TABLE OF CONTENTS

I. FUNDAMENTAL PRINCIPLES AND CONCEPTS

A. Legal Basis ..................................................................................................... 1
B. State Policy Towards Labor .............................................................................. 6

II. PRE-EMPLOYMENT
A. Recruitment and Placement of Local and Migrant Workers ................................. 13
B. Employment of Non-Resident Aliens ................................................................ 33
C. Discriminatory Practices................................................................................... 38

III. EMPLOYMENT PROPER

A. Management Prerogative ................................................................................. 42
B. Labor Standards.............................................................................................. 53
C. Social Welfare Legislation ................................................................................ 101
D. Labor Relations ............................................................................................... 122
E. Telecommuting Act (RA 11165) ....................................................................... 180

IV. POST-EMPLOYMENT
A. Employer-Employee Relationship ..................................................................... 181
B. Termination of Employment by Employer ......................................................... 192
C. Termination of Employment by Employee ......................................................... 204
D. Preventive Suspension..................................................................................... 205
E. Reliefs from Illegal Dismissal ........................................................................... 206
F. Retirement ..................................................................................................... 212

V. JURISDICTION AND REMEDIES

A. Labor Arbiter .................................................................................................. 215
B. National Labor Relations Commission ............................................................... 220
C. Court of Appeals ............................................................................................. 225
D. Supreme Court ............................................................................................... 226
E. Bureau of Labor Relations................................................................................ 227
F. National Conciliation and Mediation Board ........................................................ 229
G. DOLE Regional Directors .................................................................................. 231
H. DOLE Secretary .............................................................................................. 234
I. Voluntary Arbitrator ........................................................................................ 237
J. Prescription of Actions ..................................................................................... 240
 a. Security of Tenure. a. Conduct Collective
LABOR LAW AND SOCIAL LEGISLATION b. Receive a Living bargaining or
Wage. negotiation with
Labor Law is a branch of law that governs and c. A just Share in the management.
regulates the relationship between employers fruits of b. Organize
and employees. (Ungos & Ungos, Labor Law 2 - production; and themselves.
The Law on Labor Relations, 2020, p.2) d. Work under c. Participate in policy
Humane conditions and decision-making
Labor Standards sets out the minimum (Sec. 3, Art. XIII, processes; and
terms, conditions and benefits of employment 1987 Constitution). d. Engage in peaceful
that employers must provide or comply with concerted activities
and to which employees are entitled as a matter including strike (Ibid)
of legal right. The laws on wages and work
hours, safety and health of employees,
employment benefits such as paid leaves and
medical services for work-connected injuries -
these are examples of labor standards laws.
(Azucena, Everyone’s Labor Code, 2021, p.11)

Labor Relations define the status, rights and

duties, as well as the institutional mechanisms Our laws on labor, foremost of which is the
that govern the individual and collective Labor Code, are pieces of social legislation.
interactions between employers, employees They have been adopted pursuant to the
and their representatives. Unionization, constitutional recognition of "labor as a primary
negotiation, and dispute settlements fall in the social economic force" and to the constitutional
area of labor relations. (Ibid) mandates for the state to "protect the rights of
workers and promote their welfare" and for
I. FUNDAMENTAL PRINCIPLES AND Congress to "give highest priority to the
CONCEPTS enactment of measures that protect and
enhance the right of all the people to human
A. Legal Basis dignity, [and] reduce social, economic, and
political inequalities. (Wahing v. Spouses Daguio,
1. 1987 CONSTITUTION G.R. No. 219755, April 18, 2022)

Article II – Declaration of Principles and

Basic Rights of Workers as Guaranteed by State Policies
the Constitution
a. The State shall promote a just and dynamic
social order that will ensure the prosperity
Labor Standards. Labor Relations; Right to and independence of the nation, and free
Rights to [TWSH] [COPE] the people from poverty through policies
that provide adequate social service,
promote full employment, a rising standard
of living, and an improved quality of life for
all (Sec. 9);
b. The State shall promote social justice in all
phases of national development (Sec.10);
c. The State recognizes the role of women in
nation-building, and shall ensure the

