer
Foreign employers shall assume joint and
solidary liability with the recruitment/
placement agency for all claims arising out
of an employer-employee relationship or
by virtue of any law or contract involving
Filipino workers for overseas deployment
including claims for damages. [Sec. 10 of
RA 8042, as amended]
III. Solidary Liability of Agent and
Principal
Coverage: The liability of the
principal/employer and the
recruitment/placement agency for the
claims involving Filipino workers for
overseas deployment including claims for
damages is joint and several.
Incorporation into the contract: This shall
be incorporated in the contract for overseas
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employment and shall be a condition
precedent for its approval.
Performance Bond: The performance bond
filed by the recruitment/placement agency
shall be answerable for all money claims
or damages awarded to workers.
Corporate officers and directors and
partners solidarily liable: If the
recruitment/placement agency is a juridical
being, the corporate officers and directors
and partners as the case may be, shall be
joint and severally liable with the
corporation or partnership for the claims
and damages. [Sec. 10, RA 8042 as
amended]
Purpose of Solidary Liability: The
termination of agreement between the
manning agency and its principal does not
relieve the former of its liability. The
agency agreement extends until the
expiration of the employment contracts of
the employees recruited and employed.
Otherwise, this renders nugatory the
purpose of the law which is to assure
aggrieved workers of immediate and
sufficient payment of what is due them.
Requisite undertaking for application of
license
The written application for a license to
operate a private employment agency shall
be submitted with, among others, a duly
notarized undertaking that the applicant:
1. Shall assume full and complete
responsibility for all claims and
liabilities which may arise in
connection with the use of the
license;
2. Assume joint and several liability
with the employer for all claims
and liabilities which may arise in
connection with the
implementation of the contract,
including but not limited to unpaid
wages, death, disability
compensation and repatriation.
3. Assume full and complete
responsibility for all acts of its
officers, employees and
representatives done in connection
with recruitment and placement
[Part II, Rule II, Sec. 4 (f) (7-9),
2016 Revised POEA Rules and
Regulations].
For corporations or partnerships, a duly
notarized undertaking by the corporate
officers and directors, or partners, that they
shall be joint and severally liable with the
corporation or partnership for claims
and/or damages awarded to workers is also
required. [Part II, Rule II, Sec. 4 (g), 2016
Revised POEA Rules and Regulations]
b. Theory of Imputed Knowledge
This is a doctrine in agency stating that the
principal is chargeable with and bound by
the knowledge of or notice to his agent
received while the agent was acting as
such.
Notice to the agent is notice to the
principal.
A local employment agency is considered
the agent of the foreign employer, the
principal. Knowledge of the former of
existing labor and social legislation in the
Philippines is binding on the latter. Notice
to the former of any violation thereof is
notice to the latter.
But, notice to the principal is NOT notice
to the agent. Notice to the foreign
employer, therefore, is not notice to the
local employment agency.
3. Entities Prohibited from Recruiting
Entities disqualified from Engaging in the
Business of Recruitment and Placement of
Workers for Local Employment
1. Travel agencies and sales agencies
of airline companies, whether for
profit or not. [Art. 26]
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2. Those who are convicted of illegal officer, member of the board or

recruitment, trafficking in persons, partner of a corporation or
anti-child labor violation, or crimes partnership engaged in the business
involving moral turpitude; of a travel agency;
3. Those against whom probable 4. Individuals, partners, officers, or
cause or prima facie finding of directors of an insurance company
guilt for illegal recruitment or other who make, propose or provide an
related cases exist particularly to insurance contract under the
owners or directors of agencies compulsory insurance coverage for
who have committed illegal agency-hired OFWs;
recruitment or other related cases. 5. Sole proprietors, partners or
4. Those agencies whose licenses officers and members of the board
have been previously revoked or with derogatory records, such as,
cancelled by the Department under but not limited to the ff:
Sec. 54 of these rules. a. Those convicted or against
5. Cooperatives whether registered or whom probable cause or
not under the Cooperative Act of prima facie finding of guilt
the Philippines. is determined by a
6. Law enforcers and any official and competent authority for
employee of the Department of illegal recruitment or for
Labor and Employment (DOLE). other related crimes or
7. Sole proprietors of duly licensed offenses committed in the
agencies are prohibited from course of, related to, or
securing another license to engage resulting from, illegal
in recruitment and placement. recruitment, or for crimes
8. Sole proprietors, partnerships or involving moral turpitude;
corporations licensed to engage in b. Those agencies whose
private recruitment and placement licenses have been revoked
for local employment are for violation of RA 8042,
prohibited from engaging in job PD 442, RA 9208, and their
contracting or subcontracting IRRs;
activities. [Sec. 5, DO 141-14, c. Those agencies whose
Revised Rules and Regulations licenses have been
Governing Recruitment and cancelled, or those who,
Placement for Local Employment] pursuant to the order of the
Administrator, were
Entities disqualified from Engaging or included in the list of
Participating in the Business of persons with derogatory
Recruitment and Placement of Workers for record for violation of
Overseas Employment recruitment laws and
1. Travel agencies and sales agencies regulations;
of airline companies, whether for 6. Any official employee of the
profit or not. [Art. 26] DOLE, POEA, OWWA, DFA,
2. Officers or members of the Board DOJ, DOH, BI, IC, NLRC,
of any corporation or partners in a TESDA, CFO, NBI, PNP, Civil
partnership engaged in the business Aviation Authority of the
of a travel agency; Philippines, international airport
3. Corporations and partnerships, authorities, and other government
where any of its officers, members agencies directly involved in the
of the board or partners is also an implementation of RA 8042, as

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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
Regulations]
4. Cancellation or license or authority
The Secretary of Labor shall have the
power to suspend or cancel any license or
authority to recruit employees for overseas
employment for:
a. violation of rules and regulations
issued by the Department of Labor,
the Overseas Employment
Development Board, and the
National Seamen Board;
b. violation of the provisions of this
and other applicable laws, General
Orders and Letters of Instructions.
[Art. 35]
Acts prohibited under Art. 34 are grounds
for suspension or cancellation of license.
Note that these acts likewise constitute
illegal recruitment under RA 8042 as
amended by RA 10022.
Who can suspend or cancel the license?
1. DOLE Secretary
2. POEA Administrator
The 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. [People v. Diaz, G.R. 112175
(1996)]
5. Termination of Contract of Migrant
Worker without Just or Valid Cause
In case of---
a. Termination of overseas
employment without just, valid, or
authorized cause as defined by law
or contract, or
b. Any unauthorized deductions from
the migrant worker’s salary
---the worker shall be entitled to full
reimbursement of:
a. His placement fee and the
deductions made with interest
at twelve percent (12%) per
annum; AND
b. His salaries for the unexpired
portion of his employment
contract
(*or for three (3) months for every year of
the unexpired term, whichever is less)
[Sec. 10, RA8042, as amended by RA
10022]
Rule before Serrano (1995-2009): 3-month
salary rule applied: 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: Invalidated the 3-
month Salary Cap Clause: The SC there
held that “said clause is unconstitutional
for being an invalid classification, in
violation of the equal protection clause.”
Thus, the present rule is that OFWs whose
contracts are terminated without just cause
are entitled to all the salaries for the entire
unexpired portion of their employment
contract, irrespective of the stipulated term
or duration thereof.
In the case of Yap v. Thenamaris Ship’s
Management and Intermare Maritime
Agencies, Inc [G.R. No. 179532, (May 30,
2011)], the SC affirmed the Serrano ruling,
but did not apply the Operative Fact
doctrine: “As an exception to the general
rule, the doctrine applies only as a matter
of equity and fair play.”
Note: In 2010, a year after Serrano, RA
10022, in amending RA 8042,
reincorporated the nullified 3-month salary
cap clause. However, the SC did not allow
this and again struck the revived clause as
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unconstitutional in the 2014 case of above the standards set by

Sameer Overseas Placement Agency v. the POEA. The number of
Cabiles [G.R. No. 170139, (August 05, professional and skilled
2014)]. There, the SC said that: “when a Overseas Filipino Workers
law or a provision of law is null because it hired for the first time by
is inconsistent with the Constitution, the the employer shall not
nullity cannot be cured by a exceed five (5). For the
reincorporation or re-enactment of the purpose of determining the
same or a similar law or provision. A law number, workers hired as a
or provision of law that was already group shall be counted as
declared unconstitutional remains as such one; OR
unless circumstances have so changed as iii. Workers hired by a
to warrant a reverse conclusion.” Hence, relative/family member
the case of Serrano holds as binding who is a permanent resident
precedent, even after the passage of RA of the host country. [Sec.
10022. 124, 2016 Revised POEA
Rules and Regulations]
6. Ban on Direct Hiring, Exceptions
General Rule: No employer may hire a
Filipino worker for overseas employment
except through the Boards and entities
authorized by the Secretary of Labor. [Art. B. Employment of Non-Resident Aliens
18] Coverage
No employer shall directly hire an Who should apply for an Alien
Overseas Filipino Worker for overseas Employment Permit
employment. [Sec. 123, 2016 Revised
POEA Rules and Regulations] a. Any alien seeking admission to the
Philippines for employment
Exemptions: purposes, and
a. Members of the diplomatic corps b. Any domestic or foreign employer
b. International organizations who desires to engage an alien for
c. Heads of state and government employment in the Philippines.
officials with the rank of at least [Art. 40, Labor Code]
deputy minister; Art. 40 of the Labor Code which requires
d. Other employers as may be employment permit refers to non-resident
allowed by the Secretary of Labor aliens. Resident aliens do not fall within
and Employment, such as: the ambit of the provision [Almodiel v.
i. Those provided in (a), (b) NLRC, 223 SCRA 341 (1993)]
and (c) who bear a lesser
rank, if endorsed by the An alien cannot file a labor complaint
Philippine Overseas Labor without having obtained an employment
Office (POLO), or Head of permit. [Andrew James McBurnie v.
Mission in the absence of Eulalio Ganzon, 707 SCRA 646 (2013)]
the POLO; Who are exempted from securing an Alien
ii. Professionals and skilled Employment Permit [DOISIPRRL]
workers with duly
executed/authenticated 1. All members of the Diplomatic
contracts containing terms service and foreign government
and conditions over and Officials accredited by and with

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Notes for BAR 2022: Labor Low and Social Legislation
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reciprocity arrangement with the
Philippine government;
2. Officers and staff of International
organizations of which the
Philippine government is a
member, and their legitimate
Spouses desiring to work in the
Philippines;
3. Owners and representatives of
foreign principals whose
companies are accredited by the
POEA, who come to the
Philippines for a limited period and
solely for the purpose of
Interviewing Filipino applicants for
employment abroad;
4. Foreign national who comes to the
Philippines to teach, present and/or
conduct research studies in
universities and colleges as
visiting, exchange or adjunct
Professors under formal
agreements between the
universities or colleges in the
Philippines and foreign universities
or colleges; or between the
Philippine government and foreign
government: provided that the
exemption is on a reciprocal basis;
5. Permanent Resident foreign
nationals, probationary or
temporary resident visa holders;
6. Refugees and stateless persons
recognized by DOJ; and
7. All foreign nationals granted
exemption by Law. [Section 2,
D.O. No. 186-17]
Who are excluded from securing an Alien
Employment Permit [BPTCICR]
1. Members of the governing Board
with voting rights only and do not
intervene in the management of the
corporation or in the day to day
operation of the enterprise.
2. President and Treasurer, who are
part-owner of the company.
3. Those providing Consultancy
services who do not have
employers in the Philippines.
4. Intra corporate transferee who is a
Manager, Executive or Specialist
5. Contractual service supplier who is
a Manager, Executive, or Specialist
6. Representative of the Foreign
Principal/Employer assigned in the
Office of Licensed Manning
Agency (OLMA) in accordance
with the POEA law, rules and
regulations. [Section 3, D.O. No.
186-17]
Certificate of Exclusion: All foreign
nationals excluded from securing AEP
shall secure Certificate of Exclusion
from the Regional Office. Further,
Regional Offices shall issue the
Certificate of Exclusion within two (2)
working days after receipt of complete
documentary requirements and fees.
[Section 4, D.O. No. 186-17]
Conditions for Grant of Permit:
Non-availability of Competent, Able,
and Willing persons [CAW]
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 40, Labor Code]
Where to file Applications
All applications for AEP shall be filed
and processed at the DOLE Regional
Office or Field Office having
jurisdiction over the intended place of
work. [Sec. 5(a), D.O. No. 186-17]
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Only one AEP at a time At any given
time only one AEP shall be issued to a
foreign national. A foreign national
may be issued one AEP only at any
given time. [Sec. 5d, D.O. No. 186-17]
III. LABOR STANDARDS
Labor Standards refers to the minimum
requirements 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, safety and health
standards. [Maternity Children’s Hospital
v. Secretary of Labor, G.R. 78909 (1989)]
1. Employer-Employee relationship
Both a question of law and of fact
The existence or absence of EER is a
question of law and of fact, each in its
defined sense. Ultimately, it is a question
of fact because whether one exists or not is
dependent upon the facts of each case.
[SSS v. CA and Ayalde, G.R. No. 100388,
(2000)]. However, it is a question of law
because it cannot be made the subject of
agreement [Tabas et.al. v. California
Manufacturing Co., et. al., G.R. No.
80680, (1989)]. Hence, the
characterization of the law prevails over
that in the contract.
What determines?
a. by operation of law
b. not by parties; agreement
c. not dependent on compensation
2. Test to Determine Existence
a. Four-fold Test
Elements of an EER
1. Selection and engagement of the
employee - HIRING
2. Payment of wages - WAGES
3. Power of dismissal - FIRING
4. Employer’s power to control the
employee’s conduct with respect to
the means and methods by which
the work is to be accomplished
[Brotherhood Labor Unity
Movement of the PH v. Zamora,
G.R. No. 48645, (1987)] - This is
the most important element when
determining the existence of an
EER. It pertains not only to results,
but also to the means and methods
to attain those results. [Lirio v.
Genovia, G.R. No. 169757 (2011)].
- CONTROL
Tongko vs Manufacturers – methodology
must be controlled for results;
Control Over the work vs Over the Result
The “existence” of the right to control is
sufficient for the element to be present.
There need not be “actual exercise” of the
right. [Zanotte Shoes v. NLRC, G.R. No.
100665, (1995)]
Not every form of control will create an
EER. No EER exists when control is in the
form of rules that merely serve as
guidelines towards the achievement of
results without dictating the means or
methods to attain them. EER exists when
control is in the form of rules that fix the
methodology to attain a specified result
and bind the worker to use such. [Insular
Life Assurance Co, LTD v. NLRC, G.R.
No. 84484 (1989)].
PBA Referees NOT Employees (Bernante
vs PBA)
Competent and relevant evidence needed
to prove EER
No particular form of evidence is required
to prove the EER. Any competent and
relevant evidence to prove the relationship
may be admitted. For, if only documentary
evidence would be required to show that
relationship, no scheming employer would
ever be brought before the bar of justice,
as no employer would wish to come out
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with any trace of the illegality he has
authored considering that it should take
much weightier proof to invalidate a
written instrument. [Tenazas, et al., v. R.
Villegas Taxi Transport, G.R. No. 192998
(2014)]
Burden of proof on alleged employee
The onus probandi rests on the employer
to prove that its dismissal was for a valid
cause. However, before a case for illegal
dismissal can prosper, an EER must first
be established. It is incumbent upon the
employee to prove the EER by substantial
evidence. [Javier v. Fly Ace Corporation,
G.R. No. 192558 (2012)]
Doctrine of piercing the corporate veil
When this doctrine is applied, an employee
can be said to have an EER with the
corporation that another corporation (who
the employee “works” for) is merely an
alter ego of. It applies in these 3 basic
scenarios:
1. Defeat of public convenience as
when corporate fiction is used as a
vehicle to evade existing
obligations;
2. Fraud cases as when the corporate
entity is used to justify a wrong,
protect fraud, or defend a crime;
3. Alter ego cases, where a
corporation is a farce, as it is a
mere alter ego or business conduit
of a person, or where the
corporation is so organized and
controlled and its affairs are so
conducted as to make it merely an
instrumentality, agency, conduit or
adjunct of another corporation.
[Maricalum Mining Corp. v.
Florentino, G.R. No. 221813
(2018)]
Doctrine illustrated in jurisprudence
In Sarona v. NLRC [G.R. No. 185280
(2012)], the doctrine was applied. It
involved the illegal dismissal of Sarona, a
security guard who first worked at Sceptre
but was subsequently assigned to Royale,
where he was illegally dismissed. In the
computation of his separation pay, Sarona
prayed that the corporate veil of Royale be
pierced as it was a mere continuation of
Sceptre; hence, his separation pay should
be computed from the time he was hired
by Sceptre. This was granted.
Circumstances indicated that Spectre and
Royale were one and the same (same
office, same officers, same person
exercising control and supervision over
employees of both companies), and that
Sarona’s transfer to Royale was done in
bad faith. As such, Sarona could be said to
have an EER with Sceptre. Thus, his
separation pay was to be computed from
the time he was hired by Sceptre.
Dual Juridical Relationship
Under the boundary-hulog scheme
incorporated in the Kasunduan, a dual
juridical relationship was created between
petitioner and respondent: that of
employer-employee and vendor-vendee.
The Kasunduan did not extinguish the
employer-employee relationship of the
parties extant before the execution of said
deed. (Villamaria vs CA)
Officer vs Employee:
Corporate Officer – enumerated in the By-
Laws, if dismissed, it is an intra-corporate
dispute; regular courts has jurisdiction
If Corporate Officer is an employee as
expressly stipulated by the By-Laws, then
the Labor Arbiter has jurisdiction with
respect to Employer-Employee
Relationship
Two-Tier Test:
1. status of the relationship between the
parties
2. the nature of the question that is the
subject of the controversy
3. Employee vs Independent Contractor
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Distinguished from independent
contractors
No EER exists between independent
contractors and their principals; their
contracts are governed by the law on
contracts and other applicable law.
Employees under fixed-term contracts
cannot be independent contractors because
in fixed-term contracts, an EER exists.
[Fuji Television Network, Inc. v. Espiritu,
G.R. No. 204944-45 (2014)]
Talents:
Case of Jay Sonza: Talents
Production Assistants, drivers/cameraman,
security guards are not TALENTs, they are
employees
Apprentice: Art. 72, LC
Case: Atlanta Industries: distinction of an
apprentice and an employee
Women Workers, Art 136, LC
A. Conditions of Employment
1. Covered Employees/Workers
General rule: Title I: Working Conditions
and Rest Periods shall apply to employees
in all establishments and undertakings
whether for profit or not. [Art. 82]
Article 82 applies to the whole of Title I.
This includes Service Incentive Leaves,
which will be discussed in a separate
section
Exceptions (i.e. those NOT covered by
Title I):
1. Government employees [Art. 82;
Art. 76] (exception to the
exception: Employees of GOCCs
created under the Corporation
Code)
The terms and conditions of employment
of all government employees, including
employees of GOCCs, are governed by the
Civil Service rules and regulations, not by
the Labor Code [Art. 291].
However, not all GOCCs are governed by
the Civil Service Rules; only those created
by original charter are governed by the
Civil Service rules:
“Following Sec. 2(i) Art. IX-B of 1987
Phil. Constitution, the test in determining
whether a government owned corporation
is subject to the Labor Code or the Civil
Service law is finding out what created it –
if it is created by a special charter, then,
Civil Service Law applies, if it is created
by the General Corporation Law, then the
Labor Code applies.” [PNOC Energy
Development Corp. v. NLRC, G.R. No.
79182 (1991)]
2. Managerial Employees
Two definitions of “managerial employee”
in the Labor Code:
i. One whose primary duty consists
of the management of the
establishment in which they are
employed or of a department or
subdivision thereof and to other
officers or members of the
managerial staff. [Art. 82]
ii. One who is vested with the powers
or prerogatives to lay down and
execute management policies
and/or to hire transfer, suspend, lay
off, recall, discharge, assign or
discipline employees. [Art.
219(m)]
Characteristics of managerial employees
[Sec. 2(b), Rule I, Book III, IRR]:
Managerial employees are exempted from
the coverage of Book III Articles 83
through 96 if they meet all of the
following conditions:
i. Their primary duty consists of the
management of the establishment
in which they are employed or of a
department or subdivision thereof.
ii. They customarily and regularly
direct the work of two or more
employees therein.
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Notes for BAR 2022: Labor Low and Social Legislation
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iii. 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.
Managerial employees and managerial
staff are determined by their job
description and not their job title.
[Peñarada v. Baganga Plywood Corp.,
G.R. No. 159577 (2006)]
3. Members of the Managerial Staff
(Supervisory Employees)
Definition:
Supervisory employees are those who, in
the interest of the employer, effectively
recommend such managerial actions if the
exercise of such authority is not merely
routinary or clerical in nature but requires
the use of independent judgment. [Art.
219(m)]
Art. 82 also includes managerial staff
(supervisory employees) in the definition
of managerial employees. The definition in
Art. 82 covers more people than that in
Art. 219(m). In effect, managerial
employees in Art. 82 includes supervisors,
but Art. 219(m) does not, for purposes of
the right to self-organization.
Managerial Staff is included as they are
considered managerial employees as well
[Sec. 2(c), Rule I, Book III, IRR]: Officers
or members of a managerial staff are also
exempted if they perform the following
duties and responsibilities:
i. Their primary duty consists of the
performance of work directly
related to management policies of
their employer;
ii. Customarily and regularly exercise
discretion and independent
judgment;
iii. (a) 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 (b) Execute under general
supervision work along specialized
or technical lines requiring special
training, experience, or knowledge;
OR (c) Execute, under general
supervision, special assignments
and tasks;
iv. Do not devote more than 20% 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.
Effective recommendatory power
Supervisory employees are those who, in
the interest of the employer, effectively
recommend such managerial actions and
the exercise of such authority is not merely
routinary or clerical in nature but requires
the use of independent judgment [Art.
219(m)].
4. Field Personnel
Field personnel are non-agricultural
employees:
i. Who regularly perform their duties
away from the principal or place of
business or branch office of the
employer; and
ii. Whose actual hours of work in the
field cannot be determined with
reasonable certainty. [Art. 82]
Legal Test: Control & Supervision of
employer
In order to determine whether an employee
is a field employee, it is also necessary to
ascertain if actual hours of work in the
field can be determined with reasonable
certainty by the employer. In so doing, an
inquiry must be made as to whether or not
the employee’s time and performance are
constantly supervised by the employer.
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[Far East Agricultural Supply v.
Lebatique, G.R. No. 162813 (2007)
Although the fishermen perform non-
agricultural work away from petitioner’s
business offices, the fact remains that
throughout the duration of their work they
are under the effective control and
supervision of petitioner through the
vessel’s patron or master. Hence, the
fishermen are not “field personnel”.
[Mercidar Fishing Corporation v. NLRC,
G.R. No. 112574 (1998)]
5. Members of the family of the
employer who are dependent on
him for support [Art. 82]; -
Workers who are family members
of the employer, and who are
dependent on him for their support,
are outside the coverage of this
Title on working conditions and
rest periods [Art. 82].
6. Domestic workers or kasambahay
[Art. 141, RA 10361] (exception to
the exception: Assignment in a
Commercial, Industrial or
Agricultural Enterprise)
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:
i. General househelp
ii. Nursemaid or “yaya”
iii. Cook
iv. Gardener
v. Laundry person
The definition of “Kasambahay” excludes:
i. Any person who performs
domestic work only occasionally or
sporadically and not on an
occupational basis.
ii. Children who are under foster
family arrangement, and are
provided access to education and
given an allowance incidental to
education [Sec. 4(d), Art. 1, RA
10361]
iii. Service providers
iv. Family drivers
Exclusivity of function required Note that
the definition contemplates a domestic
helper who is employed in the employer’s
home to minister exclusively to the
personal comfort and enjoyment of the
employer’s family. [Azucena]
Thus, it has been held that the following
personnel are NOT domestic employees:
i. House-help or laundry-women
working in staffhouses of a
company, as well as drivers,
houseboys, or gardeners
exclusively working in the
company, the staffhouses and its
premises [Apex Mining Company
v. NLRC, G.R. No. 94951 (1991)]
ii. House-help doing chores for the
employer's family, while also
fulfilling tasks connected with the
employer's business (bakery) such
as cooking, filling orders, baking
orders, and other clerical work
[Fernando Co v. Vargas, G.R. No.
195167 (2011)]
7. Persons in the personal service of
another
Persons in the personal service of another
are not covered by Title I: Working
Conditions and Rest Periods if they:
i. Perform such services in the
employer’s home which are usually
necessary or desirable for the
maintenance and enjoyment
thereof; or
ii. Minister to the personal comfort
convenience or safety of the
employer as well as the members
of his employer’s household. [Sec.
2 (d), Rule I, Book III, IRR]
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8. Workers who are paid by result as
determined by DOLE regulation
[Art. 82] (pieceworkers)
Definition
Workers who are paid by results are those
whose output rates are in accordance with
the standards prescribed under Sec. 8, Rule
VII, Book Three of these regulations, or
where such rates have been fixed by the
Secretary of Labor and Employment in
accordance with the aforesaid Section.
These include those who are paid on piece
work, “takay,” “pakiao” or task basis, and
other nontime work. [Sec. 2(e), Rule I,
Book III, IRR]
Workers under piece-rate employment
have no fixed salaries and their
compensation is computed on the basis of
accomplished tasks. That their work output
might have been affected by the change in
their specific work assignments does not
necessarily imply that any resulting
reduction in pay is tantamount to
constructive dismissal. It is the prerogative
of the management to change their
assignments or to transfer them. [Best
Wear Garments v. De Lemos and
Ocubillo, G.R. No. 191281 (2012)]
Workers paid by results may be grouped
into two: 1) those whose time and
performance is supervised by the employer
and 2) those whose time and performance
is unsupervised by the employer [Azucena,
p. 289].
Must be unsupervised to be excluded
Those who are engaged on task basis,
purely commission basis, or those who are
paid a fixed amount for performing work
irrespective of the time consumed in the
performance thereof are excluded from
receiving benefits such as nightime pay,
holiday pay, service incentive leave, inter
alia, provided their time and performance
is unsupervised by the employer. [Labor
Congress of the Philippines v. NLRC,
G.R. No. 123938 (1998)]
Rule on overtime pay Workers who are
paid by results, if their output rates are in
accordance with the standards prescribed
under Sec. 8, Rule VII, Book III, of those
regulations, or where such rates have been
fixed by the Secretary of Labor in
accordance with the aforesaid section, are
not entitled to receive overtime pay. [Sec.
2(e), Rule I; Labor Congress of the
Philippines v. NLRC, G.R. No. 123938
(1998)]
Not determinative of EER
Payment by result is not determinative of
employer-employee relationship. It is a
method of compensation and does not
define the essence of the relation. It is a
method of computing compensation, not a
basis for determining the existence or
absence of employer-employee
relationship. [Tan v. Lagrama, G.R. No.
111042 (1999)]
9. Those employed in retail and
service establishments regularly
employing not more than five (5)
workers are also NOT entitled to
Night Shift differential [Sec. 1,
Rule II, Book III, IRR]
2. Hours of Work
a. Normal hours of work: hours worked
General Rule: 8-Hour Labor Law
The normal hours of work of any
employee shall not exceed eight (8) hours
a day. [Art. 83]
Art. 83 of the Labor Code only sets a
maximum of number of hours as "normal
hours of work" but did not prohibit work
of less than eight hours. [Legend Hotel v.
Realuyo, G.R. 153511 (2012)]
Exception to 8-Hour Law: Work Hours of
Health Personnel
Health personnel in:
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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.
HOWEVER, where the exigencies of the
service require that they work for six (6)
days or forty-eight (48) hours, they shall
be entitled to an additional compensation
of at least thirty percent (30%) of their
regular wage for work on the sixth day.
“Health personnel" shall include:
1. Resident physicians, nurses,
nutritionists, dietitians,
pharmacists, social workers,
laboratory technicians, paramedical
technicians, psychologists,
midwives, attendants and all other
hospital or clinic personnel. [Art.
83]
2. Medical Secretaries
Hours Worked include:
1. All time during which an employee
is required to be on duty or to be at
a prescribed workplace
2. All time during which an employee
is suffered or permitted to work
Rest periods of short duration during
working hours shall be counted as hours
worked
b. Meal periods
General Rule: Subject to such regulations
as the Secretary of Labor may prescribe, it
shall be the duty of every employer to give
his employees not less than sixty (60)
minutes time-off for their regular meals.
[Art. 85]
Exceptions: Employees may be given a
meal period of not less than twenty (20)
minutes provided that such shorter meal
period is credited as compensable hours
worked of the employee:
1. Where the work is non-manual
work in nature or does not involve
strenuous physical exertion;
2. Where the establishment regularly
operates not less than sixteen (16)
hours a day;
3. 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; OR
4. Where the work is necessary to
prevent serious loss of perishable
goods [par. 1, Sec. 1, Rule I, Book
III, IRR]
The eight-hour work period does not
include the meal break. Employees are not
prohibited from going out of the premises
as long as they return to their posts on
time. Nowhere in the law may it be
inferred that employees must take their
meals within the company premises.
[Philippine Airlines v. NLRC, G.R. No.
132805 (1999)]
SYNTHESIS OF THE RULES
General Rule: Meal periods are NOT
compensable.
Exception: It becomes compensable:
1. Where the lunch period or meal
time is predominantly spent for the
employer’s benefit. [Azucena
citing 31 Am. Jur. 881;
2. Meal periods of 1 hour are deemed
compensable when the employee is
on continuous shift. [National
Development Co. v. CIR, G.R. No.
L-15422, (1962)]
3. Shortened meal period of less than
1 hour (say, 30 minutes) must be
compensable. [Sec. 7, Rule I, Book
III, IRR]
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To shorten meal time to less than 20
minutes is not allowed. If the so-called
meal time is less than 20 minutes, it
becomes only a REST PERIOD and is
considered working time
Exception to the Exception: Shortened
meal breaks upon the employees’ request –
NOT compensable
The employees themselves may request
that the meal period be shortened so that
they can leave work earlier than the
previously established schedule. [Drilon:
Letter to Kodak Philippines, Nov. 27,
1989; Cilindro: BWCWHSD, Opinion No.
197, s. 1998]
Conditions for shortened meal breaks upon
employee’s request:
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 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. [BWC-WHSD Opinion No.
197, s. 1998]
c. Night Shift Differential
Night Shift Differential is the additional
compensation of 10% of an employee’s
regular wage for each hour of work
performed between 10pm and 6am. [Art.
86]
Illustration: If an employee has a regular
wage of P100 for each hour of work
performed between 10PM and 6AM,
he/she shall be paid P110 per hour worked
during such time interval.
Coverage
Aside from those enumerated under Art.
82 as excluded from Title I: Working
Conditions and Rest Periods, those
employed in retail and service
establishments regularly employing not
more than five (5) workers are also NOT
entitled to Night Shift differential [Sec. 1,
Rule II, Book III, IRR]
Rest days (night-off)
Night shift employees are entitled to a
weekly night-off (usually Saturday
evening) or a weekly rest period of 24
hours beginning at the start of the night
shift [See also Art. 91].
Work on special days
Night shift employees are also entitled to
the premium pay on special days and
holidays. These days are reckoned as
calendar days which start at midnight and
end at the following midnight. The
premium pay for the night shift also starts
or ends at midnight. However, the
employment contract, company policy or
CBA may provide that in the case of night
shift workers, days—including special
days and regular holidays—shall begin on
the night before a calendar day. [Chan,
Pre-Week Guidelines]
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d. Overtime Work
Overtime compensation is additional pay
for service or work rendered or performed
in excess of eight hours a day by
employees or laborers covered by the
Eight-hour Labor Law. [National Shipyard
and Steel Corp. v. CIR, G.R. No. L-17068
(1961)]
Rationale
There can be no other reason than that he
is made to work longer than what is
commensurate with his agreed
compensation for the statutorily fixed or
voluntary agreed hours of labor he is
supposed to
Overtime on ordinary working day
Work may be performed beyond eight
hours a day, provided that the employee is
paid an additional compensation
equivalent to his regular wage plus at least
25% thereof. [Art. 87)
Overtime work on holiday or rest day
Work performed beyond eight hours on a
holiday or rest day shall be paid an
additional compensation equivalent to the
rate of the first eight hours on a holiday or
rest day plus at least 30% thereof. [Art. 87]
Computation of additional compensation
Base of Computation: Regular wage –
means regular base pay
It includes the cash wage only without
deduction on account of facilities provided
by the employer. [Art. 90]
It excludes money received in different
concepts, such as Christmas bonus and
other fringe benefits. [Bisig ng
Manggagawa ng Philippine Refining Co.
v. Philippine Refining Co., G.R. L-27761
(1981)]
BUT when the overtime work was
performed on the employee’s rest day or
on special days or regular holidays (Art. 93
and 94), the premium pay, must be
included in the computation of the
overtime pay. [See: p. 19 of Handbook on
Workers’ Statutory Monetary Benefits,
issued by the Bureau of Working
Conditions, 2006]
ILLUSTRATIONS
Overtime on a Regular Day (OTRD)
Work may be performed beyond eight (8)
hours a day provided that the employee is
paid for the overtime work, an additional
compensation equivalent to his regular
wage plus at least twenty-five percent
(25%) thereof [Art. 87]
OTRD = Hourly wage x 125% x number
of hours of OT work
Work on Scheduled Rest Day (WRD)
Work performed on a rest day shall be paid
an additional compensation equivalent to
30% of the regular wage. [Art. 93]
WRD = Regular Wage x 130%
Overtime on Scheduled Rest Day
(OTSRD) Where an employee is made or
permitted to work on his scheduled rest
day, he shall be paid an additional
compensation of at least thirty percent
(30%) of his regular wage. An employee
shall be entitled to such additional
compensation for work performed on
Sunday only when it is his established rest
day. [Art. 93(a)]
OTSRD = Hourly Wage x 169% x number
of hours of OT work
Note: 169% was derived by adding 39%
(which is 30% of 130 or 1.3x.3 to 130%
Emergency overtime
Any employee may be required by the
employer to perform overtime work in any
of the following cases:
1. When the country is at war or when
any other national or local
emergency has been declared by
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the National Assembly or the Chief
Executive;
2. When it is necessary to prevent loss
of life or property or in case of
imminent danger to public safety
due to an actual or impending
emergency in the locality caused
by serious accidents, fire, flood,
typhoon, earthquake, epidemic, or
other disaster or calamity;
3. When there is urgent work to be
performed on machines,
installations, or equipment, in order
to avoid serious loss or damage to
the employer or some other cause
of similar nature;
4. When the work is necessary to
prevent loss or damage to
perishable goods; and
5. Where the completion or
continuation of the work started
before the eighth hour is necessary
to prevent serious obstruction or
prejudice to the business or
operations of the employer. [Art.
89]
6. Where overtime work is necessary
to avail of favorable weather or
environmental conditions where
performance or quality of work is
dependent thereon. [added by Rule
1, Sec. 10]
Overtime pay does not preclude night
differential pay
When the hour 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.
L-12075 (1959)]
SYNTHESIS OF RULES
1. An employer cannot compel an
employee to work overtime
Exception: Emergency overtime work as
provided for in Art. 89
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:
a. If the work performed is necessary,
or that it benefited the company; or
b. 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. [Sec. 4(c), Rule I; Manila
Railroad Co. v. CIR, G.R. L-4614
(1952)]
However, the Court has also ruled that a
claim for overtime pay is NOT justified in
the absence of a written authority to render
overtime after office hours during Sundays
and holidays. [Global Incorporated v.
Atienza, G.R. L51612-13 (1986)]
Daily time records cannot prove the
performance of overtime work if the same
had no prior authorization by the
management. [Robina Farms
Cebu/Universal Robina Corp. v. Villa,
G.R. No. 175869 (2016)]
3. Compensation for work rendered in
excess of the 8 normal working
hours in a day:
a. For ordinary days, additional 25%
of the basic hourly rate
b. 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.
Undertime work on any particular
day shall not be offset by overtime
work on any other day. Permission
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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. [Art. 88]
Offsetting work on a regular day with
work rendered on a holiday or rest day is
prohibited because such deprives the
employee of additional pay or premium.
[Lagatic v. NLRC, G.R. No. 121004
(1998)]
e. Compressed Work Week, Flexible Work
Arrangement, Alternative Work
Arrangements, Telecommuting Program
A CWW refers to one where the normal
workweek is reduced to less than 6 days
but the total number of work hours of 48
hours per week shall remain. Under the
CWW scheme, the normal workday goes
beyond eight hours but not exceed 12
hours, without the corresponding overtime
premium. [DOLE Advisory No. 04, Series
of 2010].
In excess of such, the employer is obliged
to pay the worker the overtime premium.
Conditions for CWW
1. The CWW scheme is undertaken as
a result of an express and voluntary
agreement of majority of the
covered employees or their duly
authorized representatives. This
agreement may be expressed
through collective bargaining or
other legitimate workplace
mechanisms of participation such
as labor management councils,
employee assemblies or referenda.
2. In firms using substances,
chemicals and processes or
operating under conditions where
there are airborne contaminants,
human carcinogens or noise
prolonged exposure to which may
pose hazards to employees’ health
and safety, there must be a
certification from an accredited
health and safety organization or
practitioner from the firm’s safety
committee that work beyond eight
hours is within threshold limits or
tolerable levels of exposure, as set
in the OSHS.
3. The employer shall notify DOLE,
through the Regional Office having
jurisdiction over the workplace, of
the adoption of the CWW scheme.
The notice shall be in DOLE CWW
Report Form attached to this
Advisory. [DOLE Advisory No.
02-04]
Effects of CWW:
1. Unless there is a more favorable
practice existing in the firm, work
beyond eight 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.
2. Consistent with Art. 85, employees
under a CWW scheme are entitled
to meal periods of not less than 60
minutes. There shall be no
impairment of the right of the
employees to rest days as well as to
holiday pay, rest day pay or leaves
in accordance with law or
applicable collective bargaining
agreement or company practice
3. Adoption of the CWW scheme
shall in no case result in diminution
of existing benefits. Reversion to
the normal eighthour workday shall
not constitute a diminution of
benefits.
Rationale: Although the right to overtime
pay cannot be waived as per Cruz v. Yee
Sing [G.R. No. L-12046 (1959)], D.O. No.
21 sanctions the waiver of overtime pay in
consideration of the benefits that the
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employees will derive from the adoption of
a compressed workweek scheme, thus:
The compressed workweek scheme was
originally conceived for establishments
wishing to save on energy costs, promote
greater work efficiency and lower the rate
of employee absenteeism, among others.
Thus, under this scheme, the generally
observed workweek of six (6) days is
shortened to five (5) days, but prolonging
the working hours from Monday to Friday
without the employer being obliged for
pay overtime premium compensation for
work performed in excess of eight (8)
hours on weekdays, in exchange for the
benefits that will accrue to the employees
(e.g. savings on meal and snack expenses;
longer weekends etc). [Bisig Manggagawa
sa Tryco v. NLRC, et al., G.R. No. 151309
(2008)]
Gliding or flexi-time schedule - preserve
the 8-hour per day
Telecommuting Act
SECTION 3. Telecommuting Defined. —
As used in this Act, the term
"telecommuting" refers to a work
arrangement that allows an employee in
the private sector to work from an
alternative workplace with the use of
telecommunication and/or computer
technologies.
SECTION 4. Telecommuting Program.
— An employer in the private sector
may offer a telecommuting program to
its employees on a voluntary basis, and
upon such terms and conditions as they
may mutually agree upon: Provided, That
such terms and conditions shall not be less
than the minimum labor standards set by
law, and shall include compensable work
hours, minimum number of work hours,
overtime, rest days, and entitlement to
leave benefits.
The employer shall provide the
telecommuting employee with relevant
written information in order to adequately
apprise the individual of the terms and
conditions of the telecommuting program,
and the responsibilities of the employee.
SECTION 5. Fair Treatment. — The
employer shall ensure that the
telecommuting employees are given the
same treatment as that of comparable
employees working at the employer's
premises. All telecommuting employees
shall:
a. Receive a rate of pay, including
overtime and night shift
differential, and other similar
monetary benefits not lower than
those provided in applicable laws,
and collective bargaining
agreements.
b. Have the right to rest periods,
regular holidays, and special
nonworking days.
c. Have the same or equivalent
workload and performance
standards as those of comparable
workers at the employer's premises.
d. Have the same access to training
and career development
opportunities as those of
comparable workers at the
employer's premises, and be
subject to the same appraisal
policies covering these workers.
e. Receive appropriate training on the
technical equipment at their
disposal, and the characteristics
and conditions of telecommuting.
f. Have the same collective rights as
the workers at the employer's
premises, and shall not be barred
from communicating with workers'
representatives.
The employers shall also ensure that
measures are taken to prevent the
telecommuting employee from being
isolated from the rest of the working
community in the company by giving the
telecommuting employee the opportunity
to meet with colleagues on a regular basis,
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and allowing access to company
information.
SECTION 6. Data Protection. — The
employer shall be responsible for taking
the appropriate measures to ensure the
protection of data used and processed by
the telecommuting employee for
professional purposes. The employer shall
inform the telecommuting employee of all
relevant laws, and company rules
concerning data protection. The
telecommuting employee shall ensure that
confidential and proprietary information
are protected at all times.
For this purpose, the provisions of the
Data Privacy Act of 2012 shall have
suppletory effect.
SECTION 7. Administration. — The
parties to a telecommuting work
arrangement shall be primarily responsible
for its administration. In case of
differences in interpretation, the following
guideline shall be observed:
a. The differences shall be treated as
grievances under the applicable
grievance mechanism of the
company.
b. If there is no grievance mechanism
or if the mechanism is inadequate,
the grievance shall be referred to
the regional office of the
Department of Labor and
Employment (DOLE) which has
jurisdiction over the workplace for
conciliation
c. To facilitate the resolution of
grievances, employers shall keep
and maintain, as part of their
records, the documents proving
that the telecommuting work
arrangement was voluntarily
adopted.
Flexible work schedule for solo parents
“Flexible work schedule” is the right
granted to a solo parent to vary his/her
arrival and departure time without
affecting core work hours as defined by
the employer. [Sec. 3(e), RA 8972]
The employer shall provide a flexible work
schedule for solo parents: Provided,
1. That the same shall not affect
individual and company
productivity:
2. That any employer may request
exemption from the above
requirements from the DOLE on
certain meritorious grounds. [Sec.
6, RA 8972]
3. Rest Periods
It shall be the duty of every employer,
whether operating for profit or not, to
provide each of his employees a rest
period of not less than twenty-four (24)
consecutive hours after every six (6)
consecutive normal work days. [Art. 91
(a)]
Preference of the employee
The employer shall determine and
schedule the weekly rest day of his
employees subject to collective bargaining
agreement and to such rules and
regulations as the Secretary of Labor and
Employment may provide. However, the
employer shall respect the preference of
employees as to their weekly rest day
when such preference is based on religious
grounds. [Art. 92 (b)]
The employee shall make known his
preference to the employer in writing at
least seven days before the desired
effectivity of the initial rest day so
preferred.
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.
[Rule III, Sec. 4]
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Compulsory Work on Rest Day
The employer may require his employees
to work on any day:
1. In case of actual or impending
emergencies caused by serious
accident, fire, flood, typhoon,
earthquake, epidemic or other
disaster or calamity to prevent loss
of life and property, or imminent
danger to public safety;
2. In cases of urgent work to be
performed on the machinery,
equipment, or installation, to avoid
serious loss which the employer
would otherwise suffer;
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 loss or damage to
perishable goods;
5. Where the nature of the work
requires continuous operations and
the stoppage of work may result in
irreparable injury or loss to the
employer; and
6. Under other circumstances
analogous or similar to the
foregoing as determined by the
Secretary of Labor and
Employment. [Art. 92]
Synthesis of the Rules
1. Rest day of not less than 24
consecutive hours after 6 performing work irrespective of the
consecutive days of work.
2. No work, no pay principle applies.
3. If an employee works on his
designated rest day, he is entitled to
a premium pay.
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.
4. Holidays
Holiday pay is a one-day pay given by law
to an employee, even if he does not work
on a regular holiday. This gift of a day’s
pay is limited to each of the 12 regular
holidays.
Note: Art. 94 (c), was superseded by E.O.
203, which was subsequently amended by
RA 9177, 9256, 9492, and 9849. The
current state of the law is discussed below
Coverage
General Rule: All employees [Art. 94(a);
Rule IV, Sec. 1]
Exceptions:
1. Those of the government and any
of the political subdivision,
including governmentowned and
controlled corporation;
2. Those of retail and service
establishments regularly employing
less than 10 workers;
3. Domestic helpers and persons in
the personal service of another;
4. Managerial employees and officers
or members of the managerial staff
as defined in Book III;
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
time consumed in the performance
thereof. [Sec. 1, Rule IV]
Retail Establishment is one principally
engaged in the sale of goods to end-users
for personal or household use.
Service Establishment is one principally
engaged in the sale of service to
individuals for their own or household use
and is generally recognized as such. [RA
6727 (The Wage Rationalization Act)
IRR]
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Notes for BAR 2022: Labor Low and Social Legislation
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Regular holidays
RA 9492 and 9849 (which added the two
Muslim holidays) provide for the
observance of the following regular
holidays:
1. New Year’s Day – Jan. 1
2. Maundy Thursday – Movable date
3. Good Friday – Movable date
4. Araw ng Kagitingan – Monday
nearest Apr. 9
5. Labor Day – Monday nearest May
1 employee to work on any holiday but such
6. Independence Day – Monday
nearest June 12
7. Eid’l Fitr – Movable date
8. Eid’l Adha – Movable date
9. National Heroes Day – Last
Monday of August
10. Bonifacio Day – Monday nearest
Nov. 30
11. Christmas Day – Dec. 25
12. Rizal Day – Monday nearest Dec.
30
Special (Non-Working Days)
RA 9492 and RA 10966 provide for the
observance of the following special
holidays:
1. Ninoy Aquino Day – Monday
nearest Aug. 21
2. All Saints Day – Nov. 1
3. Immaculate Conception of Mary
[RA 10966] – Dec. 8
4. Last day of the year – Dec. 31
5. Chinese New Year
6. Edsa Revolution
Note: Proclamation 269 fixed the data for
the observance of the regular and special
holidays including additional special
holidays for 2018 and 2019
The dates for Eid’l Fitr and Eid’l Adha
(special holidays) shall follow after
approximate dates of the Islamic holidays
have been determined.
General Rule: An employer may require an
employee to work on a regular holiday but
such employee shall be paid a
compensation equivalent to twice his
regular rate. If an employee is required to
work on a special holiday, the additional
compensation should be 30% of his regular
rate.
1. Work on a Regular Holiday
(WRH)
WRH = Regular wage x 200%
Note: The employer may require an
employee shall be paid a compensation
equivalent to twice his regular rate [Art.
94(b)]
2. Overtime on a Regular Holiday
(OTRH)
OTRH = Hourly wage x 260% x number
of hours of OT work
Note: Work performed beyond eight hours
on a holiday or rest day shall be paid an
additional compensation equivalent to the
rate of the first eight hours on a holiday or
rest day plus at least thirty percent (30%)
thereof. [Art. 87]
200% of regular daily wage (for the 1st 8
hours)+ 60% of hourly rate on said day
[260%]
3. Work on Regular Holiday which
falls on a Rest Day (WRHRD)
WRHRD = Regular wage x 260%
Note: Where an employee is made or
permitted to work on his scheduled rest
day, he shall be paid an additional
compensation of at least 30% of his
regular wage. [Art. 93(a)] 200% of regular
daily wage + 60% (which is 30% of 200%)
[260%]
4. Overtime on Regular Holiday
which falls on a Rest Day
(OTWRHRD)
OTWRHRD = Hourly Rate x 338% x
number of hours of OT
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Note: Regular holiday-on-rest day rate
(200% of regular daily wage plus 30% of
such amount) + 30% of hourly rate on said
day. [338%]
5. Work on Special Holiday (WSH)
WSH = Regular wage x 130%
Note: Work performed on any special
holiday shall be paid an additional
compensation of at least 30% of the
regular wage of the employee. [Art. 93(c)]
Regular daily wage + 30% thereof [130%]
6. Overtime during Work on Special
Holiday (OTWSH)
OTWSH = Hourly wage x 169% x number
of hours of OT work
Note: 130% of regular daily wage + 39
(which is 30% of 130%) [169%]
7. Work on Special Holiday which
falls on a Rest Day (WSHRD)
WSHRD = Regular wage x 150%
Note: Where such holiday work falls on
the employee’s scheduled rest day, he shall
be entitled to an additional compensation
of at least 50% of his regular wage.
Regular daily wage + 50% thereof [150%]
8. Overtime during Work on Special
Holiday which falls on a Rest Day
(OTWSHRD)
OTWSHRD = Hourly wage x 195% x
number of hours of OT work
Note: 45% (which is 30% of 150%) +
150% [195%]
According to DOLE Memo Circular 1-04,
a “special holiday”/”special day” includes
the National Special Days, and declared
special days such as Special Non-working
Holiday, Special Public Holiday and
Special National Holiday. Such days are
entitled to the rates prescribed above.
These days are not the same as a special
working holiday.
A special working holiday is considered an
ordinary working day, so there is no
premium pay.
Double holiday pay
According to “DOLE Explanatory Bulletin
on Worker’s Entitlement to Holiday Pay
on 9 April 1993,” if two holidays fall on
the same day:
a. If unworked, 200% of basic wage.
b. If worked, 300% of basic wage.
[Azucena]
Double Holiday Rule for Monthly-paid
employees
employees For covered employees whose
monthly salaries are computed based on
365 days and for those other employees
who are paid using factor 314, or 262, or
any other factor which already considers
the payment for the 11 [now 12] regular
holidays, NO additional payment is due
them. [BWC-WHSD Opinion No. 053, s.
1998]
Successive Holiday Pay
According to IRR, Rule IV, Sec. 10, an
employee is entitled to holiday pay for
both days, IF:
a. He is present on day immediately
preceding first holiday; or
b. He works on first holiday, which
entitles him to pay on second
holiday
Where the day immediately preceding the
holiday is a non-working day in the
establishment or the scheduled rest day of
the employee, he shall not be deemed to be
on leave of absence on that day, in which
case he shall be entitled to the holiday pay
if he worked on the day immediately
preceding the non-working day or rest day.
[Sec. 6, Rule IV, Book III, IRR]
Divisors
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The divisor assumes an important role in
determining whether or not holiday pay is
already computed.
1. Monthly paid employees are not
entitled to the holiday pay if their
total annual income is divided by
365 days resulting in a wage which
is beyond the minimum wage per
day because they are considered
paid everyday of the year including
holidays, rest days, and other non-
working days.
2. As a general rule, for a company
with a 6- day working schedule, the
divisor 313 already means that the
legal holidays are included in the
monthly pay of the employee. The
divisor is arrived at by subtracting
all Sundays from the total number
of calendar days in a year.
3. As a general rule for a company
with a 5- day working schedule, the
divisor 277 means that the holiday
pay is already included in the
monthly salary of the employee.
[Trans Asia Phils. v. NLRC, G.R.
No. 118289 (1999)]
An increase in the divisor that results in
the prejudice of the employees is a
violation of the proscription against non-
diminution of benefits under Sec. 100 of
the Labor Code. Such increases should
only be used for computations which
would be advantageous to the employer
(i.e. deduction for absences) and not for
computations which would diminish the
existing benefits of the employees (i.e.,
overtime pay, holiday pay and leave
conversions). [Trans Asia Phils. v. NLRC,
supra]
Sundays
a. When a holiday falls on a Sunday,
the following Monday will not be
considered a holiday unless a
proclamation says so
b. A legal holiday falling on a Sunday
does not create a legal obligation to
pay extra, aside from the usual
holiday pay, to monthly-paid
employees. [Azucena, citing Letter
of Instruction No. 1087]
No provision of law requires any employer
to make adjustments in the monthly salary
rate set by him to take account of legal
holidays falling on Sundays in a given
year, otherwise to reckon a year at more
than 365 days. [Wellington Investment and
Manufacturing Corporation v. Trajano,
G.R. No. 114698 (1995)]
Non-working/scheduled rest day
Where the day immediately preceding the
holiday is a non-working day in the
establishment or the scheduled rest day of
the employee, he shall not be deemed to be
on leave of absence on that day, in which
case he shall be entitled to the holiday pay
if he worked on the day immediately
preceding the non-working day or rest day.
[Sec. 6(c), Rule IV, Book III, IRR]
Example:
If a holiday falls on Monday, and Sunday
is a non-working day in the establishment
or is the scheduled rest day of the
employee, the employee shall be entitled
to holiday pay if he worked on Saturday
(which is the day immediately preceding
Sunday, the non-working day or rest day).
Right to Holiday Pay in case of absences
If an employee is on leave of absence with
pay on the day immediately preceding a
regular holiday, he is entitled to holiday
pay. [Sec. 6(a), Rule IV, Book III, IRR]
If an employee is on leave of absence
without pay on the day immediately
preceding a regular holiday, he is not
entitled to holiday pay unless he works on
such regular holiday. [Sec. 6(a), Rule IV,
Book III, IRR]
In case of temporary cessation of work
a. In cases of temporary or periodic
shutdown and temporary cessation
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Notes for BAR 2022: Labor Low and Social Legislation
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of work of an establishment, as
when a yearly inventory or when
the repair or cleaning of
machineries and equipment is
undertaken, the regular holidays
falling within the periods shall be
compensated in accordance with
this Rule.
b. The regular holiday during the
cessation of operation of an
enterprise due to business reverses
as authorized by the Secretary of
Labor may not be paid by the
employer. [Sec. 7, Rule IV, Book
III, IRR]
An employee is entitled to holiday pay for
the regular holidays falling within the
period in cases of temporary shutdowns or
cessation of work, when:
a. An annual inventory; or
b. Repair or cleaning of machineries
and equipment is undertaken.
The employer may not pay his employees
for the regular holidays during the
suspension of work if: the cessation of
operation is due to business reverses, and
is authorized by the Secretary of Labor.
Teachers, Piece Workers, Seafarers,
Seasonal Workers, Etc.
1. Private school teachers, including
faculty members of colleges and
universities, may not be paid for
the regular holidays during
semestral vacations. They shall,
however, be paid for the regular
holidays during Christmas
vacation;
2. Where a covered employee, is paid
by results or output, such as
payment on piece work, his holiday
pay shall not be less than his
average daily earnings for the last
seven (7) actual working days
preceding the regular holiday;
Provided, However, that in no case
shall the holiday pay be less than
the applicable statutory minimum
wage rate.
3. Seasonal workers may not be paid
the required holiday pay during
off-season when they are not at
work
4. Workers who have no regular
working days shall be entitled to
the benefits provided in this Rule.
[Sec. 8, Rule IV, Book III, IRR]
Holiday Pay of Hourly-Paid Faculty
Members
Not Entitled: Regular Holiday Pay
Entitled: Regular hourly rate on days
declared as special holidays or for some
reason classes are called off or shortened
for the hours they are supposed to have
taught, whether extensions of class days be
ordered or not; in case of extensions said
faculty members shall likewise be paid
their hourly rates should they teach during
said extensions
a. They are not entitled to payment of
holiday pay because they are paid
only for work actually done. Since
regular holidays are known to both
the school and faculty members as
“no class day”; certainly the latter
do not expect payment for said
unworked holidays
b. They are entitled to their hourly
rate on days declared as special
holidays. When a special public
holiday is declared, the faculty
member paid by the hour is
deprived of expected income, and it
does not matter that the school
calendar is extended in view of the
days or hours lost, for their income
that could be earned from other
sources is lost during the extended
days.
c. Similarly, when classes are called
off or shortened on account of
typhoons, floods, rallies, and the
like, these faculty members must
likewise be paid, whether or not
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Notes for BAR 2022: Labor Low and Social Legislation
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extensions are ordered. [Jose Rizal
College v. NLRC, G.R. No. L-
65482 (1987)]
Piece workers
The philosophy underlying the exclusion
of piece workers from the 8-hour law is
that said workers are paid depending upon
the work they do irrespective of the
amount of time employed in doing said
work. [Red V Coconut Products Ltd. v.
CIR, G.R. No. L-21348 (1966)]
Seafarers
Any hours of work or duty including hours
of watch-keeping performed by the
seafarer on designated rest days and
holidays shall be paid rest day or holiday
pay. [Sec. 11.C, Standard Terms and
Conditions Governing the Employment of
Filipino Seafarers on Board Ocean-Going
Vessels]
Seasonal workers
Seasonal workers who do not work during
offseason are not entitled to pay for the
regular holidays occurring during their off-
season. Workers assigned to “skeleton
crews” that work during the off-season
have the right to be paid on regular
holidays falling in that duration.
5. Service Charges
Coverage
Employers
This rule shall apply only to
establishments which collect service
charges such as:
a. Hotels, restaurants, lodging houses,
night clubs, cocktail lounge,
massage clinics, bars, casinos and
gambling houses;
b. Similar enterprises including those
entities operating primarily as
private subsidiaries of the
Government [Sec. 1, DO 206-19,
IRR of RA11360]
Employees
Shall apply to ALL employees of covered
employers:
a. Regardless of their positions,
designations, or employment
status, and
b. Irrespective of the method by
which their wages are paid. [Sec. 2
(a), DO 206-19, IRR of RA11360]
Exceptions: Managerial employees [Sec. 2
(c), DO 2016- 19, IRR of RA11360]
Distribution, amended by RA 11360
Pursuant to the 2019 amendments to Art.
96, all service charges collected by hotels,
shall be distributed completely and equally
among the covered workers except
managerial employees, based on actual
hours or days of work or service rendered,
among the covered employees, including
those already receiving the benefit of
sharing in the service charges. [Sec. 3, DO
206-19, IRR of RA11360
The shares shall be distributed to
employees not less than once every 2
weeks or twice a month at intervals not
exceeding 16 days. [Sec. 4, DO 206-19,
IRR of RA11360]
Notes:
1. The P2,000.00 salary ceiling for
entitlement thereto is no longer
applicable
2. [The employees’] right to their
shares in the service charges
collected by [the employer] is
distinct and separate from their
right to ECOLA; gratification by
the [employer] of one does not
result in the satisfaction of the
other. [Philippine Hoteliers, Inc.,
Dusit Hotel-Nikko v.
NUWHRAIN-APL-IUF-Dusit
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Hotel Nikko Chapter, G.R. No.
181972 (2009)
Service charge not included in determining
compliance with minimum wage
In the event that the minimum wage is
increased by law or wage order, service
charges paid to the covered employees
shall not be considered in determining the
covered establishment’s compliance with
the increased minimum wage. [Sec. 5, DO
206-19, IRR of RA11360]
In Relation to Collective Bargaining
Agreements and Employer-Employee
Agreements
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 III, IRR]
The rule is without prejudice to existing,
future collective bargaining agreements.
[Sec. 7, Rule VI, Book III, IRR]
Synthesis of the Rules:
1. Service charges must be pooled;
2. Where a restaurant or similar
establishment does not collect
service charges but has a practice
or policy of monitoring and
pooling tips given voluntarily by its
customers to its employees, the
pooled tips should be monitored,
accounted for and distributed in the
same manner as the services
charges [Handbook on Workers’
Statutory Monetary Benefits,
2018];
3. The amount collected shall be
distributed completely and equally
among the covered workers;
4. It shall be given twice a month
with intervals of not more than 16
days;
5. Payment of service charges will not
be considered in compliance with
any increase in the minimum wage
by law or wage order
6. 13th month Pay
Coverage
General Rule: ALL EMPLOYERS are
hereby required to pay all their rank and
file employees a 13th month pay not later
than Dec 24 of every year, Provided that
they have worked for at least one (1)
month during a calendar year.
[Memorandum Order No. 28]
The law distinguishes managerial
employees from rank-and-file employees;
hence, managerial employees are not
legally entitled to 13th month pay.
Exempted Employers:
a. Government, its political
subdivisions, including GOCCs
except those operating essentially
as private subsidiaries of the
Government;
b. Employers already paying their
employees a 13th month pay or
more in a calendar year or its
equivalent at the time of this
issuance; and
c. Employers of those who are paid
on purely commission, boundary or
task basis and those who are paid a
fixed amount for performing
specific work, irrespective of the
time consumed in the performance
thereof (except those workers who
are paid on piece-rate basis, in
which case their employer shall
grant them 13th month pay).
Notes: “Equivalent” of a 13th month pay
includes:
a. Christmas bonus, mid-year bonus,
cash bonuses; and
b. Other payments amounting to not
less than 1/12 of the basic salary
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But shall NOT INCLUDE cash and stock
dividends, cost of living allowances and all
other allowances regularly enjoyed by the
employee, as well a non-monetary
benefits.
Workers paid on a piece-rate basis – paid a
standard amount for every piece or unit of
work produced that is more or less
regularly replicated, without regard to the
time spent in producing the same. Their
employer shall grant them 13th month pay.
Minimum Amount
1/12 of the total basic salary earned by an
employee within a calendar year
Base Amount
General Rule: basic salary shall include:
a. Cost of living allowances (COLA)
integrated into the basic salary of a
covered employee pursuant to EO
178.
b. All remunerations or earnings paid
by this employer for services
rendered.
Excluding the allowances and monetary
benefits which are not considered or
integrated as part of the regular or basic
salary, such as the cash equivalent of:
1. Unused vacation and sick leave
credits,
2. Overtime,
3. Premium,
4. Night differential,
5. Holiday pay and, and
6. Cost-of-living allowances.
Exception: A company practice favorable
to the employees had indeed been
established if for a considerable length of
time, the employer had freely, voluntarily
and continuously included in the
computation of its employees' thirteenth
month pay, the payments for sick, vacation
and maternity leaves, premiums for work
done on rest days and special holidays, and
pay for regular holidays. Thus, the
payments made pursuant thereto, ripened
into benefits enjoyed by the employees,
and any benefit and supplement being
enjoyed by them cannot be reduced,
diminished, discontinued or eliminated by
the employer. [Davao Fruits Corp. v.
ALU, G.R. No. 85073 (1993)]
Time of payment
General Rule: paid not later than Dec 24 of
each year.
Exception: ER may give to his employees
half (½) of the required 13th Month Pay
before the opening of the regular school
year and the other half on or before the
24th of December every year.
The frequency of payment of this
monetary benefit may be the subject of
agreement between the employer and the
recognized CBA of the employees.
Rationale behind 13th Month Pay
a. To further protect the level of real
wages from the ravage of world-
wide inflation;
b. There had been no increase in the
legal minimum wage rates since
1970;
c. The Christmas season is an
opportune time for society to show
its concern for the plight of the
working masses so they may
properly celebrate Christmas and
New Year. [Whereas clauses of PD
851]
13th Month Pay in Special Cases
a. Paid by Results: Employees
who are paid on piece work
basis are, by law, entitled to the
13th Month Pay. [Revised
Guidelines on the
Implementation of the 13th
Month Pay Law]
b. Fixed or Guaranteed Wage:
Employees who are paid a
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Notes for BAR 2022: Labor Low and Social Legislation
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fixed or guaranteed wage plus
commission are entitled to 13th
month pay (not purely
commission); the basis for
computation shall be both their
fixed or guaranteed wage and
commission. [Revised
Guidelines]
c. Those with Multiple
Employers: Government
Employees working part time
in a private enterprise,
including private educational
institutions, as well as
Employees working in two or
more private firms, whether on
full or part time bases, are
entitled to the required 13th
Month Pay from all their
private Employers regardless of
their total earnings from each
or all their employers. [Revised
Guidelines]
d. Private School Teachers:
Private school teachers,
including faculty members of
universities and colleges, are
entitled to the required 13th
month pay, regardless of the
number of months they teach or
are paid within a year, if they
have rendered service for at
least one (1) month within a
year. [Revised Guidelines
Overload pay is NOT included in
the computation for 13th month
pay; overload is not overtime as it
is additional work done within the
normal shift. [Letran Calamba
Faculty v. NLRC, G.R. No. 156225
(2008)]
e. Resigned or Separated
Employee: An Employee who
has resigned or whose services
were terminated at any time
before the time for payment of
the 13th month pay is entitled
to this monetary 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 service. [Revised
Guidelines]
f. Terminated Employees: The
payment of the 13th month pay
may be demanded by the
employee upon the cessation of
employer-employee
relationship. [Archilles
Manufacturing Corp. v. NLRC,
G.R. No. 107225 (1995)]
Additional Rules:
a. Commissions: If the commissions
may be properly considered part of
the basic salary, then they should
be INCLUDED. If they are not an
integral part of the basic salary,
then they should be EXCLUDED.
[Phil. Duplicators Inc. v. NLRC,
G.R. No. 110068 (1995)]
b. Substitute Payment not allowed:
Benefits in the form of food or free
electricity, assuming they were
given, were not a proper substitute
for the 13th month pay required by
law. Neither may year-end rewards
for loyalty and service be
considered in lieu of 13th month
pay. [Framanlis Farms, Inc. v.
MOLE, G.R. No. 72616-17 (1989)]
c. Wage Difference: The difference
between the minimum wage and
the actual salary received by the
Employee cannot be deemed as his
13th month pay as such difference
is not equivalent to or of the same
import as the said benefit
contemplated by law. [JPL
Marketing Promotions v. CA, G.R.
No. 151966 (2005)]
d. 14th Month Pay is not mandated:
Employers already paying their
employees a 13th month pay or its
equivalent are not covered by this
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Notes for BAR 2022: Labor Low and Social Legislation
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Decree. [Kamaya Point Hotel v.
NLRC, G.R. No. 75289 (1989)]
e. Non-inclusion in regular wage: The
mandated 13th month pay need not
be credited as part of regular wage
of employees for purposes of
determining overtime and premium
pays, fringe benefits insurance
fund, Social Security, Medicare
and private retirement plans.
[Revised Rules]
Commissions vis-à-vis 13th month pay
The Rule on Productivity Bonuses.
“Productivity bonuses” have no clear
direct or necessary relation to the amount
of work actually done by each individual
employee. If an employer cannot be
compelled to pay a productivity bonus to
its employees, it should follow that such
productivity bonus, when given, should
not be deemed to fall within the “basic
salary” of employees when the time comes
to compute their 13th month pay.
[BoieTakeda v. de la Serna, G.R. No.
92174 and G.R. No. L-102552 (1993)]
The sales commission earned by the
salesmen who make or close a sale
constitute part of the compensation or
remuneration paid to salesmen for serving
as salesmen, and hence as part of the
“wage” or salary of petitioner’s salesmen.
The sale commissions were an integral part
of the basic salary structure used as the
base amount for the computation of 13th
month pay. [Phil. Duplicators v. NLRC,
G.R. No. 110068 (1995)]
CBA vis-à-vis 13th month pay
P.D. No. 851 is specific and mandatory.
However, if the employers actually grant
such 13th month pay in the monetary
benefits provided for in the CBA, they
could be exempted from the operation of
the decree. To be exempted, there must be
actual payment. [Marcopper Mining Corp.
v. Ople, G.R. No. L-51254 (1981)]
Effect of Deficiency in 13th month pay
An employer who pays less than 1/12th of
the employees’ basic salary as their 13th
month pay is only required to pay the
difference. [Revised Rules]
If the commission forms part of the salary
structure, then it is included in the
computation of 13th month pay.
If the commission is an additional
incentive, then it is not included.
Basic +Commission – entitled to 13 th
month pay
Commission only – not entitled to 13th
month pay
B. Wages
Definition, Components and Exclusions
Definition: It is the remuneration or
earnings, however designated:
1. Capable of being expressed in
terms of money;
2. Whether fixed or ascertained on a
time, task, piece, or commission
basis, or other method of
calculating the same;
3. Payable by an employer to an
employee under a written or
unwritten contract of employment
–
a. for work done or to be
done; or
b. for services rendered or to
be rendered [Art. 97(f)]
Supplement – benefit the ER
Facility – for the benefit of EE and his/her
family; part of the wage
Coverage/Exclusions
Wage includes the fair and reasonable
value of facilities furnished by the
employer to the employee. [Art. 97(f)]
while allowances are excluded from the
basic salary or wage computation. [Cebu
Institute of Technology v. Ople, G.R. No.
L-58870 (1987)]
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Fair and reasonable value shall not include 5. Chits