1
 fundamental equality before the law of
women and men (Sec. 14);
d. The State affirms labor as a primary social
economic force. It shall protect the rights
the workers and promote their welfare (Sec.
18); and
e. The State recognizes the indispensable role
of the private sector, encourages private
enterprise and incentives to needed
investments (Sec. 20).
Note: Article II is merely a statement of
principles and state policies. Its provisions
are not self-executing. They do not embody
judicially enforceable constitutional rights
but guidelines for legislation. These broad
principles need legislative enactments to
implement them. The disregard of these
provisions cannot give rise to a cause of
action in the courts. Consequently, no case
can be filed based on these principles.
There must be enabling laws to implement
them. (Kilosbayan, Inc. vs. Morato, G.R. No.
118910, November 16, 1995).
Art. III –Bill of Rights
1. No person shall be deprived of life, liberty
or property without due process of law, nor
shall any person be denied the equal protection
of the laws (Sec. 1);
Two-fold requirement: Under the Labor
Code (NOT the Constitution), 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, August 8, 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, September 28, 2007)
The right of a person to his labor is deemed to
be his property within the mantle of
constitutional protection. That is his means of
livelihood. He cannot be deprived of his labor or
work without due process of law.(Philips
Semiconductors (Phils.) Inc. v. Fadriquela, G.R. No.
141717, April 14, 2004)
2. No law shall be passed abridging the
freedom of speech, of expression, or of the
press, or the right of the people to peaceably
assemble and petition the government for
redress of grievances. (Sec. 4)
Picketing peacefully carried out is not illegal
even in the absence of employer-employee
relationship, for peaceful picketing is a part of
the freedom of speech guaranteed by the
Constitution. (De Leon, et al. vs. National Labor
Union, et al., G.R. No. L-7586, January 30, 1957)
3. The right of the people including those
employed in the public and private sectors, to
form unions, association, or societies for
purposes not contrary to law shall not be
abridged. (Sec. 8)
The right to form, join, or assist a union is
specifically protected by Art. XIII, Section 3 of
the Constitution and such right, according to
Art. III, Sec. 8 of the Constitution and Art. 246
of the Labor Code, shall not be abridged. ( S.S.
Ventures International, Inc. vs. S.S. Ventures Labor
Union, G.R. No. 161690, July 23, 2008)
4. No law impairing the obligation of contracts
shall be passed. (Sec. 10)
The constitutional guaranty of non-impairment
of contract is limited by the exercise of the
police power of the State in the interest of
public health, safety, morals, and general
welfare. (Philamlife Insurance Co. vs. The Auditor
General, G.R. No. L-19225, January 18, 1968)
2
5. All persons shall have the right to a speedy
disposition of their cases before all judicial,
quasi-judicial, or administrative bodies (Sec.
16); and
The right to a speedy disposition of cases is
guaranteed by the Constitution. The concept of
speedy disposition is flexible. The fact that it
took the CSC six years to resolve the appeal of
petitioner does not, by itself, automatically
prove that he was denied his right to the speedy
disposition of his case. After all, a mere
mathematical reckoning of the time involved is
not sufficient, as the facts and circumstances
peculiar to the case must also be considered.
(Barcelona v. Lim, G.R. No. 189171, June 3, 2014)
The right to a speedy trial, as well as other
rights conferred by the Constitution or statute,
may be waived except when otherwise
expressly provided by law. One's right to the
speedy disposition of his case must therefore
be asserted. (Ibid)
6. No involuntary servitude in any form shall
exist except as punishment for a crime whereof
the party shall have been duly convicted (Sec.
18[2]).
The notion of involuntary servitude connotes
the presence of force, threats, intimidation or
other similar means of coercion and
compulsion. (Spouses Imbong v. Ochoa, Jr., G.R.
Nos. 204819, April 8, 2014)
An individual employee can, at any time, in a
consensual and in personam employment
contract, walk away from it, subject only to the
adjustment of the obligations he has incurred
under the contractual relationship that binds
him; a contrary rule would violate the
involuntary service provision of
Constitution. (Bank of the Philippine Islands vs. BPI
Employees Union-Davao Chapter-Federation of
Unions in BPI Unibank, G.R. No. 164301, August 10,
2010)
Art. XIII – Social Justice and Human
Rights
1. The promotion of social justice shall include
the commitment to create economic
opportunities based on freedom of initiative
and self-reliance (Sec. 2);
2. The State shall afford full protection to
labor, local and overseas, organized and
unorganized, and promote full employment
and equality of employment opportunities
for all.
It shall guarantee the rights of all workers to
self-organization, collective bargaining and
negotiations, and peaceful concerted activities,
including the right to strike in accordance with
law. They shall be entitled to security of tenure,
humane condition of work, and a living wage.
They shall also participate in policy and
decision-making processes affecting their rights
and benefits as may be provided by law.
The State shall promote the principle of shared
responsibility between workers and employers
and the preferential use of voluntary modes in
settling disputes, including conciliation, and
shall enforce their mutual compliance therewith
to foster industrial peace.
The State shall regulate the relations between
workers and employers, recognizing the right of
labor to its just share in the fruits of production
and the right of enterprises to reasonable
returns to investments, and to expansion and
growth (Sec. 3)
NOTE: Sec. 3, Article XIII of the 1987
Constitution is also known as the
PROTECTION-TO-LABOR CLAUSE.
the
Constitutional Basis for Right to Strike
The measures embedded in our legal system
which accord specific protection to labor stems
from the reality that normally, the laborer
stands on unequal footing as opposed to an
employer. Indeed, the labor force is a special
class that is constitutionally protected because
3
of the inequality between capital and labor.
(Reyes vs. Rural Bank of San Rafael, G.R. No.
230597, March 23, 2022, Per J. Hernando)
3. The State shall establish a special agency for
disabled persons for their rehabilitation, self-
development and self-reliance, and their
integration into the mainstream of society (Sec.
13); and
The intent is to balance the scale of justice; to
put the two parties on relatively equal positions.
There may be cases where the circumstance
warrants favoring labor over the interest of
management but never injustice to the
employer (Abad, Compendium on Labor Law, 2015,
p.8)
2. CIVIL CODE
1. Article 1700
The relations between capital and labor
are not merely contractual. They are so
impressed with public interest that labor
contracts must yield to the common good.
Therefore, such contracts are subject to the
special laws on labor unions, collective
bargaining, strikes and lockouts, closed shop,
wages, working conditions, hours of labor and
similar subjects. (Art. 1700, Civil Code)
The supremacy of the law over the
nomenclature of the contract and its pacts and
conditions is to bring life to the policy enshrined
in the Constitution to afford full protection to
labor. Thus, labor contracts are placed on a
higher plane than ordinary contracts since
these are imbued with public interest and,
therefore, subject to the police power of the
State. (Dynamiq Multi-Resources, Inc. v. Genon,
G.R. No. 239349, June 28, 2021)
However, when parties enter into contracts
voluntarily, without force, duress or acts
tending to vitiate the workers’ consent, there is
no reason not to honor and give effect to the
terms and conditions stipulated therein (Leyte
Geothermal Power Progressive Employees Union –
ALU-TUCP vs. Philippine National Oil Company
Energy Development Corporation, G.R. No. 170351,
March 30, 2011).
The contracts referred to in Article 1700 may
either be (1) employment contract, or (2)
Collective Bargaining Agreement (CBA).
CBA, as a labor contract within the
contemplation of Article 1700 of the Civil Code,
is not merely contractual in nature but
impressed with public interest, thus, it must
yield to the common good. (Davao Integrated
Port Stevedoring Services vs. Abarquez, G.R. No.
102132, March 19, 1993)
In the interpretation of contracts, obscure
words and provisions shall not favor the party
that caused the obscurity. Consequently, the
terms of the contract of employment should be
construed strictly against the petitioner, which
prepared it. Indeed, a contract of
employment is impressed with public
interest. For this reason, 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.” Moreover, in case of doubt, the terms of
a contract should be construed in favor of labor.