any profit to the employer, or to any 6. Any other form alleged to represent
person affiliated with the employer. [Art. a legal tender, even when expressly
97(f)] requested by the employee. [Art.
102]
Applicability
When payment through check, postal
The Labor Code Title on wages shall not orders or money orders is allowed:
apply to the following [Art. 98 and Sec. 3,
Rule VII, Book III, IRR]: a. When payment is customary (on
the date of Code effectivity);
a. Farm tenancy or leasehold; b. Where it is so stipulated in a
b. Household or domestic helpers, collective agreement;
including family drivers and other c. Where all of the following
persons in the personal service of conditions are met:
another; i. Bank/Facility for
c. Homeworkers engaged in encashment is within 1-km
needlework; radius from the workplace
d. Workers in registered cottage ii. ER did not receive any
industries who actually work at pecuniary benefit because
home; of said arrangement
e. Workers in registered cooperatives iii. EEs are given reasonable
when so recommended by the time during banking hours
Bureau of Cooperative to withdraw their wages
Development upon approval of the (compensable hours, if
Secretary of Labor. during working hours)
Workers in registered barangay micro iv. The payment by check is
business enterprise are only exempted with the written consent of
from the Minimum Wage Law, not from the EEs concerned, in the
the Title on Wages [RA 9178]. absence of a CBA. [Sec. 2,
Rule VIII]
Regional Wage Board (Regional Tripartite
Wages and Productivity Board) – b. Time of Payment
determines minimum wage rates 1. Frequency - At least once every 2
1. Payment of Wages weeks or 2x per month
2. Intervals - Must not be more than
a. Form of Payment t [Art. 102; Secs. 1-2, 16 days
Rule VIII, Book III, IRR] 3. Force Majeure or circumstances
General Rule: Legal Tender Only beyond ER’s control - Valid excuse
for delayed payment; BUT ER
Exception: Check/Money Order if must pay immediately after
customary OR necessary because of cessation and not less than once a
special circumstances, as specified by the month
Secretary of Labor or the CBA. 4. Tasks which cannot be completed
in 2 weeks - Payments should be
Not allowed:
made with intervals not more than
1. Promissory Notes 16 days, in proportion to work
2. Vouchers completed; Final settlement is
3. Tokens made upon completion of the work.
4. Tickets

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c. Place of Payment [Art. 104; Sec. 4, Rule
VIII, Book III, IRR]
General Rule: Shall be made at or near the
place of undertaking (workplace).
Exceptions:
1. Deterioration of peace and order
conditions, or by reason of actual
or impending emergencies (fire,
flood, epidemic);
2. 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.
NO PAYMENT in any 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, except in the case of persons
employees in such places.
Condition for ATM payment [Labor
Advisory on Payment of Salaries thru
ATM (1996)]
1. ATM system of payment is with
the written consent of the EEs.
2. EEs are given reasonable time to
withdraw their wages from the
banking facility (compensable
hours, if during work hours).
3. System shall allow workers to
receive their wages within the
period/frequency provided by law.
4. There is a bank/ATM facility
within 1km radius from the place
of work.
5. Upon request of the concerned
EEs, the ER 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.
7. The ER shall assume responsibility
in case the wage protection
provisions of law and regulations
are not complied with under the
arrangement.
d. Person to Pay
General Rule: Directly to EE
Exceptions:
1. Member of EE’s family → if ER is
authorized in writing by the EE.
2. A 3rd person → if authorized by
law (e.g. insurance companies for
premiums, union dues where the
right to check-off has been
recognized by ER in accordance
with a CBA or authorized in
writing by EE concerned).
3. Heirs → in case of death of EE,
without necessity of intestate
proceedings
a. If heirs are of age → they
shall execute an affidavit
attesting to their
relationship to the deceased
and the fact that they are his
heirs to the exclusion of
others
b. If any of the heirs is a
minor → such affidavit
shall be executed in his
behalf by his natural
guardian or next of kin
When the employer engages the services
of an organized group of workers, payment
to their leader cannot be considered a
violation of the rule on direct payment.
[Bermiso v. Escano, G.R. No. L-11606
(1959)]
2. Prohibitions regarding wages
a. Interference in disposal of wages
[Art. 112]
No employer shall:
1. Limit or otherwise interfere with
the freedom of any employee to
dispose of his wages
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2. Force, compel, or oblige his
employees to:
i. Purchase merchandise,
commodities or other
property from any other
person; or
ii. Make use of any store or
services of such employer
or any other person. [Art.
112
b. Wage deduction [Art. 113]
General Rule: ER cannot make any
deduction from the wages of his EE.
Exceptions:
1. Insurance Premiums
2. Union Dues
3. Other deductions authorized by
law/Secretary of Labor [e.g.
SSS, withholding tax
4. When the deductions are with
written authorization of the
employees 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.
[Labor Advisory No. 11
(2014)]
If the law prohibits a deduction, the
authorization given by the employee does
not validate the deduction.
In case of Bankruptcy or Liquidation of an
ER’s business: Workers shall enjoy first
preference as regards their wages and other
monetary claims, any provision of law to
the contrary notwithstanding. Such unpaid
wages and monetary claims shall be paid
in full before the claims of the
Government and other creditors may be
paid. [Art. 110]
Article 110 of the Labor Code has
modified Article 2244 of the Civil Code in
two respects:
1. Firstly, by removing the one year
limitation found in Article 2244,
number 2; and
2. Secondly, by moving up claims for
unpaid wages of laborers or
workers of the Insolvent from
second priority to first priority in
the order of preference established
I by Article 2244. [Republic v.
Peralta, G.R. 150537 (1987)]
RA 10142 (FRIA) subsequently amended
Art. 2244, CC and Art. 110 by elevating
trade-related claims to 1st priority.
c. Requirement to make deposits for
loss or damage [Arts. 114-115]
General Rule: No employer shall require
his worker to make deposits from which
deductions shall be made for the
reimbursement of loss of or damage to
tools, materials, or equipment supplied by
the employer
Exception: It is allowed when the
employer is engaged in such trades,
occupations or business where the practice
of making deductions or requiring deposits
is:
1. A recognized one, or is necessary;
or
2. Desirable as determined by the
Secretary of Labor and
Employment in appropriate rules
and regulations. [Art. 114]
No deduction from the deposits of an EE
for the actual amount of the loss/damage
shall be made unless:
1. There is reasonable opportunity for
EE to show cause why deduction
should not be made;
2. EE’s responsibility has been clearly
shown
3. Amount is fair and reasonable and
shall not exceed the actual loss of
damage; and
4. Must not exceed 20% of weekly
pay. [Art. 115; Rule VIII, Sec. 11]
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Attorney’s fees in any judicial or
administrative proceedings for the
recovery of wages shall not exceed 10% of
the amount awarded.
d. Withholding of wages [Art. 116]
General Rule: It shall be unlawful for any
person, directly or indirectly, to:
1. Withhold any amount from the
wages of a worker or;
2. Induce him to give up any part of
his wages by force, stealth,
intimidation, threat or by any other
means whatsoever without the
worker’s consent. [Art. 116]
Exceptions:
1. Deduction is for insurance
premium
2. For union dues
3. Authorized by law/DOLE Sec
4. Due and demandable debt to ER
e. Deduction to ensure employment
[Art. 117]
It shall be unlawful to make any 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. [Art. 117]
f. Retaliatory measures [Art. 118]
It shall be unlawful for an employer to:
1. Refuse to pay or reduce the wages
and benefits
2. Discharge
3. Discriminate in any manner 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. [Art. 118]
This covers offenses only under the title of
Wages in the Labor Code.
g. False reporting [Art. 119]
It shall be unlawful for any person to 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.
[Art. 119]
Covers all offenses under the Labor Code.
3. Facilities vs Supplements
Criterion: In determining whether a
privilege is a facility, the criterion is not so
much its kind but the PURPOSE for which
it is given. [Millares v. NLRC & PICOP,
G.R. No. 122827 (1999)]
Comparison between Facilities and
Supplements
Facilities:
1. What it is: Articles or
services/items of expense;
EXCLUDES tools of the trade or
articles or service primarily for the
benefit of the ER [Sec. 5, Rule 7-
A, Book III, IRR]
2. Who benefits: For the benefit of the
employee and his family; for their
existence and subsistence
3. Part of the Wage? –YES
4. Deduction from Wage? - Yes – part
of the wage so it is deductible [Art.
97]
Supplements:
1. What it is: Extra remuneration or
special benefits/ articles or
services/ tools of the trade given to
or received by laborers over and
above their ordinary earning or
wages [Sec. 5, Rule 7-A, Book III,
IRR;]
2. Who benefits? - For the benefit or
convenience of the employer
3. Part of the Wage? – NO
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4. Deductible from Wage? - No –
independent of the wage so not
deductible [Art. 97]
Requirements for deducting value of
Facilities: Mere availment is not sufficient
to allow deductions from employees’
wages. Before the value of facilities can be
deducted from the employees’ wages, the
following requisites must all be attendant:
a. Proof must be shown that such
facilities are customarily furnished
by the trade;
b. The provision of deductible
facilities must be voluntarily
accepted in writing by the
employee; and
c. Facilities must be charged at
reasonable value. [SLL
International Cable Specialists v.
NLRC, G.R. No. 172161 (2011)]
“Customary” means long-established and
constant practice connoting regularity.
[Millares v. NLRC & PICOP, G.R. No.
122827 (1999)]
Computation:
Value of Facilities = Cost of Operation and
maintenance + Adequate depreciation +
reasonable allowance (not more than 5.5%
interest on the depreciated amount of
capital invested by the employer)
If the fair rental value is lower than the
computed value, fair rental value will be
used. [Rule VII-A, Sec. 6]
4. Minimum Wage
Definition: “Statutory minimum wage” is
the lowest wage fixed by law that an
employer can pay his workers. [Rules
Implementing RA 6727]
Payment of Statutory minimum wage is
mandatory
Lack of funds is not a valid defense from
paying the statutory minimum wage,
which is a mandatory statutory obligation.
To uphold such defense of lack of
available funds would render the
Minimum Wage Law futile and defeat its
purpose. [De Racho v. Municipality of
Ilagan, G.R. No. L-23542, January 2,
1968]
a. Payment by hours worked
The minimum wage rates for agricultural
and non-agricultural employees and
workers in each and every region of the
country shall be those prescribed by the
Regional Tripartite Wages and
Productivity Boards. [Art. 99]
b. Payment by results
The Secretary of Labor and Employment
shall regulate the payment of wages by
results, including pakyao, piecework, and
other nontime work, in order to ensure the
payment of fair and reasonable wage rates,
preferably through time and motion studies
or in consultation with representatives of
worker’s and employer’s organizations.
[Art. 101]
5. Wage Distortion
Wage Distortion/Rectification
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 bases of
differentiation. [Art. 124]
Elements of Wage Distortion:
1. 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 (must be
caused by a wage order)
[Philippine Geothermal Inc. v.
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Chevron, G.R. No. 190187
(2018)];
3. The elimination of the distinction
between the two levels; and
4. The existence of the distortion in
the same region of the country.
[Prubankers Assn. v. Prudential
Bank and Co., G.R. No. 131247
(1999)]
The implementation of wage orders in one
region but not in others does not in itself
necessarily result in wage distortion.
[Prubankers Assn. v. Prudential Bank and
Co., G.R. No. 131247 (1999)]
Wage distortion can only exist where the
wage adjustment is brought about by a
wage order, not by management
prerogative. [Bankards Employees’ Union
v. NLRC, G.R. No. 140689 (2004)]
How to Resolve Wage Distortion:
A. Organized Establishment
1. Employer and the union shall
negotiate to correct the distortions.
2. Disputes shall be resolved through
the grievance procedure.
3. If still unresolved, voluntary
arbitration.
Grievance Procedure (under the CBA) →
if unresolved, VOLUNTARY arbitration
B. Unorganized Establishment
1. ERs and Ees shall endeavor to
correct such distortions
2. Disputes shall be settled through
the National Conciliation and
Mediation Board.
3. If still unresolved after 10 calendar
days of conciliation, it shall be
referred to the appropriate branch
of the NLRC – compulsory
arbitration
Both the employer and employee
cannot use economic weapons.
4. Employer cannot declare a lock-
out; Employee cannot declare a
strike because the law has provided
for a procedure for settling
5. The salary or wage differential
does not need to be maintained.
[National Federation of Labor v.
NLRC, G.R. No. 103586 (1994)]
National Conciliation and Mediation
Board → if unresolved, COMPULSORY
arbitration by the NLRC
CBA vis-à-vis Wage Orders – CBA
creditability
In determining an employee’s regular
wage, the pertinent stipulations in the CBA
are controlling, provided the result is not
less than the statutory requirement
[Philippine National Bank v. PEMA, G.R.
No. L-30279 (1982)]
The manner of resolving wage distortion is
largely based on the applicable wage
order. The current one for NCR, WO 20,
refers to the procedure in Art. 124 of the
Labor Code
6. Non-diminution of benefits
General Rule: There is a prohibition
against elimination or diminution of
benefits. [Art. 100]
No wage order issued by any regional
board shall provide for wage rates lower
than the statutory minimum wage rates
prescribed by Congress. [Art. 127, as
amended by RA 6727]
Requisites: If the following are met, then
the employer cannot remove or reduce
benefits [Vergara Jr. v. Coca-Cola Bottlers
Phils, G.R. No. 176985 (2013)]:
1. Ripened company policy – Benefit
is founded on a policy which has
ripened into a practice over a long
period;
2. Practice is consistent and
deliberate; and
3. Not due to error in the construction
or application of a doubtful or
difficult question of law. [Globe
Mackay Cable v. NLRC, G.R. No.
L-74156 (1988)]
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4. The diminution or discontinuance
is done unilaterally by the
employer.
When not applicable: At least one of the
requisites is absent
a. Mistake in the application of the
law [Globe Mackay Cable v.
NLRC, supra.]
b. Negotiated benefits
c. Reclassification of Positions – e.g.
loss of some benefits by promotion
d. 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.
Benefits initiated through negotiation
between Employee and Employer, e.g.
CBA, can only be eliminated or
diminished bilaterally.
C. Leaves
1. Service Incentive Leave (SIL)
Coverage: Every employee who has
rendered at least one year of service shall
be entitled to a yearly service incentive
leave of five days with pay. [Art. 95(a)]
Service Incentive Leave does not apply to
the following employees:
a. Those of the government and any
of its political subdivisions,
including GOCCs;
b. Domestic helpers and persons in
the personal service of another;
c. Managerial employees as defined
in Book III of this Code;
d. Field personnel and other
employees whose 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;
e. Those who are already enjoying the
benefit herein provided;
f. Those enjoying vacation leave with
pay of at least 5 days;
g. Those employed in establishments
regularly employing less than 10
employees. [Sec. 1, Rule V, Book
III, IRR]
Piece-rate employees are entitled to
service incentive leave pay provided that
they are supervised. If they are
unsupervised, they are not entitled to SIL.
[Labor Congress of the Phils. v. NLRC,
G.R. No. 123938 (1998)]
Teachers of private school on contract
basis are entitled to service incentive
leave. [Cebu Institute of Technology v.
Ople, G.R. No. L-58870 (1987)]
The law grants annual SIL of five days to
domestic workers, but their SIL shall not
be converted to cash or carried over to
succeeding years. [Sec. 5, RA 10361]
Meaning of “1 year service”
General Rule: "At least one year service"
shall mean service for NOT LESS than 12
months, whether continuous or broken,
reckoned from the date the employee
started working, including authorized
absences and paid regular holidays.
Exception: Service for less than 12 months
is counted as “at least one year service”
when:
1. The working days of the
establishment, as a matter of
practice or policy, is less than 12
months; or
2. The employment contract provides
working days that is less than 12
months. [Sec. 3, Rule V, Book III,
IRR]
Arbitration or Administrative Action
The grant of benefit IN EXCESS of that
provided herein shall not be made a
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subject of arbitration or any court or
administrative action. [Art. 95 (c)]
Commutable nature of benefit
The service incentive leave shall be
commutable to its money equivalent if not
used or exhausted at the end of the year.
[Sec. 5, Rule V, Book III, IRR]
When Entitled EE’s Cause of Action
Accrues
1. If the employee did not make use
of said leave credits but instead
chose to avail of its commutation
into money: The cause of action to
claim his SIL pay accrues from the
moment the employer refuses to
remunerate its monetary
equivalent.
2. If the employee wishes to
accumulate his leave credits and
opts for its commutation upon his
resignation or separation from
employment:
The cause of action to claim the whole
amount of his accumulated SIL shall arise
when the employer fails to pay such
amount at the time of his resignation or
separation from employment. [Auto Bus
Transport v. NLRC, G.R. No. 156367
(2005)]
2. Expanded Maternity Leave
Expanded Maternity Leave -- Maternity
leave of 105 days with full pay, with an
option to extend for an additional 30 days
without pay. [Sec. 3, RA 11210]
Coverage
Every female worker in government and
the private sector, including those in the
informal economy, regardless of civil
status or the legitimacy of her child, is
entitled to the maternity leave benefits.
This is applicable to pregnancy and
miscarriage, or emergency termination of
pregnancy, regardless of frequency. [Sec.
3, RA 11210]
Maternity leave for female workers in
private sector, requisites
a. Contribution: The female worker
must have paid at least 3 monthly
contributions in the 12-month
period immediately preceding the
semester of her childbirth,
miscarriage, or emergency
termination of pregnancy.
In determining the female
member’s entitlement to the
benefit, the SSS shall consider only
those contributions paid prior to the
semester of contingency; and
b. Notice: 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. [Sec. 1,
Rule VI, IRR of RA11210]
Maternity leave benefit after termination
of employment possible
General Rule: Maternity leave with full
pay shall be granted even if the childbirth,
miscarriage, or emergency termination of
pregnancy occurs not more than 15
calendar days after the termination of an
employee’s service.
Exception: When the employment of the
pregnant woman worker has been
terminated without just cause, the
employer must pay her the full amount
equivalent to her salary for 105 days for
childbirth and 60 days for miscarriage and
emergency termination of pregnancy based
on her full pay, in addition to the other
applicable daily cash maternity benefits
that she should have received had her
employment not been illegally terminated.
[Sec. 5, Rule IV, IRR of RA 11210]
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Benefit Received: A daily maternity
benefit equivalent to 100% of her average
daily salary credit for:
a. 105 days in cases of live childbirth
b. 60 days in cases of miscarriage or
emergency termination of
pregnancy.
The maternity leave can be credited as
combinations of prenatal and postnatal
leave as long as it does not exceed 105
days or 60 days as the case may be. In no
case shall postnatal care be less than 60
days. [Sec. 2, Rule IV, IRR of RA 11210]
In case the employee qualifies as a solo
parent (see III. C. 2. a., above), the
employee shall be paid an additional
maternity benefit of 15 days. [Sec. 5 (a),
RA 11210]
Extended maternity leave option, requisite
notice: In cases of live childbirth, an
additional maternity leave of 30 days,
without pay, can be availed of, at the
option of the female worker, provided that
the employer shall be given notice.
Due notice must be in writing must be
given at least 45 days before the end of the
female worker’s maternity leave.
Exception: No prior notice shall be
necessary in the event of a medical
emergency, but subsequent notice shall be
given to the employer.
The period of extended maternity leave
without pay shall not be considered a gap
in the service. [Sec. 3, Rule IV, IRR of RA
11210]
Allocation of maternity leave credits
A female worker entitled to maternity
leave benefits may, at her option, allocate
up to 7 days of said benefits to the child’s
father, whether or not the father is married
to the mother.
The allocated benefit granted to the child’s
father is over and above the paternity
benefits provided under RA 8187
(Paternity Leave Act). In case of death,
absence, or incapacity of the child’s father,
the female worker may allocate to an
alternate caregiver who may be:
a. A relative within the 4th degree of
consanguinity; or
b. The current partner, regardless of
sexual orientation or gender
identity, of the female worker
sharing the same household.
The option to allocate maternity leave
credits shall not be applicable in cases of
miscarriage or emergency termination of
pregnancy. [Sec. 1, Rule VIII, IRR of RA
11210]
Death or permanent incapacity
If the female worker dies or becomes
permanently incapacitated, the balance of
her maternity leave benefits shall accrue to
the child’s father or to a qualified alternate
caregiver subject to the following
conditions:
a. That the maternity leave benefits
have not yet been commuted to
cash, if applicable; and
b. That a certified true copy of the
death certificate or medical
certificate or abstract is provided to
the employers of both the female
worker and the child’s father or
alternate caregiver.
In case the maternity leave benefits have
already been paid to the female worker in
full, the child’s father or alternate
caregiver shall be entitled to enjoy the
remaining unexpired leave credits of the
female worker, if any.
Provided, That such leave without pay
shall not be considered a gap in the service
of the child’s father or alternate caregiver.
[Sec. 4, Rule VIII, IRR of RA 11210]
Other conditions:
a. Employer shall advance the full
payment subject to reimbursement
by the SSS within 30 days from
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filing of leave application. [Sec. 3,
Rule VI, IRR of RA 11210]
b. SSS shall immediately reimburse
the employer the maternity benefits
advanced to the employed female
member, only to the extent of
100% of her average daily salary
credit for 105 days, 120 days or 60
days, as the case may be, upon
receipt of satisfactory and legal
proof of such payment. [Sec. 4,
Rule VI, IRR of RA 11210]
c. Availment shall be a bar to the
recovery of sickness benefits
provided under RA 1161 (Social
Security Law) for the same period
for which daily maternity benefits
have been received. [Sec. 6, Rule
VI, RA 11210]
d. Sanction: That if an employee
should give birth or suffer
miscarriage or emergency
termination of pregnancy:
1. Without the required
contributions having been
remitted for her by her
employer to the SSS, or
2. Without the latter having
been previously notified by
the ER of time of the
pregnancy,
the employer shall pay to the SSS damages
equivalent to the benefits which said
employee would otherwise have been
entitled to. [Sec. 5, RA 11210]
3. Paternity Leave
Paternity Leave – leave of 7 calendar days
with full pay for every married male
employee in the private and public sectors
Coverage and Purpose
Paternity leave is granted to all married
male employees in the private and public
sectors, regardless of their employment
status (e.g. probationary, regular,
contractual, project basis).
The purpose of this benefit is to allow the
husband to lend support to his wife during
her period of recovery and/or in nursing
her newborn child. [Sec. 3, RA 8187]
Benefit
It shall be for 7 calendar days, with full
pay, consisting of basic salary and
mandatory allowances fixed by the
Regional Wage Board, if any, provided
that his pay shall not be less than the
mandated minimum wage. [Sec. 2, RA
8187]
It shall apply to the first 4 deliveries of the
employee’s lawful wife with whom he is
cohabiting.
Cohabiting means the obligation of the
husband and wife to live together. [Sec. 1,
IRR, RA 8187] If the spouses are not
physically living together because of the
workstation or occupation, the male
employee is still entitled to the paternity
leave benefit.
Usage of the benefit
Usage of the leave shall be after the
delivery, without prejudice to an
employer’s policy of allowing the
employee to avail of the benefit before or
during the delivery, provided that the total
number of days shall not be more than 7
days for each covered delivery. [Sec. 5,
IRR, RA 8187]
Conditions for entitlement [Sec. 3, IRR,
RA 8187]
a. He is married;
b. He is an employee at the time of
the delivery of his child
c. He is cohabiting with his spouse at
the time that she gives birth or
suffers a miscarriage
d. He has applied for paternity leave
with his ER within a reasonable
period of time from the expected
date of delivery by his pregnant
spouse, or within such period as
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may be provided by company rules
and regulations, or by CBA; and,
e. His wife has given birth or suffered
a miscarriage.
In case of miscarriage, prior application
for paternity leave shall not be required.
[Sec. 4, IRR, RA 8187]
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. [Sec. 7,
IRR, RA 8187]
Crediting of existing benefits
a. If the existing paternity leave
benefit under the CBA, contract, or
company policy is greater than 7
calendar days as provided for in
RA 8187, the greater benefit shall
prevail.
b. If the existing paternity leave
benefit is less than that provided in
RA 8187, the ER shall adjust the
existing benefit to cover the
difference. [Sec. 9, IRR, RA 8187]
Where a company policy, contract, or
CBA provides for an emergency or
contingency leave without specific
provisions on paternity leave, the ER shall
grant to the employee 7 calendar days of
paternity leave. [Sec. 9, IRR, RA 8187]
4. Parental Leave for Solo Parents
Parental leave for solo parents – Leave
benefits granted to a solo parent to enable
him/her to perform parental duties and
responsibilities where physical presence is
required. [Sec. 3 (d), RA 8972]
Coverage:
Any solo parent or individual who is left
alone with the responsibility of parenthood
due to:
a. Giving birth as a result of rape or
and other crimes against chastity
even without a final conviction of
the offender: Provided, That the
mother keeps and raises the child;
b. Death of spouse
c. Spouse is detained or is serving
sentence for a criminal conviction
for at least one (1) year
d. Physical and/or mental incapacity
of spouse as certified by a public
medical practitioner;
e. Legal separation or de facto
separation from spouse for at least
one (1) year: Provided, that he/she
is entrusted with the custody of the
children;
f. Declaration of nullity or annulment
of marriage as decreed by a court
or by a church: Provided, that
he/she is entrusted with the custody
of the children;
g. Abandonment of spouse for at least
one (1) year;
h. Unmarried father/mother who has
preferred to keep and rear his/her
child/children, instead of having
others care for them or give them
up to a welfare institution;
i. Any other person who solely
provides parental care and support
to a child or children: Provided,
that he/she is duly licensed as a
foster parent by the Department of
Social Welfare and Development
(DSWD) or duly appointed legal
guardian by the court; and
j. Any family member who assumes
the responsibility of head of family
as a result of the death,
abandonment, disappearance, or
prolonged absence of the parents or
solo parent for at least one (1) year.
[Sec. 3 (a), RA 8972]
Conditions for Entitlement
A solo parent employee shall be entitled to
the parental leave under the following
conditions:
a. He/she has rendered at least one (1)
year of service, whether continuous
or broken;
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b. He/she has notified his/her
employer that he/she will avail
himself/herself of it, within a
reasonable period of time; and
c. He/she has presented to his/her
employer a Solo Parent
Identification Card, which may be
obtained from the DSWD office of
the city or municipality where
he/she resides. [Sec. 19, Art. V,
IRR, RA 8972]
Availment
The parental leave is in addition to leave
privileges under existing laws with full
pay, consisting of basic salary and
mandatory allowances. It shall not be more
than seven (7) working days every year.
[Sec. 8, RA 8972]
Grant of 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]
Protection against Work Determination
No employer shall discriminate against
any solo parent employee with respect to
terms and conditions of employment on
account of his/her status. [Sec. 7, RA
8972]
Termination of the Benefit
A change in the status or circumstance of
the parent claiming the benefit under the
law, such that he/she is no longer left alone
with the responsibility of parenthood, shall
terminate his/her eligibility for these
benefits. [Sec. 3 (a), RA 8972]
5. Leave Benefits for women workers
under RA 9710 and RA 9262
Gynecological Leave (RA 9710)
Gynecological Leave - A female
employee’s leave entitlement of two (2)
months with full pay from her employer
based on her gross monthly compensation
following surgery caused by gynecological
disorders, provided that she has rendered
continuous aggregate employment service
of at least six (6) months for the last 12
months.
Gynecological Disorders
Disorders that would require surgical
procedures such as, but not limited to:
1. Dilatation and curettage;
2. Those involving female
reproductive organs such as the
vagina, cervix, uterus, fallopian
tubes, ovaries, breast, adnexa and
pelvic floor, as certified by a
competent physician;
3. Hysterectomy, ovariectomy, and
mastectomy.
Gross Monthly Compensation - The
monthly basic pay plus mandatory
allowances fixed by the regional wage
boards. [Sec. 7, Rule II, IRR, RA 9710]
Basic Requirement
The woman employee should have been
with the company for 12 months prior to
surgery. An aggregate service of at least
six (6) months within the said 12-month
period is sufficient to entitle her to avail of
the special leave benefit.
Employment service includes absences
with pay such as use of other mandated
leaves, company-granted leaves and
maternity leaves.
Competent Physician: A medical doctor
preferably specializing in gynecological
disorders or is in the position to determine
the period of recuperation of the woman
employee. [Sec. 1, D.O. No. 112, as
amended (Guidelines Governing the
Implementation of the Special Leave
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Benefits for Women Employees in the
Private Sector)]
Conditions for Entitlement
Any female employee, regardless of age
and civil status, shall be entitled to a
special leave benefit, provided she has
complied with the following conditions:
a. She has rendered at least 6 months
continuous aggregate employment
service for the last 12 months prior
to surgery;
b. She has filed an application for
special leave
c. She has undergone surgery due to
gynecological disorders as certified
by a competent physician. [Sec. 2,
D.O. No. 112]
Application for Special Leave Before
Surgery - The employee shall file her
application for 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 by CBA.
Application for Special Leave After
Surgery
Prior application for leave shall not be
necessary in cases requiring emergency
surgical procedure, provided that the
employer shall be notified verbally or in
written form within a reasonable period of
time and provided further that after the
surgery or appropriate recuperating period,
the female employee shall immediately file
her application using the prescribed form.
[Sec. 3, D.O. No. 112]
Period of Entitlement
The 2 months special leave is the
maximum period of leave with pay that a
woman employee may avail of under RA
9710
For purposes of determining the period of
leave with pay that will be allowed to a
female employee, the certification of a
competent physician as to the required
period of recuperation shall be controlling.
[Sec. 4, D.O. No. 112, as amended]
Availment:
The special leave shall be granted to the
qualified employee after she has
undergone surgery. [Sec. 5, D.O. No. 112,
as amended]
Frequency of Availment
A woman employee can avail of the SLB
for every instance of surgery due to
gynecological disorder for a maximum
total period of 2 months per year. [Sec. 6,
D.O. No. 112, as amended]
Special Leave Benefit vis-à-vis SSS
Sickness Benefit
The SLB is different from the SSS
sickness benefit. The former is granted by
the employer in accordance with RA 9710.
It is granted to a woman employee who
has undergone surgery due to
gynecological disorder. The SSS sickness
benefit, on the other hand, is administered
and given by the SSS in accordance with
RA 1161 as amended by RA 8282. [Sec. 7,
D.O. No. 112, as amended]
Battered Woman Leave (RA 9262)
Victims of any of the acts covered by
VAWC shall be entitled to take a paid
leave of absence up to ten (10) days in
addition to other paid leaves under the
Labor Code and Civil Service Rules and
Regulations, extendible when the necessity
arises as specified in the protection order
[Sec. 43, RA 9262]
Acts covered by VAWC:
1. “Physical violence” - refers to acts
that include bodily or physical
harm
2. “Sexual violence” - refers to an act
which is sexual in nature,
committed against a woman or her
child.
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3. “Psychological violence” - acts or
omissions causing or likely to
cause mental or emotional
suffering of the victim
4. Economic abuse” - acts that make
or attempt to make a woman
financially dependent.
To fall under VAWC, the offender must
have had a sexual or dating relationship
with the offended woman.
When availed of: A victim leave may be
availed of at any time during the
application of any protection order,
investigation, prosecution and/or trial of
the criminal case [Sec. 42, Rule VI, IRR]
Requirement:
In order to be entitled to the leave benefit,
the only requirement is for the victim-
employee to present to her employer a
certification from the barangay chairman
(Punong Barangay) or barangay councilor
(barangay kagawad) or prosecutor or the
Clerk of Court, as the case may be, that an
action relative to the matter is pending
[Sec. 42, Rule VI, IRR]
The usage of the ten-day leave shall be at
the option of the woman employee. In the
event that the leave benefit is not availed
of, it shall not be convertible into cash and
shall not be cumulative [Sec. 42, Rule VI,
IRR].
When denied; employer’s liability
The employer/agency head who denies the
application for leave, and who shall
prejudice the victim-survivor or any
person for assisting a co-employee who is
a victim-survivor under the Act shall be
held liable for discrimination and violation
of R.A 9262. [Sec. 42, Rule VI, IRR].
D. Special Groups of Employees
1. Women
Constitutional Basis - The State recognizes
the role of women in nation-building, and
shall:
a. Ensure the fundamental equality
before the law of women and men;
b. Protect working women by
providing:
1. Safe and healthful working
conditions, taking into
account their maternal
functions, and
2. Such facilities and
opportunities that will
enhance their welfare and
enable them to realize their
full potential in the service
of the nation. [Sec. 14, Art.
II & Sec. 14, Art. XIII,
1987 Constitution]
a. Discrimination
It shall be unlawful for any employer to
discriminate against any woman employee
with respect to terms and conditions of
employment solely on account of her sex.
The following are acts of discrimination:
a. Payment of a lesser compensation,
including wage, salary or other
form of remuneration and fringe
benefits, to a female employee as
against a male employee, for work
of equal value; and
b. Favoring a male employee over a
female employee with respect to
promotion, training opportunities,
study and scholarship grants solely
on account of their sexes. [Art.
133]
The Magna Carta of Women provides that
the State:
1. Condemns discrimination against
women in all its forms
2. Pursues by all appropriate means
and without delay the policy of
eliminating discrimination against
women in keeping with the
Convention on the Elimination of
All Forms of Discrimination
Against Women (CEDAW) and
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other international instruments
consistent with Philippine law.
3. Shall accord women the rights,
protection, and opportunities
available to every member of
society
4. Shall take steps to review and,
when necessary, amend and/or
repeal existing laws that are
discriminatory to women within
three (3) years from the effectivity
of this Act. [Sec. 2 & Sec. 12,
Magna Carta of Women]
b. Stipulation against Marriage [Art. 134;
Sec. 13(e), Rule XII]
It shall be unlawful for an employer to:
1. require as a condition of
employment or continuation of
employment that a woman
employee shall not get married, or
2. stipulate expressly or tacitly that
upon getting married a woman
employee shall be deemed resigned
or separated or
3. actually dismiss, discharge,
discriminate or otherwise prejudice
a woman employee merely by
reason of her marriage. [Art. 134;
Duncan Assoc of Detailman –
PTGWO v. Glaxo Wellcome, G.R.
No. 162994 (2004)]
The Magna Carta of Women protects
women against discrimination in all
matters relating to marriage and family
relations, including the right to choose
freely a spouse and to enter into marriage
only with their free and full consent.
Bona fide occupational qualification
exception
While a marriage or no-marriage
qualification may be justified as a "bona
fide occupational qualification," the
employer must prove two factors
necessitating its imposition, viz:
1. that the employment qualification
is reasonably related to the
essential operation of the job
involved; and
2. that there is a factual basis for
believing that all or substantially
all persons meeting the
qualification would be unable to
properly perform the duties of the
job. [Capin-Cadiz v. Brent Hospital
and Colleges, Inc., G.R. No.
187417 (2016)]
When the employer can prove that the
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 ER
may discriminate against an EE based on
the identity of the EE’s spouse. [Star Paper
Corp. v. Simbol, G.R. No. 164774 2006].
A personal or marital relationship with an
employee of a competitor might
compromise the interests of the company.
Thus an employer policy prohibiting the
same may be held as valid [Duncan
Association of Detailmen v. Glaxo
Wellcome, supra.]
c. Prohibited Acts
1. Discharge to prevent enjoyment of
benefits - To deny any woman
employee the benefits provided for
in this Chapter or to discharge any
woman employed by him for the
purpose of preventing her from
enjoying any of the benefits
provided under this Code. [Art. 135
(1), as amended by R.A. 6725]
2. Discharge on account of
pregnancy. - To discharge such
woman on account of her
pregnancy, while on leave or in
confinement due to her pregnancy.
[Art. 135 (2)]
3. Discharge or refusal of the
admission to work - To discharge
or refuse the admission of such
woman upon returning to her work
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for fear that she may again be employed: Provided, however,