(Innodata Philippines Inc. vs. Quejada-Lopez, G.R.
No, 162839, October 12, 2006)
2. Article 1701
Neither capital nor labor shall act oppressively
against the other, or impair the interest or
convenience of the public (Art. 1701, Civil Code)
The preferential treatment given by our law to
labor is not a license for abuse; it is not a signal
to commit acts of unfairness that will
unreasonably infringe on the property rights of
the company. Both labor and employer have
social utility, and the law is not so biased that it
does not find a middle ground to give each their
due (Milan vs. NLRC, G.R. No. 202961, February 4,
2015).
4
3. In case of doubt, all labor legislation and all
labor contracts shall be construed in favor of
the safety and decent living for the laborer (Art.
1702).
This Civil Code provision pertains to
construction of labor contracts and labor
legislation, in contrast to Article 4 of the Labor
Code which mandates construction of Labor
Laws and Social Legislation (Dealco Farms vs.
NLRC, GR No. 153192, January 30, 2009).
4. No contract which practically amounts to
involuntary servitude, under any guise
whatsoever, shall be valid (Art.1703).
3. LABOR CODE (P.D No. 442, as
amended)
a. The State shall afford protection to labor,
promote full employment, ensure equal work
opportunities regardless of sex, race or creed,
and regulate the relations between workers and
employers. The State shall assure the rights of
workers to self-organization, collective
bargaining, security of tenure, and just and
humane conditions of work. (Art. 3)
b. 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)
c. The Department of Labor and other
government agencies charged with the
administration and enforcement of this Code or
any of its parts shall promulgate the necessary
implementing rules and regulations. Such rules
and regulations shall become effective fifteen
(15) days after announcement of their adoption
in newspapers of general circulation. (Art. 5)
d. 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. (Art. 6)
Labor Code – defined as the “charter of
human rights and a bill of obligations” for every
working man (Poquiz, Labor Standards and Social
Legislation with Notes and Comments, 2018, p.3).
The Labor Code is a social legislation primarily
intended to help the employees in conformity
with social justice which is guaranteed in the
Constitution (Cristobal vs. ECC, et al., G.R. No. L-
49280, April 30, 1980).
Applicability of the Labor Code
General rule: All rights and benefits granted
to workers under the Labor Code shall apply
alike to all workers whether agricultural or non-
agricultural (Art. 6, Labor Code)
Exceptions:
1. Government employees;
2. Employees of government-owned and
controlled corporations with original charter
or created by special laws; (Azucena,
Everyone’s Labor Code, 2021, p.19)
Rights of family drivers are governed by the
Civil Code and not by the Labor Code. (Atienza
v. Saluta G.R. No. 233413, June 17, 2019)
Note: The Labor Code may apply even if the
parties are not employers or employees of each
other. It is not correct to say that employment
relationship is a precondition to the applicability
of the Code. (Ibid)
On Aliens Employed in the Philippines
Aliens are required to secure work permits
before their employment to claim employee’s
benefits under the Philippine labor laws. (WPP
Marketing Communications, Inc. et. al. vs. Jocelyn M.
Galera et al / Jocelyn M. Galera vs. WPP, G.R. No.
169207/G.R. No. 169239, March 25, 2010)
No alien seeking employment, whether as a
resident or non-resident, may enter the
Philippines without first securing an
employment permit from the Ministry. If an
alien enters the country under a non-working
visa and wishes to be employed thereafter, he
may only be allowed to be employed upon
presentation of a duly approved employment
5
permit. (Section 4, Rule XIV, Book 1 of the
Implementing Rules and Regulations)
Principle of Co-determination or Shared
Responsibility
The State shall promote the principle of shared
responsibility between workers and employers
and the preferential use of voluntary modes in
settling disputes, including conciliation, and
shall enforce their mutual compliance therewith
to foster industrial peace. (Section 3, Article XIII,
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 on investments, and to expansion and
growth. (Ibid)
Indeed, industrial peace cannot be achieved if
the employees are denied their just
participation in the discussion of matters
affecting their rights. Thus, even before Article
211 of the Labor Code (P.D. 442) was amended
by Republic Act No. 6715, it was already
declared a policy of the State: “(d) To promote
the enlightenment of workers concerning their
rights and obligations . . . as employees.” This
was, of course, amplified by Republic Act No.
6715 when it decreed the “participation of
workers in decision and policy making
processes affecting their rights, duties and
welfare.” (PAL vs. NLRC and PALEA, G.R. No.
85985, August 13, 1993)
B. State Policy Towards Labor
BASIC POLICY ON LABOR
Declaration of Basic Policy
Under Section 3, Article XIII of the 1987
Constitution and the Labor Code, the state is
duty-bound to: [APERA]
a. Afford full protection to labor;
b. Promote full employment;
c. Ensure equal work opportunities regardless
of sex, race or creed;
d. Regulate the relations between workers
and employers; and
e. Assure the rights of workers to [CJSS
i. Collective bargaining;
ii. Just and humane conditions of work;
iii. Self-organization; and
iv. Security of Tenure (Chan, Bar Reviewer
on Labor, 2019, pp. 1-2)
NOTE: Full employment means that “those who
want to work at the prevailing rates of pay are
able to find work without undue difficulty”
(Poquiz, Labor Standards and Social Legislation,
2018, p. 15; Lester, Economics of Employment, p17)
It covers a situation under which there are
more job openings than there are job applicants
(Poquiz, Labor Standards and Social Legislation,
2018, p. 15; Dankert, An Introduction to Labor, p.
68). It does not mean that everybody is working
and the society does not experience involuntary
unemployment (Ibid.)
Reason for Affording Protection to Labor
Due to labor’s economic dependence upon the
capital, it is considered the weaker factor of
production and therefore needs protection from
the State. (Poquiz, Labor Standards and Social
Legislation with Notes and Comments, 2018, p.14)
Extent of Protection
Protection extends to all of labor – local and
overseas, organized and unorganized, whether
in private or public sectors. (Lopez vs. MWSS,
G.R. No. 154472, June 30, 2005)
Limitations on Protection to Labor
In protecting the rights of the workers, the law
does not authorize the oppression or self-
destruction of the employer. The constitutional
commitment to the policy of social justice
cannot be understood to mean that every labor
dispute shall automatically be decided in favor
of labor. The constitutional and legal protection
equally recognize the employer’s right and
prerogative to manage its operation according
to reasonable standards and norms of fair play.
6
(Imasen Philippine Manufacturing Corporation vs.
Alcon, G.R. No. 194884, October 22, 2014)
Examples of non-application of
protection to labor are:
If an employee is found guilty of violating rules
designed for the safety of the laborers
themselves, his dismissal should be upheld. In
this manner, labor is protected and at the same
time capital is given its due. (Northern Motors vs.
National Labor Union, G.R. No. L-10022, January 31,
1958)
Protection to labor cannot be extended to an
employee found guilty of malfeasance or
misfeasance because the law, in protecting the
rights of labor, authorizes neither oppression
nor self-destruction of the employer. (Manila
Trading and Supply Co. vs. Zulueta, G.R. No. L-
46853, January 30, 1940)
Where both parties have violated the law,
neither party is entitled to protection.
(PAMBUSCO Employees Union vs. CIR, G.R. No.
46727, September 27, 1939)
Declaration of Policy on Labor Relations
It is the policy of the State:
a. To promote and emphasize the primacy of
free collective bargaining and negotiations,
including voluntary arbitration, mediation
and conciliation, as modes of settling labor
or industrial disputes;
b. To promote free trade unionism as an
instrument for the enhancement of
democracy and the promotion of social
justice and development;
c. To foster the free and voluntary
organization of a strong and united labor
movement;
d. To promote the enlightenment of workers
concerning their rights and obligations as
union members and employees;
e. To provide an adequate administrative
machinery for the expeditious settlement of
labor or industrial disputes;
f. To ensure a stable but dynamic and just
industrial peace; and
g. To ensure the participation of workers in
decision and policy-making processes
affecting their rights, duties and welfare
(Art. 218.A, Labor Code, as amended).
To encourage a truly democratic method of
regulating the relations between the employers
and employees by means of agreements freely
entered into through collective bargaining, no
court or administrative agency or official shall
have the power to set or fix wages, rates of pay,
hours of work or other terms and conditions of
employment, except as otherwise provided
under this Code (Art. 218.B, Labor Code, as
amended)
Constitutional Basis
1. Security of Tenure
The State shall guarantee the rights of all
workers to self-organization, collective
bargaining and negotiations, and
peaceful concerted activities, including
the right to strike in accordance with law.
They shall be entitled to security of tenure,
humane conditions of work, and a living wage.
They shall also participate in policy and
decision-making processes affecting their rights
and benefits as may be provided by law (Sec.
3(2), Art. XIII, 1987 Constitution)
Security of tenure is a right of paramount value.
Our laws and jurisprudence guarantee to every
employee security of tenure. That guarantee is
an act of social justice. The right to security of
tenure guarantees the right of employees to
continue in their employment absent a just or
authorized cause for termination. In contrast,
the prerogative of management to dismiss a
worker, as an aspect of property right, has
never been endowed with a constitutional
status. (Inter-Asia Development Bank v. Pereña,
G.R. No. 213627, April 5, 2022)
In cases of regular employment, the employer
shall not terminate the services of an employee
except for a just cause or when authorized by
this Title. An employee who is unjustly
dismissed from work shall be entitled to
7
reinstatement without loss of seniority rights
and other privileges and to his full backwages,
inclusive of allowances, and to his other
benefits or their monetary equivalent computed
from the time his compensation was withheld
from him up to the time of his actual
reinstatement. (Art. 294, Labor Code)
Our labor laws and the Constitution afford
security of tenure to employees that one may
have a reasonable expectation that they are
secured in their work and that management
prerogative, although unilaterally wielded, will
not harm them. Employees are guaranteed that
they can only be terminated from service for a
just aan valid cause and when supported by
substantial evidence after due process. (Telus
International Philippines v. De Guzman, G.R. No.
202676, December 04, 2019)
While the right of workers to security of tenure
is guaranteed by the Constitution, its exercise
may be reasonably regulated pursuant to the
police power of the State to safeguard health,
morals, peace, education, order, safety, and
the general welfare of the people.
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. The most concrete
example of this would be in the field of
medicine, the practice of which in all its
branches has been closely regulated by the
State. (St. Luke’s Medical Center Employee’s
Association-AFW v. NLRC, G.R. No. 162053, March 7,
2007)
2. Social Justice
Social Justice is neither communism, nor
despotism, nor atomism, nor anarchy, but the
humanization of laws and the equalization of
social and economic forces by the State so that
justice in its rational and objectively secular
conception may at least be approximated.
Social justice means the promotion of the
welfare of all the people, the adoption by the
Government of measures calculated to insure
economic stability of all the competent
elements of society, through the maintenance
of a proper economic and social equilibrium in
the interrelations of the members of the
community, constitutionally, through the
adoption of measures legally justifiable, or
extra-constitutionally, through the exercise of
powers underlying the existence of all
governments on the time-honored principle of
salus populi est suprema lex. (Calalang vs.
Willams, G.R. No. 47800, December 2, 1940)
The aim and the reason and therefore the
justification of labor laws is social justice. While
social justice is the reason for existence of labor
laws, their BASIS or FOUNDATION is the police
power of the State (Everyone’s Labor Code,
Azucena, 2021, p.3)
When conflicting interests of labor and capital
are to be weighed on the scales of social justice,
the law should accord more sympathy and
compassion to the less privileged workingman.
This is only fair if the worker is to be given the
opportunity and the right to assert and defend
his cause, not as a subordinate, but as part of
management with which he can negotiate on
even plane, thus, labor is not a mere employee
of capital but it’s active as equal partner
(Fuentes vs. NLRC, G.R. No. 110017, January 2,
1997).
Social justice connotes equality under the law
and the attainment of a decent quality of life by
the people through humane productive work.
Social justice is both a legal mandate and a
socio-economic goal. (Azucena, Everyone’s Labor
Code, 2021, p.3)
It should be borne in mind that social justice
ceases to be an effective instrument for the
“equalization of the social and economic forces”
by the State when it is used to shield
wrongdoing. (Jamer vs. NLRC, G.R. No. 112630,
September 5, 1997)
3. Equal Work Opportunities
The State shall afford protection to labor,
promote full employment, ensure equal work
opportunities regardless of sex, race or creed
and regulate the relation between workers and
8
employers. The State shall assure the rights of
workers to self-organization, collective
bargaining, security of tenure, and just and
humane conditions of work. (Art. 3, Labor Code)
4. Right to Self-Organization and
Collective Bargaining
It is the right of workers and employees to
form, join or assist unions, organizations for
purposes of collective bargaining and
negotiation and for mutual aid and protection.
It also refers to the right to engage in peaceful
concerted activities or to participate in policy
and decision-making processes affecting their
rights and benefits.
The concept of the government employees'
right of self-organization differs significantly
from that of employees in the private sector.
The latter's right of self-organization, i.e., "to
form, join or assist labor organizations for
purposes of collective bargaining," admittedly
includes the right to deal and negotiate with
their respective employers in order to fix the
terms and conditions of employment and also,
to engage in concerted activities for the
attainment of their objectives, such as strikes,
picketing, boycotts.
But the right of government employees to
"form, join or assist employees organizations of
their own choosing" under Executive Order No.
180 is not regarded as existing or available for
"purposes of collective bargaining," but simply
"for the furtherance and protection of their
interests. (Confederation for Unity, Recognition and
Advancement of Government Employees v. Abad,
G.R. No. 200418, November 10, 2020)
The right of the government employees to deal
and negotiate with their respective employers
is not quite as extensive as that of private
employees. Excluded from negotiation are the
“terms and conditions of employment…that are
fixed by law.” The right to engage in concerted
activities, including the right to strike, must be
exercised in accordance with law i.e. are
subject both to Civil Service Law and rules and
any legislation that may be enacted by the
Congress. (Ibid)
The right to form and join associations and
unions is not absolute or unlimited. Thus, if a
person accepts employment that falls under the
civil service law and his employer performs
governmental functions, he may not resort to
strike, because that is prohibited by law. Having
accepted the employment freely and being
chargeable with knowledge of the fact that he
has no right to resort to strike to enforce his
demands against his employer, his only
recourse is either to respect and comply with
that condition or resign. (Confederation of Unions
in Government Corporations and Offices vs. The
Commissioner of Civil Service, et. al, G.R. No. L-
22723, April 30, 1970)
The right to form a union or association or to
self-organization comprehends two notions, to
wit:
a. the liberty or freedom, that is, the absence
of restraint which guarantees that the
employee may act for himself without being
prevented by law; and
b. the power, by virtue of which an employee
may, as he pleases, join or refrain from
joining an association. (Samahan ng
Manggagawa sa Hanjin Shipyard vs. Bureau of
Labor Relation, G.R. No. 211145, October 14,
2015)
Limitations to the Rights to Self-
Organization
The right to self-organization, however, is
subject to certain limitations as provided by
law. For instance, the Labor Code specifically
disallows managerial employees from joining,
assisting or forming any labor union.
Meanwhile, supervisory employees, while
eligible for membership in labor organizations,
are proscribed from joining the collective
bargaining unit of the rank and file employees.
Even government employees have the right to
self-organization. It is not, however, regarded
as existing or available for purposes of
collective bargaining, but simply for the
9
furtherance and protection of their interests. labor. (Hubilla vs. HSY Marketing Ltd., Co., G.R. No.
(Ibid) 207354, January 10, 2018)