pregnant. [Art. 135 (3)] That his/her employment neither
4. Discharge on account of testimony endangers his/her life, safety,
- To discharge any woman or child health, and morals, nor impairs
or any other employee for having his/her normal development:
filed a complaint or having testified Provided, further, That the parent
or being about to testify under the or legal guardian shall provide the
Code [Sec. 13 (d), Rule XII, Book said child with the prescribed
III, IRR] primary and/or secondary
5. Expulsion of women education; or
faculty/female student due to b. Where a child's employment or
pregnancy outside of marriage - participation in public
Expulsion and non-readmission of entertainment or information
women faculty due to pregnancy through cinema, theater, radio,
outside of marriage shall be television or other forms of media
outlawed. No school shall turn out is essential: Provided, That the
or refuse admission to a female employment contract is concluded
student solely on the account of her by the child's parents or legal
having contracted pregnancy guardian, with the express
outside of marriage during her term agreement of the child concerned,
in school. [Sec. 13(c), RA 9710] if possible, and the approval of the
Department of Labor and
2. Minors Employment: Provided, further,
Relevant Laws: RA 7610 (Special That the following requirements in
Protection of Children Against Abuse, all instances are strictly complied
Exploitation and Discrimination Act), RA with:
9231 (Special Protection of Children 1. The employer shall ensure
Against Child Abuse, Exploitation and the protection, health,
Discrimination Act), Art. 137(a) safety, morals and normal
development of the child;
Constitutional Basis: The State recognizes 2. The employer shall institute
the vital role of the youth in nation- measures to prevent the
building and shall promote and protect child's exploitation or
their physical, moral, spiritual, intellectual, discrimination taking into
and social well-being. It shall inculcate in account the system and
the youth patriotism and nationalism, and level of remuneration, and
encourage their involvement in public and the duration and
civic affairs. [Sec. 13, Art. II, 1987 arrangement of working
Constitution] time; and
General Rule: Children below 15 shall 3. The employer shall
NOT be employed. formulate and implement,
subject to the approval and
Exception (Employment of Children): supervision of competent
Children below fifteen (15) years of age authorities, a continuing
shall not be employed except: program for training and
skills acquisition of the
a. When a child works directly under
child.
the sole responsibility of his/her
parents or legal guardian and where In the above-exceptional cases where any
only members of his/her family are such child may be employed, the employer

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shall first secure, before engaging such 1. his employment does

child, a work permit from the DOLE NOT endanger his life,
which shall ensure observance of the safety, health and
above requirements. morals
2. nor impairs his normal
For purposes of this Article, the term development, and
"child" shall apply to all persons under 3. the parent or legal
eighteen (18) years of age. [Sec. 2, RA guardian shall provide
9231] the said minor child
Children - refers to any person under 18 with the prescribed
years of age or those over but are unable to primary and/or
fully take care of themselves or protect secondary education;
themselves from abuse, neglect, cruelty, [Sec. 12 of RA 7610, as
exploitation or discrimination because of a amended by RA 7658]
physical or mental disability or condition. b. Child’s employment or
[Sec. 2, RA 7610] participation in public
entertainment or information
a. Child Labor vs Working Child through cinema, theater, radio
Child labor - refers to any work or or television is essential,
economic activity performed by a child provided that [Sec. 12 of RA
that subjects him/her to any form of 7610, as amended by RA
exploitation or is harmful to his/her health 7658]:
and safety or physical, mental or 1. employment does NOT
psychosocial development. involve ads or
commercials promoting
Working Child – refers to any child alcohol, tobacco and its
engaged as follows: by-products or violence
[Sec. 14, RA 7610]
1. when the child is below eighteen
2. the employment
(18) years of age, in work or
contract is concluded by
economic activity that is not child
the child’s parents or
labor as defined in the immediately
guardian, and approved
preceding subparagraph; and
by DOLE
2. when the child is below fifteen (15)
3. The ER shall ensure the
years of age, in work where he/she
protection, health,
is directly under the responsibility
safety and morals of the
of his/her parents or legal guardian
child
and where only members of the
4. The ER shall institute
child‘s family are employed; or in
measures to prevent the
public entertainment or
child’s exploitation or
information. [Sec. 3, D.O. No. 65-
discrimination taking
04]
into account the system
Exceptions: and level of
remuneration, and the
a. Child works directly under the duration and
sole responsibility of his arrangement of working
parents or legal guardian and time
where only members of the 5. The ER shall formulate
employer’s family are and implement, subject
employed, provided: to the approval and

56
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Compiled by: Sugaree of SKSU

supervision of d. Work which, by its nature or

competent authorities, a the circumstances in which it is
continuing program for carried out, is hazardous or
training and skills likely to be harmful to the
acquisition of the child. health, safety or morals of
[Sec. 12 of RA 7610, as children, such that it:
amended by RA 7658] 1. Debases, degrades or
demeans the intrinsic
Employment of Children from 15 to 18 worth and dignity of a
Employment is allowed even without child as a human being;
permit but restricted to non-hazardous or
work. 2. Exposes the child to
Non-hazardous work shall mean any work physical, emotional or
or activity in which the EE is not exposed sexual abuse, or is
to any risk which constitutes an imminent found to be highly
danger to his safety and health. [Sec. 3, stressful
Rule XII, Book III, IRR] psychologically or may
prejudice morals; or
The Secretary of Labor shall from time to 3. Is performed
time publish a list of hazardous work and underground,
activities in which persons 18 years of age underwater or at
and below cannot be employed [Sec. 3, dangerous heights; or
Rule XII, Book III, IRR] 4. Involves the use of
Worst Forms of Child Labor: dangerous machinery,
equipment and tools
a. All forms of slavery, as such as power-driven or
defined under the "Anti- explosive power-
trafficking in Persons Act of actuated tools; or
2003", or practices similar to 5. Exposes the child to
slavery such as sale and physical danger such as,
trafficking of children, debt but not limited to the
bondage and serfdom and dangerous feats of
forced or compulsory labor, balancing, physical
including recruitment of strength or contortion,
children for use in armed or which requires the
conflict; or manual transport of
b. The use, procuring, offering or heavy loads; or
exposing of a child for 6. Is performed in an
prostitution, for the production unhealthy environment
of pornography or for exposing the child to
pornographic performances; hazardous working
or conditions, elements,
c. The use, procuring or offering substances, co-agents or
of a child for illegal or illicit processes involving
activities, including the ionizing, radiation, fire,
production and trafficking of flammable substances,
dangerous drugs and volatile noxious components
substances prohibited under and the like, or to
existing laws; or extreme temperatures,

57
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noise levels, or 2. nor impairs his normal

vibrations; or development, and
7. Is performed under 3. the parent or legal
particularly difficult guardian shall provide
conditions; or the said minor child
8. Exposes the child to with the prescribed
biological agents such primary and/or
as bacteria, fungi, secondary education;
viruses, protozoans, [Sec. 12 of RA 7610, as
nematodes and other amended by RA 7658]
parasites; or b. Child’s employment or
9. Involves the participation in public
manufacture or entertainment or information
handling of explosives through cinema, theater, radio
and other pyrotechnic or television is essential,
products [Sec. 12-D, provided that [Sec. 12 of RA
RA 9231 as amended]. 7610, as amended by RA
7658]:
b. Allowed Working Hours and Industries 1. employment does NOT
of a working Child involve ads or
1. Below 15 yo – 4 hours daily max, commercials promoting
20 hours weekly max alcohol, tobacco and its
2. 15 to below 18 – 8 hours daily by-products or violence
max, 40 hours weekly max [Sec. 14, RA 7610]
2. the employment
Night Work Prohibition: contract is concluded by
1. Below 15 yo – 8pm t0 6 am (10 the child’s parents or
hours) guardian, and approved
2. 15 to below 18 – 10pm to 6 am (8 by DOLE
hours) 3. The ER shall ensure the
protection, health,
Discrimination safety and morals of the
child
No employer shall discriminate against
4. The ER shall institute
any person in respect to terms and
measures to prevent the
conditions of employment on account of
child’s exploitation or
his age. [Art. 138]
discrimination taking
Industries of a Working Child: into account the system
and level of
a. Child works directly under the remuneration, and the
sole responsibility of his duration and
parents or legal guardian and arrangement of working
where only members of the time
employer’s family are 5. The ER shall formulate
employed, provided: and implement, subject
1. his employment does to the approval and
NOT endanger his life, supervision of
safety, health and competent authorities, a
morals continuing program for
training and skills

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acquisition of the child. 4. Involves the use of

[Sec. 12 of RA 7610, as dangerous machinery,
amended by RA 7658] equipment and tools
such as power-driven or
c. Prohibited acts explosive
a. All forms of slavery, as defined poweractuated tools; or
under the "Anti-trafficking in 5. Exposes the child to
Persons Act of 2003", or physical danger such as,
practices similar to slavery such but not limited to the
as sale and trafficking of dangerous feats of
children, debt bondage and balancing, physical
serfdom and forced or strength or contortion,
compulsory labor, including or which requires the
recruitment of children for use manual transport of
in armed conflict; or heavy loads; or
b. The use, procuring, offering or 6. Is performed in an
exposing of a child for unhealthy environment
prostitution, for the production exposing the child to
of pornography or for hazardous working
pornographic performances; or conditions, elements,
c. The use, procuring or offering substances, co-agents or
of a child for illegal or illicit processes involving
activities, including the ionizing, radiation, fire,
production and trafficking of flammable substances,
dangerous drugs and volatile noxious components
substances prohibited under and the like, or to
existing laws; or extreme temperatures,
d. Work which, by its nature or noise levels, or
the circumstances in which it is vibrations; or
carried out, is hazardous or 7. Is performed under
likely to be harmful to the particularly difficult
health, safety or morals of conditions; or
children, such that it: 8. Exposes the child to
1. Debases, degrades or biological agents such
demeans the intrinsic as bacteria, fungi,
worth and dignity of a viruses, protozoans,
child as a human being; nematodes and other
or parasites; or
2. Exposes the child to 9. Involves the
physical, emotional or manufacture or
sexual abuse, or is handling of explosives
found to be highly and other pyrotechnic
stressful products [Sec. 12-D,
psychologically or may RA 9231 as amended].
prejudice morals; or 3. Kasambahay (RA 10361)
3. Is performed
underground, Relevant Law: RA 10361 (Batas
underwater or at Kasambahay or Domestic Worker’s Act
dangerous heights; or Note: RA 10361 has expressly repealed
Chapter III, “Employment of

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Househelpers”, Title III, Book III of the
Labor Code
Domestic work - This refers to work
performed in or for a household or
households. [Sec 4(c)., RA 10361]
Household - refers to the immediate
members of the family or the occupants of
the house that are directly provided
services by the domestic worker. [Sec 4(f),
RA 10361]
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.
[Sec 4(d), RA 10361]
The term domestic worker or
“kasambahay” excludes any person who
performs domestic work only
occasionally or sporadically and not on
an occupational basis. [Sec.4(d), RA
10361]
IRR, Sec. 2 does not include family
drivers.
Minimum Wage - The minimum wage of
domestic workers shall not be less than the
following:
a. P2,500 a month for those employed
in NCR
b. P2,000 a month for those employed
in chartered cities and first class
municipalities
c. P1,500 a month for those employed
in other municipalities
Within one year from the effectivity of RA
10361, and periodically thereafter, the
Regional Board shall review, and if proper,
determine and adjust the minimum wage
rates of domestic workers. [Sec. 24, RA
10361]
Standard of Treatment
The employer or any member of the
household shall not subject a domestic
worker or “kasambahay” to any kind of
abuse nor inflict any form of physical
violence or harassment or any act tending
to degrade the dignity of a domestic
worker. [Sec. 5, RA 10361]
Board, Lodging and Medical Attendance
The employer shall provide for the basic
necessities of the domestic worker to
include:
1. At least three adequate meals a day
2. Humane sleeping arrangements
that ensure safety
3. Appropriate rest and assistance in
case of illnesses and injuries
sustained during service without
loss of benefits. [Sec. 6, RA 10361]
Privacy
Respect for the privacy of the domestic
worker shall be guaranteed at all times and
shall extend to all forms of communication
and personal effects [Sec. 7, RA 10361]
Access to Outside Communication
The employer shall grant the domestic
worker access to outside communication
during free time: Provided, That in case of
emergency, access to communication shall
be granted even during work time. [Sec. 8,
RA 10361]
Education and Training
The employer shall afford the domestic
worker the opportunity to finish basic
education and may allow access to
alternative learning systems and, as far as
practicable, higher education or technical
and vocational training. [Sec. 9, RA
10361]
Social and Other Benefits
A domestic worker who has rendered at
least one (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,
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Notes for BAR 2022: Labor Low and Social Legislation
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and shall be entitled to all the benefits in
accordance with the pertinent provisions
provided by law.
Leave Benefits
A domestic worker who has rendered at
least one (1) year of service shall be
entitled to an annual service incentive
leave of five (5) days with pay. [Sec. 29,
RA 10361]
Rest Periods
Daily Rest Period: 8 hours
Weekly Rest Period: at least 24
consecutive hours. The employer and
employee may agree to:
a. Offsetting a day of absence with a
particular rest day;
b. Waiving a particular rest day in
return for an equivalent daily rate
of pay;
c. Accumulating rest days not
exceeding five (5) days; or
d. Other similar arrangements. [Sec.
20, 21, RA 10361]
Pre-Employment Requirement
Prior to the execution of the employment
contract, the employer may require the
following from the domestic worker:
a. Medical certificate or a health
certificate issued by a local
government health officer;
b. Barangay and police clearance
c. National Bureau of Investigation
(NBI) clearance; and
d. 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.
However, Sec. 12(a), (b), (c) and (d) shall
be standard requirements when the
employment of the domestic worker is
facilitated through the PEA.
The cost of the foregoing shall be borne by
the prospective employer or agency, as the
case may be. [Sec. 12, RA 10361]
Pre-employment Prohibition: The
following shall be unlawful:
1. Charging any share in the
recruitment or finder’s fees against
the domestic worker by a private
employment agency or third party.
[Sec. 13, RA 10361]
2. Requiring a domestic worker to
make deposits from which
deductions shall be made for the
reimbursement of loss or damage
to tools, materials, furniture and
equipment in the household. [Sec.
14, RA 10361]
3. Placing the domestic worker under
debt by the employer or any person
acting on behalf of the employer to
[Sec. 15, RA 10361]
Time and Manner of Payment – Payment
of wages shall be made:
1. Directly to the domestic worker in
cash
2. At least once a month
3. With no deductions from the wages
other than that which is mandated
by law, unless allowed by the
domestic worker through a written
consent
No employer shall pay the wages of a
domestic worker by means of promissory
notes, vouchers, coupons, tokens, tickets,
chits, or any object other than the cash
wage as provided for under this Act. [Sec.
25, RA 10361]
Payslip - The employer shall at all times
provide the domestic worker with a copy
of the pay slip containing the amount paid
in cash every pay day, and indicating all
deductions made, if any. The copies of the
pay slip shall be kept by the employer for a
period of three (3) years. [Sec. 26, RA
10361]
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Wage Prohibitions - It shall be unlawful
for the original employer to charge any
amount from the said household where the
service of the domestic worker was
temporarily performed. [Sec. 23, RA
10361]
Other Prohibited Acts:
a. Interference in employee’s wage
disposal [Sec. 27, RA 10361]
b. Direct or indirect withholding of
wages by the employer [Sec. 28,
RA 10361]
c. Payment in forms other than cash
[Sec. 25, RA 10361]
Right against assignment to non-household
work at a wage rate lower than that
mandated for agricultural or non-
agricultural enterprises depending on the
case. [Sec. 22, RA 10361]
Employment Age of Domestic Workers:
Unlawful to employ any person below
fifteen (15) years of age as a domestic
worker [Sec. 16, RA 10361]
Persons between 15-18 years old should
only be employed in non-hazardous work.
[D.O. No. 4-99 Sec. 4]
Daily Rest Period: Aggregate of eight (8)
hours per day. [Sec. 20, RA 10361]
Employment Certification: ER shall give
the househelper a written statement of the
nature and duration of the service and his
or her work performance as househelper
upon severance. [Sec. 35, RA 10361]
Termination
Initiated by the Domestic Worker - The
domestic worker may terminate the
employment relationship at any time
before the expiration of the employment
contract for any of the following causes:
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; and
6. Other causes analogous to the
foregoing. [Sec. 33, RA 10361]
Initiated by the Employer - An employer
may terminate the services of the domestic
worker at any time before the expiration of
the contract, for any of the following
causes:
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;
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; and
7. Other causes analogous to the
foregoing. [Sec. 34, RA 10361]
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Employment Certification - Upon the
severance of the employment relationship,
the employer shall issue the domestic
worker within five (5) days from request a
certificate of employment indicating the
nature, duration of the service and work
performance [Sec. 35, RA 10361]
Unjust Dismissal - Neither the domestic
worker nor the employer may terminate
the contract before the expiration of the
term except for grounds provided in Secs.
33 and 34 of RA 10361.
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 [Sec. 32, RA 10361].
Leaving without justifiable reason by the
domestic worker
a. Any unpaid salary due not
exceeding the equivalent 15 days
work shall be forfeited AND
b. The employer may recover from
the domestic worker the costs
incurred related to the deployment
expenses, if any: Provided, that the
service has been terminated within
6 months from the domestic
worker’s employment [Sec. 32, RA
10361].
Notice to end the working relationship - If
the duration of the domestic service is not
determined either in stipulation or by the
nature of the service, the employer or the
domestic worker may give notice to end
the working relationship five (5) days
before the intended termination of the
service.
The domestic worker and the employer
may mutually agree upon written notice to
pre-terminate the contract of employment
to end the employment relationship. [Sec.
32, RA 10361]
4. Homeworkers
Note: D.O. No. 5, DOLE (February 4,
1992), is now Rule XIV, Book III of the
IRR.
Industrial Work
a. 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
b. Decentralized form of production,
where there is ordinarily very little
supervision or regulation of
methods of work. [Sec. 2(a), Rule
XIV, Book III, IRR
Industrial Homeworker - a worker who is
engaged in industrial homework
Employer means any natural or artificial
person who:
a. Acts as a contractor or
subcontractor – 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 employer’s
direction; OR
b. Sells any goods, articles, or
materials to be processed or
fabricated in or about a home and
then rebuys them after. [Art. 153]
Rights and benefits accorded
homeworkers:
a. Right to form, join or assist
organizations [Sec. 3, Rule XIV,
Book III, IRR]
b. Right to acquire legal personality
and the rights and privileges
granted by law to legitimate labor
organizations upon issuance of the
certification of registration [Sec. 4,
Rule XIV, Book III, IRR]
c. Immediate payment upon
employer’s receipt of finished
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Notes for BAR 2022: Labor Low and Social Legislation
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goods or articles [Sec. 6, Rule XIV,
Book III, IRR
d. SSS, MEDICARE and ECC
premium contributions shall be
deducted from their pay and shall
be remitted by
ER/contractor/subcontractor to the
SSS [Sec. 6, Rule XIV, Book III,
IRR]
Liability of Employer
a. Employer may require homeworker
to redo work improperly executed
without additional pay [Sec. 9(a),
Rule XIV, Book III, IRR]
b. Employer need not pay
homeworker for any work done on
goods or articles not returned due
to homeworker’s fault [Sec. 9(b),
Rule XIV, Book III, IRR]
c. If subcontractor/contractor fails to
pay homeworker, employer is
jointly and severally liable with the
former to the homeworker for
his/her wage [Sec. 11, Rule XIV,
Book III, IRR]
d. Employer shall assist the
homeworkers in the maintenance of
basic safe and healthful working
conditions at the homeworkers’
place of work. [Sec. 11, Rule XIV,
Book III, IRR]
Regional Office shall provide technical
assistance to registered homeworkers’
organizations [Sec. 14, Rule XIV, Book
III, IRR]
Prohibited Homework:
a. explosives, fireworks and articles
of like character;
b. drugs and poisons and
c. other articles, the processing of
which requires exposure to toxic
substances. [Sec. 13, Rule XIV,
Book III, IRR]
Deductions: No deduction from the
homeworker’s earnings for the value of
materials lost, destroyed or damaged
unless:
a. Homeworker is clearly shown to be
responsible for loss or damage
b. Reasonable opportunity to be heard
c. Amount of deduction is fair and
reasonable, and does not exceed
actual loss or damage
d. Deduction does not exceed 20% of
homeworker’s weekly earnings
[Sec. 8, Rule XIV, Book III, IRR]
5. Night workers
Night worker: Any employed person
whose work requires performance of a
substantial number of hours of night work
which exceed a specified limit. This limit
shall be fixed by the Sec of Labor after
consulting the workers’
representatives/labor organizations and
employers. [Art. 154, as amended by RA
10151]
Any employed person whose work covers
the period from 10:00 pm to 6:00 am the
following morning, provided that the
worker performs no less than 7
consecutive hours of work. [Sec. 2, Rule
XV, Book III, Rule XV, Sec. 2, IRR,
through D.O. No. 119-12]
Health Assessment - At the worker’s
request, they 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
c. If they experience health problems
during such an assignment
With the exception of a finding of
unfitness for night work, the findings of
such assessments shall be confidential and
shall NOT be used to their detriment,
subject, however, to applicable company
policies. [Art. 155, as amended by RA
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10151; Sec. 3, Rule XV, Book III, IRR,
through D.O. No. 119-12]
Mandatory Facilities - Mandatory facilities
shall be made available for workers
performing night work, which include the
following
a. Suitable first-aid and emergency
facilities;
b. Lactation station in required
companies pursuant to RA 10028;
c. Separate toilet facilities for men &
women
d. Facility for eating w/ potable
drinking water; AND
e. Facilities for transportation and/or
properly ventilated temporary
sleeping or resting quarters,
separate for male and female
workers, shall be provided except
where any of the ff. circumstances
is present:
1. There is an existing
company guideline, practice
or policy, CBA, or any
similar agreement
providing for an equivalent
or superior benefit; or
2. Start or end of the night
work does NOT fall within
12 mn - 5 am; or
3. Workplace is located in an
area that is accessible 24
hours to public
transportation; or
4. Number of employees does
NOT exceed a specified
number as may be provided
for by the SOLE in
subsequent issuances [Art.
156, as amended by RA
10151; Sec. 4, Rule XV,
Book III, IRR, through
D.O. No. 119-12]
Transfer - If night worker is unfit for night
work due to health reasons as certified by
competent physician, s/he shall be:
a. Transferred in good faith to a job
for which they are fit to work
whenever practicable, which must
be similar and equivalent position;
b. If transfer is not practicable, or
workers are unable to render night
work for a continuous period of not
less than 6 months upon
certification of a competent public
health authority, they shall be
granted the same benefits as other
workers who are unable to work
due to illness.
c. If workers are certified as
temporarily unfit to render night
work for a period of less than 6
months, they shall be given the
same protection against dismissal
or notice of dismissal as other
workers who are prevented from
working for health reasons. [Art.
157, as amended by RA 10151;
Sec. 5, Rule XV, Book III, IRR,
through D.O. No. 119-12]
Women Night Workers - Employers shall
ensure that measures shall be taken to
ensure that an alternative to night work for
pregnant and nursing employees who
would otherwise be called upon to perform
such work. Such measures may include
a. Transfer to day work - Transfer to
day work – As far as practicable,
pregnant or nursing employees
shall be assigned to day work,
before and after childbirth, for a
period of at least sixteen (16)
weeks, which shall be divided
between the time before and after
childbirth;
Medical certificate issued by competent
physician (OB/Gyne/Pedia) is necessary
for the grant of:
1. additional periods of assignment to
day work during pregnancy or after
childbirth, provided that such shall
not be more than 4 weeks or for a
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Notes for BAR 2022: Labor Low and Social Legislation
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longer period as may be agreed
upon by employer and worker;
2. extension of maternity leave
3. clearance to render night work
b. Provision of social security
benefits - in accordance with
provisions of Act No 8282 (Social
Security Act of 1997) and other
existing company policy or
collective bargaining agreement.
c. Extension of maternity leave –
where transfer to day work is not
possible, but requires
recommendation by competent
physician; without pay or using
earned leave credits, if any. [Art.
158, , as amended by RA 10151;
Sec. 6, Rule XV, Book III, IRR,
through D.O. No. 119-12]
Protection against dismissal and loss of
benefits attached to employment status,
seniority, and access to promotion - Where
no alternative work can be provided to a
woman employee who is not in a position
to render night work, she shall be allowed
to go on leave or on extended maternity
leave, using her earned leave credits
A woman employee shall NOT be
dismissed for reasons of pregnancy,
childbirth and childcare responsibilities as
defined under this Rule. She shall NOT
lose the benefits regarding her
employment status, seniority, and access to
promotion which may attach to her regular
night work position. [Sec. 8, Rule XV,
Book III, IRR, through D.O. No. 119-12
6. Persons with Disabilities
Definitions:
a. Disabled persons 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. [Sec. 4(a), RA
7277]
b. Impairment is any loss, diminution
or aberration of psychological,
physiological, or anatomical
structure or function. [Sec. 4(b),
RA 7277]
c. Disability shall mean (1) a
physical or mental impairment
that substantially limits one or
more psychological, physiological
or anatomical function of an
individual or activities of such
individual; (2) a record of such an
impairment; (3) being regarded as
having such an impairment. [Sec.
4(c), RA 7277]
d. Handicap refers to a disadvantage
for a given individual, resulting
from an impairment or a disability
that limits or prevents the function
or activity that is considered
normal given the age and sex of the
individual. [Sec. 4(d), RA 7277
Coverage: RA 7277 covers all disabled
persons and, to the extent herein provided,
departments, offices and agencies of the
National Government or nongovernment
organizations involved in the attainment of
the objectives of this Act. [Sec. 3, RA
7227]
a. Equal Opporunity
Rights of Disabled Workers
1. Equal Opportunity for Employment
- No disabled person shall be
denied access to opportunities for
suitable employment. A qualified
disabled EE 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. [Sec. 5 (par. 1), RA
7277]
Once they are regular employees, they are
entitled to the benefits granted by law
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which the parties cannot stipulate away.
[Bernardo v. NLRC, 310 SCRA 186
(1999)]
2. Reserved Contractual Positions
5% of all casual, emergency and
contractual positions in the DSWD; DOH,
DepEd; and other government agencies,
offices or corporations engaged in social
development shall be reserved for disabled
persons. [par. 2, Sec. 5, RA 7277]
3. Sheltered Employment
Definition - The provision of productive
work for disabled persons through
workshop providing special facilities,
income producing projects or homework
schemes. [Sec 4(i), RA 7277
Purpose - To give them the opportunity to
earn a living thus enabling them to acquire
a working capacity required in open
industry. [Sec 4(i), RA 7277]
If suitable employment for disabled
persons cannot be found through open
employment, the State shall endeavor to
provide it by means of sheltered
employment.
In the placement of disabled persons in
sheltered employment, it shall accord due
regard to the individual qualities,
vocational goals and inclinations to ensure
a good working atmosphere and efficient
production. [Sec 6, RA 7277]
4. Full Minimum Wage
All qualified handicapped workers shall
receive the full amount of the minimum
wage rate prescribed herein. [Sec 7, Wage
Order No. NCR-19]
A Qualified Individual with a Disability
shall mean 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:
1. The employer’s judgement as to
what functions of a job are
essential
2. The written description prepared by
the employer before advertising or
interviewing applicants for the job,
which shall be considered evidence
of the essential functions of the job.
[Sec. 2(l), RA 7277 (Magna Cart
for Persons with Disability, as
amended by RA 9442)]
A qualified disabled EE should be given
the same terms and conditions of
employment as a qualified able-bodied
person. Since the Magna Carta accords
them the rights of qualified able-bodied
persons, they are thus covered by Art. 280
of the Labor Code. In the present case, the
handicap of petitioners (deafmutes) is
NOT a hindrance to their work. The
eloquent proof of this statement is the
repeated renewal of their employment
contracts. [Bernardo v. NLRC, G.R. No.
122917 (1999)]
Apprenticeship Opportunities - Disabled
persons shall be eligible as apprentices or
learners: Provided, that:
1. Their handicap is NOT as much as
to effectively impede the
performance of job operations in
the particular occupation for which
they are hired;
2. After the lapse of the period of
apprenticeship, if found
satisfactory in the job performance,
they shall be eligible for
employment. [Art. 81; Sec. 7, RA
7277; Bernardo v. NLRC, supra.]
a. Discrimination
No entity, whether public or private, shall
discriminate against a qualified disabled
person by reason of disability in regard to:
1. Job application procedures
2. The hiring, promotion or
discharge of employees
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3. Employee compensation
4. Job training
5. Other terms, conditions and
privileges of employment
Acts of Discrimination:
1. Limiting, segregating or
classifying a disabled job applicant
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 disabled person
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 (BFOQ);
3. Utilizing standards, criteria, or
methods of administration that:
a. have the effect of
discrimination on the basis of
disability; or
b. perpetuate the discrimination of
others who are subject to
common administrative control
4. Providing less compensation, such
as salary, wage or other forms of
remuneration and fringe benefits,
to a qualified disabled employee,
by reason of his disability, than the
amount to which a non-disabled
person performing the same work
is entitled;
5. Favoring a non-disabled employee
over a qualified disabled employee
with respect to promotion, training
opportunities, study and
scholarship grants, solely on
account of the latter's disability;
6. Re-assigning or transferring a
disabled employee to a job or
position he cannot perform by
reason of his disability;
7. Dismissing or terminating the
services of a disabled employee 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 disabled
persons;
8. Failing to select or administer in
the most effective manner
employment tests which accurately
reflect the skills, aptitude or other
factor of the disabled applicant or
employee that such tests purports
to measure, rather than the
impaired sensory, manual or
speaking skills of such applicant or
employee, if any; and
9. Excluding disabled persons from
membership in labor unions or
similar organizations. [Sec. 32, RA
7277]
Occasions when a Disabled Applicant may
be subjected to Medical Examination -
Upon an offer of employment, a disabled
applicant may be subjected to medical
examinations, on the following occasions:
1. All entering employees are
subjected to such an examination
regardless of disability;
2. Information obtained during the
medical condition or history of the
applicant is collected and
maintained on separate forms
and in separate medical files and
is treated as a confidential
medical record; Provided,
however, That:
a. Supervisors and managers
may be informed regarding
necessary restrictions on the
work or duties of the
employees and necessary
accommodations;
b. First aid and safety
personnel may be informed,
when appropriate, if the
disability may require
emergency treatment;
c. Government officials
investigating compliance
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with this Act shall be documentation and to the

provided relevant
information on request; and
d. The results of such
examination are used only
in accordance with this Act
[Sec. 33, RA 7277]
b. Incentives for Employers
For employment of disabled persons -
additional deduction, from their gross
income, equivalent to 25% of the total
amount paid as salaries and wages to
disabled persons:
a. Private entities that employ
disabled persons either as regular
EEs, apprentice or learner;
b. Provided such entities present
proof as certified by the DOLE and
the DOH [Sec. 8[b], RA 7277]
For construction of disabled-friendly
facilities - additional deduction from their
net taxable income, equivalent to 50% of
the direct costs of the improvements or
modifications:
a. Private entities that improve or
modify their physical facilities in
order to provide reasonable
accommodation for disabled
persons;
b. Does NOT apply to improvements
or modifications or facilities
required under BP 344. [Sec. 8 (c),
RA 7277]
For Establishments giving discounts - may
claim such discounts as tax deductions
based on the net cost of the goods sold or
services rendered:
a. The cost of the discount shall be
allowed as deduction from gross
income for the same taxable year
that the discount is granted
b. The total amount of the claimed tax
deduction net of VAT if applicable,
shall be included in their gross
sales receipts for tax purposes and
shall be subject to proper
provisions of the National Internal
Revenue Code, as amended. [Sec.
32, RA 7277, as amended by RA
9442]
E. Sexual Harassment in the Work
Environment
1. Anti-Sexual Harassment Act (RA 7877)
Work, education or training-related sexual
harassment is defined in Sec. 3, RA 7877
Acts Covered: Demanding, requesting or
otherwise requiring any sexual favor from
the other, regardless of whether these are
accepted by the object of said Act
Committed by: An employer, employee,
manager, supervisor, agent of the
employer, teacher, instructor, professor,
coach, trainor, or any other person who,
having authority, influence or moral
ascendancy over another
Where: In a work or training or education
environment
Employment or Work-Related Sexual
Harassment
1. The sexual favour is made as a
condition:
a. in the hiring or in the employment,
re-employment or continued
employment of said individual; or
b. in granting said individual
favorable compensation, terms,
conditions, promotions, or
privileges; or
c. in the refusal to grant the sexual
favor results in limiting,
segregating or classifying the EE
which in any way would
discriminate, deprive or diminish
employment opportunities or
otherwise adversely affect said
employee;
2. The above acts would either:
a. impair the employee’s
rights or privileges under
existing labor laws; or