5. Construction in Favor of Labor It bears stressing that the policy of liberal

approach only applies when there is doubt on
the evidence, but not when evidence is lacking.
(Santos v. Bicol Apparel Corp., G.R. No. 226259,
In Case of Doubt in the...
October 19, 2022)

The rule remains that where the law speaks in

clear and categorical language, there is no
Labor Code and GR: Interpretation in
room for interpretation; there is only room for
Implementing Rules favor of labor
application (Leoncio vs. MST Marine Services, Inc.,
and Regulations (IRR)
G.R. No. 230357, December 6, 2017).

Those who have less in life should have

Labor legislation and GR: Interpretation in more in law.
all labor contracts favor of the safety and
decent living for the When conflicting interests of labor and capital
laborer are weighed on the scales of social justice, the
heavier influence of the latter must be
counterbalanced by the sympathy and
All doubts in the implementation and compassion the law must accord the
interpretation of the provisions of this Code, underprivileged worker. This is in line with the
including its implementing rules and express mandate of the Labor Code and the
regulations, shall be resolved in favor of labor principle that those with less in life should have
(Art. 4, Labor Code)
more in law. (Eastern Shipping Lines vs. POEA, G.R.
No. L-76633, October 18, 1988)
In case of doubt, all labor legislation and all
labor contracts shall be construed in favor of
A contrary ruling would be a dilution and
the safety and decent living for the laborer (Art.
1702, New Civil Code). emasculation of the protection to labor clause
of the Constitution. (MD Transit vs. Estrella, G.R.
No. L-52188, March 30, 1982)
In case of doubt in the interpretation or
application of laws, it is presumed that the
lawmaking body intended right and justice to The Rule Does Not Deprive Employers of
prevail (Art. 10, New Civil Code) Fair Treatment

Article 4 of the Labor Code applies only when
there is doubt. This principle has been extended
by jurisprudence to cover doubts in the
evidence presented by the employer and the
employee. (Peñaflor vs. Outdoor Clothing Mfg.
Corp., G.R. No. 177114, April 13, 2010)
When the evidence of the employer and the
employee are in equipoise, doubts are resolved
in favor of labor. This is in line with the policy
of the State to afford greater protection to
The rule of interpretation and construction in
favor of labor does not mean that capital
should, at all times, be at the losing end of a
controversy. The law does not say so. For while
the Constitution and the law tend to favor the
working man, protection to the employer is also
assured. Protection of the rights of the laborer
authorizes neither the oppression nor self-
destruction of the employer. Management also
has its own rights which as such are entitled to
respect and enforcement in the interest of
simple fair play. Out of its concern for those

10
with less privilege in life, the Court has inclined
more often than not towards the workers and
upheld his cause with his conflicts with the
employer. Such favoritism, however, has not
blinded the Court to rule that justice is, in every
case, for the deserving to be dispensed in the
light of the established facts and applicable law
and doctrine (Chan, Bar Reviewer on Labor Law,
2019, p6)
The Philippine Constitution, while inexorably
committed towards the protection of the
working class from exploitation and unfair
treatment, nevertheless mandates the policy of
social justice so as to strike a balance between
an avowed predilection for labor, on the one
hand, and the maintenance of the legal rights
of capital, the proverbial hen that lays the
golden egg, on the other. (Ibid)
The constitutional policy to provide full
protection to labor is not meant to be a sword
to oppress employers. Justice is for the
deserving and must be dispensed within the
light of established facts, the applicable law,
and existing jurisprudence. The Court's
commitment to the cause of labor is not a
lopsided undertaking. It cannot and does not
prevent us from sustaining the employer when
it is in the right. (Trans-Global Maritime Agency,
Inc. vs. Utanes, G.R. No. 236498, September 16,
2020)
The employer should not be compelled to
continue employing a person who is admittedly
guilty of misfeasance or malfeasance and
whose continued employment is patently
inimical to the employer. The law protecting the
rights of the laborer authorizes neither
oppression nor self- destruction of the
employer. (Agabon vs. NLRC, G.R. No. 158693,
November 17, 2004)
6. Burden of Proof and Quantum of
Evidence
Summary on Burden of Proof in Illegal
Dismissal Cases
Existence of ER-EE EmployEE
Relationship
Fact of dismissal EmployEE
Validity of Dismissal EmployER
(compliance with
procedural &
substantive due
process)
On Burden of Employers
The burden of proving that the
termination of an employee was for a just
or authorized cause lies with the
employer. If the employer fails to meet this
burden, the dismissal is unjustified, thus, illegal.
To discharge this burden, the employer must
present substantial evidence, or the amount of
relevant evidence which a reasonable mind
might accept as adequate to justify a
conclusion, and not based on mere surmises or
conjectures. (Systems and Plan Integrator and
Development Corp. v. Ballesteros, G.R. No. 217119,
April 25, 2022, J. Hernando)
Before a case for illegal dismissal can prosper,
an employer-employee relationship must first
be established by the employee (Javier vs. Fly
Ace Corp., G.R. No. 192558, February 15, 2012)
On Burden of Employees
It is well-established that the employee must
first prove the fact of dismissal before the
burden shifts to the employer to prove that the
dismissal was legal. (Nerida vs. NJ World Corp.,
G.R. No. 240005, December 6, 2022)
11
In illegal dismissal cases, the burden of proof is
on the employer in proving the validity of
dismissal. However, the fact of dismissal, if
disputed, must be duly proven by the
complainant. (Rubio v. Lucky Star Service
Placement, G.R. No. 242556, June 13, 2022)
It is true that in constructive dismissal cases,
the employer is charged with the burden of
proving that its conduct and action or the
transfer of an employee are for valid and
legitimate grounds such as genuine business
necessity. (Ibid)
Only then when the dismissal is established that
the burden shifts to the employer to prove that
the dismissal was for just and/or authorized
cause. The logic is simple — if there is no
dismissal, there can be no question as to its
legality or illegality. (Ibid)
To discharge its burden, the employer must rely
on the strength of its own evidence. Hence, any
doubt or vagueness in the provisions of the
contract of employment should have been
interpreted and resolved in favor of the
employee. (Centro Project Manpower Services
Corporation vs. Naluis and CA, G.R. No. 160123,
June 17, 2015)
When there is doubt between the evidence
submitted by the employer and that submitted
by the employee, the scales of justice must be
tilted in favor of the employee. This is
consistent with the rule that an employer’s
cause could only succeed on the strength of its
own evidence and not on the weakness of the
employee’s evidence (Misamis Oriental II Electric
Service Cooperative vs. Virgilio Cagalawan, G.R. No.
175170, September 5, 2012)
Summary on Burden of Proof in
Monetary claims
Incurred in normal EmployER
course of business
Not incurred in EmployEE
normal course of
business
In determining the employee's entitlement to
monetary claims, the burden of proof is shifted
from the employer or the employee, depending
on the monetary claim sought.
In claims for payment of salary differential,
service incentive leave, holiday pay and 13th
month pay, the burden rests on the employer
to prove payment. This standard follows the
basic rule that in all illegal dismissal cases the
burden rests on the defendant to prove
payment rather than on the plaintiff to prove
non-payment. This likewise stems from the fact
that all pertinent personnel files, payrolls,
records, remittances and other similar
documents – which will show that the
differentials, service incentive leave and other
claims of workers have been paid – are not in
the possession of the worker but are in the
custody and control of the employer.
On the other hand, for overtime pay, premium
pays for holidays and rest days, the burden is
shifted on the employee, as these monetary
claims are not incurred in the normal course of
business. It is thus incumbent upon the
employee to first prove that he actually
rendered service in excess of the regular eight
working hours a day, and that he in fact worked
on holidays and rest days (Minsola vs. New City
Builders, Inc., G.R. No. 207613 January 31, 2018)
Quantum of Proof; Substantial Evidence
Substantial evidence is the quantum of proof
required in labor cases. It is such relevant
evidence as a reasonable mind might accept as
adequate to support a conclusion. (Tavera, Jr. v.
Red Ribbon Bakeshops, Inc., G.R. No. 227817, June
13, 2022)
In constructive dismissal cases, the
employee has the burden to prove first the fact
of dismissal by substantial evidence. (Rubio v.
12
Lucky Star Service Placement, G.R. No. 242556, June
13, 2022)
In all cases, as in other administrative
and quasi-judicial proceedings, the
quantum of proof necessary is substantial
evidence, or such amount of relevant evidence
which a reasonable mind might accept as
adequate to justify a conclusion. (Valencia vs.
Classic Vinyl Products Corp., G.R. No. 206390,
January 30, 2017)
II. Pre-Employment
A. RECRUITMENT AND PLACEMENT OF
LOCAL AND MIGRANT WORKERS
(Labor Code and R.A. No. 8042, as
amended by R.A. No. 10022)
1. Definition of Recruitment and
Placement
Recruitment And Placement Refers to Any Act
of: [CETCHUP]
1. Canvassing,
2. Enlisting,
3. Transporting,
4. Contracting,
5. Hiring,
6. Utilizing, or
7. Procuring workers.
It Includes: [CRAP]
1. Contract services;
2. Referrals;
3. Advertising for; or
4. Promising employment, locally or abroad,
whether for profit or not.
Provided that any person or entity which, in any
manner, offers or promises for a fee,
employment to two or more persons shall be
deemed engaged in recruitment and
placement. (Art. 13(b), Labor Code)
The act of referral, which is included in
recruitment, is the “act of passing along or
forwarding of an applicant for employment
after an initial interview of a selected applicant
for employment to a selected employer,
placement officer or bureau”. (Rodolfo vs. People,
G.R. No. 146964, August 10, 2006)
Definition of Terms
Worker - any member of the labor force,
whether employed or unemployed. (Art. 13,
Labor Code, as amended)
Overseas Filipino
– Dependents of migrant workers and other
Filipino nationals abroad who are in distress as
mentioned in Sections 24 and 26 of the Migrant
Workers Act. (Sec. 3[c], R.A. No. 8042)
Overseas Filipino Worker or Migrant
Worker – is a person who is to be engaged, is
engaged or has been engaged in a
remunerated activity in a state of which he or
she is not a citizen or on board a vessel
navigating the foreign seas other than a
government ship used for military or non-
commercial purposes or on an installation
located offshore or on the high seas. (Sec. 2[a],
R.A. No. 8042)
A person to be engaged in a remunerated
activity refers to an applicant worker who has
been promised or assured employment
overseas.
Private Employment Agency (PEA) –
means any person or entity engaged in
recruitment and placement of workers for a fee
which is charged, directly or indirectly, from the
workers or employers or both. (Art. 13[c], Labor
Code)
Private Recruitment Entity – means any
person or association engaged in the
recruitment and placement of workers, locally
or overseas, without charging, directly or
indirectly, any fee from the workers or
employees. (Art. 13[e], Labor Code).
13
Who May Engage in Recruitment and
[w], Rule II, Omnibus g agency to conduct
Placement of Workers Rules and Regulations recruitment and
Implementing the placement activities
a) Public Employment Offices; Migrant Workers and in a place stated in
b) Private Recruitment Offices Overseas Filipinos Act the license or in a
c) Private Employment Agencies of 1995, as amended specified place.
d) Shipping or Manning Agents & by Republic Act No. (Section 1 [b], Rule II,
Representatives; 10022) Omnibus Rules and
Regulations
e) Such other persons or entities as may be
Implementing the
authorized by the DOLE Secretary (Rule III,
Migrant Workers and
Sec. 1, Omnibus Rules Implementing the Labor
Overseas Filipinos Act
Code)
of 1995, as amended
f) Philippine Overseas Employment by Republic Act No.
Administration (POEA) (Section 14, R.A. No. 10022)
10022);
g) Construction Contractors
Qualifications to Operate a Recruitment
DISTINCTIONS BETWEEN PEA AND PRE and Placement Agency