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b. result in an intimidating,
hostile, or offensive
environment for the
employee. [Sec. 3, RA
7877]
Superior-subordinate relationship
2. Safe Spaces Act (Gender-based Sexual
Harassment (GBSH) in the Workplace
The crime of GSBH in the workplace
includes the following:
1. An act or series of acts:
a. involving any unwelcome
sexual advances, requests or
demand for sexual favors or
any act of sexual nature;
b. 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. that has or could have a
detrimental effect on the
conditions of an individual's
employment or education, job
performance or opportunities.
2. A conduct of sexual nature and
other conduct based on sex:
a. affecting the dignity of a
person, which is unwelcome,
unreasonable, and offensive to
the recipient;
b. 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
3. 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.
Workplaces include all sites, locations,
spaces, where work is being undertaken by
an employee within or outside the
premises of the usual place of business of
the employer. [Sec. 18, Rule VI, IRR of
RA11313]
Duties and Liabilities of Employers
Anti-Sexual Harassment Act
Persons who may be liable:
1. Any employer, employee, manager,
supervisor, agent of the employer,
teacher, instructor, professor,
coach, trainer or any other person,
regardless of whether the demand,
request for requirement for
submission is accepted by the
object of said act having authority,
influence or moral ascendancy over
another in a work or training or
education environment, who
demands, requests or otherwise
requires any sexual favor from
another;
2. Any person who directs or induces
another to commit any act of sexual
harassment as herein defined; OR
3. Any person who cooperates in the
commission by another without
which it would NOT have been
committed, shall also be held liable
under this Act. [Sec. 3, RA 7877]
It is not necessary that the demand, request
or requirement of a sexual favor be
articulated in a categorical oral or written
statement. It may be discerned, with equal
certitude, from the acts of the offender.
[Domingo v. Rayala, G.R. No. 155831
(2008)]
Role of the Employer or Head of Office
The Employer or Head of Office shall
have the duty:
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1. to prevent the commission of such
acts and
2. to lay down the procedure for the
resolution, settlement or
prosecution of committed acts.
[Sec. 4, RA 7877
He shall be solidarily liable for damages:
1. if he is informed of such acts by the
offended party, and
2. no immediate action is taken
thereon. [Sec. 5, RA 7877]
Independent Action for Damages - The
victim of work, education or
trainingrelated sexual harassment can
institute a separate and independent action
for damages and other affirmative relief.
[Sec. 6, RA 7877]
Sanctions - Criminal: imprisonment of 1
month to mos. or fine of P10k to P20k or
both
Prescription of such action is in 3 years
Termination
As a managerial employee, petitioner is
bound by more exacting work ethics.
When such moral perversity is perpetuated
against his subordinate, he provides a
justifiable ground for his dismissal for lack
of trust and confidence. [Sec. 7, RA 7877;
Libres v. NLRC, G.R. No. 123737 (1999)]
The gravamen of the offense in sexual
harassment is not the violation of the
employee's sexuality but the abuse of
power by the employer. Any employee,
male or female, may rightfully cry "foul"
provided the claim is well substantiated.
Strictly speaking, there is no time period
within which he or she is expected to
complain through the proper channels.
[Phil. Aelous Automotive United Corp. v.
NLRC, G.R. No. 124617 (2000)]
Safe Spaces Act - Anyone who commits
any of the acts of GBSH may be held
liable. GBSH may even be committed
between peers, and by a subordinate to a
superior officer. [Sec. 18, IRR of RA
11313]
Duties of Employers - Employers, or other
persons of authority, influence or moral
ascendancy have the following duties:
a. Disseminate or post a copy of the
Safe Spaces Act to all persons in
the workplace;
b. Provide measures to prevent GBSH
in the workplace;
c. Create an independent internal
mechanism or a committee on
decorum and investigation to
investigate and address complaints
of GBSH;
d. Provide and disseminate, in
consultation with all persons in the
workplace, a code of conduct or
workplace policy. [Sec. 17, RA
11313]
In addition to liabilities for committing
acts of GSBH, employers may also be held
responsible for:
a. Non-implementation of their duties
under Sec. 17 of this Act (see
above), as provided in the penal
provisions; or
b. Not taking action on reported acts
of GBSH committed in the
workplace.
Any person who violates (a) shall, upon
conviction, be penalized with a fine of not
less than P5,000, nor more than P10,000.
Any person who violates (b) shall, upon
conviction, be penalized with a fine of not
less than P10,000 nor more than P15,000.
[Sec. 19, RA 11310]
Independent action for damages
Nothing shall preclude the victim of work-
related GBSH from instituting a separate
and independent action for damages and
other affirmative relief.
IV. SOCIAL WELFARE
LEGISLATION
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A. SSS Law RA 8282
1. Coverage and Exclusions
a. Compulsory
1) Employees not over 60 years old
and their employers, including
domestic helpers [Sec. 9(1), RA
11199]
Provided, That any benefit already earned
by the employees under private benefit
plans existing at the time of the approval
of this Act shall not be discontinued,
reduced or otherwise impaired.
Private plans which are existing and in
force at the time of compulsory coverage
shall be integrated with the plan of the
SSS, in such a way where the employer’s
contribution to his private plan is more
than required of him in this Act:
a. He shall pay to the SSS only the
contribution required of him; and
b. He shall continue his contribution
to such private plan less his
contribution to the SSS
c. So that the employer’s total
contribution to his benefit plan and
to the SSS shall be the same as his
contribution to his private benefit
plan before the compulsory
coverage. [Sec. 9(1), RA 11199]
Domestic workers or “kasambahays” as
defined under RA10361 or the Batas
Kasambahay, who are receiving a monthly
income lower than minimum salary credit
prescribed under this Act, shall pay
contributions based on their actual
monthly salary. [Sec. 4(a)(9), RA 11199]
2) Self-employed persons as may be
determined by the Commission,
including but not limited to:
a. All self-employed professionals
b. Partners and single proprietors of
businesses
c. Actors and actresses, directors,
scriptwriters and news
correspondents who do not fall
within the definition of the term
“employee” under Sec. 8 (d) of this
Act;
Employee [Sec 8(d), RA 11199] - Any
person who performs services for an
employer in which either or both mental or
physical efforts are used and who receives
compensation for such services, where
there is an employer-employee
relationship: Provided, That a self-
employed person shall be an employer and
employee at the same time.
d. Professional atheism coaches,
trainers and jockeys
e. Individual farmers and fishermen
[Sec. 9-A, RA11199]
3) All sea-based and land-based
Overseas Filipino Workers (OFWs)
not over 60 years of age [Sec. 9-B,
RA 11199]
b. Voluntary
1. Spouses who devote full time to
managing household and family
affairs, unless they are also
engaged in another vocation or
employment (in which case,
coverage will be mandatory). [Sec.
9(b), RA 11199]
2. Employees previously under
compulsory coverage) already
separated from employment or
those self-employed (under
compulsory coverage) with no
realized income for a given month,
who chose to continue with
contributions to maintain the right
to full benefit. [Sec. 11, RA 11199]
3. Self-employed members realizing
no income in any given month,
who choose to continue paying
contributions under the same rules
and regulations applicable to a
separated employee member. [Sec.
11-A, RA 11199]
Foreign governments and international
organizations or their wholly owned
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instrumentality employing workers in
the Philippines or employing Filipinos
outside of the Philippines, may enter
into an agreement with the Philippine
Government for the inclusion of such
employees in the SSS, except those
already covered by their civil service
retirement system. [Sec. 8(j)(3), RA
11199]
Exclusions:
1. Services where there is no
employer-employee relationship in
accordance with existing labor
laws, rules, regulations and
jurisprudence;
2. Service performed in the employ of
the Philippine Government or
instrumentality or agency thereof;
3. Service performed in the employ of
a foreign government or
international organization, or their
wholly-owned instrumentalities;
and
Foreign governments and international
organizations may enter into an agreement
with the PH government to include their
employees in the Philippines in the SSS.
4. Services performed by temporary
and other employees which may be
excluded by regulation of the
Social Security Commission.
Employees of bona fide
independent contractors shall not
be deemed employees of the
employer engaging the services of
said contractors. [Sec. 8(j), RA
11199]
2. Dependents and Beneficiaries
Primary:
1. Dependent spouse – until
remarriage
2. Dependent children [legitimate,
legitimated, legally adopted and
illegitimate] - Illegitimate children
are entitled only to 50% of the
share of legitimate children. Where
there are no legitimate children, the
illegitimate children get 100%.
Secondary
1. Receives only when the primary
beneficiaries are absent
2. Dependent parents
Others:
1. Receives only when primary and
secondary beneficiaries are absent
2. Any other person designated by
member as his/her secondary
beneficiary [Sec. 8 (k), RA 11199]
3. Benefits
a. Monthly Pension [Sec. 12, RA
11199]
The monthly pension shall be the highest
of the following amounts:
1. P300 + [20% x (average monthly
credit)] + [2% x (average monthly
credit) x (# of cash credit years of
service in excess of 10 years)]
2. 40% x [average monthly credit]
3. P1000, provided that the monthly
pension shall in no case be paid for
an aggregate amount of less than
60 months [Sec. 12 (a)]
4. Notwithstanding the above
mentioned, minimum pension is:
a. P1,200 - members with at least
10 years credit service
b. P 2,400 - members with at least
20 years
b. Dependents' Pension [Sec. 12- A, RA
11199]
1. Paid on account of members’
a. Death
b. Permanent total disability
c. Retirement
2. Paid to each child conceived on or
prior to contingency, but not
exceeding 5, beginning with the
youngest and preferring the
legitimate
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3. Amount is either P250 or 10% of
the monthly pension as computed
above, whichever is higher
c. Retirement Benefits
Requisites for Eligibility
1. 120 monthly contributions
2. Age
a. Has reached the age of 60
years and is already
separated from employment
or has ceased to be self-
employed; or
b. Has reached the age of 65
years
Period of entitlement - From retirement
until death
The monthly pension shall be suspended
upon the reemployment or resumption of
self-employment of a retired member who
is less than 65 years old.
In case of Death of Member:
1. His/her primary beneficiaries as of
the date of his/her retirement shall
be entitled to receive the monthly
pension;
2. If he/she has no primary
beneficiaries AND he/she dies
within 60 months from the start of
his/her monthly pension, his/her
secondary beneficiaries shall be
entitled to a lump sum benefit
equivalent to the total monthly
pensions corresponding to the
balance of the 5 year guaranteed
period, excluding the dependents’
pension.
Lump Sum Alternative - The member may
opt to receive the first 8 monthly pensions
in lump sum but such is discounted at a
preferential rate of interest to be
determined by the SSS.
Lump Sum Eligibility (Equal to Total
Contributions) - A covered member who is
60 years old at retirement and who does
not qualify for pension benefits (see
requisites for eligibility) shall be entitled to
a lump sum benefit equal to the total
contributions paid by him and on his
behalf: Provided, That he is separated from
employment and is not continuing
payment of contributions to the SSS on his
own.
Monthly Pension - The monthly pension of
a member who retires after reaching age
60 shall be the highest of either:
1. The monthly pension computed at
the earliest time he could have
retired had he been separated from
employment or ceased to be self-
employed plus all adjustments
thereto; or
2. The monthly pension computed at
the time when he actually retires.
d. Permanent Disability Benefits
Eligibility:
1. 36 monthly contributions prior to
the semester of disability
Note: This is the same as death benefit, but
permanent disability pension is paid
directly to the member.
2. In case the permanently disabled
member dies, he/she is given the
same treatment as a retiree dying.
3. For permanent partial disability,
the pension is not lifetime. It shall
be paid in lump sum if the period is
less than 12 months.
Ex. loss of thumb entitles member to 10
months of pension; loss of arm entitles
member to 50 months.
4. For multiple partial disabilities,
they shall be additive when related
or deteriorating - the percentage
shall be equal to the number of
months the partial disability is
entitled to, divided by 75 months.
Ex. loss of sight in 1 eye - 25/75; loss of
arm = 50/75
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If both occur due to same cause then 25/75
+ 50/75 = 100% (as if it were a permanent
total disability)
Lump Sum Alternative - A member is
entitled to a lump sum benefit equivalent
to the monthly pension x number of
monthly contributions paid to the SSS or
12 times the monthly pension, whichever
is higher. To be entitled, he must not have
paid at least 36 monthly contributions.
Subject to compulsory coverage again
A member who:
1. Received a lump sum benefit, and
2. Is reemployed or resumed self-
employment not earlier than 1 year
from date of disability ,
shall be subject to compulsory coverage
and considered a new member.
Death of Member:
1. His/her primary beneficiaries as of
the date of his/her retirement shall
be entitled to receive the monthly
pension;
2. If he/she has no primary
beneficiaries AND he/she dies
within 60 months from the start of
his/her monthly pension, his/her
secondary beneficiaries shall be
entitled to a lump sum benefit
equivalent to the total monthly
pensions corresponding to the
balance of the 6 year guaranteed
period, excluding the dependents’
pension.
e. Death Benefits
Eligibility - 36 monthly contributions prior
to the semester of death
Benefit:
1. Monthly pension to primary
beneficiaries, or
2. If no primary beneficiaries, lump
sum equivalent to 36 times the
monthly pension to secondary
beneficiaries
If ineligible/has not paid 36 monthly
contributions
A lump sum benefit which shall be that
which is higher between the ff. will be
given to the beneficiaries:
a. (monthly pension) x 12, or
b. (monthly pension) x (# of monthly
contributions)
f. Funeral Benefits - P12,000 in cash or in
kind, upon the death of member.
g. Loan - Social Security Commission
Reso. No. 669, SSS Circular No. 21-P and
52 pertain to treatment of salary loans,
which sometimes provide for more flexible
payment terms or condonation for
delinquent payers.
h. Sickness Benefits
Eligibility:
1. Inability to work due to sickness or
injury,
2. Confined for more than 3 days
either in a hospital or elsewhere
with SSS approval
3. At least 3 months of contribution
paid in the 12 month period
immediately before the semester of
sickness or injury
4. All company sick leaves with pay
for the current year have been used
up;
5. Maximum of 120 days per 1
calendar year (i.e. max permissible
for the same sickness and
confinement is 240 days for 2
consecutive years)
6. Employer has been notified, or, if a
separated, voluntary or self-
employed member, the SSS has
been directly notified within 5 days
from confinement.
Notice to employers or SSS is not needed
when confinement is in a hospital.
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Notice to employer is not required when
employee became sick or injured while
working or within the premises of the
employer.
Benefit: Daily cash allowance paid for the
number of days a member is unable to
work due to sickness of injury equivalent
to 90% x (average daily salary credit)
Reimbursement of SSS to Employer
Upon satisfactory proof of payment and
legality of sickness benefits,
reimbursement shall be made by the SSS if
the following conditions are met:
1. Employer notified SSS of the
confinement within 5 calendar days
after receipt of the notification
from the employee-member - 100%
reimbursement
2. If the notification to SSS is made
beyond 5 calendar days after
receipt of notification from the
employee-member - reimbursement
only for each day of confinement
starting from the 10th calendar day
immediately preceding the date of
notification to SSS
SSS shall reimburse the employer or pay
the unemployed member only for
confinement within the 1 year period
immediately preceding the date the claim
for benefit/reimbursement is received by
SSS.
Exception: Confinement in a hospital - the
claim for benefit or reimbursement must
be filed within 1 year from the last day of
confinement
i. Maternity Leave Benefits
Eligibility:
1. Female member
2. Paid at least 3 monthly
contributions in the 12-month
period immediately preceding the
semester of her childbirth or
miscarriage
3. Member notified her employer of
her pregnancy and probable date of
childbirth, which notice shall be
transmitted to the SSS
Full payment shall be advanced by the
employer within 30 days from filing the
maternity leave application.
Coverage: Covers only the first four
deliveries or miscarriages.
Employer’s Reimbursement - Full
payment shall be advanced by the
employer within 30 days from filing the
maternity leave application.
SSS shall reimburse the employer of 100%
of the amount of maternity benefits
advanced upon receipt of satisfactory
proof of payment and legality thereof
Note: All benefits herein mentioned are
tax-exempt
j. Unemployment Insurance or Involuntary
Separation Benefits
Eligibility:
1. Not over 60 years of age
2. At least 36 months contributions,
12 months of which should be in
the 18th month period immediately
preceding the involuntary
unemployment or separation
Benefit: Monthly cash payments
equivalent to 50% of the average monthly
salary credit for a maximum of 2 months
Frequency of Claiming Benefit - An
employee who is involuntarily
unemployed can only claim unemployment
benefits once every 3 years.
In case of concurrence of 2 or more
compensable contingencies, only the
highest benefit shall be paid, subject to the
rules and regulations that the Commission
may prescribe.
B. GSIS Law RA 8291
1. Coverage and Exclusions
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Coverage - All public sector employees
below the compulsory retirement age of
65, irrespective of employment status.
[Sec. 3]
Exclusions:
1. AFP and PNP
2. Members of the Judiciary and
Constitutional Commissions who
are covered only by life insurance
as they have separate retirement
schemes
3. Contractual employees with no
employeremployee relationship
[Sec. 3]
2. Dependents and Beneficiaries
Primary:
1. Dependent Spouse – until
remarriage
2. Dependent children (legitimate,
legitimated, legally adopted and
illegitimate)
Note: Unlike the SSS law, the GSIS law
does not distinguish between the share of
legitimate and illegitimate children.
Secondary – In the absence of primary
beneficiaries
1. Dependent parents
2. Legitimate descendants (excluding
dependent children)
3. Benefits
Computation of Service - From date of
original appointment/election including
periods of service at different times under
1 or more employers, those performed
overseas under the authority of the
Republic of the Philippines, and those that
may be prescribed by the GSIS in
coordination with the Civil Service
Commission.
In case of reinstatement in the service of
an employer and subsequent retirement or
separation which is compensable under
this Act, all service credited for retirement,
resignation or separation for which
corresponding benefits have been awarded
under this Act or other laws shall be
excluded in the computation.
GSIS may prescribe rules for the inclusion
of part time and other services with
compensation.
a. Monthly Pension
The amount shall be [37.5% x (revalued
average monthly compensation)] + [2.5 x
(revalued average monthly compensation)
x (years in service in excess of 15 years)]
Provided, the monthly pension shall not
exceed 90% of the average monthly
compensation.
It shall not be less than P24,000 for those
with 20 years of service and not less than
P1,300 for everyone else.
b. Retirement Benefits
Eligibility:
1. At least 15 years of service
2. At least 60 years of age
3. Not receiving pension benefit from
permanent total disability
Compulsory Requirement – Retirement is
compulsory for employees:
1. 60 years of age
2. Who have rendered at least 15
years of service
If employee has less than 15 years of
service, he may be allowed to continue in
accordance with civil service laws.
Benefit – The member may choose
between:
1. 60 x (basic monthly pension) lump
sum payment at the time of
retirement + basic monthly pension
payable monthly for life after
expiry of the 5-year guaranteed
period which is already covered by
the lump sum, or
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2. Cash payment equal to 18 x (basic
monthly pension) + monthly
pension for life immediately but
with no 5-year guarantee
c. Permanent Disability Benefits
Total and Permanent:
1. Complete loss of sight of both eyes
2. Loss of 2 limbs at or above the
ankle or wrist
3. Permanent complete paralysis of 2
limbs
4. Brain injury resulting in incurable
imbecility or insanity
5. Other cases as determined by GSIS
Partial and Permanent:
1. Complete and permanent loss of
the use of
a. Any finger
b. Any toe
c. One arm
d. One hand
e. One foot
f. One leg
g. One/both ears
h. Hearing of one/both ears
i. Sight of one eye
2. Other cases as determined by GSIS
Eligibility for Permanent Total Disability
1. Disability not due to employee’s
own grave misconduct, notorious
negligence, habitual intoxication,
or willful intention to kill himself
for another [Sec. 15]
2. Employee is:
a. In service at time of
disability
b. Even if separated, has paid
at least 36 monthly
contributions within the 5-
year period immediately
prior to disability or has
paid a total of at least 180
monthly contributions prior
to disability
c. Not enjoying old-age
retirement benefit [Sec. 16].
Benefit for Permanent Total Disability
1. Monthly income benefit for life
equal to basic monthly pension,
from date of disability
2. If member is in service at time of
disability and has paid at least 180
monthly contributions, he receives
an additional cash payment of 18 x
basic monthly pension
Ineligible Members - If member has
rendered at least 3 years of service, he
shall receive cash payment equal to 100%
of average monthly compensation for each
year of service (essentially total amount of
contributions made) or P12,000 whichever
is higher [Sec. 16].
Partial Disability - Paid according to GSIS
prescribed schedule. Member must satisfy
conditions regarding the disability not
being due to his own fault and regarding
employment status and services rendered.
d. Death Benefits
When member dies, the primary
beneficiaries are entitled to only ONE of
the following:
1. Survivorship Pension
a. He was in service when he
died, or
b. Even if separated from
service, he has at least 3
years of service and has
paid 36 monthly
contributions within the 5
years preceding death, or
c. Even if separated from the
service, he has paid 180
monthly contributions prior
to death.
2. Survivorship pension + cash
payment of 100% of average
monthly compensation for every
year of service [pension + total
contributions made
a. He was in service when he
died, and
b. With 3 years of service
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3. Cash payment equivalent to 100% h. Separation Benefits

average monthly compensation for
each year of service he paid Eligibility and Benefit Received
contributions or P12,000 1. 60 years of age, or separation from
whichever is higher service with at least 3 years but not
a. With 3 years of service over 15 years served – cash
b. He has failed to qualify in payment of 100% of ave. monthly
the prior 2 schemes. compensation for each year of
e. Funeral Benefits service (total amount of all
contributions paid) or P12,000
Eligibility: whichever is higher
2. Below 60 years of age, but at least
1. Active member 15 years of service rendered – cash
2. Member separated from the service payment of 18 x (monthly pension)
but still entitled to benefit at time of resignation/separation +
3. Pensioner old age pension benefit (equal to
4. Retiree who at time of retirement basic monthly pension)
was of pensionable age but opted to
retire under RA 1616 i. Unemployment Benefits
f. Loan Eligibility:
The following are loans provided: 1. Employee separated from service
due to abolition of his office or
1. Consolidated Loan position and
2. Policy Loan 2. Employee has been paying
3. Emergency Loan integrated contributions for at least
4. Pension Loan 1 year prior to separation
g. Temporary Disability Benefits Benefit: Monthly cash payments of 50% x
Eligibility: average monthly compensation for a
duration which is proportional to years
1. Employee must be: rendered, ranging from 2 to 6 months
a. In service at time of disability, or
b. If separated, he has rendered at
least 3 years of service and paid at
least 6 monthly contributions in the
12 month period immediately prior j. Survivorship Benefits
to disability
c. All sick leave credits including Benefit:
those in the CBA for the current 1. Basic survivorship pension - 50% x
year have been used basic monthly pension (see Death
d. Maximum of 120 days per 1 Benefits) and
calendar year 2. Dependent children’s pension not
Ex. maximum for the same sickness and exceeding 50% of the basic
confinement is 240 days for 2 consecutive monthly pension
years k. Life Insurance Benefits - Members of
Benefit: 75% x current daily compensation the Judiciary and Constitutional
for every day or fraction thereof of Commissions are only entitled to life
disability OR P70.00, whichever is higher. insurance.

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b. Child - unmarried, not

gainfully employed, and
Summary: below 21 or
SSS LAW c. Child over 21 if he or she
became permanently
1. Enabling Law - RA 1161 as incapacitated and incapable
amended by RA 8282 or the Social of self-support, physically
Security Act of 1997, and or mentally; child may be
RA11199 or the Social Security legitimate, legitimated,
Act of 2018 legally adopted or
2. Employer – any person, natural or illegitimate
juridical, domestic or foreign, who d. Parent who is receiving
carries on in the Philippines any legal support
trade business, industry, 6. Beneficiaries
undertaking, and uses the services Primary
of another person who is under his a. Dependent spouse - until
orders as regards the employment, remarriage
except those considered as b. Dependent children
employer under the GSIS. A self- [legitimate, legitimated,
employed person shall be both legally adopted and
employer and employee at the illegitimate] - Illegitimate
same time. children are entitled only to
3. Employee – any person who 50% of the share of
performs services for an employer legitimate children. Where
in which either or both mental and there are no legitimate
physical efforts are used and who children, the illegitimate
receives compensation for such children get 100%
services, where there is an
employer— employee relationship; Secondary
also, a self-employed person who is a. Receives only when the
both employee and employer at the primary beneficiaries are
same time. absent
4. Self-employed - any person whose b. Dependent Parents
income is not derived from
employment, including but not Others:
limited to:
a. Self-employed 1. Receives only when primary
professionals and secondary beneficiaries are
b. Partners and single absent
proprietors of businesses 2. Any other person designated by
c. Actors, directors, member as his/her secondary
scriptwriters, news beneficiary.
correspondents not 7. Compensation – all actual remuneration
considered as employees for employment, including mandated
under the above definition costof-living allowance, as well as the cash
d. Individual farmers and value of any remuneration paid in any
fishers medium other than cash except that portion
5. Dependents already above the max salary credit as
a. Legal spouses entitled by provided in this Act.
law to receive support

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8. Voluntary 1. Enabling Law - PD 1146 as

amended by RA 8291
a. Spouses who devote full time to 2. Employer – National government,
managing household and family its political subdivisions, branches,
affairs agencies or instrumentalities,
b. Employees already separated form including government- owned or
employment or those self- controlled corporations and
employed with no realized income financial institutions with original
for a given month, who chose to charters [GOCCs]; constitutional
continue with contributions to commissions; and judiciary
maintain right to full benefit 3. Employee – any person receiving
Note: Foreign governments, international compensation while in service of
organizations or their wholly owned an employer whether by election or
instrumentality employing workers in the appointment, irrespective of status
Philippines may enter into an agreement of appointment; barangay officials;
with the Philippine government to include and sanggunian officials
their employees in the SSS except those 4. No Counterpart
already covered by their civil service 5. Dependents – same with SSS Law
retirement system. except child here is below 18 yo
6. Beneficiaries – same with SSS Law
9. Summary of Benefits except no distinction in the share of
a. Monthly Pension legitimate and illegitimate children
b. Dependent’s Pension 7. Compensation – basic pay received
c. Retirement Benefits excluding per diems, bonuses,
d. Permanent Disability Benefits overtime, honoraria, allowances
e. Death Benefits and other emoluments not
f. Funeral Benefits integrated into the basic pay under
g. Loan existing laws.
h. Sickness Benefits 8. Public sector employees below the
i. Maternity Leave Benefits compulsory retirement age of 65.
j. Unemployment Benefit Exceptions:
10. Effects of separation from employment a. AFP & PNP
a. Employer’s contribution, and b. Members of Judiciary and
employee’s obligation to pay Constitutional Commissions who
contribution both cease at the end are covered only by life insurance
of the month of separation c. Contractual employees with no
b. Employee shall be credited with all EER with the agency they serve
contributions paid on his behalf
and entitled to all benefits set forth 9. Summary of Benefits
by law. a. Monthly Pension
b. Dependent’s Pension
11. Dispute Settlement - Social Security c. Retirement Benefits
Commission à CA (Rule 43, questions of d. Permanent Disability
law & fact) à SC (Rule 45, questions of Benefits
law only) e. Death Benefits
f. Funeral Benefits
12. Prescriptive Period – 20 years
g. Loan
GSIS LAW h. Separation benefits
i. Unemployment benefits

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j. Survivorship benefits
k. Life insurance benefits
Note: Members of the Judiciary and
Constitutional Commissions are entitled to
life insurance only.
10. Effects of separation from
employment - Continued
membership for the unemployed
member, and entitlement to
whatever benefits he has qualified
to in the event of any compensable
contingency.
11. Dispute settlement - GSIS à CA
(Rule 43) à SC (Rule 45); appeal
does not stay execution
12. Prescriptive Period – 4 years
C. Limited Portability Law RA 7699
[RA 7699: “An Act Instituting Limited
Portability Scheme in the Social Security
Insurance Systems by Totalizing the
Workersʹ Creditable Services or
Contributions in each of the Systems”
Policy Declaration - To promote the
welfare of our workers by recognizing
their efforts in productive endeavors and to
further improve their conditions by
providing benefits for their long years of
contribution to the national economy.
Towards this end, the State shall institute a
scheme for totalization and portability of
social security benefits, with the view of
establishing within a reasonable period a
unitary social security system [Section 1,
RA 7699].
Coverage - All worker‐members of the
Government Service Insurance System
(GSIS) and/or Social Security System
(SSS) who transfer from one sector to
another, and who wish to retain their
membership in both Systems.
Portability - Refers to the transfer of funds
for the account and benefit of a worker
who transfers from one system to the other
[Section 2(b), RA 7699].
Provisions of any general or special law or
rules and regulations to the contrary
notwithstanding, a covered worker 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: That overlapping periods of
membership shall be credited only once for
purposes of totalization [Section 4, RA
7699].
Totalization - Refers to the process of
adding up the period of creditable services
or contributions under each of the
Systems, for purposes of eligibility and
computation of benefits [Section 2(e), RA
7699].
Totalization of service credits is only
resorted to when the retiree does not
qualify for benefits in either or both of the
System. In this case, since the petitioner
may be entitled to some benefits from the
GSIS, he cannot avail of the benefits under
RA 7699 [Gamogamo v. PNOC Shipping
and Transport Corp, G.R. No. 141707
(2002)].
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. [Section 4, RA 7699].
All creditable services or periods of
contributions made continuously or in the
aggregate of a worker under either of the
Sectors shall be added up and considered
for purposes of eligibility and computation
of benefits [Rule V, Sec. 1, RA 7699 Rules
and Regulations].
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Totalization shall apply in the following
instances:
1. If a worker is not qualified for any
benefits from both Systems;
2. If a worker in the public sector is
not qualified for any benefits in the
GSIS; or
3. If a worker in the private sector is
not qualified for any benefits from
the SSS.
For the purpose of computation of
benefits, totalization shall apply in all
cases so that the contributions made by the
worker‐member in both Systems shall
provide maximum benefits which
otherwise will not be available. In no case
shall the contribution be lost or forfeited
[Rule V, Sec. 3, RA 7699 Rules and
Regulations].
If after totalization the worker‐member
still does not qualify for any benefit listed
in Rule III, Section 1 (j), the member will
then get whatever benefits correspond to
his/her contributions in either or both
Systems [Rule V, Sec. 4, RA 7699 Rules
and Regulations].
If a worker qualifies for benefits in both
Systems, totalization shall not apply [Rule
V, Sec. 5, RA 7699 Rules and
Regulations].
The process of totalization of creditable
services or periods of contributions and
computation of benefits provided for under
the Act shall be the joint responsibility of
the GSIS and the SSS [Rule V, Sec. 6, RA
7699 Rules and Regulations].
Overlapping periods of creditable services
or contributions in both Systems shall be
credited only once for purposes of
totalization [Rule V, Sec. 7, RA 7699
Rules and Regulations]
D. Disability and Death Benefits
1. Labor Code
Under the Labor Code, employees'
compensation (EC) benefits are granted to
employees or their dependents for
workconnected disability or death, or those
resulting from accident arising out of and
in the course of employment. [Art. 172,
LC in rel. to Sec. 1, Rule III, IRR]
Types of Disability:
1. Temporary Total Disability (Art
197)
2. Permanent Total Disability (Art
198)
3. Permanent Partial Disability (Art
199)
a. Disability Benefits
Disability does not refer to the injury nor
to the pain and suffering it has occasioned,
but to the loss and impairment of earning
capacity. There is disability when there is a
loss or diminution of earning power
because of actual absence from work due
to injury or illness arising out of and in the
course of employment. The basis of
compensation is reduction of earning
power. [Azucena, p. 525]
Temporary Total Disability - A total
disability is temporary if as a result of the
injury or sickness, the employee is unable
to perform any gainful occupation for a
continuous period not exceeding 120 days
[Art. 197 in rel. to Sec. 2(a), Rule VII,
Amended Rules on Employees’
Compensation].
The object of the law in allowing
compensation during temporary disability
is to compensate the laborer or employee
for what he might have earned during the
period of the treatment of his injury.
[Cañete v. Insular Lumber Co., 61 Phil.
592 (1935)]
Amount of Benefit- An employee
suffering from temporary total disability
shall be paid by the System an equivalent
of ninety percent (90%) of the average
salary credit, provided:
1. The daily income benefit is not less
than Ten (10) pesos nor more than
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Ninety (90) pesos, nor paid for a
continuous period longer than 120
days. [Art. 197]
2. The monthly income benefit shall
be suspended if the employee fails
to submit a monthly medical report
certified by its attending physician
[Art.194]
Period of Entitlement - The employee is
entitled to the benefit from the day of the
start of the disability. It shall not be paid
longer than 120 consecutive days except
where such injury or sickness still requires
medical attendance beyond 120 days but
not to exceed 240 days from onset of
disability.
When after the period of temporary total
disability had ceased, an employee was
found to be suffering from a permanent
partial disability, he was entitled to an
award based upon partial disability
permanent in character. [Cañete v. Insular
Lumber Co., 61 Phil. 592 (1935)]
Permanent Total Disability - A disability is
total and permanent if as a result of the
injury or sickness the employee is unable
to perform any gainful occupation for a
continuous period exceeding 120 days.
[Art. 198 in rel. to Sec. 2(b), Rule VII]
The test of whether or not 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.
It does not mean an absolute helplessness
but rather an incapacity to perform gainful
work which is expected to be permanent.
[Vicente vs. ECC, G.R. No. 85024,
(1991)]
The Labor Code enumerates six instances
considered to be a 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
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. [Art.
197(c)]
Rules for the determination of disability
(120-day or 240-day) - Initially, there was
confusion as to the application of the 120-
day period found in Article 192 (c) (1) of
the Labor Code vis-à-vis the application of
the 240-day period found in Section 2,
Rule X of the Amended Rules on
Employees' Compensation Implementing
Title II, Book IV of the Labor Code.
Permanent Disability - Article 192(c)(1):
Temporary total disability lasting
continuously for more than one hundred
twenty days, except as otherwise provided
in the Rules.
Section 2, Rule X: …where such injury or
sickness still requires medical attendance
beyond 120 days but not to exceed 240
days from onset of disability.
To reconcile these provisions, the Supreme
Court laid down the following rules in the
case of Dagasdas v. Grand Placement and
General Services Corporation. [G.R. No.
205727, (2017)]
1. The company-designated physician
must issue a final medical
assessment on the seafarer's
disability grading within a period
of 120 days from the time the
seafarer reported to him;
2. If the company-designated
physician fails to give his
assessment within the period of
120 days, without any justifiable
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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
companydesignated 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.
It must be emphasized that the company-
designated physician must:
1. ISSUE a final medical assessment
of the seafarer's medical condition;
AND
2. GIVE his assessment to the
seafarer concerned.
That is to say that the seafarer must be
fully and properly informed of his medical
condition.
The results of his/her medical
examinations, the treatments extended to
him/her, the diagnosis and prognosis,
his/her disability grading must be fully
explained to him/her by no less than the
company-designated physician.
The company-designated physician is
mandated to issue a medical certificate,
which should be personally received by the
seafarer, or, if not practicable, sent to
him/her by any other means sanctioned by
present rules.
To require the seafarer to seek the decision
of a neutral third-party physician without
primarily being informed of the
assessment of the company-designated
physician is a clear violation of the tenets
of due process.
Amount of Benefit - The employee
suffering from a permanent total disability
shall be entitled to an amount equivalent to
the monthly income benefit, plus ten
percent thereof for each dependent child,
but not exceeding five, beginning with the
youngest and without substitution:
Provided, That the monthly income benefit
shall be the new amount of the monthly
benefit for all covered pensioners. [Art.
198]
Period of Entitlement - An employee with
permanent total disability shall be entitled
to receive benefits monthly for five (5)
years.
However, Art. 198(b) provides that the
benefits may be suspended if the employee
is gainfully employed, or recovers from his
permanent total disability, or fails to
present himself for examination at least
once a year.
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. [Art. 199 in rel. to Sec.
2(c), Rule VII, Amended Rules on
Employees’ Compensation].
The object of the law in granting
compensation for a permanent partial
disability is to compensate the injured
laborer or employee for the actual and
permanent loss of a member of the body,
or the use thereof. [Cañete v. Insular
Lumber Co., 61 Phil. 592 (1935)]
Amount of Benefits - For an employee
who has suffered a permanent partial
disability, the amount of benefits, as well
as the period of entitlement to receive such
benefits is based upon the degree of
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disability, as well as the lost body part.
The body parts and the corresponding
period of equivalent disability are
specified in Art 199.
1. One thumb – 10 months
2. One index finger – 8 months
3. One middle finger – 6 months
4. One ring finger – 5 months
5. One little finger – 3 months
6. One big toe – 6 months
7. One toe – 3 months
8. One arm – 50 months
9. One hand – 39 months
10. One foot – 31 months
11. One leg – 46 months
12. One ear – 10 months
13. Both ears – 20 months
14. Hearing of one ear – 10 months
15. Hearing of both ears – 50 months
16. Sight of one eye – 25 months
Notes:
1. A loss of a wrist shall be
considered as a loss of the hand,
and a loss of an elbow shall be
considered as a loss of the arm.
2. A loss of an ankle shall be
considered as loss of a foot, and a
loss of a knee shall be considered
as a loss of the leg
3. A loss of more than one joint shall
be considered as a loss of one-half
of the whole finger or toe:
Provided, That such a loss shall be
either the functional loss of the use
or physical loss of the member.
[Art. 199(c)]
In case of permanent partial disability less
than the total loss of the member specified
in Art. 199(b), the same monthly income
benefit shall be paid for a portion of the
period established for the total loss of the
member, in accordance with the proportion
that the partial loss bears to the total loss.
If the result is a decimal fraction, the same
shall be rounded off to the next higher
integer [Art. 199(d)].
In cases of simultaneous loss of more than
one member or a part thereof as specified
in Art. 199(b) the same monthly income
benefit shall be paid for a period
equivalent to the sum of the periods
established for the loss of the member or
the part thereof. If the result is a decimal
fraction, the same shall be rounded off to
the next higher integer [Art. 199(e)].
In cases of injuries or illnesses resulting in
a permanent partial disability not listed in
the Art. 199(b), the benefit shall be an
income benefit equivalent to the
percentage of the permanent loss of the
capacity to work [Art. 199(f)].
Distinguished from Permanent Total
Disability
While “permanent total disability”
invariably results in an employee’s loss of
work or inability to perform his usual
work, “permanent partial disability,” on
the other hand, occurs when an employee
loses the use of any particular anatomical
part of his body which disables him to
continue with his former work. [Vicente v.
ECC, G.R. No. 85024, (1991)]
Conversion from permanent partial
disability to permanent total disability
A person’s disability may not manifest
fully at one precise moment in time but
rather over a period of time. It is possible
that an injury which at first was considered
partial disability may become totally and
permanently disabled from the same cause.
There is nothing in the law that prohibits
the conversion of permanent partial
disability benefit to permanent total
disability benefit, if it is shown that the
employee’s ailment qualifies as such.
[GSIS v. Court of Appeals and R. Balais,
G.R. No. 117572 (1998)].
When salary is higher after the injury In a
case where the employee filed a claim for
permanent partial disability but the ECC
denied the claim because in fact his salary
was higher than before, the Court ruled
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that the fact of higher earning capacity fact 2. Upon the death of a covered
would not in itself necessarily affect the employee who is under permanent
laborer’s claim for compensation for a total disability under this Title:
permanent partial disability. The amount 80% of the monthly income benefit
of his salary may be affected by various and his dependents to the
extraneous matters or factors. [Central dependents’ pension: Provided,
Azucarera Don Pedro v. C. de Leon, in his That –
capacity as Workmen’s Compensation a. The marriage must have
Commissioner and L. Alla, G.R. No. L- been validly subsisting at
10036 (1957)]. the time of disability;
b. If he has no primary
b. Death Benefits beneficiary, the System
Monthly Income Benefit - Under such shall pay to his secondary
regulations as the Commission may beneficiaries the monthly
approve, the System shall pay to the pension excluding the
primary beneficiaries: dependents’ pension, of the
remaining balance of the
1. Upon the death of the covered five-year guaranteed period;
employee under this Title: and
a. An amount equivalent to c. The minimum death benefit
his monthly income benefit shall not be less than fifteen
b. Plus 10% thereof for each thousand pesos. (As
dependent child, but not amended by Section 4,
exceeding five, beginning Presidential Decree No.
with the youngest and 1921).
without substitution, except
as provided for in par. (j) of The monthly income benefit provided
Article 167 hereof: herein shall be the new amount of the
Provided, That – monthly income benefit for the surviving
i. The monthly beneficiaries upon the approval of this
income benefit shall decree. [Art. 200 (a)- (c)]
be guaranteed for Condition to entitlement - The
five years; beneficiaries of a deceased employee shall
ii. If he has no primary be entitled to an income benefit if all of the
beneficiary, the following conditions are satisfied:
System shall pay to
his secondary 1. The employee has been duly
beneficiaries the reported to the System;
monthly income 2. He died as a result of an injury or
benefit but not to sickness; and
exceed sixty 3. The System has been duly notified
months; and of his death, as well as the injury or
iii. The minimum death sickness which caused his death.
benefit shall not be His employer shall be liable for the
less than fifteen benefit if such death occurred
thousand pesos. (As before the employee is duly
amended by Section reported for coverage to the
4, Presidential System. [Sec. 1(a), Rule XIII, IRR]
Decree No. 1921).
Notes:

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1. If the employee has been receiving
monthly income benefit for
permanent total disability at the
time of his death, the surviving
spouse must show that the marriage
has been validly subsisting at the
time of his disability.
2. In addition, the cause of death must
be a complication or natural
consequence of the compensated
Permanent Total Disability. [Sec.
1(b), Rule XIII, IRR]
Beneficiaries: The beneficiaries are-
1. Primary beneficiaries:
a. Dependent spouse until
he/she remarries;
b. Dependent children
(legitimate, legitimated,
natural-born, or legally
adopted).
2. Secondary Beneficiaries:
a. Illegitimate children and
legitimate descendants;
b. Parents, grandparents,
grandchildren. [Azucena, p.
541]
Dependents
Dependent means:
1. The legitimate, legitimated or
legally adopted or acknowledged
natural child who is:
a. Unmarried
b. Not gainfully employed,
and
c. Not over twenty-one (21)
years of age or over twenty-
one (21) years of age
provided he is incapacitated
and incapable of self-
support due to a physical or
mental defect which is
congenital or acquired
during minority;
2. The legitimate spouse living with
the employee and the parents of
said employee wholly dependent
upon him for regular support. [Art.
173(i)]
The test of dependency is not merely
whether the contributions were necessary
to bare subsistence. Dependency may exist
if such contributions were relied on by
claimant for his/her means of living as
determined by his/her position in life.
[Malate Taxicab v. Del Villar, G.R. No. L-
7489 (1956)]
Period of entitlement
For Primary Beneficiaries - The income
benefit shall be paid beginning at the
month of death and shall continue to be
paid for as long as the beneficiaries are
entitled thereto. [Sec. 2, Rule XII, IRR]
For Secondary Beneficiaries - The income
benefit shall be sixty (60) times the
monthly income benefit of a primary
beneficiary which in no case be less than P
15,000.00, which shall likewise be paid in
monthly pension. [Sec. 2(a), Rule XII,
IRR]
Manner of Payment - Death benefits are
paid in the form of cash monthly pension:
1. For life to the primary
beneficiaries, guaranteed for five
years;
2. For not more than 60 months to the
secondary beneficiaries in case
there are no primary beneficiaries;
3. In no case shall the total benefit be
less than P15,000. [Art. 200]
Amount of Benefits
For Primary Beneficiaries - Monthly
income benefit shall be equivalent to the
monthly income benefit for permanent
total disability, which shall be guaranteed
for five years, increased by ten percent for
each dependent child but not exceeding 5,
beginning with the youngest and without
substitution. [Sec. 3, Rule XII, IRR]
Notes:
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1. The aggregate monthly benefit
payable in the case of the GSIS
shall in no case exceed the monthly
wage or salary actually received by
the employee at the time of his
death;
2. The minimum income benefit shall
not be less than Fifteen Thousand
Pesos (P15,000.00). [Sec. 3, Rule
XII, IRR]
For Secondary Beneficiaries - Income
benefit is payable in monthly pension
which shall not exceed the period of 60
months and the aggregate income benefit
shall not be less than P15, 000.00. [Sec. 3,
Rule XII, IRR]
Death benefits after retirement are allowed
Generally, the term “covered employees”
refers to an employee who, at the time of
his death, is still covered by the GSIS.
However, the implementing rules and
regulations of the Employees’
Compensation Commission allows death
benefits to those retired employees whose
retirement was brought about by
permanent disability.
The Court is aware that death benefits
must be granted to the primary
beneficiaries of the decedent to help the
family of a permanent and totally disabled
person who was so disabled because of
causes that are work-oriented. The rule
applies all the more when the disabled
person later dies because of the same cause
or related cause. [Manuzon v. ECC, G.R.
No. 88573, (1990)]
Death of a person receiving permanent
total disability benefits Under Art. 200(b),
death benefit shall be paid to the
beneficiaries if an employee, while
receiving permanent total disability
benefit, dies
Prescription of claims
All money claims arising from employer-
employee relations shall be filed within
three (3) years from the time the cause of
action accrued; otherwise they shall
forever be barred. [Art. 306]
2. POEA-Standard Employment Contract
for Seafarers
As part of a seafarer's deployment for
overseas work, he/she and the vessel
owner or its representative local manning
agency are required to execute the POEA-
SEC. Containing the standard terms and
conditions of seafarers' employment, the
POEA-SEC is deemed included in their
contracts of employment in foreign ocean-
going vessels. [Sharpe Sea Personnel Inc.
v. Mabunay, G.R. No. 206113 (2017)]
a. Compensation and Benefits for Injury or
illness
There are two requisites for a seafarer’s
injury or disability to be considered
compensable: (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.” [Magsaysay
Maritime Services v. Laurel, 707 Phil. 210
(2013)]
Work-related injury or illness
For an 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 enough that 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.”
[Madridejos v. NYK-FIL Ship
Management, Inc., 810 Phil. 704 (2017)]
Liabilities of Employer in case of Work-
Related Injury or Illness
1. Medical Expenses
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If the injury or illness requires medical
and/or dental treatment in a foreign port,
the employer shall be liable for the full
cost of such medical, serious dental,
surgical and hospital treatment as well as
board and lodging until the seafarer is
declared fit to work or to be repatriated.
However, if after repatriation, the seafarer
still requires medical attention arising from
said injury or illness, he/she shall be so
provided at cost to the employer until such
time he/she is declared fit or the degree of
his/her disability has been established by
the company-designated physician. [Sec.
20, A.2, POEA-SEC]
2. Sickness Allowance
The seafarer shall also receive sickness
allowance from his/her employer in an
amount equivalent to his/her basic wage
computed from the time he/she signed off
until he is declared fit to work, or the
degree of disability has been assessed by
the companydesignated physician.
The period within the seafarer shall be
entitled to sickness allowance shall not
exceed 120 days. Payment of the sickness
allowance shall be made on a regular basis,
but not less than once a month. [Sec. 20.
A.3, POEA-SEC]
3. Cost of medicines, mode of
transportation and accommodation
The seafarer shall be entitled to
reimbursement of the cost of medicines
prescribed by the company-designated
physician.
In case treatment of the seafarer is on an
out-patient basis as determined by the
companydesignated 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. [Sec. 20, A.3, POEA-SEC]
Mandatory post-employment medical
examination; strict compliance
General Rule: The seafarer shall submit
himself/herself to a post-medical
examination by a company-designated
physician within three working days upon
his return.
Exceptions:
a. When the seafarer is physically
incapacitated to do so. In which
case, a written notice to the agency
within the same period is deemed
as compliance. [Sec. 20, A.3,
POEA-SEC]
b. When the non-compliance with the
mandatory post-employment
medical examination was “not due
to the seafarer’s fault but to the
inadvertence or deliberate refusal
of the [employer].” [Interorient
Maritime Enterprises, Inc. v.
Remo, 636 Phil. 240 (2010)
Rationale:
The rationale for the rule [on the
mandatory post-employment medical
examination] is that reporting the illness or
injury within three days from repatriation
fairly makes it easier for a physician to
determine the cause of the illness or injury.
To ignore the rule might set a precedent
with negative repercussions, like opening
floodgates to a limitless number of
seafarers claiming disability benefits.
[Wallem Maritime Services, Inc. v.
Tanawan, 693 Phil. 416 (2012)]
Third Doctor Opinion Rule
If a doctor appointed by the seafarer
disagrees with the assessment [of the
companydesignated physician], a third
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doctor may be agreed jointly between the
employer and the seafarer.
The third doctor’s decision shall be final
and binding on both parties. [Sec. 20, A.4,
POEA-SEC]
Rationale: It is understandable that a
companydesignated physician is more
positive than that of a physician of the
seafarer's choice. It is on this account that
a seafarer is given the option by the POEA
Standard Employment Contract to seek a
second opinion from his preferred
physician [Abante v. KJGS Fleet
Management Manila, G.R. No. 182430
(2009)]
Mandatory Reporting Requirement
In the course of the treatment, the seafarer
shall also report regularly to the company-
designated physician specifically on the
dates as prescribed by the company-
designated physician and agreed to by the
seafarer. Failure of the seafarer to comply
with the mandatory reporting requirement
shall result in his forfeiture of the right to
claim the above benefits. [Sec. 20, A.3,
POEA-SEC]
Guidelines for the Claim of Permanent
Total Disability Benefits
The employer must also compensate the
seafarer for his/her permanent total
disability as finally determined by the
company-designated physician.
The following guidelines shall govern
seafarers' claims for permanent and total
disability benefits:
1. The company-designated physician
must issue a final medical
assessment on the seafarer's
disability grading within a period
of 120 days from the time the
seafarer reported to him.
2. If the company-designated
physician fails to give his/her
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/her
assessment within the period of
120 days with a sufficient
justification, 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;
an
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. [Jebsens Maritime
Inc. v. Rapiz, G.R. No. 218871
(2017)]
Compensation and Benefits for Death
In case of work-related death of the
seafarer, during the term of his contract,
the employer shall pay his/her
beneficiaries the Philippine currency
equivalent to the amount of Fifty
Thousand US dollars (US$50,000) and an
additional amount of Seven Thousand US
dollars (US$7,000) to each child under the
age of twenty-one (21) but not exceeding
four (4) children, at the exchange rate
prevailing during the time of payment.
[Sec. 20, B.1, POEA-SEC]
Requisites:
For death to be compensable, the claimant
bears the burden to establish that:
1. The seafarer died during the
duration of his/her contract, and
2. His/her illness was work-related.
[Sec. 20, B.1, POEA-SEC]
Exception: When the seafarer’s death
occurred after the termination of his/her
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contract after medical repatriation on
account of a work-related injury or illness
Rationale: The 2000 POEA-SEC must be
liberally construed, as impelled by the
plight of the bereaved heirs who stand to
be deprived of a just and reasonable
compensation for the seafarer’s death,
notwithstanding its evident work-
connection. [Racelis v. United Philippine
Lines, 746 Phil. 758 (2014)]
When compensation payable is double -
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]
Other liabilities of the employer when the
seafarer dies as a result of work-related
injury or illness during the term of
employment are as follows:
a. The employer shall pay the
deceased’s beneficiary all
outstanding obligations due the
seafarer under this Contract
b. The employer shall transport the
remains and personal effects of the
seafarer to the Philippines at
employer’s expense, except if the
death occurred in a port where
local government laws or
regulations do not permit the
transport of such remains. 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.
c. The employer shall pay the
beneficiaries of the seafarer the
Philippine currency equivalent to
the amount of One Thousand US
dollars (US$1,000) for burial
expenses at the exchange rate
prevailing during the time of
payment. [Sec. 20, B.4, POEA-
SEC
When compensation is not payable
(applies to both disability and death
benefits)
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. [Sec. 20, D,
POEA-SEC]
Prescription of Claims- All claims arising
from this contract shall be made within
three (3) years from the date the cause of
action arises, otherwise the same shall be
barred. [Sec. 30, POEA-SEC]
V. LABOR RELATIONS
A. Right to Self-Organization
Right to Self-Organization: A
Fundamental Right
Self-organization is a fundamental right
guaranteed by the Philippine Constitution
and the Labor Code. Employees have the
right to form, join or assist labor
organizations for the purpose of collective
bargaining or for their mutual aid and
protection. [UST Faculty Union v. Bitonio,
G.R. No. 131235 (1999)]
Infringement of the right to self-
organization
It shall be unlawful for any person to
restrain, coerce, discriminate against or
unduly interfere with employees and
workers in their exercise of the right to
self-organization [Art. 257
Scope of right to self-organization:
1. Right to form, join or assist labor
organizations of their own
choosing for the purpose of
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collective bargaining through
representatives of their own
choosing [Art. 257];
2. Right to engage in lawful concerted
activities for the same purpose
(collective bargaining) or for their
mutual aid and protection [Art.
257]
3. The right of any person to join an
organization also includes the right
to leave that organization and join
another one. [Heritage Hotel
Manila v. PIGLAS-Heritage, G.R.
No. 177024 (2009)]
4. The right to form or join a labor
organization necessarily includes
the right to refuse or refrain from
exercising said right. [Reyes v.
Trajano, G.R. No. 84433 (1992)]
5. The freedom to form organizations
would be rendered nugatory if they
could not choose their own leaders
to speak on their behalf and to
bargain for them. [PanAmerican
World Airways, Inc v. Pan
American Employees Association,
G.R. No. L-25094 (1969)]
6. Recognition of the tenets of the
sect should not infringe on the
basic right of self-organization
granted by the [C]onstitution to
workers, regardless of religious
affiliation. [Kapatiran sa Meat and
Canning Division v. Calleja, G.R.
No. 82914 (1988)]
1. Who may join, form, or assist labor
organizations or workers’
associations
a. All employees
All persons employed in commercial,
industrial and agricultural enterprises and
in religious, charitable, medical or
educational institutions, whether operating
for profit or not, shall have the right to
self-organization and to form, join or assist
labor organizations of their own choosing
for purposes of collective bargaining.
(Presumes an employer-employee
relationship)
Ambulant, intermittent and itinerant
workers, self-employed people, rural
workers and those without any definite
employers may form labor organizations
for their mutual aid and protection. [Art.
253]
Any employee, whether employed for a
definite period or not, shall, beginning on
his first day of service, be considered an
employee for purposes of membership in
any labor union. [Art. 292(c)]
Employee […] 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. [Art.
219(f)]
Employees of non-profit organizations are
now permitted to form, organize or join
labor unions of their choice for purposes of
collective bargaining [FEU-Dr. Nicanor
Reyes Medical Foundation Inc. v. Trajano,
G.R. No. 76273 (1987)]
b. Government employees of
corporations created under the
Corporation Code
The right to self-organization shall not be
denied to government employees. [Sec.
2(5), Art. IX-B, Constitution]
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 in the civil service
shall have the right to form associations
for purposes not contrary to law. [Art. 254]
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
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government authorities, labor-management
committees, work councils and other forms
of workers’ participation schemes to
achieve the same objectives. [E.O. 180,
Sec. 2 (1987)]
c. Supervisory employees
Supervisory employees are those who, in
the interest of the employer, effectively
recommend such managerial actions if the
exercise of such authority is not merely
routinary or clerical in nature but requires
the use of independent judgment. [Art.
219(m)]
What is essential is the nature of the
employee’s function and not the
nomenclature or title given to the job
which determines whether the employee
has rank-and-file or managerial status or
whether he is a supervisory employee.
[Tagaytay Highlands International Golf
Club, Inc. v. Tagaytay Highlands
Employees Union-PTGWO, G.R. 142000
(2003)]
d. Aliens with valid working permits
General Rule - All aliens, natural or
juridical, […] are strictly prohibited from
engaging directly or indirectly in all forms
of trade union activities. [Art. 284]
Exception: Aliens may exercise the right to
self-organization and join or assist labor
unions for purposes of collective
bargaining, provided the following
requisites are fulfilled:
1. With valid working permits issued
by the DOLE; and
2. They are nationals of a country
which grants the same or similar
rights to Filipino workers [Art.
284]
i. As certified by DFA; OR
ii. Has ratified either ILO
Conventions No. 87 and 98
[Sec. 2, Rule II, Book V,
IRR]
e. Security personnel
The security guards and other personnel
employed by the security service
contractor shall have the right:
1. To form, join, or assist in the
formation of a labor organization
of their own choosing for purposes
of collective bargaining and
2. To engage in concerted activities
which are not contrary to law
including the right to strike. [D.O.
No. 14 Series of 2001 (Guidelines
Governing the Employment and
Working Conditions of Security
Guards and Similar Personnel in
the Private Security Industry)]
On Dec. 24, 1986, President C. Aquino
issued EO No. 111 which eliminated the
provision which made security guards
ineligible to join any labor organization. In
1989, Congress passed RA 6715 which
also did not impose limitations on the
ability of security guards to join labor
organizations. Thus, security guards “may
now freely join a labor organization of the
rank-and-file or that of the supervisory
union, depending on their rank.” [Manila
Electric Co. v. SOLE, G.R. No. 91902
(1991)]
2. Restrictions as to managerial
employees, supervisory employees,
confidential employees, employee-
members of cooperatives, alien employees
and government employees
Ineligibility of Managerial Employees;
Rights of Supervisory Employees
Managerial employees are not eligible to
join, assist or form any labor organization.
[Art. 255]
Supervisory employees shall not be
eligible for membership in the collective
bargaining unit of the rank-and-file
employees but may join, assist or form
separate collective bargaining units and/or
legitimate labor organizations of their own.
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The rank and file union and the
supervisors' union operating within the
same establishment may join the same
federation or national union.
Managerial employees cannot assist the
formation or organization of unions.
Rationale: Supervisory employees, while
in the performance of supervisory
functions, become the alter ego of the
management in the making and the
implementing of key decisions at the sub-
managerial level. Certainly, it would be
difficult to find unity or mutuality of
interests in a bargaining unit consisting of
a mixture of rank-and-file and supervisory
employees. [Toyota Motor Phil. Corp. v.
Toyota Motor Phil. Corp. Labor Union,
G.R. No. 121084 (1997)]
Rule on Comingling
Comingling of supervisory employees
with rank and file employees in the same
collective bargaining units/same labor
organizations.
Supervisor and Rank and File Union
Affiliation The rank and file union and the
supervisors’ union operating within the
same establishment may join the same
federation or national union. [Art. 255]
Note also: Prior to the enactment of RA
9481, which inserted a new provision [Art.
245-A, now Art. 256], the Court held in
De La Salle University v. Laguesma that a
local supervisors’ union is not allowed to
affiliate with a national federation of
unions of rank and file employees only
where two conditions concur:
1. The rank-and-file employees are
directly under the authority of
supervisory employees
2. The national federation is actively
involved in union activities in the
company. [De La Salle University
Medical Center and College of
Medicine v. Laguesma, G.R. No.
102084 (1998)]
Doctrine of Necessary Implication
While Art. 245 [now 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. [Metrolab Industries
Inc. v. Roldan-Confessor, G.R. No.
108855 (1996)
Nature of Access Test
Confidential employees, by the nature of
their functions, assist and act in a
confidential capacity to, or have access to
confidential matters of, persons who
exercise managerial functions in the field
of labor relations.
Requisites:
1. The confidential relationship must
exist between the employees and
his supervisor, and
2. The supervisor must handle the
prescribed responsibilities relating
to labor relations. [San Miguel
Supervisors and Exempt Union v.
Laguesma, G.R. No. 110399
(1997)]
Function Test: Nomenclature is not
controlling
The mere fact that an employee is
designated “manager” does not ipso facto
make him one. Designation should be
reconciled with the actual job description
of the employee. [Paper Industries Corp. of
the Philippines. v. Laguesma, G. R.
No.101738 (2000)]
Confidential information: Must relate to
labor relations and not from 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
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business operations of the company is not
per se a ground for the exclusion in the
bargaining unit. [Coca-Cola Bottlers v.
IPTEU, G.R. No. 193798 (2015)]
Rationale of Exclusion of Confidential
Employees
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.
Moreover, unionization of confidential
employees for the purpose of collective
bargaining would mean the extension of
the law to persons or individuals who are
supposed to act in the interest of the
employers. It is not far-fetched that in the
course of collective bargaining, they might
jeopardize that interest which they are duty
bound to protect. [Metrolab Industries Inc.
v. Roldan-Confessor, G.R. No. 108855
(1996)]
Employee-member of a Cooperative
General Rule: 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. [Batangas-I Electric
Cooperative Labor Union v. Romeo A.
Young, G.R. No. 62386 (1988)]
Irrespective of the degree of their
participation in the actual management of
the cooperative, all members thereof
cannot form, assist or join a labor
organization for the purpose of collective
bargaining. [Benguet Electric Cooperative
v. Ferrer-Calleja, G.R. No. 79025 (1989)]
Exception: Employees who withdrew their
membership from the cooperative are
entitled to form or join a labor union for
the negotiations of a Collective Bargaining
Agreement. [Central Negros Electric
Cooperative, Inc. v. DOLE, G.R. No.
94045 (1991)]
Alien Employees/Employees of
International Organizations
International organizations are endowed
with some degree of international legal
personality. They are granted jurisdictional
immunity, as provided in their
organization’s constitutions, to safeguard
them from the disruption of their
functions.
Immunity […] is granted to avoid
interference by the host country in their
internal workings. The determination [by
the executive branch] has been held to be a
political question conclusive upon the
Courts in order not to embarrass a political
department of Government. [Hence], a
certification election cannot be conducted
in an international organization to which
the Philippine Government has granted
immunity from local jurisdiction.
[International Catholic Migration
Commission v. Calleja, G.R. No. 85750
(1990)]
Government Employees/Members of the
AFP, Policemen, Police Officers, Firemen,
and Jail Guards
Members of the AFP, Policemen, Police
Officers, Firemen and Jail Guards are
expressly excluded by EO 180, Sec. 4
from the coverage of the EO 180 which
provides guidelines for the exercise of the
right to organize of government
employees.
Summary – Who Cannot Form, Join or
Assist Labor Unions
a. Managerial employees
b. Confidential employees
c. Non-employees
d. Member-employee of a cooperative
e. Employees of international
organization
f. High-level government employees
g. Members of the AFP, police
officers, policemen, firemen and
jail guards
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3. Determination of Appropriate
Bargaining Unit (ABU), effect of inclusion
of employees outside ABU
Bargaining Unit - refers to a group of
employees sharing mutual interests within
a given employer unit, comprised of all or
less than all of the entire body of
employees in the employer unit or any
specific occupational or geographical
grouping within such employer unit. [Sec.
1(e), Rule I, Book V, IRR]
It is a group of employees of a given
employer, comprised of all or less than all
of the entire body of employees, which the
collective interests of all the employees
indicate to be best suited to serve
reciprocal rights and duties of the parties
consistent with equity to the employer.
[Belyca Corp. v. Calleja, G.R. No. 77395
(1988) citing Rothenberg]
Functions of an Appropriate Bargaining
Unit:
1. An ELECTORAL DISTRICT. – It
marks the boundaries of those who
may participate in a certification
election.
2. An ECONOMIC UNIT. – They are
a group of employees with
community of interests
3. A SOVEREIGN BODY. – It
selects the sole and exclusive
bargaining agent.
Role of a Bargaining Unit - The labor
organization designated or selected by the
majority of the employees in an
appropriate collective bargaining unit shall
be the exclusive representative of the
employees in such unit for the purpose of
collective bargaining. [Art. 267]
Right of individual or group of employees
to present grievances
An individual employee or group of
employees shall have the right at any time
to present grievances to their employer.
[Art. 267]
CBA Coverage: It is a well-settled doctrine
that the benefits of a collective bargaining
agreement extend to the laborers and
employees in the collective bargaining
unit, including those who do not belong to
the chosen bargaining labor organization.
[Mactan Workers Union v. Aboitiz, G.R.
No. L-30241 (1972)]
Note: An employee employed, whether for
a definite period is not, is an EE for
purposes of joining a union [Art. 292(c)].
But, whether or not a union member, an
EE part of the CBU is entitled to CBA
benefits unless excluded under the CBA.
Test to Determine the Constituency of an
Appropriate Bargaining Unit
4 Factors:
1. Will of the Employees (Globe
Doctrine)
A practice designated as the “Globe
doctrine,” sanctions the holding of a series
of elections, not for the purpose of
allowing the group receiving an overall
majority of votes to represent all
employees, but for the specific purpose of
permitting the employees in each of the
several categories to select the group
which each chooses as a bargaining unit.
[Kapisanan ng mga Manggagawa sa
Manila Road Co. v. Yard Crew Union,
G.R. Nos. L-16292-94 (1960)
Rationale: Highly skilled or specialized
technical workers may choose to form
their own bargaining unit because they
may be in better position to bargain with
the employer considering the market value
of their skills.
2. Affinity and unity of employees’
interest (Substantial Mutual
Interests Rule)
The basic test in determining the
appropriate bargaining unit is that a unit, to
be appropriate, must affect a grouping of
employees who have substantial, mutual
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interests in wages, hours, working
conditions, and other subjects of collective
bargaining. [UP v. Ferrer-Calleja, G.R.
No. 96189, (1992)]
Rationale: There are greater chances of
success for the collective bargaining
process. The bargaining unit is designed to
maintain the mutuality of interest among
the employees in such unit.
When the interest between groups has
changed over time, there is reason to
dissolve, change or expand a certain
bargaining unit.
3. 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.
[Sta. Lucia East Commercial Corporation
v. SOLE, G.R. No. 162355 (2009)]
4. Employment status [Democratic
Labor Association v. Cebu
Stevedoring Co. Inc, G.R. No. L-
10321 (1958); University of the
Philippines v. Ferrer-Calleja, G.R.
No. 96189 (1992)]
Among the factors to be considered [is the]
employment status of the employees to be
affected [regular, casual, seasonal,
probationary, etc.], that is the positions and
categories of work to which they belong
[....] [Belyca Corp. v. Calleja, G.R. No.
77395 (1988)]
5. Geography and Location
Geography and location only play a
significant role if:
a. The separation between the camps
[...] and the different kinds of work
in each [...] all militate in favor of
the system of separate bargaining
units;
b. [When] the problems and interests
of the workers are peculiar in each
camp or department
c. The system of having one
collective bargaining unit in each
camp [...] [has operated
satisfactorily in the past.] [Benguet
Consolidated Inc. and Balatok
Mining Co. v. Bobok Lumberjack
Association, G.R. No. L-11029
(1958)]
6. Policy of avoiding fragmentation
of the bargaining unit
It bears noting that the goal of the DOLE
is [geared] towards “a single employer
wide unit which is more to the broader and
greater benefit of the employees working
force.”
The philosophy is to avoid fragmentation
of the bargaining unit so as to strengthen
the employees’ bargaining power with the
management. To veer away from such goal
would be contrary, inimical and repugnant
to the objectives of a strong and dynamic
unionism. [Phil. Diamond Hotel and
Resort Inc v. Manila Diamond Hotel and
Employees Union, G.R. No. 158075
(2006)]
Note: Where the employment status was
not at issue but the nature of work of the
employees concerned; the Court stressed
the importance of the 2nd factor. [Belyca
Corp. v. Calleja, G.R. No. 77395 (1988)]
Effect of Inclusion of Employees Outside
the Bargaining Unit or Commingling
General Rule: It shall not be a ground for
the cancellation of the registration of the
union. Said employees are automatically
deemed removed from the list of
membership of said union. [Art. 256]
Exception: Unless such mingling was
brought about by misrepresentation, false
statement or fraud under Art. 247
(Grounds for cancellation of Union
Registration) of the Labor Code. [SMCC-
Super v. Charter Chemical and Coating
Corporation, G.R. No. 169717 (2011)]
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4. Non-interference of the Right to Self-
Organization
Infringement of the right to self-
organization
It shall be unlawful for any person to
restrain, coerce, discriminate against or
unduly interfere with employees and
workers in their exercise of the right to
self-organization [Art. 257
B. Legitimate Labor Organizations
Multi-Company Level
i. Trade Union Center
ii. Federation or National Union – can
create local chapters
Company Level:
i. Local chapter
ii. Independent Union
1. Registration with the DOLE
The labor union must be registered with
the Bureau of Labor Relations (BLR) or in
case of an independent union, with the
DOLE Regional Office.
In case the applicant is an independent
union, the names of all its members
comprising at least 20% of all employees
in the bargaining unit where it seeks to
operate;
Local or Independent Union – is a separate
and distinct unit primarily designed to
secure and maintain an equality of
bargaining power between the employer
and their employee-members. It 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. –
National Union of Bank Employees v.
Philnabank Employees Assoc.
Additional requirements for federations or
national unions (Art. 244, LC):
Proof of the affiliation of at least 10 locals
or chapters, each of which must be a duly
recognized collective bargaining agent in
the establishment or industry in which it
operates, supporting the registration of
such applicant federation or national union
1. Registration – acquires legal personality
upon issuance of the certificate of
registration
2. Chartering
i. Acquire legal personality only for
purposes of filing a petition for
certification of election
ii. Entitled to all the rights and
privileges of a legitimate labor
organization only upon submission
of:
a. Charter certificate
b. Names of chapter officers,
addresses and principal
office of the chapter
c. Constitution and By-laws
(no positive act) Art. 241,
LC
2. Cancellation of Registration
Grounds for Cancellation of Union
Registration: (Art. 247, LC)
a. Misrepresentation, false statement
or fraud in connection with the
adoption or ratification of the
constitution and by-laws, or
amendments thereto, the minutes of
ratification, and the list of members
who took part in the ratification;
b. Misrepresentation, false statements
or fraud in connection with the
election officers, minutes of the
election of officers, and the list of
voters;
c. Voluntary dissolution of members.
In case of alleged inclusion of disqualified
employees in a union, the proper
procedure for an employer is to directly
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file a petition for cancellation of the
union’s registration due to:
a. Misrepresentation
b. False statement
c. Fraud under the circumstances
enumerated in Art. 247, LC. –
Asian Institute of Management v.
AIM Faculty Assoc.
3. Affiliation/Disaffiliation from National
Union or Federation
Affiliate - An independent union affiliated
with a federated, national union 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, Secs. 6 and 7
[Sec. 1(b), Rule I, Book V, IRR]
Independent Union - A labor organization
operating at the enterprise level that
acquired legal personality through
independent registration under Art. 234 of
the Labor Code and Rule III, Sec. 2-A
[Sec. 1(x), Rule I, Book V]
Purpose of Affiliation: To foster the free
and voluntary organization of a strong and
united labor movement [Art. 218- A(c)]
The sole essence of affiliation is to
increase, by collective action, the common
bargaining power of local unions for the
effective enhancement and protection of
their interests. Admittedly, there are times
when without succor and support local
unions may find it hard, unaided by other
support groups, to secure justice for
themselves. [Philippine Skylanders, Inc. v.
NLRC, G.R. No. 127374 (2002)]
Effect of Affiliation:
Inclusion of [the federation’s initials] in
the registration is merely to stress that they
are its affiliates at the time of registration.
It does not mean that said local unions
cannot stand on their own. [Adamson v.
CIR, G.R. No. L-35120 (1984)]
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. Hence, local unions are
considered principals while the federation
is deemed to be merely their agent.
[Insular Hotel Employees Union NFL v.
Waterfront Insular Hotel, G.R. No.
174040-41 (2010)]
Disaffiliation:
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. [Malayang
Manggagawa sa M. Greenfield v. Ramos,
G.R. No. 113907 (2000)]
Local unions have the right to separate
from their mother federation on the ground
that as separate and voluntary associations,
local unions do not owe their creation and
existence to the national federation to
which they are affiliated but, instead, to
the will of their members. [Philippine
Skylanders, Inc. v. NLRC, G.R. No.
127374 (2002)]
A local union is free to serve the interests
of all its members, including the freedom
to disaffiliate or declare its autonomy from
the federation to which it belongs when
circumstances warrant, in accordance with
the constitutional guarantee of freedom of
association. [Malayang Samahan ng mga
Manggagawa sa M. Greenfield, Inc. v.
Ramos, G.R. No. 113907 (2000)]
Period of Disaffiliation:
Period of Disaffiliation Generally, 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 the expiration of
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the CBA. However, even before the onset
of the freedom period, disaffiliation may
be carried out when there is a shift of
allegiance on the part of the majority of the
members of the union. [Alliance of
Nationalist and Genuine Labor
Organization v. Samahan ng mga
Manggagawang Nagkakaisa sa Manila Bay
Spinning Mills, G.R. No. 118562 (1996)]
[A] local union which has affiliated itself
with a federation is free to sever such
affiliation anytime and such disaffiliation
cannot be considered disloyalty.
[Malayang Manggagawa sa M. Greenfield
v. Ramos, G.R. No. 113907 (2000)]
Effect of Disaffiliation:
On legal personality
A registered independent union retains its
legal personality while a chartered local
loses its legal personality unless it registers
itself.
No effect on CBA
A disaffiliation does not disturb the
enforceability and administration of a
collective agreement; it does not occasion
a change of administrators of the contract
nor even an amendment of the provisions
thereof. [Volkschel Labor Union v. BLR,
No. L-45824 (1985)]
4. Rights of Legitimate Labor
Organizations
Art. 251, LC
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.
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.
5. Rights and Conditions of Membership
in legitimate labor organizations
Art. 250. LC
1. No arbitrary or excessive initiation
fees shall be required of the
members nor shall arbitrary,
excessive or oppressive fine and
forfeiture imposed.
2. The members shall be entitled to
full and detailed reports from their
officers and representatives of all
financial transactions.
3. The members shall directly elect
their officers. No qualification
requirements for candidacy to any
position shall be imposed other
than membership in good standing.
4. The members shall determine by
secret ballot after due deliberation,
any question of major policy
affecting the entire membership of
the organization.
5. No labor organization shall
knowingly admit as members or
continue in membership any
individual who belongs to a
subversive organization or who is
engaged directly or indirectly in
any subversive activity.
6. No person who has been convicted
of a crime involving moral
turpitude shall be eligible for
election as a union officer or for
appointment to any position in the
union.
7. No officer, agent or member of a
labor organization shall collect any
fees, dues or other contributions in
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its behalf or many any
disbursement of its money or funds
unless he is duly authorized.
8. Every payment of fees, dues or
other contributions by a member
shall be evidenced by a receipt.
9. The funds of the organization shall
not be applied for any purpose or
object other than those expressly
authorized.
10. Every income or revenue of the
organization shall be evidenced by
a record showing its source and
every expenditure of its funds shall
be evidenced by a receipt.
11. The officers of a labor organization
shall not be paid any compensation
other than the salaries and expenses
due to their positions as authorized.
12. The treasurer and every officer
who is responsible for the account
or for the collection, management,
disbursement, custody or control of
funds, moneys and other properties
shall render a true and correct
account and be duly audited and
verified.
13. The books of accounts and other
records of the financial activities
shall be open to inspection by any
officer or member during office
hours.
14. No special assessment or other
extraordinary fees may be levied
upon the members unless
authorized.
15. No special assessments, attorney’s
fees, negotiation fees or any other
extraordinary fees may be checked
off from an amount due to an
employee without written
authorization.
16. The officers shall have the duty to
inform its members on the
provisions of its constitution and
by-laws, collective bargaining
agreement, prevailing labor
relations system and all their rights
and obligations.
Summary of rights:
1. Political Right
2. Deliberative and decision making
right
3. Rights over money matters
4. Right to information
6. Check off, assessments, union dues and
agency fees
a. Check off - A check-off is a
process or device whereby the
employer, on agreement with the
Union, recognized as the proper
bargaining representative, or on
prior authorization from the
employees, deducts union dues or
agency fees from the latter’s wages
and remits them directly to the
Union. [Marino v. Gamilla, G.R.
No. 149763 (2009)]
The system of check-off is primarily for
the benefit of the Union and, only
indirectly, for the benefit of the individual
employees. [Marino v. v Gamilla, G.R.
No. 149763 (2009)]
Note: For a check-off to be valid, it must
comply with the requirements of a valid
special assessment
Other than for mandatory activities under
the Labor 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. – Art. 241, LC
The express consent of the employee to
any deduction in his compensation is
required to be obtained in accordance with
the steps outlined by the law, which must
be followed to the letter. – Peninsula
Employees Union v. Esquivel
b. Assessment - Special assessments
are payments for a special purpose,
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especially if required only for a
limited time. [Azucena]
No special assessment or other
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. [Art. 250 (n)]
Strict compliance for special assessment
There must be strict and full compliance
with the requisites. Substantial compliance
is not enough. [Palacol v. Ferrer-Calleja,
G.R. No. 85333 (1990)]
c. Union Dues - Union dues are
payments to meet the union’s
general and current obligations.
The payment must be regular,
periodic, and uniform. [Azucena]
Every payment of fees, dues or other
contributions by a member shall be
evidenced by a receipt:
i. signed by the officer or agent
making the collection and
ii. entered into the record of the
organization to be kept and
maintained for the purpose. [Art.
250 (h)]
d. Agency Fees - Art. 259 (e) [2nd
sentence to last sentence] 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
EXCEPTION: Those employees who are
already members of another union at the
time of the signing of the collective
bargaining agreement
Employees of an appropriate bargaining
unit who are not members of the
recognized collective bargaining agent
may be assessed a reasonable fee
i. Amount of reasonable fee:
equivalent to the dues and other
fees paid by members of the
recognized collective bargaining
agent
ii. Condition for assessment: If such
non-union members accept the
benefits under the collective
bargaining agreement:
Provided, That the individual
authorization required under
Article 242, paragraph (o) shall not
apply to the non-members of the
recognized collective bargaining
agent;
An amount, equivalent to union dues,
which a non-union member pays to the
union because he benefits from the CBA
negotiated by the union. [Azucena]
7. Union Security Clause
Union Security Clause – is a stipulation
contained in the CBA whereby the
employer undertakes to recognize the right
of the union who negotiated the CBA to
maintain and protect its membership by
imposing certain terms and conditions in
hiring employees and retention of
employment.
i. Closed-shop – is an agreement
contained in the CBA, which
requires that when the employer
hires an employee, such employee
must be a member of a contracting
union (i.e., a union which has an
existing CBA with the employer).
ii. Union-shop – is an agreement
whereby the employer hires an
employee upon the condition that
after a certain period, said
employee is required to join a
contracting union.
iii. Maintenance of Membership – is
an agreement where the employer
hires an employee and imposes a
condition that such employee will
join and maintain his membership
with the contracting union.
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iv. Preferential-shop – the employer in
hiring new employees, members of
a contracting union shall be given
preference to be hired.
Are union security clauses form of ULP?
No. Union security clauses are not form of
ULP. When certain employees are obliged
to join a particular union as a requisite for
continued employment, as in the case of
Union Security Clauses, this condition is a
valid restriction of the freedom or right not
to join any labor organization because it is
in favor of unionism. A union security
clause in a CBA is not a restriction of the
right of freedom of association guaranteed
by the Constitution. – SLORD v. Noya
Exception: Members of religious groups
may not be compelled to join labor
organizations if their religion prohibits
their members from joining such
organizations. – Victoriano v. Elizalde
Rope Workers Union; Reyes v. Trajano
Can an employee be terminated pursuant
to a union security clause?
Yes. In terminating the employment of an
employee by enforcing the union security
clause, the employer needs only to prove
that:
i. The union security clause is
applicable;
ii. The union is requesting for the
enforcement of the union security
provision in the CBA; and
iii. There is sufficient evidence to
support the union’s decision to
expel the employee from the union.
These requisites constitute just cause for
terminating an employee based on the
CBA’s union security provision. –
Alabang Town and Country Club v. NLRC
C. Bargaining Representative
The labor organization designated or
selected by the majority of the employees
in an appropriate collective bargaining unit
shall be the exclusive representative of the
employees in such unit for the purpose of
collective bargaining. [Art. 267]
Labor Management Council
Any provision of law to the contrary
notwithstanding, workers shall have the
right:
a. To participate in policy and
decision-making processes of the
establishment where they are
employed insofar as said processes
will directly affect their rights,
benefits and welfare
b. To form labor-management
councils, for this purpose [Art.
267]
Bargaining unit – refers to a group of
employees sharing mutual interests
within a given employer unit, comprised of
all or less than all of the entire body of
employees in the employer unit or any
specific occupational or geographical
grouping within such employer unit. DO
40, Rule 1, Section 1
“Appropriate” bargaining unit
Test: commonality or mutuality of interest
test – Substantial similarity
“All” employees – employer unit
“Less than All” – sub-group
i. Occupational
ii. Geographic
Factors:
i. Similarity in manner of payment
ii. Similarity in benefits, and terms
and conditions of employment
iii. Status of employment (regular or
non-regular)
iv. Geographic location
v. History of collection bargaining
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vi. Will of the employees – Globe local to comply within ten (10) days from
Doctrine notice. Failure to comply within the
vii. Bargaining Agent – legitimate prescribed period shall be deemed
labor organization or any officer or withdrawal of the request.
agent of such organization whether
or not employed by the employer 4. Regional Director shall act on the
(i.e. federation officer) submission
5. Regional Director shall post the
1. Modes to Acquire status as Sole and SEBA Certification
Exclusive Bargaining Agent (SEBA)
Period: Fifteen (15) consecutive days
a. SEBA Certification
Where? At least two (2) conspicuous
Procedure: places in the establishment or covered
bargaining unit.
1. File Request for SEBA
Certification Effect of SEBA Certification:
Who shall file? Any Legitimate Labor Upon the issuance of the [SEBA
Organization, national union or federation Certification], the certified union or local
shall enjoy all the rights and privileges of
Where? Regional Office which issued its an exclusive bargaining agent of all the
certificate of registration or certificate of employees in the covered bargaining unit.
creation of chartered local
The certification shall bar the filing of a
2. Indicate in the request [PCE] by any labor organization for a
i. Name and address of the requesting period of one (1) year from the date of its
LLO issuance.
ii. Name and address of the company
where it operates Upon expiration of this one-year period,
iii. Bargaining unit sought to be any legitimate labor organization may file
represented a [PCE] in the same bargaining unit
iv. Approximate number of employees represented by the certified labor
in the bargaining unit organization, unless a [CBA] between the
v. Statement of the existence/non- employer and the certified labor
existence of other labor organization was executed and registered
organization/CBA with the Regional Office in accordance
with Rule XVII.
3. Regional Director shall act on the
request Effect of CBA on CE case – the
representation case shall not be adversely
When? Within one (1) day from affected by a collective bargaining
submission of request agreement registered before or during the
last 60 days of a subsisting agreement or
Action: during the pendency of the representation
a. Determine whether request is case
compliant with Sec. 2 and whether Substitutionary Doctrine
the bargaining unit sought to be
represented is organized or not; and CBA is negotiated by incumbent but new
b. Request a copy of the payroll SEBA won
If the Regional Director finds it deficient,
he/she shall advise the requesting union or

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Effect? The bargaining unit cannot
abandon the CBA simply by replacing the
CBA negotiated by the previous SEBA
Recourse of new bargaining agent – can
negotiate with the employer for the
shortening of the term/life of the CBA
b. Certification/Consent Election
Certification Election/Consent Election-
refers to the process of determining
through secret ballot the sole and exclusive
representative of the employees in an
appropriate bargaining unit
Certification Election – ordered by the
Department
Consent Election - means the election
voluntarily agreed upon by the parties with
or without the intervention by DOLE [Sec.
1(i), Rule I, Book V, IRR]
Procedure:
called to expedite and facilitate the
holding of the consent election.
Certification Election - is the process of
determining, through secret ballot, the sole
and exclusive representative of the
employees in an appropriate bargaining
unit for purposes of collective bargaining
or negotiation. [Sec. 1(i), Rule I, Book V,
IRR]
Purpose: The purpose of a certification
election is precisely 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)]
Incumbent SEBA – direct attack –
questioning the legality of the union
petitioning the SEBA
Prohibited grounds for denial/suspension:
i. Collateral attack
ii. Comingling

1. The parties may agree to hold a Certification Election

consent election Validity – Majority of eligible voters
a. Where no petition for certification
election was filed; or Winner – Majority of valid votes
b. Where a petition for certification Run Off Election
election had been filed, and upon
the intercession of Med-Arbiter -3 or more choices
[Sec. 25, Rule VIII, Book V, IRR]
2. Mediator-Arbiter shall call for the -no winner
consent election, reflecting the -total union votes amount to at least 50 %
parties’ agreement and the call in of total votes
the minutes of the conference.
Regional Director or authorized c. Bars to the holding of
representative shall determine the Certification/Consent Election
Election Officer by raffle in the Petition for certification may be filed
presence of representatives of the
contending unions if they so desire General Rule: Anytime
3. First pre-election conference is
Exceptions:
scheduled within ten (10) days
from the date of the agreement. 1. One-year bar rule
Subsequent conferences may be

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No certification election may be held
within 1 year from the time a valid
certification, consent or run-off election
has been conducted within the bargaining
unit.
[If the order of the Med-Arbiter certifying
the results of the election has been
appealed], the running of the one-year
period shall be suspended until the
decision on the appeal becomes final and
executory. [Sec. 3(a), Rule VIII, Book V]
Note: This bar also applies to a SEBA
Certification under Rule VII. “The
certification shall bar the filing of a
petition for certification election by any
labor organization for a period of one (1)
year from the date of its issuance.” [Sec.
4.2, Rule VII, Book V, IRR]
2. Negotiation bar rule
No certification of election may be filed
when:
i. Within 1 year after the valid
certification election
ii. The DULY CERTIFIED union has
COMMENCED AND
SUSTAINED negotiations in good
faith with the employer
iii. In accordance with Art. 261 of the
Labor Code Sec. 3(b), Rule VIII,
Book V
3. Deadlock bar rule
No certification of election may be filed
when:
i. The incumbent or certified
bargaining agent is a party;
ii. A bargaining deadlock had been:
a. Submitted to conciliation or
arbitration or;
b. Had become the subject of
a valid notice of strike or
lockout [Sec. 3(c), Rule
VIII, Book V, IRR
A “deadlock” is defined as the
“counteraction of things producing entire
stoppage;
• a state of inaction or of neutralization
caused by the opposition of persons or of
factions (as in government or voting
body): standstill.” [...]
• The word is synonymous with the word
impasse which [...] “presupposes
reasonable effort at good faith bargaining
which, despite noble intentions, does not
conclude in agreement between the
parties” [Divine World University v.
SOLE, G.R. No. 91915 (1992)]
4. Contract bar rule
BLR shall not entertain any petition for
certification election or any other action
which may disturb the administration of
DULY REGISTERED existing collective
bargaining agreements affecting the
parties, except under Arts. 264, 265, and
268 [(60-day freedom period)]. [Art. 238]
No petition for certification election may
be filed when a [CBA] between the
employer and a SEBA has been registered
in accordance with Art. 237.
Where such [CBA] is registered, the
petition may be filed only within sixty (60)
days prior to its expiry. [Sec. 3(d), Rule
VIII, Book V, IRR].
The Contract-Bar Rule shall apply in any
of the following: (1) when there exists an
unexpired registered CBA; or (2) when
there is no challenge on the representation
status of the incumbent union during the
freedom period. [D.O. No. 40-1-15
The five-year representation status
acquired by an incumbent bargaining agent
either through single enterprise collective
bargaining or multi-employer bargaining
shall not be affected by a subsequent
[CBA] executed between the same
bargaining agent and the employer during
the same five-year period. [Sec. 7, Rule
XVII, Book V, IRR]
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Despite an agreement for a CBA with a
life of more than five years, either as an
original provision or by amendment, the
bargaining union’s exclusive bargaining
status is effective only for five years and
can be challenged within sixty (60) days
prior to the expiration of the CBA’s first
five years. [FVC Labor UnionPTGWO v.
SANAMA-FVC-SIGLO, G.R. No. 176249
(2009)]
The rule is that 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. Hence, the contract
bar rule still applies. [Colegio de San Juan
de Letran v. Association of Employees,
G.R. No. 141471 (2000)]
Other Grounds for Denial of Petition for
CE:
i. Personality of the union
ii. Failure to submit a charter
certificate
iii. Absence of 25% signature support
for organized establishments
Bars one after the other (protection of the
SEBA)
i. CE – 1 year
ii. CBA – 5 years
iii. Deadlock (alternative)
iv. Sustained negotiations
Non-appealable: grant of a petition to an
unorganized establishments
All others are appealable to Sec of Labor
d. Failure of Election, Run-Off Election,
Re-run Election
Eligible Voter – voter belonging to the
ABU that is the subject of a petition for
certification election
Reckoning of Membership – all employees
who are members of the ABU three
months prior to the filing of the
petition/request shall be eligible to vote
Rationale: to avoid employer to influence
the results of the election
Election officer – not an adjudicator, only
a facilitator of election
Inclusion Exclusion Proceedings – parties
finalize the list of voters, adding and
removing by agreement
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 in
accordance with Sections 10 and 11 of this
Rule.
Med-arbiter will decide on the eligibility in
cases where the vote of the segregated
votes is material to the election
Double Majority Rule – refers to 1st
Majority – validity of the certification of
election; 2nd majority – determination of
the winners
1st Majority – total eligible voters
2nd Majority – determine if there is a
winning choice and who is the winning
choice
ABSTENTION – blank or unfilled ballot,
validly cast by an eligible voter; it is not
considered a negative ballot, it shall be
considered a valid vote for purposes of
determining a valid election; valid vote
SPOILED Ballot – ballot that is torn,
defaced or contains markings which can
lead to another clearly identify the voter
who casts such vote; invalid vote
2nd Majority
Total Eligible Voters – 150
First Majority – 76
Total Votes: 130
1. Failure of Election
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The Election Officer shall declare a failure
of election in the minutes of the election
proceedings when:
i. Number of VOTES CAST is less
than the majority of the number of
eligible voters; AND
ii. There are no material challenged
votes
Effect of Failure of Election: Shall not bar
the filing of a motion for the immediate
holding of a certification or consent
election within six (6) months from date of
declaration of failure of election.
Note: Under Sec. 1(tt), Rule I, Book V, a
RE-RUN ELECTION “shall likewise refer
to an election conducted after a failure of
election has been declared by the Election
Officer and/or affirmed by the [Med-
Arbiter].” Thus, under the Rules, this is the
other definition of a Re-Run Election.
Motion for another election after failure of
election [Sec. 20, Rule IX, Book V, IRR]
Within twenty-four (24) hours from receipt
of the motion, the Election Officer shall:
1. Immediately schedule another
election within fifteen (15) days
from receipt of motion
2. Cause posting of the notice of
election
a. At least ten (10) days prior
to the scheduled date of
election
b. In two (2) most
conspicuous places in the
establishment
Nullification of Election Results
It is precisely because respect must be
accorded to the will of labor thus
ascertained that a general allegation of
duress is not sufficient to invalidate a
certification election; it must be shown by
competent and credible proof. [United
Employees Union of Gelmart Industries
Philippines (UEUGIP) v. Noriel, No. L-
40810 (1975)]
2. Run-Off Election
Run-Off Election refers to an election
between the labor unions receiving the two
(2) highest number of votes in a
certification or consent election when the
following requisites have been complied
with:
1. Valid election;
2. The certification or consent
election provides for three (3) or
more choices (Note: “No Union” is
considered one choice – Prof.
Battad);
3. None of the contending UNIONS
received a majority of the VALID
VOTES cast;
4. No objections or challenges which
if sustained, can materially alter the
results; and
5. The total number of votes for all
contending UNIONS is at least
fifty (50%) of the number of
VOTES cast [Art. 268; Sec. 1(uu),
Rule I, Book V, IRR; Sec. 1, Rule
X, Book V, IRR]
Illustration
The CBU has 100 members and 80 of
which voted. Union “A”= 30; Union “B”=
15; Union “C”=15 and No Union= 20.
There were no invalid votes. Since none
got the majority of the 80 valid votes (40)
and the contending unions obtained 60
votes (which is at least 50% of the VOTES
cast), a run-off election is proper. The run-
off will be between the labor unions
receiving “the two highest number of
votes.” Pursuant to Art. 268, when an
election which provides for three or more
choices results in no choice receiving a
majority of the valid votes cast, a run-off
election shall be conducted between the
labor unions receiving the two highest
number of votes. Thus, the run-off will be
among Union “A”, “B”, and “C.”
[Azucena]
Procedure for Run-off Election:
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Election Officer shall motu proprio
conduct a run-off election within ten (10)
days from the close of the election
proceedings between the labor unions
receiving the two highest number of votes.
“No Union” shall not be a choice in the
run-off election [Sec. 1, Rule X, Book V,
IRR].
Same voters’ list used in the certification
election shall be used in the run-off
election.
The labor union receiving the GREATER
number of VALID VOTES cast shall be
certified as the winner [Sec. 2, Rule X,
Book V, IRR].
Note: Please note the difference between
valid votes cast versus votes cast – valid
votes excludes spoiled votes.
3. Re-run Election
Re-run Election refers to an election
conducted to break a tie between
contending unions, including between "no
union" and one of the unions.
It shall likewise refer to an election
conducted after a failure of election has
been declared by the election officer
and/or affirmed by the mediator-arbiter.
[Sec. 1(tt), Rule 1, Book V, as amended by
DO 40-I15]
Situations Contemplated:
1. A tie between two (2) choices.
2. Failure of Elections [
Duty of Election Officer
1. Notify parties of a re-run election
2. Cause posting of notice within five
(5) days from said election.
When will re-run be conducted:
Within ten (10) days after the posting of
the notice of the union declared as winner
and certified choice receiving the
HIGHEST VOTES CAST.
e. Employer as a mere bystander rule
In all cases, whether the petition for
certification election is filed by an
employer or a legitimate labor
organization, the employer shall not be
considered a party thereto with a
concomitant right to oppose a petition for
certification election. [Art. 271]
The employer’s participation shall be
limited to:
1. Being notified or informed of
petitions of such nature
2. Submitting the list of employees
during the pre-election conference,
should the MedArbiter act
favorably on the petition [Art. 271]
The principle of the employer as by-
stander shall be strictly observed
throughout the conduct of certification
election.
The employer shall not harass, intimidate,
threat[en], or coerce employees before,
during and after elections. [Sec. 1, Rule
IX, Book V, IRR]
However, manifestation of facts that would
aid the [Med-Arbiter] in expeditiously
resolving the petition such as existence of
a contract-bar, one year bar or deadlock
bar may be considered. [Sec. 1, Rule VIII,
Book V, IRR]
The employer is not a party to a
certification election, which is the sole or
exclusive concern of the workers. [...]
The only instance when the employer may
be involved in that process is when it is
obliged to file a petition for certification
election on its workers’ request to bargain
collectively pursuant to Art. 258 [now Art.
270]. [Hercules Industries, Inc. v. Sec. of
Labor, G.R. No. 96255 (1992)]
[The employer] did not possess the legal
personality to file a motion to dismiss the
petition for certification election even if
based on the ground that its supervisory
employees are in reality managerial
employees.
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It is well-settled that an employer has no b. And any grievances or

standing to question a certification election questions arising under
since this is the sole concern of the such agreement
workers. The only exception to this rule is i. And executing a contract
Art. 258 [now Art. 270]. [PT&T v. incorporating such agreements if
Laguesma, G.R. No. 101730 (1993)] requested by either party
ii. But such duty does not compel to
[A] company’s interference in the an party to agree
certification election below by actively
opposing the same [...] unduly creates a 1. Duty to Bargain Collectively,
suspicion that it intends to establish a bargaining in Bad Faith
company union. [Oriental Tin Can Labor
Union v. Secretary of Labor, G.R. No. Definition: The duty to bargain
116751 (1998)] collectively