1. For Local Employment

Private Employment Private Recruitment
a. Filipino citizens, partnerships or
Agency (PEA) Entity (PRE)
corporation at least 75% of the
Has a right duly Does not charge any authorized capital stock must be
recognized in law to fee either directly or owned and controlled by Filipino
charge a fee directly or indirectly from the citizens;
indirectly from the workers or employers b. Must have a minimum net worth of
workers or the to which they would be P1,000,000.00 in case of single
employers or from deployed. proprietorship and partnership, or a
both. minimum paid-up capital of
Allowed to recruit for P1,000,000.00 in case of a
Authorized to recruit both local and
corporation.
only for overseas overseas employment
placement or c. Office space with a minimum area of
deployment Derive its authority 50 square meters.
from a “authority” d. Owners, partners or the officers of
Derive its authority the corporation must be of good
from a “license” moral character and not otherwise
disqualified by law.
License And Authority; Distinguished
2. For Overseas Employment
a. Filipino citizens, partnerships or
LICENSE AUTHORITY corporation at least 75% of the
authorized capital stock must be
Document issued by the DOLE Secretary owned and controlled by Filipino
citizens;
authorizing a authorizing the b. Must have a minimum capitalization
person, partnership, officers, personnel, of P5,000,000.00 in case of single
or corporation to agents or proprietorship or partnership, and a
operate a private representatives of a minimum paid-up capital of
recruitment/mannin licensed P5,000,000.00 in case of a
g agency. (Section 1 recruitment/mannin corporation.