D. Collective Bargaining Meaning: the performance of a mutual

obligation to meet and convene promptly
Definition, Nature and Purpose and expeditiously in good faith
Collective Bargaining is: Purpose: negotiating an agreement with
respect to:
i. Defined as negotiations towards a
collective agreement 1. Wages
ii. One of the democratic frameworks 2. Hours of work
under the [Labor] Code 3. And all other terms and conditions
iii. Designed to stabilize the relations of employment including:
between labor and management a. Proposals for adjusting any
and to create a climate of sound grievances or
and stable industrial peace. b. Questions arising under
iv. A mutual responsibility of the such agreement and
employer and the Union and is c. Executing a contract
characterized as a legal obligation. incorporating such
[Kiok Loy v. NLRC, G.R. No. L- agreements
54334 (1986)] d. if requested by either party,
but such duty does not
Types of CBA: compel any party to agree
i. Single Employer to a proposal or to make
ii. Multi-employer bargaining – not any concession. [Art. 263]
mandated, volumtarily; all the CBA entered into by former SEBA –
parties must agree temporary – if there is a new SEBA, it can
Duty to Bargain: negotiate with the management
(SONEDCO vs URC)
i. Performance of a mutual obligation
a. To meet and convene Meaning of Bargaining Good Faith
b. Promptly and expeditiously There is no per se test of good faith in
c. In good faith bargaining.
ii. For the purpose of negotiating an
agreement Good faith or bad faith is an inference to
iii. With respect to: be drawn from the facts. [Union of
a. Wages, hours of work and Filipino Employees v. Nestle Philippines,
all other terms Inc., G.R. Nos. 158930-31 (2008)]

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[T]he failure to reach an agreement after
negotiations continued for a reasonable
period does not establish a lack of good
faith.
The laws invite and contemplate a
collective bargaining contract, but they do
not compel one. [Tabangao Shell Refinery
Employees Association v. Pilipinas Shell
Petroleum Corporation, G.R. No. 170007
(2014)]
Period to Reply; Bad Faith
[The period to reply] is merely procedural,
and non-compliance cannot be
automatically deemed to be an act of
unfair labor practice. [National Union of
Restaurant Workers v. CIR, G.R. No. L-
20044 (1964)]
Failure to Reply as Indicia of Bad Faith
[The employer’s] refusal to make a
counterproposal [...] is an indication of its
bad faith. Where the employer did not
even bother to submit an answer to the
bargaining proposals of the union, there is
a clear evasion of the duty to bargain
collectively, [...] making it liable for unfair
labor practice. [General Milling Corp. v.
CA, G.R. No. 146728 (2004)]
2. Collective Bargaining Agreement
(CBA), Mandatory Provisions
Collective Bargaining Agreement or
“CBA” refers to the negotiated contract
between a legitimate labor organization
and the employer concerning wages, hours
of work and all other terms and conditions
of employment in a bargaining unit. [Sec.
1(k), Rule I, Book V, IRR]
Nature of the CBA
The CBA is the law between the parties
and they are obliged to comply with its
provisions. [Zuellig Pharma Corporation v.
Alice Sibal, G.R. No. 173587 (2013)]
Although it is a rule that a contract freely
entered between the parties should be
respected, since a contract is the law
between the parties, said rule is not
absolute. [... Citing 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.
[Halagueña v. Philippine Airlines, G.R.
No. 172013 (2009)]
Mandatory Provisions in a Collective
Bargaining Agreement
Art. 273. Grievance Machinery and
Voluntary Arbitration
The parties to a Collective Bargaining
Agreement 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
1. Arising from the interpretation or
implementation of their Collective
Bargaining Agreement, and
2. Those arising from the
interpretation or enforcement of
company personnel policies
All grievances submitted to the grievance
machinery which are not settled within
seven (7) calendar days from the date of its
submission shall automatically be referred
to voluntary arbitration prescribed in the
Collective Bargaining Agreement.
For this purpose, parties to a Collective
Bargaining Agreement shall:
1. name and designate in advance a
Voluntary Arbitrator or panel of
Voluntary Arbitrators, or
2. include in the agreement a
procedure for the selection of such
Voluntary Arbitrator or panel of
Voluntary Arbitrators, preferably
from the listing of qualified
Voluntary Arbitrators duly
accredited by the Board.
In case the parties fail to select a Voluntary
Arbitrator or panel of Voluntary
Arbitrators, the Board shall designate the
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Voluntary Arbitrator or panel of Voluntary
Arbitrators
When: as may be necessary
How: pursuant to the selection procedure
agreed upon in the Collective Bargaining
Agreement
Effect: designated Voluntary Arbitrator or
panel of Voluntary Arbitrators shall act
with the same force and effect as if the
Arbitrator or panel of Arbitrators have
been selected by the parties as described
above
3. Signing, Posting, Registration
Within thirty (30) days from the execution
of a Collective Bargaining Agreement, the
parties shall submit copies of the same
directly to the Bureau or the Regional
Offices of the Department of Labor and
Employment for registration […]. [Art.
237]
Requirements for Registration
The application for CBA registration shall
be accompanied by the original and two
(2) duplicate copies of the following
documents which must be certified under
oath by the representative(s) of the
employer(s) and labor union(s) concerned:
1. The collective bargaining
agreement
2. A statement that the collective
bargaining agreement was posted
in at least two (2) conspicuous
places in the establishment or
establishments concerned for at
least five (5) days before its
ratification
3. A statement that the collective
bargaining agreement was ratified
by the majority of the employees in
the bargaining unit of the employer
or employees concerned. [Sec. 2,
Rule XVII, Book V, IRR]
4. Term of CBA, Freedom Period
Art. 265. Terms of a Collective Bargaining
Agreement – Any Collective Bargaining
Agreement that the parties may enter into
shall, insofar as the representation aspect is
concerned, be for a term of five (5) years.
[...] All other provisions of the Collective
Bargaining Agreement shall be
renegotiated not later than three (3) years
after its execution. [...]
CBA Duration for economic provisions: 3
years
CBA Duration for non-economic
provisions:
5 years for representational or political
issues; cannot be renegotiated to extend
beyond 5 years. [FVC Labor Union-
PTGWO v. SANAMA-FVC-SIGLO, G.R.
No. 176249 (2009)]
CBA Duration: Freedom Period 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 sixty-day period immediately before
the date of the expiry of such five-year
term of the Collective Bargaining
Agreement. [Art. 265]
E. Unfair Labor Practices
1. Nature, Aspects
Unfair labor practice refers to acts that
violate the workers’ right to organize. The
prohibited acts are related to the workers’
right to self-organization and to the
observance of a CBA. Without that
element, the acts, no matter how unfair, are
not unfair labor practices. The only
exception is Art. 259(f) [i.e. to dismiss,
discharge or otherwise prejudice or
discriminate against an employee for
having given or being about to give
testimony under this Code]. [Philcom
Employees Union v. Phil. Global, G.R.
No. 144315 (2006)]
Interference, Restrain and Coercion
Nature of ULP
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a. 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
b. disrupt industrial peace
c. hinder the promotion of healthy
and stable labor-management
relations
d. violations of the civil rights of both
labor and management but are also
criminal offenses [Art. 258]
Four forms of Unfair Labor Practice in
Collective Bargaining:
1. Failure or refusal to meet and
convene
2. Evading the mandatory subjects of
bargaining
3. Bargaining in bad faith
4. Gross violation of the CBA
Purpose of the Policy Against ULPs
Protection of right to self-organization
and/or collective bargaining:
a. The employee is not only protected
from the employer but also from
labor organizations
b. The employer is also protected
from ULP committed by a labor
organization.
The public is also protected because it has
an interest in continuing industrial peace.
Employer-Employee Relationship
Required General Rule: An unfair labor
practice may be committed only within the
context of an employer-employee
relationship [American President Lines v.
Clave, G.R. No. L-51641 (1982)]
Exception: “Yellow Dog” condition or
contract: 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.
[Art. 259 (b)]
Parties Not Estopped from Raising ULP
by Eventual Signing of the CBA
The eventual signing of the CBA does not
operate to estop the parties from raising
unfair labor practice charges against each
other. [Standard Chartered Bank Union v.
Confesor, G.R. No. 114974 (2004)]
Statutory Construction
The Labor Code leaves to the court the
work of applying the law's general
prohibitory language, in light of infinite
combinations of events, which may be
charged as constituting an unfair labor
practice. [HSBC Employee Union v.
NLRC, G.R. No. 125038 (1997)]
Note: Bargaining in bad faith constitutes
Unfair Labor Practice, which may be
committed by either Employer or Labor
Organization.
2. By Employers
a. Interference/Restraint/Coercion
The fact that the resignations of the union
members occurred during the pendency of
the case before the labor arbiter shows
GMC’s desperate attempts to cast doubt on
the legitimate status of the union. The ill-
timed letters of resignation from the union
members indicate that GMC had interfered
with the right of its employees to self-
organization. [General Milling Corporation
v. Court of Appeals, G.R. 146728 (2004)]
b. Yellow Dog Contracts
Yellow dog contracts 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.
Requisites:
1. A representation by the employee
that he is not a member of a labor
organization
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2. A promise by the employee that he
will not join a union
3. A promise by the employee that
upon joining a labor organization,
he will quit his employment
[Azucena]
c. Contracting Out Services which
Discourage Unionism
General Rule: contracting out is not a
ULP, but is covered by the employer’s
management prerogative
Exception:
1. contracted-out services or functions
are performed by union members
AND
2. contracting out will interfere with,
restrain, or coerce employees in the
exercise of their right to self-
organization.
d. Company union
Company Union means any labor
organization whose formation, function or
administration has been assisted by any act
defined as unfair labor practice by this
Code. [Art. 219(i)]
The employer commits ULP if it initiates,
dominates, or otherwise interferes with the
formation or administration of any labor
organization.
Example: giving out financial aid to any
union's supporters or organizers
e. Discrimination to Encourage/
Discourage Unionism
General Rule: it is ULP 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.
Exception: Union Security Clauses
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 obligation to acquire or retain union
membership as a condition affecting
employment. [NUWHRAIN v. NLRC,
G.R. No. 179402 (2008)]
[Union security clause] is an indirect
restriction on the right of an employee to
self-organization. It is a solemn
pronouncement of a policy that while an
employee is given the right to join a labor
organization, such right should only be
asserted in a manner that will not spell the
destruction of the same organization.
[Tanduay Distillery Labor Union v.
NLRC, G.R. No. 75037 (1987)]
[Employees], although 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)].
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)]
f. Discrimination for having given or
about to give testimony
g. Violation of Duty to Bargain
Collectively
Collective bargaining does not end with
the execution of an agreement. Being a
continuous process, the duty to bargain
necessarily imposes on the parties the
obligation to live up to the terms of such a
collective bargaining agreement if entered
into, it is undeniable that non-compliance
therewith constitutes an unfair labor
practice. [Shell Oil Workers Union v. Shell
Co., G.R. No. L-28607 (1971)]
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h. Payment of Negotiation or
Attorney’s Fees
Sweetheart contracts are favorable both to
the union and the employer at the expense
of the employees. The settlement of
bargaining issues must be made by fair
bargaining in good faith, and not through
the payment of negotiation or attorney's
fees which will ultimately lead to
sweetheart contracts.
i. Violation of a Collective
Bargaining Agreement
Violations of collective bargaining
agreements, except flagrant and/or
malicious refusal to comply with its
economic provisions, shall not be
considered unfair labor practice and shall
not be strikeable. [Book V, Rule XXII,
Sec. 5]
The alleged violation of the CBA, even
assuming it was malicious and flagrant, is
not a violation of an economic provision,
thus not an Unfair Labor Practice. [BPI
Employees Union-Davao FUBU v. BPI,
G.R. No. 174912 (2013)]
An employer cannot be considered to have
committed a gross and economic violation
of the CBA when it, in good faith,
withheld union dues and death benefits
from the union upon written request of the
union members in light of the conflict
between the members and the union
officers and instead deposited such amount
to the DOLE. [Arellano University
Employees and Workers Union v. Court of
Appeals, G.R. 139940 (2006)]
3. By Labor Organizations
a. Restraint or Coercion
“Interfere” is not included in Art. 260
simply because any act of a labor
organization amounts to interference to the
right of self-organization.
b. Discrimination:
Encourage/Discourage Unionism
General Rule: It is a ULP for a labor
organization to cause an employer to
discriminate against an employee.
Exception: Provisions of a valid union
security clause and other company policies
applicable to all employees.
c. Violation of Duty, or Refuse to
Bargain
d. Illegal Exaction (Featherbedding)
The practice of the labor organization to
cause or attempt to cause an employer to
pay or deliver or agree to pay or deliver
money or other things of value, in the
nature of an exaction, for services which
are not performed or are not to be
performed, including the demand for a fee
for union negotiations.
e. Asking or Accepting Negotiation
and other Attorney's Fees
f. Violation of a Collective
Bargaining Agreement
F. Peaceful Concerted Activities
Definition A concerted activity is one
undertaken by two or more employees to
improve their terms and conditions of
work.
Nature of the Right to Strike and Lockout
The right to strike is a constitutional and
legal right of the workers, as the employers
have the inherent and statutory right to
lockout within the context of labor
relations and collective bargaining.
It is a means of last resort and presupposes
that the duty to bargain in good faith has
been fulfilled and other voluntary modes
of dispute settlement have been tried and
exhausted. [Guidelines Governing Labor
Relations (1987)]
Non-abridgment of right to self-
organization
It shall be unlawful for any person to
restrain, coerce, discriminate against or
unduly interfere with employees and
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workers in their exercise of the right to
self-organization. Such right shall include
the right to (…) engage in lawful
concerted activities for the same purpose
or for their mutual aid and protection,
subject to the provisions of Art. [279] of
this Code. [Art. 257]
Limitation: Concerted activities must be in
accordance with law
The strike is a powerful weapon of the
working class. Thus, it must be declared
only after the most thoughtful consultation
among them, conducted in the only way
allowed; that is, peacefully, and in every
case conformably to reasonable regulation.
Any violation of the legal requirements
and strictures will render the strike illegal,
to the detriment of the very workers it is
supposed to protect. [Batangas Laguna
Tayabas Bus Co. v. NLRC, G.R. No.
101858 (1992)]
Forms of Concerted Activities
Concerted Activities by Labor
Organizations
a. Strike (includes slow downs, mass
leaves, sitdowns, attempts to
damage destroy or sabotage plant
equipment and similar activities)
b. Picketing
c. Boycott
Response to Concerted Activities available
to Employers
a. Lockout
1. Strikes
Definition
Any temporary stoppage of work by the
concerted action of employees as a result
of an industrial or labor dispute. [Art.
219(o)]
Requisites for a Valid Strike
A valid strike must have a lawful ground
and must conform with the procedural
requirements set by law.
a. Grounds for Strike
1. Bargaining Deadlocks
2. ULP (Art 278 c)
Note: A strike, justified by the employees’
belief in good faith that ULP was done by
the employer at the time the strikers went
on strike, is presumed valid even if the fact
of ULP was later found to be untrue
[Master Iron Labor v. NLRC, 219 SCRA
47 (1993)].
Procedural Requirements for Strike (Art.
278)
1. Effort to bargain (for bargaining
deadlock strikes)
No labor organization […] shall declare a
strike […] without first having bargained
collectively in accordance with Title VII of
this Book […] [Art. 279(a)]
The Implementing Rules use the words as
far as practicable. In this case, attaching
the counter-proposal of the company to the
notice of strike of the union was not
practicable. It was absurd to expect the
union to produce the company’s counter-
proposal which it did not have. [Club
Filipino, Inc. v. Bautista, G.R. No. 168406
(2009)]
b. Mandatory Procedural Requirements
Ground: Bargaining Deadlocks [Art.
278(c)]
Filed by: The duly certified or recognized
bargaining agent may file a notice of strike
Filed with: With the Ministry [now
DOLE]
When: At least 30 days before the intended
date of the strike
Ground: Unfair Labor Practice [Art.
278(c)]
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Filed by: The duly certified or recognized
bargaining agent, or in the absence of such
agent, any legitimate labor organization in
behalf of its members may file a notice of
strike
Filed with: With the Ministry [now
DOLE]
When: The period of notice shall be 15
days
Note: In case of dismissal from
employment of union officers duly elected
in accordance with the union constitution
and by-laws, which may constitute union-
busting, where the existence of the union is
threatened, the 15-day cooling-off period
shall not apply and the union may take
action immediately
Notice to the Employer
In case of unfair labor practice and/or
union busting, the notice must be served to
the employer. Failure to do so will
constitute noncompliance with the
procedural requirements and will result to
an illegal strike. [Filipino Pipe and
Foundry Corp v. NLRC, G.R. No. 115180
(1999)]
Rationale: Due Process
Action on Notice:
i. Upon receipt of a valid notice of
strike or lockout, the NCMB,
through its Conciliator-Mediators,
shall call the parties to a conference
the soonest possible time in order
to actively assist them to explore
all possibilities for amicable
settlement.
ii. The Conciliator-Mediator may
suggest/offer proposals as an
alternative avenue for the
resolution of their
disagreement/conflict which may
not necessarily bind the parties
iii. If conciliation/mediation fails, the
parties shall be encouraged to
submit their dispute for voluntary
arbitration.
2. Observance of cooling-off period
a. 15 days for ULP
No cooling-off period when the
ULP can be considered union
busting (dismissal of duly
elected union officers from
employment)
b. 30 days for bargaining
deadlock
Purpose of Cooling Off Period
During the cooling-off period, it shall be
the duty of the Ministry [now DOLE] to
exert all efforts at mediation and
conciliation to effect a voluntary
settlement.
Should the dispute remain unsettled until
the lapse of the requisite number of days
from the mandatory filing of the notice, the
labor union may strike or the employer
may declare a lockout. [Art. 278 (e)]
The purpose of the cooling-off period is to
provide an opportunity for mediation and
conciliation. [National Federation of Sugar
Workers v. Ovejera, G.R. No. L-59743
(1982)]
3. Notice of strike vote meeting to
NCMB within 24 hours before the
strike vote [Sec. 10, Rule XXII,
Book V, IRR]
The purpose of the notice is to allow the
NCMB to decide whether or not they will
send a representative to supervise the
strike vote.
4. Strike vote
Requirements for a declaration of a strike
in a strike vote:
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i. approval by a majority of the total
union membership in the
bargaining unit concerned
ii. approval is obtained by secret
ballot in a meeting/referendum
called for the purpose
5. Strike vote report sent to NCMB
6. Observance of the waiting period
(7-day strike ban)
7 Day Observance of the Strike Ban
The waiting period, on the other hand, is
intended to provide opportunity for the
members of the union or the management
to take the appropriate remedy in case the
strike or lockout vote report is false or
inaccurate. [National Federation of Sugar
Workers v. Ovejera, G.R. No. L-59743
(1982)]
The waiting period is intended to give the
DOLE an opportunity to verify whether
the projected strike really carries the
imprimatur of the majority of the union
members. [Lapanday Workers Union v.
NLRC, G.R. Nos. 95494-97 (1995)]
Compliance with Both Cooling-off and
Waiting Periods
The observance of both periods must be
complied with, although a labor union may
take a strike vote and report the same
within the statutory cooling-off period.
The cooling-off and 7-day strike ban
provisions of law constitute a valid
exercise of police power of the State.
[National Federation of Sugar Workers v.
Ovejera, G.R. No. L-59743 (1982)]
The requirements of cooling off period and
7 day strike ban must be complied with
although the labor union may take a strike
vote and report the same within the
statutory cooling-off period. (NFSW vs
Ovejera)
Mutually exclusive periods (used in the
NCMB Manual)
The cooling off period and the 7-day
period are mutually exclusive. Thus, in the
case of Capitol Medical Center v. NLRC
[G.R. No. 147080 (2005)], the Court held
that when the strike vote is conducted
within the cooling-off period, the 7-day
requirement shall be counted from the day
following the expiration of the cooling off
period.
c. Legal Strike vs Illegal Strike
i. Legal Strike - one called for a valid
purpose and conducted through
means allowed by law.
ii. Illegal strike – one staged for a
purpose not recognized by law, or
if for a valid purpose, conducted
through means not sanctioned by
law.
Effect of Illegality/Liability of
Participating Members/Officers of the
Union
a. Ordinary Striking Worker -
cannot be terminated for mere
participation in an illegal strike;
proof must be adduced showing
that he or she committed illegal
acts during the strike.
b. Participating Union Officer -
may be terminated, not only
when he actually commits an
illegal act during a strike, but
also if he knowingly
participates in an illegal strike
[Phimco Industries, Inc. v.
PILA, G.R. No. 170830
(2010)]
Prohibited Grounds for Strike:
1. Labor standards cases such as wage
orders
2. Issues involving wage distortion
caused by legislated wage orders
3. Execution and enforcement of final
orders or awards of cases pending
at the DOLE Regional Offices,
BLR, NLRC, VA, CA and SC and
related offices
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4. Violations of the CBA which are
not gross in character (not ULP)
[BPI Employees Union-Davao
FUBU v. BPI, G.R. No. 174912
(2013)]
Gross in character shall mean
flagrant and/or malicious refusal to
comply with the economic
provisions of such agreement. [Art.
274]
d. Prohibited Acts during Strike
1. By anyone. No person shall
obstruct, impede, or interfere with,
by force, violence, coercion,
threats, or intimidation, any
peaceful picketing by employees
[Art. 279(b)];
a. Blocking the free ingress
to/ egress from work
premises for lawful
purposes
b. Obstruction of public
thoroughfares
c. Threatening, coercing and
intimidating non-striking
employees, officers,
suppliers and customers
d. Resistance and defiance of
assumption of jurisdiction
by the Labor Secretary or
an injunction
e. Acts of violence
[Association of
Independent Unions in the
Philippines (AIUP), et. al.
v. NLRC, G.R. No. 120505
(1999)]
The violence must be pervasive and
widespread, consistently and deliberately
resorted to as a matter of policy [Shell Oil
Workers v. Shell Company of the Phil., 39
SCRA 276 (1971)] (if violence was
resorted to by both sides, such violence
cannot be a ground for declaring the strike
as illegal) [Malayang Samahan ng
Manggagawa sa M. Greenfield v. Ramos,
357 SCRA 77 (2000)]
2. By employer. No employer shall
use or employ any strike-breaker,
nor shall any person be employed
as a strike-breaker. [Art. 279(c)]
3. By public official or police force.
No public official or employee,
including officers and personnel of
the New Armed Forces of the
Philippines or the Integrated
National Police, or armed person,
shall bring in, introduce or escort in
any manner, any individual who
seeks to replace strikers in entering
or leaving the premises of a strike
area, or work in place of the
strikers. [Art. 279(d)]
e. Liability of Union Officers and
Members for Illegal Strike and Illegal Acts
During Strike
Liability of Parties
Any union officer who knowingly
participates in an illegal strike and any
worker or union officer who knowingly
participates in the commission of illegal
acts during a strike may be declared to
have lost his employment status. [Art.
279(a)]
Note: Mere participation in an illegal strike
by a union officer is sufficient ground to
terminate his employment. In case of a
lawful strike, the union officer must
commit illegal acts during a strike for him
to be terminated. [Art. 279(a)]
Procedural due process is still required for
dismissing union officers/ordinary
workers. Where an opportunity to be heard
either through oral arguments or through
pleadings is accorded, there is no denial of
procedural due process. [Equitable PCI
Banking Corp. v. RCBC Capital Corp, 574
SCRA 858 (2004)]
Liability of Ordinary Workers
General Rule: Participation by a worker in
a lawful strike is not ground for
termination of his employment. [Art.
279(a)]
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Exception: When the worker participated
in illegal acts during the strike; needs
clear, substantial and convincing proof
available under the circumstances to
justify the penalty of dismissal [Toyota
Motors Philippines Workers Association v.
NLRC, 537 SCRA 171 (2007)].
Note: The mere fact that the criminal
complaints against terminated Union
members were subsequently dismissed
does not extinguish their liability under the
Labor Code [C. Alcantara & Sons, Inc. v.
CA, G.R. No. 155109 (2011)].
Liability of Employer: Any worker whose
employment has been terminated as a
consequence of any unlawful lockout shall
be entitled to reinstatement with full
backwages. [Art. 279(a)]
2. Picketing
The right of legitimate labor organizations
to strike and picket and of employers to
lockout, consistent with the national
interest, shall continue to be recognized
and respected. [Art. 278(b)]
Picketing involves merely the marching to
and fro at the premises of the employer,
usually accompanied by the display of
placards and other signs making known the
facts involved in a labor dispute.
As applied to a labor dispute, to picket
means the stationing of one or more
persons to observe and attempt to observe.
The purpose of pickets is said to be a
means of peaceable persuasion. [Sta. Rosa
Coca-Cola Plant Employees Union v.
Coca-Cola Bottlers Philippines, Inc., G.R.
Nos. 164302-03 (2007)]
Peaceful Picketing is the right of workers
during strikes consisting of marching to
and fro before an establishment involved
in a labor dispute generally accompanied
by the carrying and display of signs,
placards and banners intended to inform
the public about the dispute. [Guidelines
Governing Labor Relations, October 19,
1987; NCMB Manual, Sec. 1]
Purpose The purpose of the picket line is
to persuade employers peacefully by
publicizing the labor dispute to inform the
public of what is happening and thus cause
other workers not to work in the
establishment and for customers not to do
business there [Phimco Industries, Inc. v.
Phimco Industries Labor Association
(PILA), et al., 628 SCRA 119 (2010)].
Prohibited Activities in Picketing
1. By any person. No person shall
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. [Art. 279(b)]
2. By police force. The police force
shall keep out of the picket lines
unless actual violence or other
criminal acts occur therein:
Provided, That nothing herein shall
be interpreted to prevent any public
officer from taking any measure
necessary to maintain peace and
order, protect life and property,
and/or enforce the law and legal
orders. [Art. 279(d)]
3. By person engaged in picketing.
No person engaged in picketing
shall commit any act of violence,
coercion or intimidation or obstruct
the free ingress to or egress from
the employer’s premises for lawful
purposes, or obstruct public
thoroughfares. [Art. 279(e)]
3. Lockouts
Lockout is the temporary refusal of an
employer to furnish work as a result of an
industrial or labor dispute. [Art. 219 (p)]
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Illegal strike and illegal lockout/In Pari
Delicto Doctrine
When the employer engaged in illegal
lockout and the employee engaged in
illegal strike, both parties are in pari
delicto, and such situation warrants the
restoration of the status quo ante and
bringing the parties back to the respective
positions before the illegal strike and
illegal lockout. [Philippines Inter-Fashion
Inc. v. NLRC, G.R. No. L-59847 (1982)]
a. Grounds for Lockout
1. Bargaining Deadlock
2. ULP by Labor Organizations
b. Mandatory Procedural Requirements
1. Effort to bargain (in case of
bargaining deadlock)
No employer shall declare a […] lockout
without first having bargained collectively
in accordance with Title VII of this Book.
[Art. 279(a)]
2. Filing and service of notice of
lockout to the NCMB
Filed with: The Department
When: At least 30 days before the intended
date of the lockout [Art. 278(c)]
3. Observance of cooling-off period
15 days for ULP
30 days for bargaining deadlock
4. Notice of lockout vote meeting
within 24 hours before the intended
vote [Sec. 10, Rule XXII, Book V,
IRR]
5. Lockout vote
6. Report of lockout vote
7. Observance of the waiting period
(7-day strike ban)
4. Assumption of Jurisdiction by the
DOLE Secretary
When in his opinion, there exist a labor
dispute causing or likely to cause a strike
or lockout in an industry indispensable to
the national interest, the SOLE may
assume jurisdiction over the dispute and
decide it or certify the same to the
Commission for compulsory arbitration.
[Art. 278(g)]
Requisites for Assumption of Jurisdiction
1. Both parties have requested the
SOLE to assume jurisdiction; or
2. After a conference called by the
Office of the SOLE on the
propriety of its issuance, motu
proprio or upon a request or
petition by either parties to the
labor dispute [Book V, IRR Rule
XXII, sec. 15, IRR as amended by
D.O. No. 40-H-13 s 2013]
Immediately Executory
The assumption and certification orders
are executory in character and must be
strictly complied with by the parties.
[Allied Banking v. NLRC, G.R. No.
116128 (1996)]
Effect of defiance of assumption or
certification orders
No strike or lockout shall be declared after
assumption of jurisdiction by the President
or the Minister 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. [Art.
279(a), par. 2]
A strike undertaken despite the issuance by
the Secretary of Labor of an assumption or
certification order becomes a prohibited
activity and thus, illegal, pursuant to Art.
279(a) of the Labor Code. [Allied Banking
v. NLRC, G.R. No. 116128 (1996)]
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threat, prohibited or
unlawful act
5. Injunctions ii. Except against the
General Rule: Injunctions are prohibited. person or persons,
association or
Exceptions: Those provided under Art. organization making
225 (referring to the Powers of the NLRC) the threat or
in connection with Art. 279 (on Prohibited committing the
Activities) under the Labor Code. prohibited or
Findings of fact by the NLRC for an unlawful act or
Injunction to issue actually authorizing
or ratifying the same
Art. 225(e) Powers of the Commission after actual
knowledge thereof
a. To enjoin or restrain any actual or
b. That substantial and
threatened commission of any or
irreparable injury to
all prohibited or unlawful acts; or
complainant's property will
b. To require the performance of a
follow;
particular act in any labor dispute
c. That as to each item of
which, if not restrained or
relief to be granted, greater
performed forthwith, may cause
injury will be inflicted upon
grave or irreparable damage to any
complainant by the denial
party or render ineffectual any
of relief than will be
decision in favor of such party
inflicted upon defendants
Provided, That no temporary or permanent by the granting of relief;
injunction in any case involving or d. That complainant has no
growing out of a labor dispute as defined adequate remedy at law;
in this Code shall be issued except: and
e. That the public officers
1. After hearing the testimony of charged with the duty to
witnesses protect complainant's
2. With opportunity for cross- property are unable or
examination, in support of the unwilling to furnish
allegations of a complaint made adequate protection.
under oath, and testimony in
opposition thereto, if offered, and
3. Only after a finding of fact by the
Commission, to the effect: VI. TERMINATION OF
a. That prohibited or unlawful EMPLOYMENT
acts have been threatened A. Security of Tenure - In case of regular
and will be committed employment, the employer shall not
unless restrained, or have terminate the services of an employee
been committed and will be except for a just cause or when authorized
continued unless restrained by this Title.
i. But no injunction or
temporary An employee who is unjustly dismissed
restraining order from work shall be entitled to:
shall be issued on 1. Reinstatement without loss of
account of any seniority rights, and other
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2. Full backwages inclusive of
allowance, and
3. Other benefits or their monetary
equivalent
Reckoning period of computation: from
the time his compensation was withheld up
to his actual reinstatement.
Termination of employment is not
anymore a mere cessation or severance of
a contractual relationship, but an economic
phenomenon affecting members of the
family. Under the principle of social
justice, dismissal of employees is
adequately protected by the laws.
[Albambra Industries v. NLRC, GR No.
106771 (1994)]
Management Prerogative
An employer cannot be compelled to
continue in its employ a person whose
continuance in the service would patently
be inimical to its interests. [Baguio Central
University v. Gallente, GR No, 188267
(2013)]
Requisites for the valid invocation of
management prerogative affecting security
of tenure:
1. Exercised in good faith for the
advancement of employer’s
interest, and
2. Not for the purpose of defeating or
circumventing the rights of the
employees under special laws or
valid agreements. [San Miguel
Brewery Sales Force Union v.
Ople, GR No. 52515 (1989)]
1. Categories of Employment as to tenure
a. Regular
An employment shall be deemed to be
regular where the employee has been
engaged to perform activities which are
usually necessary or desirable in the usual
(usually necessary or usually desirable);
business or trade of the employer, except
where:
a. The employment has been fixed for
a specific project or undertaking,
the completion or termination of
which has been determined at the
time of the engagement of the
employee; or (project employment)
b. The work or service to be
performed is seasonal in nature and
the employment is for the duration
of the season. (seasonal employee)
[Art. 295]
An employee who is allowed to work after
a probationary period shall be considered a
regular employee. [Art. 296]
Two kinds of Regular Employee:
1. Those engaged to perform
activities which are necessary or
desirable in the usual business or
trade of the employer; and
2. Casual employees who have
rendered at least 1 year of service,
whether continuous or broken, with
respect to the activity in which they
are employed. [Romares v. NLRC,
G.R. No. 122327 (1998)]
Reasonable connection rule
The primary standard to determine regular
employment is the reasonable connection
between the activity performed by the
employee to the business or trade of the
employer.
Test: W/N the employee is usually
necessary or desirable in the usual business
or trade of the employer.
If the employee has been performing the
job for at least one year, even if not
continuous or merely intermittent, the
repeated and continuing need for
performance is sufficient evidence of
necessity, if not indispensability of that
activity to the business of the employer.
Hence, the employment is also considered
regular, but only with respect to such
activity and while such activity exists.
[Forever Richons Trading Corp. v. Molina,
G.R. No. 206061 (2013)]
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Hiring for an extended period
Where the employment of project
employees is extended long after the
supposed project has been finished, the
employees are removed from the scope of
project employees and considered regular
employees. [Audion Electric Co., Inc. v.
NLRC, G.R. No. 106648 (1999)]
While length of time is not a controlling
test for project employment, it can be a
strong factor in determining whether the
employee was hired for a specific
undertaking or in fact tasked to perform
functions which are vital, necessary and
indispensable to the usual business or trade
of the employer. [Tomas Lao Const. v.
NLRC, G.R. No. 116781 (1997)]
b. Casual
An employment shall be deemed to be
casual where:
a. An employee is engaged to
perform a job, work or service
which is merely incidental to the
business of the employer, and such
job, work or service is for a definite
period made known to the
employee at the time of
engagement. [Sec. 5(b), Rule I,
Book VI, IRR]
b. The employment has been fixed for
a specific project or undertaking,
the completion or termination of
which has been determined at the
time of the engagement of the
employee; or
c. The work or service to be
performed is seasonal in nature and
the employment is for the duration
of the season. [Art. 295]
Provided, That any employee who has
rendered at least one year of service,
whether such service is continuous or
broken, shall be considered a regular
employee with respect to the activity in
which he is employed and his employment
shall continue while such activity exists.
[Art. 295]
Requirements to become regular employee
1. One (1) year service, continuous or
broken with respect to activity
employed, unless he has been
contracted for a specific project.
[Tabas v. California Marketing
Co., Inc., G.R. No. L-80680
(1989)]
2. Employment shall continue while
such activity exists.
Nature of work determines kind of
employment
What determines regularity or casualness
is not the employment contract but the
nature of the job. If the job is usually
necessary or desirable to the main business
of the employer, then employment is
regular. [A. M. Oreta and Co., Inc. v.
NLRC, G.R. No. 74004 (1989)]
c. Probationary
Probationary employee defined
One who is made to go on a trial period by
an employer during which the employer
determines whether he is qualified for
permanent employment, based on
reasonable standards made known to him
at the time of engagement. [Robinson’s
Galleria et al. v. Ranchez, G.R. No.
177937 (2011)]
Rules for probationary employment
1. Shall not exceed 6 months from the
date the employee started working,
unless it is covered by an
apprenticeship agreement
stipulating a longer period. [Art.
296]
2. The services of an employee who
has been engaged on a
probationary basis may be
terminated for a just cause or when
he fails to qualify as a regular
employee in accordance with
reasonable standards made known
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by the employer to the employee at an employee. [Mariwasa v.

the time of his engagement. [Art. Leogardo, G.R. No. 74246 (1989)]
296]
a. The employer shall make Purpose of Probationary Period:
known to the employee the 1. Observation Period – for the
standards under which he employee to demonstrate his skills
will qualify as regular to the employer who determines
employee at the time of his whether the former is qualified
engagement 2. Restrictive - As long as termination
b. Where no standards are was made before the expiration of
made known to the the 6-month probationary period,
employee at the time of the employer has a right to sever
engagement, he shall be the EER.
deemed a regular employee.
[Sec. 6(d), Rule I, Book VI, The employer has the right to choose who
IRR will be hired. It is within the exercise of
3. An employee who is allowed to this right that the employer may fix a
work after a probationary period probationary period within which he may
shall be considered a regular test and observe the conduct of the
employee. [Art. 296] employee before permanent hiring. [Grand
Motor Parts Corp. v. MOLE, G.R. No. L-
Duration: 58958 (1984)]
General Rule: Shall not exceed 6 months Requirements for validity of qualification
from the date of the commencement of standards In order for the standards set by
employment the employer to be validly used in
Exceptions: determining whether the employee
qualifies for permanent employee:
1. When it is covered by an
apprenticeship agreement 1. The employer must communicate
stipulating a longer period. [Art. such standards to the probationary
296] employee; and
2. When the parties to the 2. Such communication must be made
employment contract agree at the time of the probationary
otherwise, such as when employee’s engagement.
established by company policy or An employer is deemed to have made
required by the nature of the work known the standards when it has exerted
performed by the employee. reasonable efforts to apprise the employee
[Buiser v. Leogardo, G.R. No. of what he is expected to do or accomplish
L63316, (1984)] during the trial period of probation. This
3. When it involves the 3-year employee must be sufficiently made aware
probationary period of teachers. of his probationary status as well as the
[Mercado v. AMA Computer length of time of the probation. The
College, G.R. No. 183572, (2010)] exception to the foregoing is when the job
4. When it involves an act of is self-descriptive in nature. [Abbott
liberality on the part of his Laboratories Phil. et al. v. Alcaraz, G.R.
employer affording him a second No. 192571 (2013)]
chance to make good after having
initially failed to prove his worth as Effect of failure to comply

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If the employer fails to comply with the
above-requirements, the employee is
deemed as a regular and not probationary
employee. [Alcira v. NLRC, G.R. No.
149859, (2004)]
Prohibition on extended/double probation
When the employer renews the
employment contract after the lapse of the
6-month probationary period, the
employees thereby became regular
employees. No employer is allowed to
indefinitely determine the fitness of its
employees. [Bernardo v. NLRC, supra.]
Furthermore, an employee who is merely
transferred to his employer’s sister
company cannot be subjected to new
probationary employment when he had
already attained regular employment under
his original employer. [A Prime Security
Services, Inc. v. NLRC, G.R. No. 107023,
(2000)]
Termination of probationary employee
A probationary employee enjoys only a
temporary employment status. He is
terminable at any time, permanent
employment not having been attained in
the meantime. The employer could decide
he no longer needed the probationary
employee’s services or his performance
fell short of expectations. As long as
termination was made before the
termination of the 6-month probationary
period, the employer was within his rights
to sever the EER. A contrary interpretation
would defect the clear meaning of the term
“probationary.” [De la Cruz, Jr. v. NLRC,
G.R. No. 145417 (2003)]
Termination can only be for:
1. Just causes
2. Authorized causes
3. Failure to qualify as a regular
employee in accordance with
reasonable standards made known
by the employer to the employee at
the time of engagement.
[Robinson’s Galleria et al. v
Ranchez, G.R. No. 177937, Jan.
19, (2011)]
Nonetheless, procedural and substantial
due process must be observed during
termination of the probationary employee.
Note: In order to invoke “failure to meet
the probationary standards” as a
justification for dismissal, the employer
must show how these standards have been
applied to the subject employee. [Univac
Development, Inc. v. Soriano, G.R. No.
182072 (2013)]
Limits to Termination:
1. It must be exercised in accordance
with the specific requirements of
the contract
2. If a particular time is prescribed,
the termination must be within
such time and if formal notice is
required, then that form must be
used
3. Employer’s dissatisfaction must be
real and in good faith, not feigned
so as to circumvent the contract or
the law
4. There must be no unlawful
discrimination in the dismissal
[Manila Hotel Corporation v.
NLRC, G.R. No. 53453 (1986)]
Private school teachers
A private school teacher’s entitlement to
security of tenure is governed by the
Manual of Regulations for Private Schools
and not the Labor Code. Thus, for a private
school teacher to acquire permanent
employment (security of tenure), these
must be present:
1. Must be a full-time teacher
2. Must have rendered 3 consecutive
years of service
3. Service must have been
satisfactory. [La Salette of Santiago
v. NLRC, G.R. No. 82918 (1991)]
Mere completion of the 3-year probation,
even with an above-average performance,
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does not guarantee that the employee will
automatically acquire a permanent
employment status. The probationer can
only qualify upon fulfillment of the
reasonable standards set for permanent
employment as a member of the teaching
personnel. [Herrera-Manaois v. St.
Scholastica’s College, G.R. No. 18891
(2013)]
These standards should be made known to
the teachers on probationary status at the
start of their probationary period, or at the
very least under the circumstances of the
present case, at the start of the semester or
the trimester during which the
probationary standards are to be applied.
Of critical importance in invoking a failure
to meet the probationary standards, is that
the school should show – as a matter of
due process – how these standards have
been applied. [Colegio del Santisimo
Rosario v. Rojo, G.R. No. 170388 (2013)]
d. Project
Employment is not deemed regular where
the employment has been fixed for a
specific project or undertaking the
completion or termination of which has
been determined at the time of the
engagement of the employee. [Art. 295]
Project employee defined
One who is hired for carrying out a
separate job, distinct from the other
undertakings of the company, the scope
and duration of which has been determined
and made known to the employees at the
time of employment. [Hanjin Heavy
Industries & Const. Co. v. Ibañez, G.R.
No. 170181 (2008)
Rationale for project employment
If a project has already been completed, it
would be unjust to require the employer to
maintain them in the payroll while they are
doing absolutely nothing except waiting
until another project is begun. In effect,
these standby workers would be enjoying
the status of privileged retainers, collecting
payment for work not done, to be
disbursed by the employer from profits not
earned. [De Ocampo, Jr. v. NLRC, G.R.
No. 81077 (1990)]
Two kinds of project employee
1. For a particular job or undertaking
that is WITHIN the regular or usual
business of the employer company,
but which is distinct and separate,
and identifiable as such, from the
other undertakings of the company
(e.g., construction)
2. For a particular job or undertaking
that is NOT within the regular
business of the corporation. Such a
job or undertaking must also be
identifiably separate and distinct
from the ordinary or regular
business operations of the
employer. [Villa v. NLRC, G.R.
No. 117043 (1988)]
Test of project employment (description of
the completion stage)
W/N employment has been fixed for a
specific project or undertaking the
completion or termination of which has
been determined at the time of the
engagement of the employee. [D.M.
Consunji v. NLRC, G.R. No. 116572
(2000)]
Note: When the employment contract does
not state a particular date, but it does
specify that termination of employment is
to be on a “day certain” -- the day when
the specified phase of work would be
completed --, the employee cannot be
considered regular. He is a project
employee. [Filipinas Pre-Fabricated
Building Systems, Inc. v. Puente, G.R. No.
153832 (2005)]
Maraguinot Formula/Doctrine
i. If there is continuous rehiring
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ii. For the same tasks or nature of
tasks under different projects
iii. Which tasks are vital, necessary
and indispensable to the usual
business or trade of the employer
iv. An employee who was initially
hired as a project employee may
eventually acquire regular status
e. Seasonal
Employment is not deemed regular where
the work or service to be performed is
seasonal in nature and the employment is
for the duration of the season. [Art. 295]
Seasonal employees defined
Those whose work or services to be
performed are seasonal in nature, as there
is no continuing need for the worker. Their
employment is for the duration of the
season (planting season, harvest season)
“Regular seasonal” employees after one
season
Seasonal workers who are constantly
rehired and are only temporarily laid off
during offseason are not separated from
service in said period, but are merely
considered on leave until work resumes.
They are considered regular and
permanent employees. The nature of their
relationship is such that during offseason
they are temporarily laid off but during
summer season they are re-employed, or
when their services may be needed. They
are not strictly speaking separated from the
service but are merely considered as on
leave of absence without pay until they are
re-employed. [Philippine Tobacco Flue-
Curing & Redrying Corp. v. NLRC, G.R.
No. 127395, (1998)]
Must only be hired for the duration of one
season
To be considered seasonal employees, it is
not enough that work or services
performed are seasonal in nature. The
employees must have been employed only
for the duration of one season. [Hacienda
Fatima v. National Federation of
Sugarcane Workers, G.R. No. 149440
(2003)]
Exception to one season rule (illustrative
case)
Although respondent constantly availed
herself of the petitioners’ services from
year to year, it was clear from the facts
therein that they were not in her regular
employ. Petitioners therein performed
different phases of agricultural work in a
given year. However, during that period,
they were free to work for other farm
owners, and in fact they did. In other
words, they worked for respondent, but
were nevertheless free to contract their
services with other farm owners. The
Court was thus emphatic when it ruled that
petitioners were mere project employees,
who could be hired by other farm owners.
[Mercado, Sr. v. NLRC, G.R. No. 79869
(1991)]
f. Fixed-Term
Brent doctrine
When the following indicators are present,
fixed-term employment is valid:
1. Fixed period of employment was
knowingly and voluntarily agreed
upon by the parties absent any
circumstance vitiating consent
2. It satisfactorily appears that the
employer and employee dealt each
other on more or less equal footing
with no moral dominance exercised
by one over the other.
Reason for equal footing indicator
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. The level of protection to
labor must be determined on the basis of
the nature of the work, qualifications of the
employee, and other relevant
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circumstances. [Fuji Television Network
Inc v. Espiritu, G.R. No. 204944-45
(2014)].
g. Work-pool employees
Project employees may or may not be
members of a work pool. Those who are
members of a work pool may either be
project or regular employees. [Raycor
Aircontrol Systems, Inc. vs. NLRC, G.R.
114290, (1996)]
A work pool may exist although the
workers in the pool do not receive salaries
and are free to seek other employment
during temporary breaks in the business,
provided, that the worker shall be available
when called to report for a project.
Although primarily applicable to regular
seasonal workers, this set-up can likewise
be applied to project workers insofar as the
effect of temporary cessation of work is
concerned. [Maraguinot v. NLRC, G.R.
No. 120969. (1998)]
Work pools in construction companies
Members of a work pool from which a
construction company draws its project
employees, if considered employees of the
construction company while in the work
pool, are non-project employees or
employees for an indefinite period. If they
are employed in a particular project, the
completion of the project or any phase
thereof will not mean severance of the
EER. [Policy Instruction No. 20; J. & DO
Aguilar Corp. v. NLRC, G.R. No. 116352
(1997)]
When a project employee or a member of a
work pool acquires the status of regular
employment
1. Continuous rehiring of project
employees even after cessation of a
project;
2. Task performed by the alleged
“project employees” are vital,
necessary and indispensable to the
usual business or trade of the
employer. [Maraguinot v. NLRC,
G.R. No. 120969. (1998)]
Termination requirements
A report of termination to the nearest
public employment office every time their
employment was terminated due to
completion of each construction project.
Failure of the employer to file termination
reports after every project completion
proves that the employees are not project
employees. [Pasos v. Philippine National
Construction Corp., G.R. No. 192394
(2013)]
2. Legitimate contracting vs Labor-only
Contracting
Contracting or Subcontracting
Definition of Contracting/Subcontracting
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 –
a. Within a definite or predetermined
period
b. Regardless of whether such job or
work is to be performed or
completed within or outside the
premises of the principal. [Sec.
3(c), D.O. No. 174-17]
Trilateral Relationship
Three parties: Principal, Contractor,
Employees
Two Contracts:
i. Contract for a specific job, work or
service between the Principal and
the Contractor
ii. Contract of employment between
the Contractor and the Employees
Permissible Contracting:
i. Contractor is an entity, independent
contractor; independent business
ii. Must have substantial capital and
investments
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iii. Absence of control from the
principal as to methodology
iv. Rights of workers must be
guaranteed
Contracting/Subcontracting as
distinguished from Labor-Only
Contracting
There is "labor-only" contracting where:
1. 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
2. The workers recruited and placed
by such person are performing
activities which are directly related
to the principal business of such
employer.
3. The contractor/subcontractor does
not exercise the right to control
over the performance of the work
of the employees
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. [Art. 106, par. 4]
Case: Coca-cola Bottlers vs. Agito: capital
element is not only considered
Quintanar vs Coca-Cola: possession of
capital is only one element; absence of any
of the two elements, labor-only contracting
can still be defined
Rules for Contracting/Subcontracting:
1. Whenever an employer enters into
a contract with another person for
the performance of the former’s
work, the employees of the
contractor and of the latter’s
subcontractor, if any, shall be paid
in accordance with the provisions
of this Code. [Art. 106, par. 1]
2. 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:
a. To the extent of the work
performed under the
contract
b. In the same manner and
extent that he is liable to
employees directly
employed by him. [Art.
106, par. 2]
3. The SOLE may, by appropriate
regulations, restrict or prohibit the
contracting-out of labor to protect
the rights of workers established
under this Code. [Art. 106, par. 3]
a. He may make appropriate
distinctions between labor-
only contracting and job
contracting as well as
differentiations within these
types of contracting.
b. He may determine who
among the parties involved
shall be considered the
employer for purposes of
this Code.
4. 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. [Art. 108]
5. Contractors and subcontractors
referred to in these rules are
prohibited from engaging in
recruitment and placement
activities as defined in Art. 13(b),
whether for local or overseas
employment. [Sec. 2. D.O. No.
174-17: Rules Implementing
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Articles 106 to 109 of the Labor
Code, as amended]
Applicability of Rules to Indirect
Employers
The provisions of Art. 106 shall likewise
apply to any person, partnership,
association or corporation which, not being
an employer, contracts with an
independent contractor for the
performance of any work, task, job or
project. [Art. 107]
Service Agreement
Service agreement refers to the contract
between the principal and contractor
containing the terms and conditions
governing the performance or completion
of a specific job or work being farmed out
for a definite or predetermined period.
[Sec. 3(j), D.O. No. 174- 17]
Service Agreement and Contract of
Employment must be co-terminous
Mandatory Registration of the Legitimate
Contractors
BPOs not covered by DO 174
Construction Industry not covered by DO
174
a. Elements
To be considered legitimate contracting or
subcontracting, the following elements
must concur:
1. Distinct and independent business:
Contractor or subcontractor is
engaged in a distinct and
independent business and
undertakes to perform the job on its
own responsibility, according to its
own manner and method;
2. Substantial capital or investment:
Contractor or subcontractor has
substantial capital to carry out the
job farmed out by the principal on
his account, manner and method,
investment in the form of tools,
equipment, machinery and
supervision;
Substantial capital (#2) Refers to paid-up
capital stocks/shares of at least P5,000,000
in the case of corporations, partnerships
and cooperatives; in case of single
proprietorship, a net worth of at least
P5,000,000. [Sec. 3(l), D.O. No. 174-17]
3. Free from control/direction of the
principal: In performing the work,
contractor or subcontractor is free
from the control/direction of the
principal in all matters regarding
performance of the work except the
result;
4. Compliance with labor laws:
Service Agreement ensures that
employees of the
contractor/subcontractor are given
all the benefits and rights they are
entitled to under labor laws. [Sec.
8, D.O. No. 174-17]
b. Trilateral relationship
When the above-elements are present, a
trilateral relationship arises. It consists of
the following parties:
1. Principal - Any natural or juridical
entity, whether an employer or not,
who puts out or farms out a job or
work to a contractor
2. Contractor - Any person or entity
engaged in a legitimate contracting
or subcontracting arrangement
providing services for a specific
job or undertaking farmed out by a
principal under a Service
Agreement.
3. Contractor’s employee - Employee
of the contractor hired to perform
or complete a job or work farmed
out by the principal. [Sec. 3, D.O.
No. 174-17]
Note: Contractor may also be a
subcontractor
Relationships within the trilateral
relationship
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1. EER between the contractor and
the employees it engaged to
perform the specific job, work or
service being contracted; and
2. Contractual relationship between
the principal and the contractor as
governed by the provisions of the
NCC. [Sec. 5, par. 1, D.O. No. 18-
A-11]
Required Contracts
1. Employment contract between the
contractor and its employees -
Notwithstanding any oral or
written stipulations to the contrary,
such contract shall be governed by
LC 294 and 295, and provisions on
general labor standards. It shall
include the following:
a. Specific description of the
job or work to be performed
by the employee; and
b. Place of work and terms
and conditions of
employment, including a
statement of the wage rate
applicable to the individual
employee.
2. Service Agreement between the
principal and the contractor - It
shall include the following:
a. Specific description of the job or
work being subcontracted,
including its term or duration;
b. Place of work and terms and
conditions governing the
contracting arrangement, including
the agreed amount of the
contracted job or work, the
standard administrative fee of not
less than 10% of the total contract
cost;
c. Provision on the issuance of the
bond/s renewable every year. [Sec.
11, D.O. No. 174-17]
Rights of Contractor’s Employees
1. Security of tenure
2. Safe and healthful working
conditions;
3. Labor standards such as but not
limited to service incentive leave,
rest days, overtime pay, holiday
pay, 13th month pay, and
separation pay
4. Retirement benefits under the SSS
or retirement plans of the
contractor/subcontractor;
5. Social security and welfare
benefits; and
6. Self-organization, collective
bargaining and peaceful concerted
activities including the right to
strike. [Sec. 10, D.O. No. 174- 17]
c. Solidary Liability
Solidary liability of principal and
contractor
Every employer or indirect employer shall
be held responsible with his contractor for
any violations of labor laws. For purposes
of determining the extent of their civil
liability, they shall be considered as direct
employers. [Art. 109]
Labor-only Contracting
This is one of the violations that may be
committed by the principal and contractor,
which may make them solidarily liable.
There are two kinds:
1. Provided for by Article 206, Labor
Code:
a.i. The contractor does not have
substantial capital; or
b.i. The contractor does not have
investments in the form of tools,
equipment, machineries,
supervision, work premises, among
others;
b. The contractor’s employees are
performing activities that are directly
related to the main business operation of
the principal.
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2. The contractor does not exercise
the right to control the performance
of the work of the employee. [Sec.
5., D.O. No. 174-17]
Substantial capital under 1st kind
Having substantial capitalization is not
enough to declare one a legitimate
contractor. If any of the other elements of
labor-only contracting is present, they are
labor-only contractors. [Quintanar v. Coca-
Cola Bottlers, 794 SCRA 654 (2016)]
Presumption of labor-only contracting
A contractor is presumed to be a labor-
only contractor and has the burden of
proving the contrary. [Polyfoam-RGC Int’l
Corp. v. Concepcion, 672 SCRA 148
(2012)]
Effect of labor-only contracting:
employees become regular employees
Where an entity is declared to be a labor-
only contractor, the employees supplied by
said contractor to the principal become
regular employees of the latter. Having
gained regular status, the employees are
entitled to security of tenure and can only
be dismissed for just or authorized causes
and after they had been afforded due
process. [Norkis Trading v. Buenavista,
G.R. No. 182018 (2012)]
Mandatory registration
It shall be mandatory for all persons or
entities, including cooperative, acting as
contractors, to register with the Regional
Office of the DOLE where it principally
operates. Failure to register shall give rise
to the presumption that the contractor is
engaged in labor-only contracting. [Sec.
14, D.O. No. 174-17]
B. Termination by Employer
1. Substantive Due Process - whether the
termination was based on the provisions of
the Labor Code or in accordance with
jurisprudence
The dismissal must be for any of the
causes provided for in Art. 297-299.
a. Just Causes
i. Serious misconduct or wilful
disobedience (insubordination)
Requisites of Serious Misconduct:
1. There must be misconduct
2. The misconduct is of such grave
and aggravated character
3. It must relate to the performance of
the employee’s duties
4. A showing that the employee
becomes unfit to continue working
for the employer. [Sec. 5.2(a), D.O.
No. 147-15]
Extramarital Affairs: Alilem Credit
Cooperative vs Bandiola
Bookkeeper – extramarital relations
publicly, work-related because it affected
the small cooperative
Premarital Sexual Relations/Pregnancy
St. Scholastica’s case: We have to
determine the nature of the act as immoral
not on the basis of religious morality but
based on public and secular view.
Pre-marital sexual relations leading to
pregnancy is not a ground for dismissal.
Parties are both adults and both have no
impediment to marry.
Termination due to Pregnancy: Case of
SaudiA vs Rebesencio – gender based
discrimination and termination
Misconduct refers to the improper or
wrong conduct that transgresses some
established and definite rule of action, a
forbidden act, a dereliction of duty, willful
in character, and implies wrongful intent
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and not mere error in judgment.
[Northwest Airlines Inc v. Del Rosario,
GR No. 157633 (2014)]
Example: Accusatory and inflammatory
language used by an employee to the
employer or superior. [Nissan Motors
Phils v. Angelo, GR No. 164181 (2011)]
Requisites of Willful Disobedience:
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 [Mirant
Philippines Corp v. Sario, GR No.
197598 (2012)]; and
4. The order must pertain to the duties
which he has been engaged to
discharge. [Sec. 5.2(b), D.O. No.
147-15]
Willful Disobedience: Dongon vs Rapid
Movers
ID borrowed from an employee not a
wilful disobedience. Facts of the case tell
us that there was a delivery and needed to
facilitate the delivery of the goods.
ii. Gross and habitual neglect of
duties
Requisites:
1. There must be a neglect of duty
2. The neglect must be both gross and
habitual in character.
Repeated failure to meet the quota
(monthly sales) can be considered as gross
negligence
iii. Fraud/wilful breach of trust
Requisites:
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
employee’s work. [Sec. 5.2 (d), DO
No. 147-15]
When dismissal is proper for fraud/willful
breach of trust
Such breach is willful if it is done
intentionally, knowingly, and purposely,
without justifiable excuse as distinguished
from an act done carelessly, thoughtlessly,
heedlessly or inadvertently. The act
complained of must be work-related and
shows that the employee is unfit to
continue working. In addition, it must be
premised on the fact that the employee
concerned holds a position of
responsibility, trust and confidence or is
entrusted with confidence with respect to
delicate matters such as handling or case
and protection of the property and assets of
the employer. [Villanueva, Jr. v. NLRC,
GR No. 176893 (2012)]
Requisites 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 unqualified;
and
6. It must be genuine and not a mere
afterthought to justify an earlier
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action taken in bad faith. [Sec.
5.2(e), DO No. 147-15]
When dismissal is proper for loss of
trust/confidence
The employee is one holding a position of
trust and confidence (e.g. managerial or
fiduciary employees). There must be an act
that justifies the loss of trust and
confidence based on a willful breach of
trust and founded on clearly established
facts. [Wesleyan University - Philippines
v. Reyes, GR No. 208321 (2014)]
Moreover, the act complained must be
related to the performance of the duties of
the employee such as would show him to
be thereby unfit to continue working for
the employer. [Equitable Banking Corp. v.
NLRC, GR No. 102467 (1997)]
Acquittal in Criminal Case arising from
Misconduct
Notwithstanding acquittal in the criminal
case for qualified theft, the company had
adequately established the basis for the
company’s loss of confidence as a just
cause to terminate. As opposed to the
“proof beyond reasonable doubt” standard
of evidence in criminal cases, labor suits
require only substantial evidence to prove
the validity of the dismissal. [Paulino v.
NLRC, GR No. 176184 (2012)]
Betrayal by a long-time employee
Length of service is not a bargaining chip
that can simply be stacked against the
employer. After all, an employer-employee
relationship is symbiotic where both
parties benefit from mutual loyalty and
dedicated service, If an employer had
treated his employees well, has accorded
him fairness and adequate compensation as
determined by law, it is only fair to expect
a long-time employee to return such
fairness with at least some respect and
honesty. Thus, it may be said that betrayal
by a long-time employee is more insulting
and odious for a fair employer. [Moya v.
First Solid Rubber Industries, GR No.
184011 (2013)].
iv. Commission of a crime
Requisites:
1. There must be an act or omission
punishable or prohibited by law;
and
2. The act or omission was committed
by the employee against the person
of the employer, his immediate
family member, or his duly
authorized representative. [Sec.
5.2(f), D.O. No. 147- 15]
The employer may validly dismiss for loss
of trust and confidence an employee who
commits an act of fraud prejudicial to the
interest of the employer. Neither a criminal
prosecution nor a conviction beyond
reasonable doubt for the crime is a
requisite for the validity of the dismissal.
[Concepcion v. Mimex Import
Corporation, GR No. 153569 (2012)]
v. Analogous cases
Requisites:
1. There must be an act or omission
similar to those specified just
causes; and
2. The act or omission must be
voluntary and/or willful on the part
of the employees.
No act or omission shall be considered as
analogous cause unless expressly specified
in the company rules and regulations or
policies. [Sec 5.2. (g), D.O. No. 147-15]
Analogous means susceptible of
comparison with another either in general
or in some specific detail; or has a close
relationship with the latter.
Other Causes:
1. Abandonment - It is the deliberate
and unjustified refusal of an
employee to resume his
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employment. It is a form of neglect
of duty
2. Courtesy resignation - Resignation
per se means voluntary
relinquishment of a position or
office. Adding the word ‘courtesy’
did not change the essence of the
resignation. [Batongbacal v.
Associated Bank, GR No. 184517
(2013)]
3. Change of ownership - A mere
change in the equity composition
of a corporation is neither just nor
an authorized cause that would
legally permit the dismissal of the
corporation’s employees en masse.
[SME Bank Inc. v. De Guzman,
GR No. 184517, 186641 (2013)]
4. Habitual absenteeism/tardiness - It
is a form of neglect of duty. Lack
of initiative, diligence and
discipline to come to work on time
everyday exhibit the employee’s
deportment towards work. It is
inimical to the general productivity
and business of the employer. This
is especially true when the
tardiness and/or absenteeism occur
frequently and repeatedly within an
extensive period of time. [RB
Michael Press v. Galit, GR NO.
153510 (2008)]
5. Poor performance - It is tantamount
to inefficiency and incompetence in
the performance of official duties.
An unsatisfactory rating can be a
just cause for dismissal only if it
amounts to gross and habitual
neglect of duties. Poor or
unsatisfactory performance of an
employee does not necessarily
mean he is guilty of gross and
habitual neglect of duty.
[Shipmanagement Inc. v. Campo-
Redondo, GR No. 199931 (2015)]
6. Past offenses - Previous offenses
may be used as a valid justification
for dismissal only if the infractions
are related to the subsequent
offense upon which the basis of
termination is decreed. [Century
Canning Corporation v. Ramil, GR
No. 171630 (2010)
7. Habitual infractions - A series of
irregularities when put together
may constitute serious misconduct,
under which Art. 297 of the Labor
Code is a just cause for dismissal.
[Gustilo v. Wyeth Phil Inc., GR
No. 149629 (2004)]
8. Immorality - 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. The Board received
complaints and petitions from the
cooperative members for the
removal of Bandiola because of his
immoral conduct, hence immorality
(extramarital affair) justified the
termination of his employment.
[Alilem Credit Cooperative v.
Bandila, Jr. GR No. 173489 (2013)
9. Totality of infractions - While it
may be true that the petitioner was
penalized for his previous
infractions, this does not and
should not mean that his
employment record would be
wiped clean. 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, GR No.
171790 (2008)]
10. Pregnancy out of wedlock - When
the law speaks of immoral or
necessarily, disgraceful conduct, it
pertains to public and secular
morality.
Pre-marital sexual relations
between two consenting adults,
who have no impediment to marry
each other, and consequently,
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conceiving a child out of wedlock,
gauged from a purely public and
secular view of morality does NOT
amount to an immoral conduct.
[Cheryl Leus v. St. Scholastica
College Westgrove, GR No.
187226 (2015)]
11. Conviction/commission of a crime
- The charge of drug abuse within
the company’s premises and during
work hours constitutes serious
misconduct which is a just cause
for termination. [Bughaw Jr. v.
Treasure Island Industrial, GR No.
173151 (2008)]
12. Temporary “off-detail” or floating
status - This is the period of time
when security guards are in
between assignments or when they
are made to wait after being
relieved from a previous post until
they are transferred to a new one.
During such time, the security
guard does not receive any salary
or financial assistance provided by
law. It does not constitute a
dismissal, as the assignments
primarily depend on contracts
entered into between security
agencies and third parties, so as
long as such status does not
continue beyond a reasonable time.
When such status lasts for more
than 6 months, the employee may
be considered constructively
dismissed. [Salvaloza v. NLRC,
GR No. 182086 (2010)]
Basis
As a measure of self-protection against
acts inimical to the employer’s interest. An
employer cannot be compelled to continue
employing an employee guilty of acts
inimical to the employer’s interest,
justifying loss of confidence in him.
[Yabut v. Meralco, GR No. 190436
(2012)]
b. Authorized Causes
The employer may also terminate the
employment of any employee due to:
a. The installation of labor-saving
devices - This refers to the
installation of machinery to effect
efficiency and economy in the
employer’s method of production.
[Edge Apparel Inc v. NLRC, GR
No. 121314 (1998)]
Requisites:
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 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.
General Rule: In cases of installation of
labor-saving devices, redundancy and
retrenchment, the Last-In, First-Out Rule
shall apply.
Exception: Employee volunteers to be
separated from employment. [Sec. 5.2(a),
D.O. No. 147-15]
Separation Pay: 1 month pay or at least 1
month pay for every year of service,
whichever is higher [Art. 298]
b. Redundancy - A position is
redundant when it is superfluous
and superfluity of a position or
positions could be the result of a
number of factors such the
overhiring of workers, a decrease
in the volume of business or
dropping of a particular line or
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service previously manufactured or
undertaken by the enterprise.
[Morales v. Metrobank, GR No.
182475 (2012)]
Requisites:
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 efficient and
economical 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
5. There must be adequate proof of
redundancy such as but not limited
to the new staffing pattern,
feasibility studies/proposal, on the
viability of newly created
positions, job description and the
approval by the management of the
restructuring. [Sec. 5.4(b), D.O.
No. 147- 15
In implementing a redundancy program,
the employer is required to adopt fair and
reasonable criteria taking into
consideration factors such as (a) preferred
status, (b) efficiency, and (c) seniority
among others. [Morales v. Metrobank, GR
No. 182475 (2012)]
Separation Pay - 1 month pay or at least 1
month pay for every year of service,
whichever is higher [Art. 298]
c. Retrenchment to prevent losses
Requisites:
1. The retrenchment is reasonably
necessary and likely to prevent
business losses
2. The losses, if already incurred, are
not merely de minimis, but
substantial, serious, actual and real,
or if only expected are reasonably
imminent as perceived objectively
and in good faith by the employer;
3. The expected or actual losses must
be proved by sufficient and
convincing evidence;
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 would be retained
among the employees such as
status, efficiency, seniority,
physical fitness, age and financial
hardship for certain workers. [Sec.
5.4(c), D.O. No. 147-15]
Retrenchment is resorted to improve
earnings.
Separation Pay – 1 month pay or at least ½
month pay for every year of service,
whichever is higher. [Art. 298]
d. The closing or cessation of
operation of the establishment or
undertaking not due to serious loss
[Art. 298]
Requisites:
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
3. There is no other option available
to the employer except to close or
cease operations. [Sec 5.4(d), DO
No. 147-15]
Separation Pay - 1 month pay or at least ½
month pay for every year of service,
whichever is higher. [Art. 298]
Note: A fraction of at least 6 months shall
be considered 1 whole year. [Art. 298]
Basis
Employment is the lifeblood upon which
the worker and his family owe their
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survival. [Flight Attendants and Stewards
Ass’n of the Philippines v. PAL, GR. No.
178083 (2009)]
Last in First Out shall apply except when
an employee volunteers to sever the
employment.
Written notice
For all authorized causes, a written notice
served on both the employees and the
DOLE at least one month prior to the
intended date of termination is required.
Criteria in Selecting Employees for
Dismissal:
1. Preferred Status (temporary, casual
or regular employees)
2. Efficiency
3. Physical fitness
4. Age
5. Financial hardship
6. Seniority
Other Causes:
a. Disease incurable in 6 months [Art.
299]
i. Who has been found to be suffering
from any disease; and
ii. Whose continued employment is
prohibited by law or is prejudicial
to his health as well as the health of
his co-employees. [Art. 299]
Separation Pay:
An employee terminated on the ground of
disease shall be paid separation pay
equivalent to at least 1 month salary or to
½ month salary for every year of service,
whichever is greater. [Art. 299]
Note: A fraction of at least six (6) months
being considered as one (1) whole year.
Note: If the disease or ailment can be
cured within the period of 6 months, the
employer shall not terminate the employee
but shall ask the employee to take a leave
of absence. The employer shall reinstate
such employee to his former position
immediately upon the restoration of his
health. [Sec. 8, Rule I, Book VI]
b. Enforcement of union security
clause in the CBA
The law authorizes the enforcement of
union security clauses, provided it is not
characterized by arbitrariness and always
with due process.
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
3. There is sufficient evidence to
support the union’s decision to
expel the employee from the union
or company.
c. Dismissal of union officers for the
conduct of an illegal strike;
Dismissal of union members for
participating in the commission of
illegal acts in a strike [Art. 279 (a)]
Any union officer who knowingly
participates in an illegal strike, and any
worker or union officer who knowingly
participates in the commission of illegal
acts during a strike may be declared to
have lost employment status. [Art. 279 (a)]
d. Termination in conformity with
existing statute/qualification
requirements.
While the right of workers to security of
tenure is guaranteed by the Constitution,
its exercise may be reasonably regulated
pursuant to the police powers of the State
to safeguard health, morals, peace,
education, order, safety, and the general
welfare of the people.
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Consequently, persons who desire to
engage in the learned professions requiring
scientific or technical knowledge may be
required to take an examination as a
prerequisite to engaging in their chosen
careers. [St. Luke's Medical Center
Employees Assn v. NLRC, GR No.
162053 (2007)]
2. Procedural Due Process
The employer shall:
a. Furnish the worker, whose
employment is sought to be
terminated, a written notice
containing a statement of the
causes for termination; and
b. 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 DOLE.
[Art. 292 (b)]
a. Two-Notice Rule
The employer has the burden of proving
that a dismissed worker has been served
two notices:
1. First written notice: specifying the
ground(s) for termination and
giving the employee the reasonable
opportunity within which to
explain his side.
2. Second written notice: indicating
that upon due consideration of all
circumstances, grounds have been
established to justify his
termination
Reasonable opportunity for the first
written notice should be construed at least
5 calendar days from receipt of the notice.
Ratio: to give the employee an opportunity
to study the accusation against him,
consult a union official or lawyer, gather
data and evidence, and decide on his
defenses. [King of Kings Transport v.
Mamac, GR No. 166208 (2007); Puncia v.
Toyota Shaw/Pasig, GR No. 214399
(2016)]
3. Illegal Dismissal, reliefs therefrom
Kinds:
i. No just or authorized cause
For the dismissal of an employee to be
valid, the dismissal must be for any of the
causes provided for in Art. 297-299.
An employer who dismisses an employee
without just or authorized cause is liable
for:
1. Reinstatement or separation pay if
reinstatement is not possible; and
2. Full backwages
ii. Constructive dismissal
Constructive dismissal is cessation of work
because continued employment is either:
1. rendered impossible, unreasonable
or unlikely;
2. when there is a demotion in rank or
diminution in pay or both; or
3. when a clear discrimination,
insensibility, or disdain by an
employer becomes unbearable to
the employee. [Dusit Hotel Nikko
v. NUHWRAIN-Dusit Hotel
Chapter, G.R. No. 160391 (2005)]
The Test of Constructive Dismissal
Whether a reasonable person in the
employee’s position would have felt
compelled to give up his position under the
circumstances. [Tuazon v. Bank of
Commerce, G.R. No. 192076 (2012)]
It is an act amounting to dismissal but
made to appear as if it were not.
Constructive dismissal is, therefore, a
dismissal in disguise. As such, 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
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is constructively dismissed may be
allowed to keep on coming to work.
[McMer Corp., Inc. v. NLRC, G.R. No.
193421 (2014)]
Unlawful withholding of wages for a long
time could be tantamount to an illegal
constructive dismissal. [Gilles v. CA, G.R.
No. 149273 (2009)]
A bona fide suspension of work is allowed
for as long as it does not exceed 6 months.
Failure of the employer to recall the
suspended employees in the 6-month
period amounts to constructive dismissal.
[SKM Art. Craft Corp. v. Bauca, G.R. No.
171282 (2013)]
Degree of Proof
In labor cases, as in other administrative
proceedings, substantial evidence is
required and it is such relevant evidence as
a reasonable mind might accept as
adequate to support a conclusion.
[Andrada v. Agemar Manning Agency,
GR No. 194758 (2012)]
Substantial evidence is necessary for an
employer to effectuate any dismissal.
Uncorroborated assertions and accusations
by the employer do not suffice; otherwise
the constitutional guarantee of security of
tenure of the employee would be
jeopardized. [Kulas Ideas & Creations et.
al. v. Alcoseba & Arao Arao, GR No.
180123 (2010)]
Reliefs from Illegal Dismissal
The following reliefs are cumulative and
not alternative:
1. Reinstatement
2. Options given to employers
a. Actually reinstate the
dismissed employees
b. Constructively reinstate
them in the payroll
c. Backwages
d. Damages and Attorney’s
Fees
e. Separation Pay
a. Reinstatement
Reinstatement means 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. [Asian
Terminals, Inc. v. Villanueva, G.R. No.
143219 (2006)]
General Rule: Reinstatement and
Backwages
Exceptions:
a. Separation pay
b. Closure of business
c. Economic business conditions
d. Employee’s unsuitability
e. Employee’s retirement/overage
f. Antipathy and antagonism
g. Job with a totally different nature
h. Long passage of time
i. Inimical to the employer’s interest
j. When supervening facts have
transpired which make execution
on that score unjust or inequitable
or, to an increasing extent
[Emeritus Security & Maintenance
Systems, Inc. v. Dailig, G.R. No.
204761 (2014)
Prescription Period:
An action for reinstatement by reason of
illegal dismissal is one based on an injury,
which may be brought within 4 years from
the time of dismissal. [Art. 1146, CC]
In any event, the decision of the Labor
Arbiter reinstating a dismissed or
separated employee, insofar as the
reinstatement aspect is concerned, shall
immediately be executory, 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
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shall not stay the execution for
reinstatement provided herein. [Art. 229]
Options Given to Employers:
a. Actually reinstate the dismissed
employees or,
b. Constructively reinstate them in the
payroll.
The Labor Arbiter's order of reinstatement
is immediately executory and the employer
has to either re-admit them to work under
the same terms and conditions prevailing
prior to their dismissal, or to reinstate them
in the payroll, and that failing to exercise
the options in the alternative, employer
must pay the employee's salaries [Magana
v. Medicard Philippines, Inc., G.R. No.
174833 (2010)]
No refund doctrine
An employee cannot be compelled to
reimburse the salaries and wages he
received during the pendency of his
appeal, notwithstanding the reversal by the
NLRC of the LA's order of reinstatement.
[College of the Immaculate Conception v.
NLRC, G.R. No. 167563 (2010)]
b. Backwages - 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
In the nature of a command to the
employer to make a public reparation for
illegally dismissing an employee.
a. It is not private compensation or
damages
b. Nor is it a redress of a private right.
[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.
An illegally dismissed employee is entitled
to (1) either reinstatement, if viable, or
separation pay if reinstatement is no longer
viable, and (2) backwages. [Aurora Land
Projects Corp. v. NLRC, G.R. No. 114733
(1997)]
Extent of Entitlement:
General Rule: An illegally dismissed
employee is entitled to full backwages.
Exceptions:
a. 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)]
b. Delay of the EE in filing the case
for illegal dismissal [Mercury Drug
Co., Inc. v. CIR, supra]
Computation of 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)]
The effects of extraordinary inflation are
not to be applied without an official
declaration thereof by competent
authorities. [Lantion v. NLRC, G.R. No.
82028 (1990)]
Note that according to Nacar v. Gallery
Frames, when the judgment of the court
awarding a sum of money becomes final
and executory, the rate of legal interest ….
shall be 6% per annum from such finality
until its satisfaction, this interim period
being deemed to be by then an equivalent
to a forbearance of credit. [Nacar v.
Gallery Frames, G.R. No. 189871, (2013)]
c. Separation Pay, Doctrine of Strained
Relations
Instances when the award of separation
pay, in lieu of reinstatement to an illegally
dismissed employee, is proper:
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a. When reinstatement is no longer
possible, in cases where the
dismissed employee's position is no
longer available;
b. The continued relationship between
the employer and the employee is
no longer viable due to the strained
relations between them; and
c. When the dismissed employee
opted not to be reinstated, or the
payment of separation benefits
would be for the best interest of the
parties involved. [Sec. 4(b), Rule I,
Book VI, IRR]
Separation Pay and Reinstatement,
Exclusive Remedies
The payment of separation pay and
reinstatement are exclusive remedies. The
payment of separation pay replaces the
legal consequences of reinstatement to an
employee who was illegally dismissed.
[Bani Rural Bank, Inc. v. De Guzman,
G.R. No. 170904 (2013)]
Doctrine of Strained Relations
Where reinstatement is not feasible,
expedient or practical, as where
reinstatement would only exacerbate the
tension and strained relations between the
parties or where the relationship between
the employer and employee has been
unduly strained by reason of their
irreconcilable differences, particularly
where the illegally dismissed employee
held a managerial or key position in the
company, it would be more prudent to
order payment of separation pay instead of
reinstatement. [Quijano v. Mercury Drug
Corp., G.R. No. 126561 (1998)]
Computation:
SP as a statutory requirement is computed
by integrating the basic salary with regular
allowances employee has been receiving
[Planters Products, Inc. v. NLRC, G.R.
No. 78524, 78739 (1989)]; allowances
include transportation and emergency
living allowances [Santos v. NLRC, G.R.
No. 76721 (1987)]
In an illegal dismissal case involving
salespersons, the Court took judicial notice
of the fact that the nature of the work of a
salesperson and the reason for such type of
remuneration for services rendered,
demonstrate clearly that commissions are
part of salespersons' wage or salary. If the
Court adopted the opposite view that
commissions do not form part of wage or
salary, then, in effect, the Court will be
saying that salespersons do not receive any
salary and therefore, not entitled to
separation pay in the event of discharge
from employment. This narrow
interpretation is not in accord with the
liberal spirit of our labor laws and
considering the purpose of separation pay
which is, to alleviate the difficulties which
confront a dismissed employee thrown to
the streets to face the harsh necessities of
life. [Songco v. NLRC, G.R. Nos. 50999-
51000 (1990)]
A dismissed employee who has accepted
separation pay is not necessarily estopped
from challenging the validity of his or her
dismissal. Neither does it relieve the
employer of legal obligations. [Anino v.
NLRC, G.R. No. 123226 (1998)]
An employee who voluntarily resigns is
not entitled to separation pay unless
stipulated in the employment contract, or
the collective bargaining agreement, or is
sanctioned by established practice or
policy of the employer. [Phimco Industries
v. NLRC, G.R. No. 118041 (1997);
Hinatuan Mining Corp v. NLRC, G.R. No.
117394 (1997) cited in JPL Marketing
Promotions v. CA, G.R. No. 151966
(2005)]
Basis of Separation Pay
The computation of separation pay of an
employee shall be based on his/her latest
salary rate. [DOLE Handbook on Workers’
Statutory Monetary Benefits, 2018 ed.]
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Inclusion of Regular Allowance in the
Computation
In the computation of separation pay, it
would be error not to integrate the
allowance with the basic salary. The salary
base properly used in computing the
separation pay should include not just the
basic salary but also the regular allowances
that an employee has been receiving.
[Planters’ Products, Inc. v. NLRC, G.R.
No. 78524 (1989); DOLE Handbook on
Workers’ Statutory Monetary Benefits,
2018 ed.]
Non-taxable
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
from tax. [Last proviso of par. 1, Sec. 1,
RA 4917]
d. Damages
e. Attorney’s Fees
In cases of unlawful withholding of wages:
the culpable party may be assessed
attorney’s fees
Amount: equivalent to 10% of the amount
of wages recovered.
It shall be unlawful for any person to
demand or accept, in any judicial or
administrative proceedings for the
recovery of wages, attorney’s fees which
exceed 10% percent of the amount of
wages recovered. [Art. 111, CC]
General Rule: attorney's fees and expenses
of litigation, other than judicial costs,
cannot be recovered
Exception: stipulation to the contrary xxx
in actions for the recovery of wages of
household helpers, laborers and skilled
workers [Art. 2208(7), CC
The employee is entitled to moral damages
when the employer acted:
a. In bad faith or fraud
b. in a manner oppressive to labor; or
in a manner contrary to morals,
good customs, or public policy
[Montinola v. PAL, G.R. No.
198656 (2014).
In labor cases, the court may award
exemplary damages "if the dismissal was
effected in a wanton, oppressive or
malevolent manner." [Garcia v. NLRC,
GR. No. 110518 (1994)]
f. Liabilities of Corporate Officers
Art. 219(e) defines “employer” as
including any person acting in the interest
of an employer, directly or indirectly.
Note that the provision does not expressly
make a corporate officer personally liable
for the liabilities of a corporation.
However, in Lozada vs Mendoza [GR No.
196134, 12 October 2016], the Court ruled
that, as a general rule, officers are not
personally liable for corporate obligation,
with the exception that in order to hold a
director or officer personally liable occurs
when the following requisites are present:
1. the complaint must allege that the
director or officer assented to the
patently unlawful acts of the
corporation, or that the director or
officer was guilty of gross
negligence or bad faith; and
2. there must be proof that the
director or officer acted in bad
faith.
g. Burden of Proof
Burden of Proof:
The burden of proving that the termination
was for a valid or authorized cause shall
rest on the employer. [Art. 292 (b)].
In illegal dismissal cases, the onus of
proving that the employee was not
dismissed or, if dismissed, that the
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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,
GR No. 198656 (2014)
C. Termination by Employee
1. With notice to the employer
An employee may terminate without just
cause the employer-employee relationship:
a. By serving a written notice on the
employer at least one (1) month in
advance
b. The employer upon whom no such
notice was served may hold the
employee liable for damages [Art.
300]
Notice is required when termination is
without just cause. Written notice to resign
must be submitted one (1) month in
advance. [Art. 300]
2. Without Notice to the employer
An employee may put an end to the
relationship without serving any notice on
the employer for any of the following
requirements:
a. Serious insult by the employer or
his representative on the honor and
person of the employee;
b. Inhuman and unbearable treatment
accorded the employee by the
employer or his representative;
c. Commission of a crime or offense
by the employer or his
representative against the person of
the employee or any of the
immediate members of his family;
and
d. Other causes analogous to any of
the foregoing. [Art. 300]
Notice is NOT required when termination
is with just cause. [Art. 300]
1. Resignation vs Constructive
Dismissal
Definition of 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 resignation:
1. It must be unconditional and with
the intent to operate as such;
2. There must be an intention to
relinquish a portion of the term of
office accompanied by an act of
relinquishment.
The fact that the employee signified his
desire to resume his work when he went
back to AZCOR after recuperating from
his illness, and actively pursued his case
for illegal dismissal before the labor courts
when he was refused admission by his
employer, negated any intention on his
part to relinquish his job at AZCOR.
[Azcor Manufacturing Inc. v. NLRC, G.R.
No. 117963 (1999)]
Well-entrenched is the rule that resignation
is inconsistent with the filing of a
complaint for illegal dismissal. [Blue
Angel 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)]
Resignation is voluntary when the act of
resignation and the intention to resign
concur. If the resignation was done
because of oppressive conditions set by the
employer, such is tantamount to
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constructive dismissal. [Saudi Arabian
Airlines v. Rebesencio, G.R. No. 198587
(2015)]
Constructive Dismissal:
Involuntary or forced resignation due to
the harsh, hostile, and unfavorable
conditions set by the employer. It is
essentially quitting or cessation of work
because continued employment is rendered
impossible, unreasonable or unlikely;
when there is a demotion in rank or a
diminution of pay and other benefits. It
exists if an act of clear discrimination,
insensibility, or disdain by 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. [Gan v. Galderma
Philippines, Inc.]; Illegal Dismissal
2. Abandonment - It is the deliberate and
unjustified refusal of an employee to
resume his employment. It is a form of
neglect of duty.
Requisites:
1. Failure to report for work or
absence without valid or justifiable
reason, and
2. Clear intention to sever the
employeremployee relationship
(more determinative factor and
manifested in overt acts).
The burden to prove whether the employee
abandoned his work rests on the employer.
[Protective Maximum Security Inc. v.
Celso E. Fuentes, GR No. 169303 (2015)]
Absence must be accompanied by overt
acts unerringly pointing to the fact that the
employee simply does not want to work
anymore. The employer has the burden of
proof to show a deliberate and unjustified
refusal of the employee to resume
employment without any intention of
returning. [Tan Brothers Corp v. Escudero,
GR No. 188711 (2013)]
D. Preventive Suspension
Definition
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. [Gatbonton v.
NLRC, G.R. No. 146779 (2006)]
It is important to note that preventive
suspension is not a penalty, but a part of a
process to investigate a questioned action
of an employee. Preventive suspension
does not in itself prove that the employer
already finds the employee guilty of the
charges he is asked to answer and explain
[Soriano v. NLRC et. al., G.R. No. 75510,
(1987)].
When Imposed:
Preventive suspension may be legally
imposed on employee whose alleged
violation is the subject of an investigation.
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.
When, however, it is determined that there
is no sufficient basis to 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
(2006)]
Purpose: The purpose of his suspension is
to prevent him from causing harm or
injury to the company as well as to his
fellow employees. [Sec. 8, Rule XXIII,
IRR].
Period of Suspension: Period of
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
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2. The employer may extend the Employee placed under preventive

period of suspension provided that: suspension is not entitled to the payment
a. During the period of of wages. However, if the basis for
extension, he pays the suspension is later proven to be unfounded
wages and other benefits or invalid, the said employee is entitled to
due to the worker his salary during the whole period of his
b. The worker shall not be suspension. [Gatbonton v. NLRC, G.R.
bound to reimburse the No. 146779 (2006)]
amount paid to him during
the extension if the E. Floating Status
employer decides, after The bona fide suspension of the operation
completion of the hearing, of a business or undertaking for a period
to dismiss the worker. [Sec. not exceeding six (6) months, or the
9, Rule XXIII, Book V, fulfillment by the employee of a military
IRR] or civic duty shall not terminate
Note: The portion on preventive employment. [Art. 301]
suspension under the cited Book V, Rule During this time, employees are
XXIII, Secs. 8-9 are no longer in considered on "floating status". [Art. 301;
existence. The current IRR of the Labor International Hardware, Inc. vs. NLRC,
Code (as of 2020) has replaced Rule XXIII G.R. No. 80770 (1989)]
with “Rule XXIII Contempt” and does not
contain provisions on preventive Floating Status in Security Agencies
suspension. Temporary “off-detail” or “floating status”
It is curious to note, however, that in a is the period of time when security guards
2018 case [Consolidated Building are in between assignments or when they
Maintenance, Inc. v. Asprec, Jr., G.R. No. are made to wait after being relieved from
217301, (June 6, 2018)], the Court stated a previous post until they are transferred to
that “preventive suspension shall not last a new one
for more than 30 days” HOWEVER, in Dire exigency of the employer’s bona fide
stating so, the Court cited an OLD suspension of operation, business or
provision of the IRR of the Labor Code. In undertaking takes place when:
fact, it is a recurring theme in a number of
more recent cases that the Court would cite a. The security agency’s clients
old provisions of the IRR of the labor code decide not to renew their contracts
which have long been amended or with the agency; and
repealed. b. Contracts for security services
stipulate that the client may request
When preventive suspension is deemed the agency for the replacement of
dismissal the guards assigned to it
When preventive suspension exceeds the The employer should prove that there are
maximum period allowed without no posts available to which the employee
reinstating the employee either by actual or temporarily out of work can be assigned.
payroll reinstatement or when preventive [Peak Ventures Corp v. Nestor Villareal,
suspension is for an indefinite period, only G.R. No. 184618 (2014)]
then will constructive dismissal set in.
Requirement to be Reinstated
Not entitled to pay
The employee on floating status must
indicate his desire to resume his work not

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later than one (1) month from the
resumption of operations of his employer
or from his relief from the military or civic
duty
Thereafter, the employer shall reinstate the
employee to his former position without
loss of seniority rights. [Art. 301]
When deemed constructive dismissal
When that "floating status" of an employee
lasts for more than six months, he may be
considered to have been illegally
dismissed from the service. Thus, he is
entitled to the corresponding benefits for
his separation, and this will apply to the
two types of work suspension, that is,
either of the entire business or of a specific
component thereof. [Valdez v. NLRC,
G.R. No. 125028 (1998)]
F. Retirement
What is Retirement: It is 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
Three Kinds of Retirement Schemes:
1. Mandated by law: Compulsory and
contributory in character
2. CBA and other agreements:
Agreement between the employer
and the employees
3. Voluntarily given by the employer:
expressly as in an announced
company policy or impliedly as in
a failure to contest the employee's
claim for retirement benefits.
[Gerlach v. Reuters Limited, PH,
G.R. No. 148542 (2005)]
Requisites for Retroactive Application
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. [Universal Robina Sugar
Milling Corp. v. Caballeda, G.R.
No. 156644 (2008)]
Who are covered: All employees in the
private sector, regardless of their position,
designation, or status, and irrespective of
the method by which their wages are paid
[Sec. 1, IRR, RA 7641]
Exceptions:
1. Employees covered by the Civil
Service Law;
2. Employees in retail, service and
agricultural establishments or
operations regularly employing not
more than ten employees [Sec. 2,
IRR, RA 7641]
When the provisions of RA 7641 apply:
RA 7641 only applies in a situation where
there is:
a. No CBA or other applicable
employment contract providing for
retirement benefits; OR
b. Retirement benefits provided by
CBA or other employment contract
fall below the requirements set by
law. [Oxales v. Unilab, G.R. No.
152991 (2008)]
Age of Retirement - In the absence of a
retirement plan or agreement:
a. Compulsory retirement: 65 years
old [Sec. 4, IRR, RA 7641]
b. Optional retirement: 60 years or
more (but below 65) and having
served the establishment for at least
5 years. [Sec. 1, IRR, RA 7641]
An employer is free to impose a retirement
age less than 65 for as long as it has the
employees’ consent. [Jaculbe v. Silliman
University, G.R. No. 156934 (2007)]
For surface mine workers:
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a. Compulsory retirement age: 60
years old
b. Optional retirement age is 50 and
having served the establishment for
at least 5 years. [Sec. 2, RA 10757]
Forfeiture of Benefits
Employees dismissed for just cause are not
entitled to retirement benefits and other
privileges including reinstatement and
backwages. To rule otherwise would be to
reward acts of willful bread of trust by
employees. [Sy v. Metropolitan Bank,
G.R. No 160618 (2006)]
Employee may still work after retirement
Upon retirement of an employee, whether
optional or compulsory, his services may
be continued or extended on a case to case
basis upon the agreement of the employer
and employee. [Sec. 4, IRR, RA 7641]
Amount of Retirement Pay:
a. Minimum: ½ month salary for
every year of service
NOTE: a fraction of at least 6
months shall be considered a year
“one-half month salary” is
equivalent to 22.5 days. [Capitol
Wireless, Inc. v. Sec. Confessor,
G.R. No. 117174 (1996); Reyes v.
NLRC, G.R. No. 160233 (2007)]
b. Components: “One-half month
salary” shall include all of the
following: Fifteen (15) days salary
based on the latest salary rate;
Cash equivalent of five (5) days of
service incentive leave;
One-twelfth (1/12) of the 13th
month pay. (1/12 x 365/12 = .083 x
30.41 = 2.52)
All other benefits that the employer
and employee may agree upon
Non-Taxable
General Rule: Exempt from all taxes, not
liable to attachment
Exception: Payment of Debts
VII. MANAGEMENT PREROGATIVE
Basis: The State recognizes the
indispensable role of the private sector,
encourages private enterprise, and
provides incentives to needed investments.
[Sec. 20, Art. II, 1987 Constitution]
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. 3, pars. 4, Art. XIII, 1987
Constitution]
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)
Definition: “Management Prerogative” is
the right of an employer to regulate all
aspects of employment.
Courts often decline to interfere in
legitimate business decisions of
employers. In fact, labor laws discourage
interference in employers’ judgment
concerning the conduct of their business.
Scope Management prerogative gives
employers the freedom to regulate,
according to their discretion and best
judgment, all aspects of employment,
including:
a. Work assignment
b. Working methods
c. Processes to be followed
d. Working regulations
e. Transfer of employees
f. Work supervision, lay-off of
workers and the discipline,
dismissal and recall of workers.
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A. Discipline
Management has the prerogative to
discipline its employees and to impose
appropriate penalties on erring workers
pursuant to company rules and regulations.
[Jose P. Artificio v. NLRC, G.R. No.
172988 (2010)]
Among the employer’s management
prerogatives is the right to prescribe
reasonable rules and regulations necessary
or proper for the conduct of its business or
concern, to provide certain disciplinary
measures to implement said rules and to
assure that the same would be complied
with. [St. Luke’s Medical Center, Inc. v.
Sanchez, G.R. 212054 (2015)]
The employer’s right to conduct the affairs
of his business, according to its own
discretion and judgment, includes the
prerogative to instill discipline in its
employees and to impose penalties,
including dismissal, upon erring
employees. [Consolidated Food
Corporation v. NRLC, G.R. No. 118647
(1999))]
Right to dismiss or otherwise impose
disciplinary sanctions upon an employee
for just and valid cause, pertains in the first
place to the employer, as well as the
authority to determine the existence of said
cause in accordance with the norms of due
process. [Makati Haberdashery, Inc. v.
NLRC, G.R. Nos. 83380-81 (1989)]
Corollary Duty of Employees: The
employee has the corollary duty to obey all
reasonable rules, orders, and instructions
of the employer; and willful or intentional
disobedience thereto, as a general rule,
justifies termination of the contract of
service and the dismissal of the employee.
[St. Luke’s Medical Center, Inc. v.
Sanchez, G.R. 212054 (2015)]
Criteria: The policies, rules and regulations
on work-related activities of the employees
must always be fair and reasonable and
the corresponding penalties, when
prescribed, commensurate to the offense
involved and to the degree of the
infraction. [Consolidated Food
Corporation v. NRLC, G.R. No. 118647
(1999); St. Michael’s Institute v. Santos,
G.R. No. 145280 (2001)]
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, Inc. v. Saidali Pasawilan, et. al.,
G.R. No. 182397 (2011)]
Disciplinary action against an erring
employee is a management prerogative
which, generally, is not subject to judicial
interference. However, this policy can be
justified only if the disciplinary action is
dictated by legitimate business reasons
and is not oppressive. [Areno v.
Skycable, G.R. No 180302 (2010)]
B. Transfer of Employees
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.
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.
Management has the prerogative on
whether or not to renew the contract of a
fixed-term employee. [Fonterra Brands
Phils., Inc. v. Largado, G.R. No. 205300
(2015)
Criteria: 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)]
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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
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.
Wendel Osaka Realty Corp., G.R. No.
189082 (2012)]
Employer Bears the Burden of Proof
In cases of a transfer of an employee, the
rule is settled that 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. [Jonathan
Morales v. Harbor Centre Port Terminal
Inc., 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)]
In the consolidated cases of Leonardo v.
NLRC [G.R. No. 125303 (2000)] and
Fuerte v. Aquino [G.R. No. 126937
(2000)], the employer claimed that the
employee was demoted pursuant to a
company policy intended to foster
competition among its employees. Under
this scheme, its employees are required to
comply with a monthly sales quota. Should
a supervisor such as the employee fail to
meet his quota for several consecutive
months, he will be demoted, whereupon
his supervisor’s allowance will be
withdrawn and be given to the individual
who takes his place. When the employee
concerned succeeds in meeting the quota
again, he is re-appointed supervisor and
his allowance is restored.
The Supreme Court held that this
arrangement is an allowable exercise of
company rights since an employer is
entitled to impose productivity standards
for its workers. In fact, non-compliance
may be visited with a penalty even more
severe than demotion.
D. Bonus
A bonus is "a gratuity or act of liberality of
the giver which the recipient has no right
to demand as a matter of right" [Philippine
National Construction Corp. v. National
Labor Relations Commission, 345 Phil.
324, 331 (1997)]. It is something given in
addition to what is ordinarily received by
or strictly due the recipient.
The granting of a bonus is basically a
management prerogative which cannot be
forced upon the employer "who may not
be obliged to assume the onerous burden
of granting bonuses or other benefits aside
from the employee's basic salaries or
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wages" xxx. [Kamaya Point Hotel v.
National Labor Relations Commission,
Federation of Free Workers and Nemia
Quiambao, G.R. No. 75289, (1989);
Traders Royal Bank v. NLRC, G.R. No.
120592 (1990)]
The matter of giving a bonus over and
above the worker’s lawful salaries and
allowances is entirely dependent on the
financial capability of the employer to give
it. [Kimberly-Clark Philippines, Inc. v.
Dimayuga, G.R. No. 177705 (2009)]
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
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)]
F. Bona Fide Occupational Standards
General Rule: 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.
Exception: The exception is called a bona
fide occupational qualification (BFOQ).
In the United States, there are a few
federal and many state job discrimination
laws that contain an exception allowing an
employer to engage in an otherwise
unlawful form of prohibited discrimination
when the action is based on a BFOQ
necessary to the normal operation of a
business or enterprise. BFOQ is valid
"provided it reflects an inherent quality
reasonably necessary for satisfactory job
performance." [Yrasuegui v. PAL, G.R.
No. 168081 (2008)]
BFOQ in Philippine Jurisdiction
The concept of a bona fide occupational
qualification is not foreign in our
jurisdiction. We employ the standard of
reasonableness of the company policy
which is parallel to the bona fide
occupational qualification requirement.
In Duncan Association of Detailman-
PTGWO and Pedro Tecson v. Glaxo
Wellcome Philippines, Inc., we passed on
the validity of the policy of a
pharmaceutical company prohibiting its
employees from marrying employees of
any competitor company. We held that
Glaxo has a right to guard its trade secrets,
manufacturing formulas, marketing
strategies and other confidential programs
and information from competitors. We
considered the prohibition against personal
or marital relationships with employees of
competitor companies upon Glaxo’s
employees reasonable under the
circumstances because relationships of that
nature might compromise the interests of
Glaxo. In laying down the assailed
company policy, we recognized that Glaxo
only aims to protect its interests against the
possibility that a competitor company will
gain access to its secrets and procedures.
[Star Paper Corp. v. Simbol, G.R. No.
164774 (2006)]
A requirement that a woman employee
must remain unmarried could be justified
as a "bona fide occupational qualification,"
or BFOQ, where the particular
requirements of the job would justify the
same, but not on the ground of a general
principle, such as the desirability of
spreading work in the workplace. A
requirement of that nature would be valid
provided it reflects an inherent quality
reasonably necessary for satisfactory job
performance. [Phil. Telegraph and
Telephone Company v. NLRC, G.R. No.
118978 (1997)]
G. Post-Employment Restrictions
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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 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. [Rivera v. Solidbank, G.R. No.
163269 (2006)]
H. Clearance Procedures
Long has it been held by the Supreme
Court in the Solid Mills, Inc.,  case  that
that the institution of clearance procedures
has legal bases:
Requiring clearance before the release of
last payments to the employee is a
standard procedure among employers,
whether public or private. Clearance
procedures are instituted to ensure that the
properties, real or personal, belonging to
the employer but are in the possession of
the separated employee, are returned to the
employer before the employee’s departure.
As a general rule, employers are prohibited
from withholding wages from employees.
The Labor Code provides:
Art. 116. Withholding of wages and
kickbacks prohibited. It shall be unlawful
for any person, directly or indirectly, to
withhold any amount from the wages of a
worker or induce him to give up any part
of his wages by force, stealth, intimidation,
threat or by any other means whatsoever
without the worker’s consent.
The Labor Code also prohibits the
elimination or diminution of benefits.
Thus:
Art. 100. Prohibition against elimination or
diminution of benefits. Nothing in this
Book shall be construed to eliminate or in
any way diminish supplements, or other
employee benefits being enjoyed at the
time of promulgation of this Code.
However, our law supports the employers’
institution of clearance procedures before
the release of wages. As an exception to
the general rule that wages may not be
withheld and benefits may not be
diminished, the Labor Code provides:
Art. 113. Wage deduction. No employer,
in his own behalf or in behalf of any
person, shall make any deduction from the
wages of his employees, except:
1. In cases where the worker is
insured with his consent by the
employer, and the deduction is to
recompense the employer for the
amount paid by him as premium on
the insurance;
2. For union dues, in cases where the
right of the worker or his union to
check-off has been recognized by
the employer or authorized in
writing by the individual worker
concerned; and
3. In cases where the employer is
authorized by law or regulations
issued by the Secretary of Labor
and Employment. (Emphasis
supplied)
The Civil Code provides that the employer
is authorized to withhold wages for debts
due:
Article 1706. Withholding of the wages,
except for a debt due, shall not be made by
the employer.
"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.
There is no reason to limit its scope to
uniforms and equipment, as petitioners
would argue.
More importantly, respondent Solid Mills
and NAFLU, the union representing
petitioners, agreed that the release of
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petitioners’ benefits shall be "less
accountabilities."
"Accountability," in its ordinary sense,
means obligation or debt. The ordinary
meaning of the term "accountability" does
not limit the definition of accountability to
those incurred in the worksite. As long as
the debt or obligation was incurred by
virtue of the employer-employee
relationship, generally, it shall be included
in the employee’s accountabilities that are
subject to clearance procedures.
It may be true that not all employees
enjoyed the privilege of staying in
respondent Solid Mills’ property.
However, this alone does not imply that
this privilege when enjoyed was not a
result of the employer-employee
relationship. Those who did avail of the
privilege were employees of respondent
Solid Mills. Petitioners’ possession should,
therefore, be included in the term
"accountability."
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.
Petitioners do not categorically deny
respondent Solid Mills’ ownership of the
property, and they do not claim superior
right to it. What can be gathered from the
findings ofthe Labor Arbiter, National
Labor Relations Commission, and the
Court of Appeals is that respondent Solid
Mills allowed the use of its property for
the benefit of petitioners as its employees.
Petitioners were merely allowed to possess
and use it out of respondent Solid Mills’
liberality. The employer may, therefore,
demand the property at will.
The return of the property’s possession
became an obligation or liability on the
part of the employees when the employer-
employee relationship ceased. Thus,
respondent Solid Mills has the right to
withhold petitioners’ wages and benefits
because of this existing debt or liability. In
Solas v. Power and Telephone Supply
Phils., Inc., et al., this court recognized this
right of the employer when it ruled that the
employee in that case was not
constructively dismissed. Thus:
There was valid reason for respondents’
withholding of petitioner’s salary for the
month of February 2000. Petitioner does
not deny that he is indebted to his
employer in the amount of around
95,000.00. Respondents explained that
petitioner’s salary for the period of
February 1-15, 2000 was applied as partial
payment for his debt and for withholding
taxes on his income; while for the period
of February 15-28, 2000, petitioner was
already on absence without leave, hence,
was not entitled to any pay.
The law does not sanction a situation
where employees who do not even assert
any claim over the employer’s property are
allowed to take all the benefits out of their
employment while they simultaneously
withhold possession of their employer’s
property for no rightful reason.
Withholding of payment by the employer
does not mean that the employer may
renege on its obligation to pay employees
their wages, termination payments, and
due benefits. The employees’ benefits are
also not being reduced. It is only subjected
to the condition that the employees return
properties properly belonging to the
employer. This is only consistent with the
equitable principle that "no one shall be
unjustly enriched or benefited at the
expense of another."
These benefits were properly withheld by
respondent Solid Mills because of their
refusal to return its property.
I. Limitations on management prerogative;
police power of the State
1. Good faith - So long as a
company’s management
prerogatives are exercised in good
faith for the advancement of the
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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. [Ernesto G.
Ymbong v. ABS-CBN
Broadcasting Corp.]
It is incumbent upon the company to show
that decisions made under management
prerogative are in good faith and not
intended to circumvent employees’ rights.
[San Miguel Brewery Sales Force Union
(PTGWO) v. Ople, G.R. No. L-53515
(1989)
The exercise of management prerogative is
valid, provided it is not performed in a
malicious, harsh, oppressive, vindictive or
wanton manner or out of malice or spite.
[Magdadaro v. PNB, G.R. No. 166198
(2009)]
2. Without 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)
3. Law – The privilege of
management prerogative is not
absolute, but subject to limitations
imposed by law.
Management prerogative 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); University of Immaculate
Concepcion Inc. v. Sec. of Labor, G.R. No.
151379 (2005)]
Although management prerogative refers
to the right to regulate all aspects of
employment, it cannot be understood to
include the right to temporarily withhold
salary/wages without the consent of the
employee. To sanction such an
interpretation would be contrary to Art.
116 of the Labor Code. [SHS Perforated
Materials, Inc. v. Diaz, G.R. No. 185814
(2010)]
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. [Goya Inc.
v. Goya, Inc., Employees Union-
FFW, G.R. No. 170054 (2013)
5. Equity and/or Substantial Justice –
The Court 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. [Dongon
v. Rapid Movers and Forwarders
Co., Inc., G.R. No. 163431 (2013)]
VIII. JURISDICTION AND RELIEFS
A. Mandatory conciliation-mediation,
SENA
All issues arising from labor and
employment shall be subject to mandatory
conciliation-mediation.
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Exception: As provided in Title VII-A,
Book V of this Code, as amended, or as
may be excepted by the Secretary of Labor
and Employment.
The Labor Arbiter or the appropriate
DOLE agency or office that has
jurisdiction over the dispute shall entertain
only endorsed or referred cases by the duly
authorized officer.
Any or both parties involved in the dispute
may pre-terminate the conciliation-
mediation proceedings and request referral
or endorsement to the appropriate DOLE
agency or office which has jurisdiction
over the dispute, or if both parties so agree,
refer the unresolved issues to voluntary
arbitration. [Art. 234]
Nature of proceedings
Conciliation and mediation is non-
litigious/non-adversarial, less expensive,
and expeditious. Under this informal set-
up, the parties find it more expedient to
fully ventilate their respective positions
without running around with legal
technicalities and, in the course thereof,
afford them wider latitude of possible
approaches to the problem.
SENA
The Single-Entry Approach (SENA) is a
prescribed 30-day Mandatory
Conciliation-Mediation Services to be
made operational through the Single Entry
Approach Desk (SEAD) for all labor and
employment cases except: 1. cases on
notices of strikes or lock-outs, or on
preventive mediation cases (NCMB) 2.
interpretation and implementation of CBA
(Grievance Machinery) [D.O. No. 107-10]
B. Labor Arbiter
Jurisdiction of the Labor Arbiter - Except
as otherwise provided under the Code, the
Labor Arbiters shall have original and
exclusive jurisdiction to hear and decide:
a. Unfair labor practice
b. Termination disputes
c. Cases that workers may file
involving wages, rates of pay,
hours of work and other terms and
conditions of employment, if
accompanied with a claim for
reinstatement;
d. Claims for actual, moral,
exemplary and other forms of
damages arising from the
employer-employee relations;
e. Cases arising from any violation of
Art. [279] of this Code, including
questions involving the legality of
strikes and lockouts;
f. Except claims for Employees
Compensation, Social Security,
Medicare [Philhealth] and
maternity benefits, all other claims,
arising from employer-employee
relations, including those of
persons in domestic or household
service, involving an amount
exceeding P5,000 regardless of
whether accompanied with a claim
for reinstatement. [Art. 224]
g. Money claims arising out of
employer-employee relationship or
by virtue of any law or contract,
involving claims for actual, moral,
exemplary and other forms of
damages, as well as employment
termination of OFWs;
Requisites:
1. Money claims arose from ER-EE
relations; Note: If not, regular
courts have jurisdiction
2. Money claims arose from law or
contracts other than a CBA.
Note: If not, Voluntary Arbitrator has
jurisdiction
h. Wage distortion disputes in
unorganized establishments not
voluntarily settled by the parties.
[Art. 124]
i. Enforcement of compromise
agreements when there is non-
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compliance by any of the parties.
[Art. 233]
j. Other cases as may be provided by
law.
Labor Arbiter vs Regional Director
A money claim arising from employer-
employee relations, except SSS,
ECC/Medicare [Philhealth] claims, is
within the jurisdiction of a Labor Arbiter
if:
a. The claim, regardless of amount, is
accompanied with a claim of
reinstatement; or
b. The claim exceeds P5,000, whether
or not there is a claim for
reinstatement
The Regional Director has jurisdiction if:
a. Money claim arose out of
employer-employee relationships;
b. Money claim is NOT accompanied
by a claim for reinstatement; AND
c. Money claim does not exceed
P5,000, whether or not claim arose
from ER-EE relationships.
Procedure before Labor Arbiter
Where to File [Sec. 1, Rule IV, 2011
NLRC Rules of Procedure] - All cases
which Labor Arbiters have authority to
hear and decide may be filed in the
Regional Arbitration Branch (RAB)
having jurisdiction over the workplace of
the complainant or petitioner
Nature of the Proceedings:
Proceedings before the LA are non-
litigious. The Labor Arbiter is not bound
by the technical rules of procedure.
The Labor Arbiter shall use all reasonable
means to ascertain the facts in each
speedily and objectively. [Art. 227]
Requirements to perfect appeal to NLRC:
Period of Appeal
Labor Arbiter to NLRC: Decisions,
awards, or orders of the [LA] shall be final
and executory unless appealed to the
[NLRC] by any or both parties within 10
calendar days from receipt [thereof]. [Art.
229]
Note: If the last day of the reglementary
period falls on a Sunday or a holiday, the
last day shall be the next working day.
Grounds of Appeal: Art 229
a. If there is prima facie evidence of
abuse of discretion on the part of
the Labor Arbiter or Regional
Director;
b. If the decision, resolution or order
was secured through fraud or
coercion, including graft and
corruption;
c. If made purely on questions of law;
and/or
d. If serious errors in the findings of
fact are raised which, if not
corrected, would cause grave or
irreparable injury to the appellant
When Appeal is Perfected
Judgment involving a monetary award
An appeal by the employer may be
perfected only upon the posting of a cash
or surety bond issued by a reputable
bonding company duly accredited by the
Commission in the amount equivalent to
the monetary award in the judgment
appealed from. [Art. 229]
It is clear from the NLRC Rules of
Procedure that appeals must be verified
and certified against forum-shopping by
the parties-ininterest themselves. [Antonio
B. Salenga, et al. v. CA, G.R. No. 174941
(2012)]
Note: Decisions of the Labor Arbiter are
appealable to the NLRC. Decisions by the
NLRC are appealable to the CA via Rule
65. [St. Martin’s Funeral Homes v. NLRC,
295 SCRA 494 (1998)]
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Memorandum of Appeal: In all cases, the
appellant shall furnish a copy of the
memorandum of appeal to the other party
who shall file an answer not later than ten
(10) calendar days from receipt thereof.
[Art. 229]
Reinstatement and/or execution pending
appeal
Reinstatement Pending Appeal and Effect
of NLRC reversal of Labor Arbiter’s order
of reinstatement
In any event, the decision of the Labor
Arbiter reinstating a dismissed or
separated employee, insofar as the
reinstatement aspect is concerned, shall
immediately be executory, even pending
appeal.
The employee shall either be:
a. Admitted back to work under the
same terms and conditions
prevailing prior to his dismissal or
separation; or
b. Merely reinstated in the payroll, at
the option of the employer.
The posting of a bond by the employer
shall not stay the execution for
reinstatement provided herein. [Art. 229]
Reversal of the order of reinstatement of
the Labor Arbiter
During the period of appeal until reversal
by the higher court, it is obligatory on the
part of the employer to:
1. Reinstate
2. Pay in the wages of the dismissed
employee
If the employee has been reinstated during
the appeal period and such reinstatement
order is reversed with finality, the
employee is NOT required to reimburse
whatever salary he received. He is entitled
to such especially if he actually rendered
services during the period. [Garcia v.
Philippine Airlines, Inc., G.R. No. 164856
(2009)]
C. National Labor Relations Commission
Jurisdiction/Powers
NLRC en banc
a. To promulgate rules and
regulations governing the hearing
and disposition of cases
b. To formulate policies affecting its
administration and operations
c. To allow cases within the
jurisdiction of any division to be
heard and decided by another
division
d. To recommend appointment of a
Labor Arbiter
NLRC in divisions (8 divisions with 3
commissioners each)
a. Exclusive appellate jurisdiction
from decisions of LA (within
respective territorial jurisdiction)
b. Jurisdiction over petitions for
injunction or temporary restraining
order under Art. 225(e)
c. Certified cases: “national interest”
labor disputes certified (or referred)
to the Commission by the SOLE
for compulsory arbitration under
Art. 278 (g)
Exclusive Appellate Jurisdiction: over all
cases decided by Labor Arbiters [Art.
224(b)] and the DOLE Regional Directors
under Art. 129.
Remedies
Appeal: Appeal from decisions of the
NLRC after denial of Motion for
Reconsideration appealed via Rule 65 to
CA then Rule 45 to the SC. [St. Martin’s
Funeral Homes v. NLRC, 295 SCRA 494
(1998)]
Requisites for Perfection of Appeal to the
Court of Appeals [Rule VI, 2011 NLRC
Rules of Procedure]:
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1. The appeal shall be:
a. Filed within the reglementary
period;
b. Verified by the appellant himself in
accordance with Sec. 4, Rule 7 of
the Rules of Court;
c. In the form of a memorandum of
appeal which shall state the
grounds relied upon and the
arguments in support thereof, the
relief prayed for, and with a
statement of the date the appellant
received the appealed decision,
resolution or order;
d. In three (3) legibly typewritten or
printed copies; and
e. Accompanied by (a) proof of
payment of the required appeal fee;
(b) posting of a cash or surety bond
as provided in Sec. 6 of the NLRC
Rules; and (c) proof of service
upon the other parties
2. A mere notice of appeal without
complying with the other requisites
aforestated shall not stop the
running of the period for perfecting
an appeal.
3. The appellee may file with the
Regional Arbitration Branch or
Regional Office where the appeal
was filed, his answer or reply to
appellant’s memorandum of
appeal, not later than 10 calendar
days from receipt thereof.
a. Failure on the part of the
appellee who was properly
furnished with a copy of the
appeal to file his answer or
reply within the said period
may be construed as a
waiver on his part to file the
same.
4. Subject to the provisions of Art.
[225] of the Labor Code, once the
appeal is perfected in accordance
with these Rules, the Commission
shall limit itself to reviewing and
deciding only the specific issues
that were elevated on appeal.
Extraordinary Remedy
Verified Petition: A party aggrieved by
any order or resolution of the Labor
Arbiter, including a writ of execution and
others issued during execution
proceedings, may file a verified petition to
annul or modify the same.
The petition may be accompanied by an
application for the issuance of a temporary
restraining order and/or writ of preliminary
or permanent injunction:
a. To enjoin the Labor
Arbiter, or any person
acting under his/her
authority
b. To desist from enforcing
said resolution, order or
writ. [Rule XII, Sec. 1,
2011 NLRC Rules of
Procedure, as amended by
En Banc Resolution No. 07-
14]
Certified Cases: Certified labor disputes
are cases certified to the Commission for
compulsory arbitration under Art. 278(g)
of the Labor Code. [Sec. 2, The 2011
NLRC Rules and Procedures]
Power of the Secretary of Labor to Certify
Cases
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 and Employment may:
1. Assume jurisdiction over the
dispute and
2. Decide it or certify the same to the
Commission for compulsory
arbitration
Such assumption or certification shall have
the effect of automatically enjoining the
intended or impending strike or lockout as
specified in the assumption or certification
order. [Art. 278(g)]
Function of the NLRC
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When sitting in a compulsory arbitration
certified to by the Secretary of Labor, the
NLRC is tasked:
a. To implement the order of the
Secretary as an administrative
body, not as a judicial court
b. To formulate the terms and
conditions of the CBA, staying
within the scope of the order
c. To act within the earliest time
possible and with the end in view
that its action would not only serve
the interests of the parties alone,
but would also have favorable
implications to the community and
to the economy as a whole. [Art.
278(g); Union of Filipino
Employees v. NLRC, G.R. No.
91025 (1990)]
Execution and Judgment:
Upon issuance of the entry of judgment,
the Commission motu proprio or upon
motion by the proper party, may cause the
execution of the judgment in the certified
case. [Sec. 6, Rule VIII, 2011 NLRC Rules
and Procedures]
D. Judicial Review of Labor Rulings
All references in the amended Sec. 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 v. NLRC, G.R.
No. 130866 (1998)]
Rule 45, Rules of Court
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.
[Sec. 1]
Since the Court of Appeals had jurisdiction
over the petition under Rule 65, any
alleged errors committed by it in the
exercise of its jurisdiction would be errors
of judgment which are reviewable by
timely appeal, and not by a special civil
action of certiorari.
If the aggrieved party fails to do so within
the reglementary period, and the decision
accordingly becomes final and executory,
he cannot avail himself of the writ of
certiorari, his predicament being the effect
of his deliberate inaction. [Tirazona v Phil
EDS Techno-Service Inc, G.R. No.
169712 (2009)]
Note: Review of decisions of the NLRC
shall be done through (in order):
1. Motion for Reconsideration
2. Rule 65 to the CA
3. Rule 45 to the SC
E. Bureau of Labor Relations
Jurisdiction:
The Bureau of Labor Relations and the
Labor Relations Divisions in the regional
offices of the Department of Labor and
Employment shall have original and
exclusive authority:
a. To act
1. At their own initiative or
2. Upon request of either or
both parties
b. On all inter-union and intra-union
conflicts, and
c. All disputes, grievances or
problems arising from or affecting
labor-management relations in all
workplaces –
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1. Whether agricultural or
non-agricultural
2. Except those arising from
the implementation or
interpretation of collective
bargaining agreements
which shall be the subject
of grievance procedure
and/or voluntary arbitration.
[Art. 232]
The Bureau shall have fifteen (15)
calendar days to act on labor cases before
it, subject to extension by agreement of the
parties.
Original Jurisdiction
a. Inter-union and intra-union
disputes and other related labor
relations disputes.
b. All disputes, grievances or
problems arising from or affecting
labor-management relations in all
workplaces whether agricultural or
non-agricultural, except those
arising from the implementation or
interpretation of collective
bargaining agreements which shall
be the subject of grievance
procedure and/or voluntary
arbitration. [Art. 232]
Note: If the complaint involves an
independent union, chartered local or
worker’s association, file with the DOLE
Regional Office but if the complaint
involves a federation or an
industry/national union, file with the BLR.
Inter-Union Dispute: one which occurred
between or among legitimate labor unions
involving representation questions for
purposes of collective bargaining or to any
other conflict or dispute between
legitimate labor unions [IRR Book V, IRR
Rule 1, Sec. 1 (x)]
Intra-Union Dispute: conflict within and
inside a union between and among union
members including grievances from any
violation of rights and conditions of
membership or provisions from the
union’s constitution and by-laws and
chartering of unions [D.O. No. 40-03, Rule
I, Sec. 1 (bb)]
Appellate Jurisdiction
The BLR Director exercises exclusive
appellate jurisdiction over:
1. All decisions of the Med-Arbiter
in:
a. Inter/Intra-union disputes
(Note: Complaints
involving Federations,
National Unions, etc.
pursuant to Rule XI Sec. 4,
formerly Sec. 5, as
amended by D.O. 40-F-03).
b. Other related labor relations
disputes
2. All decisions from the DOLE
Regional Director in the cases
falling under their original
jurisdiction as enumerated. [Sec.
14, Rule XI, Book V, IRR]
Decisions of the BLR through its appellate
jurisdiction are final and executory 10 days
after receipts by the parties. [Sec. 20, Rule
XI, Book V, IRR].
Appeals: Decisions of the BLR through its
original jurisdiction are appealable to the
Secretary of Labor and Employment. [Sec.
15, Rule XI, Book V, IRR].
Decisions of the BLR in its appellate
jurisdiction are final and executory, unless
appealed to the CA via Rule 65 and later to
the SC via Rule 45. [Abbot Laboratories
Philippines, Inc. v. Abbot Laboratories
Employees Union, 323 SCRA 392 (2000)]
F. National Conciliation and Mediation
Board
Jurisdiction
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The NCMB is an agency attached to the may disrupt or impede the

DOLE principally in charge of the early settlement of the
settlement of labor disputes through disputes [Art. 261(d)]; and
conciliation, mediation and of the c. The Board shall exert all
promotion of voluntary approaches to efforts to settle disputes
labor dispute prevention and settlement. amicably and encourage the
[NCMB Manual of Procedures for parties to submit their case
Conciliation and Preventive Mediation to a voluntary arbitrator
Cases, Rule III, sec. 1] [Art. 261(e)].
The following procedures shall be Procedure for Correction of Wage
observed in collective bargaining: Distortion:
1. When a party desires to negotiate a. In organized establishments with
an agreement, it shall serve a CBA
written notice upon the other party i. Submit issue to
with a statement of its proposals grievance machinery
[Art. 261(a)]. ii. If unresolved, refer to
a. The other party shall make voluntary arbitration
a reply thereto not later than who will decide within
ten (10) calendar days from 10 days unless
receipt of such notice [Art. otherwise agreed upon
261(a)]; by parties in writing
b. Should differences arise on b. If unorganized establishments
the basis of such notice and without CBA
reply, either party may i. Submit issue before the
request for a conference NCMB for conciliation
which shall begin not later after endeavors to correct
than ten (10) calendar days have failed
from the date of request ii. If not fruitful within 10
[Art. 261(b)]. days, refer to the NLRC for
2. If the dispute is not settled, the arbitration to be decided
Board shall intervene upon request within 20 days from
of either or both parties or at its submission [Rule VII,
own initiative and immediately call Rules of Procedure of
the parties to conciliation meetings Minimum Wage Fixing]
[Art. 261(c)].
a. The Board shall have the Conciliation vs Mediation
power to issue subpoenas Both refer to a process where a third
requiring the attendance of person called a Conciliator/Mediator
the parties to such meetings intervenes in a dispute to reconcile
i. It shall be the duty of differences or persuade them to adjust or
the parties to participate settle their dispute
fully and promptly in
the conciliation In Conciliation, Conciliation/Mediator
meetings the Board may facilitates disputants to keep things calm,
call [Art. 261(c)]; delivers messages back and forth between
b. During the conciliation the parties
proceedings in the Board,
the parties are prohibited
from doing any act which

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In Mediation, Conciliation/Mediator monitoring the overseas

assists parties to voluntarily reach
mutually acceptable settlement.
Pre-Termination of Conciliation-
Mediation:
Any or both parties in the dispute may pre-
terminate the proceedings and request
referral or endorsement to the appropriate
DOLE agency or office with jurisdiction or
to the voluntary arbiter if both parties
agreed.
Privileged Communication not Available
as Evidence: Any statement made in
conciliation proceedings shall be treated as
privileged communication, and shall not be
used as evidence in the NLRC.
Conciliators may not testify in any court or
body regarding any matter during the
conciliation proceedings. [D.O. No. 40-03,
Rule XXII, Sec. 2]
G. POEA
Jurisdiction:
1. Administrative cases arising out of
violations of rules and regulations
relating to licensing and
registration of recruitment and
employment agencies and entities.
[Sec. 28(a), Omb. Rules
Implementing RA 8042]
2. Disciplinary action cases and other
special cases, involving employers,
principals, contracting partners,
and Filipino migrant workers [Sec.
28(b), Omb. Rules Implementing
RA 8042]
Powers and Functions:
a. Regulate private sector
participation in the recruitment and
overseas placement of workers by
setting up a licensing and
registration system;
b. Formulate and implement, in
coordination with appropriate
entities concerned, when necessary,
a system for promoting and
employment of Filipino workers
taking into consideration their
welfare and the domestic
manpower requirements;
c. Protect the rights of Filipino
workers for overseas employment
to fair and equitable recruitment
and employment practices and
ensure their welfare;
d. Exercise original and exclusive
jurisdiction to hear and decide all
claims arising out of an employer-
employee relationship or by virtue
of any law or contract involving
Filipino workers for overseas
employment including the
disciplinary cases; and all pre
employment cases which are
administrative in character
involving or arising out of violation
or requirement laws, rules and
regulations including money claims
arising therefrom, or violation of
the conditions for issuance of
license or authority to recruit
workers. All prohibited
recruitment. activities and practices
which are penal in character as
enumerated and defined under and
by virtue of existing laws, shall be
prosecuted in the regular courts in
close coordination with the
appropriate Departments and
agencies concerned;
e. Maintain a registry of skills for
overseas placement;
f. Recruit and place workers to
service the requirements for trained
and competent Filipino workers by
foreign governments and their
instrumentalities and such other
employers as public interest may
require;
g. Promote the development of skills
and careful selection of Filipino
workers;
h. Undertake overseas market
development activities for
placement of Filipino workers;

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i. Secure the best terms and
conditions of employment of
Filipino contract workers and
ensure compliance therewith;
j. Promote and protect the well-being
of Filipino workers overseas;
k. Develop and implement programs
for the effective monitoring of
returning contract workers,
promoting their re-training and re-
employment or their smooth re-
integration into the mainstream of
national economy in coordination
with other government agencies;
l. Institute a system for ensuring fair
and speedy disposition of cases
involving violation or recruitment
rules and regulations as well as
violation of terms and conditions of
overseas employment;
m. Establish a system for speedy and
efficient enforcement of decisions
laid down through the exercise of
its adjudicatory function;
n. Establish and maintain close
relationship and enter into joint
projects with the Department of
Foreign Affairs, Philippine
Tourism Authority, Manila
International Airport Authority,
Department of Justice, Department
of Budget and Management and
other relevant government entities,
in the pursuit of its objectives.
H. DOLE Regional Directors
Jurisdiction: The DOLE Regional
Directors shall have original and exclusive
jurisdiction over:
a. Labor standards enforcement cases
under Art. 129;
Note: as the duly authorized
representative of the SOLE
b. Small money claims from labor
standards violations not exceeding
P5,000 and not accompanied with a
claim for reinstatement under Art.
129;
c. Operational safety and health
conditions (can order stoppage or
suspension of operations) [Art.
128; Bk. IV, Rule II, Sec. 8];
d. Registration of unions and
cancellations thereof, cases filed
against unions and other labor
relations related cases [Sec. 4, Rule
XI (renumbered, D.O. 40-F-03];
Note: only if against an
independent labor union, chartered
local or workers’ association;
e. Complaints against private
recruitment and placement
agencies (PRPAs) for local
employment [Secs. 45/46, D.O.
141-14]; and
f. Cases submitted to voluntary
arbitration in their capacity as Ex
Officio Voluntary Arbiters under
D.O 83-07 (2007).
Note: The DOLE Regional Director, as the
duly authorized representative of the
SOLE, also has visitorial and enforcement
power under:
1. Art. 37, Art. 128 (have access to
employer’s records and premises
with right to copy or investigate to
determine violations of law); and
2. Art. 289 (where it can inquire into
the financial activities of any
legitimate labor organization and
examine their books and records to
determine compliance with the law
if requested by at least 20% of total
membership).
Appeal: Appeal of decisions from
visitorial and enforcement power to the
SOLE within 10 calendar days from
receipt thereof [Rule IV, sec. 1, Rules on
Disposition of Labor Standard Cases in the
Regional Offices]
Recovery and Adjudicatory Power
Art. 129. Recovery of Wages, Simple
Money Claims and Other Benefits.
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Who: The Regional Director of the
Department of Labor and Employment or
any of the duly authorized hearing officers
of the Department [par. 1]
What: They are empowered to hear and
decide any matter involving the recovery
of wages and other monetary claims and
benefits
- including legal interest, owing to
an employee or person employed in
domestic or household service or
househelper under this Code,
arising from employer-employee
relations
How: Through summary proceeding and
after due notice
When: Upon complaint of any interested
party
Conditions:
a. Provided that such complaint does
not include a claim for
reinstatement;
b. Provided, further, That the
aggregate money claims of each
employee or househelper do not
exceed five thousand pesos
(P5,000)
Period to Decide: The Regional Director or
hearing officer shall decide or resolve the
complaint within thirty (30) calendar days
from the date of the filing of the same [Art.
129, par. 2].
Appeal of decision or resolution - Any
decision or resolution of the Regional
Director or hearing officer pursuant to this
provision may be appealed on the same
grounds provided in Article 223 of this
Code.
Period: Within five (5) calendar days from
receipt of a copy of said decision or
resolution
To whom: To the National Labor Relations
Commission which shall resolve the
appeal within ten (10) calendar days from
the submission of the last pleading
required or allowed under its rules
The Secretary of Labor and Employment
or his duly authorized representative may
supervise the payment of unpaid wages
and other monetary claims and benefits,
including legal interest, found owing to
any employee or househelper under this
Code [Art. 129, par. 6].
Period of Appeal to NLRC: Decisions of
the Regional director on recovery of
wages, simple money claims and other
benefits, shall be final and executory
unless appealed within 5 days from receipt
thereof. [Art. 129]
Definition: Recovery/adjudicatory power
is the power of the Regional Director or
any duly authorized hearing officer of
DOLE to adjudicate on recovery of wages
of employees/househelpers employed in a
domestic household for claims not
exceeding P5,000 and without seeking
reinstatement. [Art. 129]
If any of the requisites are missing, the
Labor Arbiter shall have jurisdiction over
claims arising from ER-EE relations
except claims for employees’
compensation, SSS, PhilHealth and
maternity benefits. [Art. 224]
Money claims should be filed within 3
years from the time the cause of action
accrued. [Art. 306]
I. DOLE Secretary
Powers:
1. Visitorial (access to employer’s
records and premises and to copy
therefrom) and enforcement
powers (to question any employee
and investigate any fact which may
be necessary to determine
violations)
2. Power to suspend effects of
termination
3. Assumption of jurisdiction
4. Appellate jurisdiction
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5. Voluntary arbitration powers
Jurisdiction:
a. Assumption of Jurisdiction
When may the SOLE Assume Jurisdiction
Art. 278 (g). Strikes, Picketing and
Lockouts. – The SOLE may:
i. Assume jurisdiction over the
dispute and decide it;
ii. Certify the same to the
Commission for compulsory
arbitration
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.
Requisites for Assumption of Jurisdiction
1. Both parties have requested the
SOLE to assume jurisdiction; or
2. After a conference called by the
Office of the SOLE on the
propriety of its issuance, motu
proprio or upon a request or
petition by either party to the labor
dispute. [Book V, IRR Rule XXII,
sec. 15, IRR as amended by D.O.
No. 40-H-13 s 2013]
Power of the Secretary of Labor to
Assume Jurisdiction (Alternative)
a. Decide the labor dispute
himself/herself
b. Certify the labor dispute to the
NLRC for compulsory arbitration.
Scope: The authority of the Secretary to
assume jurisdiction over a labor dispute
includes and extends to all questions and
controversies arising from such labor
dispute. The power is plenary and
discretionary in nature to enable him to
effectively and efficiently dispose of the
dispute. [Philcom Employees Union v.
Philippine Global Communications, 495
SCRA 214 (2006)]
Effects of Assumption of Jurisdiction:
Automatically enjoins intended or
impending strike or lockout. If one has
already taken place at the time of
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. [Art. 278 (g)]
The SOLE may also determine the
retroactivity of arbitral awards pursuant to
power to assume jurisdiction as part of
his/her plenary powers to determine the
effectivity thereof in absence of specific
provision of law. [LMG Chemicals Corp.
v. Sec. of Labor and Employment, 356
SCRA 577 (2001)]
b. Appellate Jurisdiction
1. Orders issued by the duly
authorized representative of the
SOLE under Art. 128 may be
appealed to the latter.
2. Denial of application for union
registration or cancellation of union
registration originally rendered by
the BLR may be appealed to the
SOLE (if originally rendered by the
Regional Office, appeal should be
made to the BLR)
3. POEA — The Office of the SOLE
shall have exclusive jurisdiction to
act on appeals from the Orders of
the Administration. [Sec. 185, Rule
VII, Revised POEA Rules and
Regulations Governing The
Recruitment And Employment Of
Landbased Overseas Filipino
Workers Of 2016]
4. Decisions of the Med-Arbiter in
certification election cases are
appealable to the SOLE. [Art. 272]
(decisions of med-arbiters in intra-
union disputes are appealable to the
BLR [Sec. 15, Rule XI, Book V,
IRR])
c. Voluntary Arbitration Powers
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Art. 278 (h). Strikes, Picketing and
Lockouts. – The parties may opt to submit
their dispute to voluntary arbitration
When: Before or at any stage of the
compulsory arbitration process.
Sec. 15, Rule XXII, Book V. Assumption
by the Secretary of Labor and
Employment. – … parties to the case may
agree at any time to submit the dispute to
the SOLE or his/her duly authorized
representative as Voluntary Arbitrator…
J. Grievance Machinery
Art. 273. Grievance Machinery and
Voluntary Arbitration
The parties to a Collective Bargaining
Agreement 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
1. Arising from the interpretation or
implementation of their Collective
Bargaining Agreement, and
2. Those arising from the
interpretation or enforcement of
company personnel policies.
All grievances submitted to the grievance
machinery which are not settled within
seven (7) calendar days from the date of its
submission shall automatically be referred
to voluntary arbitration prescribed in the
Collective Bargaining Agreement.
K. Voluntary Arbitrator
Automatic Referral If Grievance
Machinery Fails All grievances submitted
to the grievance machinery which are not
settled within 7 calendar days from the
date of its submission shall automatically
be referred to voluntary arbitration
prescribed in the CBA. [Art. 273]
Jurisdiction:
Exclusive and Original Jurisdiction over
Unresolved Grievances
a. Interpretation or implementation of
the CBA [Art. 274]
b. Interpretation or enforcement of
company personnel policies [Art.
274]
c. Violations of a CBA which are not
gross in character (gross being
flagrant and/or malicious refusal to
comply with the economic
provisions of [the CBA]) [Art. 274]
Note: Gross violations of the CBA shall
mean flagrant and/or malicious refusal to
comply with the economic provisions of
such agreement.
Termination Cases: Plenary Jurisdiction of
Voluntary Arbitrator vis-à-vis Labor
Arbiter Termination cases arising in or
resulting from the interpretation and
implementation of CBAs and
interpretation and enforcement of company
personnel policies which were initially
processed at the various steps of the plant-
level Grievance Procedures under the
parties' CBAs fall within the original and
exclusive jurisdiction of the VA.
Remedies:
Motion for Reconsideration The absence
of a categorical language in Art. [276]
does not preclude the filing of a motion for
reconsideration of the VA’s decision
within the 10-day period. [Teng v Pahagac,
G.R. 169704 (2010)]
Appeal 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.
[AMA Computer College-Santiago City,
Inc. v. Nacino, G.R. No. 162739 (2008)]
But See: Guagua National Colleges v. CA,
G.R. 188412, Aug. 28, 2018, the 10-day
period under Article 276 of the Labor
Code refers to the filing of a motion for
reconsideration vis-à- vis the Voluntary
Arbitrator's decision or award, while the
15 days is the period to file petition for
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review under Rule 43 of the Rules of

Court.
L. Prescription of Actions
1. Money Claims - Art. 306. Money
claims. – All money claims arising
from employer-employee relations
accruing during the effectivity of
this Code shall be filed within three
(3) years from the time the cause of
action accrued; otherwise they shall
be forever barred.
2. Illegal Dismissal
4 years from dismissal In illegal
dismissal cases, the employee
concerned is given a period of four
years from the time of his dismissal
within which to institute a
complaint. This is based on Art.
1146 of the Civil Code which
states that actions based upon an
injury to the rights of the plaintiff
must be brought within four years.
[Victory Liner, Inc. v. Race, G.R.
No. 164820 (2007)]
3. Unfair Labor Practice
All unfair labor practice arising
from Book V
i. Shall be filed with the
appropriate agency within
one (1) year from accrual of
such unfair labor practice;
ii. Otherwise, they shall be
forever barred.
4. Offenses under the Labor Code - 3
years, except ULP
5. Illegal recruitment
Illegal recruitment cases under this
Act shall prescribe in five (5)
years.

Provided, however, that illegal

recruitment cases involving
economic sabotage as defined
herein shall prescribe in twenty
(20) years. [Migrant Workers and
Overseas Filipinos Act of 1995,
Sec. 12]

-end-
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