14
 i. Those with existing licenses shall
within 4 years from the effectivity
hereof, increase their capitalization
or paid up capital to P5,000,000 at
the rate of P750,000 every year.
(2016 Revised POEA Rules and
Regulations Governing the
Recruitment and Employment of
Landbased OFWs)
c. Office space with a minimum area of
100 square meters.
d. Owners, partners or the officers of the
corporation must be of good moral
character and not otherwise
disqualified by law.
Re: Terms of employment contract of
OFWs.
A contract freely entered into should, of course,
be respected, as PIA argues, since a contract is
the law between the parties. The principle of
party autonomy in contracts is not, however, an
absolute principle. The rule in Article 1306, of
our Civil Code is that the contracting parties
may establish such stipulations as they may
deem convenient, "provided they are not
contrary to law, morals, good customs,
public order or public policy." Thus,
counterbalancing the principle of autonomy of
contracting parties is the equally general rule
that provisions of applicable law, especially
provisions relating to matters affected with
public policy, are deemed written into the
contract. Put a little differently, the governing
principle is that parties may not contract away
applicable provisions of law, especially
peremptory provisions dealing with matters
heavily impressed with public interest. The law
relating to labor and employment is
clearly such an area and 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. (Industrial
Personnel & Management Services vs. De Vera, G.R.
No. 205703, March 7, 2016)
The general rule is that Philippine laws apply
even to overseas employment contracts.
This rule is rooted in the constitutional provision
of Section 3, Article XIII that the State shall
afford full protection to labor, whether local or
overseas. Hence, even if the OFW has his
employment abroad, it does not strip him of his
rights to security of tenure, humane conditions
of work and a living wage under our
Constitution. (supra)
As an exception, the parties may agree that a
foreign law shall govern the employment
contract, provided:
1. That it is expressly stipulated in the
overseas employment contract that a
specific foreign law shall govern;
2. That the foreign law invoked must be
proven before the courts pursuant to the
Philippine rules on evidence;
3. That the foreign law stipulated in the
overseas employment contract must not be
contrary to law, morals, good customs,
public order, or public policy of the
Philippines; and
4. That the overseas employment contract
must be processed through the
POEA.(supra)
2. Regulation of Recruitment and
Placement Activities
a) Regulatory Authorities
(1) Philippine Overseas Employment
Administration
Jurisdiction
Original and exclusive jurisdiction
POEA shall exercise original and exclusive
jurisdiction to hear and decide all cases which
are administrative in character, involving or
arising out of violation of recruitment rules and
regulations including refund of fees collected
from OFWs and any violation of the conditions
for issuance of license to recruit OFWs (Sec. 138,
Rule I, Part VI, POEA Rules) and seafarer. (Section
118, Rule I, Part V, 2016 POEA Rules and Regulations
Governing the Recruitment and Placement of
Seafarers).
15
Cases not falling under the POEA
jurisdiction
1. Money claims of OFWs (LA)
2. Quasi-delict or Tort cases (if arising from
employment relationship, LA)
3. Enforcement of foreign judgment (regular
courts)
4. Local employment disputes (LA or RD, as
applicable)
It is well settled that in administrative
proceedings as in the case before the POEA,
only substantial evidence is needed or such
relevant evidence as a reasonable mind may
accept as adequate to support a conclusion.
(Asian International Manpower Services, Inc. vs.
DOLE, G.R. No. 210308, April 6, 2016)
Grounds for Imposition of Administrative
Sanctions against a Licensed Recruitment
Agency
1. For Land Based OFWs
a. Knowingly deploying a minor;
b. Engaging in acts of gross
misrepresentation for the purpose of
securing a license or renewal thereof,
such as violation of the Anti-Dummy
Law, or giving false information or
fictitious documents in relation to a
matter that is material for the approval
of the license application or renewal.
c. Engaging in an act of reprocessing by
documenting workers through a job
order that pertains to: (1)non-existent
work; (2) positions different from the
actual overseas work or for positions
different from the actual visa category,
unless covered by an undertaking of
visa usage by the licensed recruitment
agency and an affidavit of awareness
and consent by the worker, and a job
description signed by the worker and
approved by the Administration; or (3)
a different principal/employer whether
or not accredited with the POEA.
d. Engaging in the recruitment or
placement of workers in jobs declared
by the Administration as harmful to
public health or morality or to the
dignity of the Republic of the
Philippines.
e. Transfer or change of ownership or
control of a single proprietorship
licensed to engage in overseas
employment.
f. For the sole proprietor, partner, or
officer/s or member/s of the Board of
any licensed recruitment agency to
become an officer or member of the
Board of any corporation or partnership
engaged directly or indirectly in the
management of a travel agency.
g. Charging and collecting of placement
fee for deployment to countries where
the prevailing system, either by law,
policy or practice does not allow the
charging and collection of placement
and recruitment fees as determined by
the Administration.
h. Charging and accepting directly or
indirectly any amount greater than that
specified in the schedule of allowable
placement fees, or when such charging
or collection is prohibited by any law,
rules or policy, or making a worker pay
or acknowledge any amount greater
than that actually received by him/her
as loan or advance.
i. Passing on to the worker fees and costs
chargeable to the principal/employer.
j. Deploying workers whose employment
and travel documents were not
processed by the Administration.
k. Allowing a non-Filipino citizen to head
or manage, directly or indirectly, a
licensed recruitment agency. For this
purpose, “heading or managing” a
licensed recruitment agency shall refer
to:
i. controlling and supervising the
operations of the licensed
recruitment agency or any branch
thereof; or
ii. exercising the authority to hire or
fire employees and to lay down and
execute management policies of
the licensed recruitment agency or
branch thereof.
16
l. Knowingly deploying a worker below recruitment agency without prior
the minimum age requirement. approval from the Administration.
m. Charging, imposing and accepting v. Allowing persons who are disqualified
directly or indirectly, any amount of to participate in the overseas
money, goods or services, or any fee or employment program under existing
bond for any purpose whatsoever laws, rules and regulations to
before employment is obtained for an participate in the ownership,
applicant worker. management and operation of the
n. Collecting any fee from a worker recruitment agency.
without issuing the official receipt w. Failure to reimburse expenses incurred
clearly showing the amount paid and by the worker in connection with
the purpose for which payment was his/her documentation and processing
made. for purposes of deployment, where
o. Engaging in any other acts of deployment does not take place
misrepresentation in connection with without any fault on the part of the
recruitment and placement of workers, worker.
such as furnishing or publishing any x. Failure to comply with any of the
false notice, information or document undertakings submitted to the
in relation to recruitment or Administration.
employment. y. Imposing a compulsory and exclusive
p. Obstructing representatives inspection arrangement whereby an OFW is
by the Secretary, the Administrator or required to undergo health
their duly authorized examinations, training, seminar,
q. Substituting or altering, to the instruction or schooling of any kind only
prejudice of the worker, a POEA- from specifically designated
approved employment contract, from institutions, entities, or persons or
the time of actual signing thereof by medical clinics, as the case may be,
the parties up to and including the unless the cost is shouldered by the
period of the expiration of the same, principal or licensed recruitment
without the approval of the POLO or agency.
POEA. z. Imposing a compulsory and exclusive
r. Withholding or demand denying arrangement whereby an OFW is
release of travel or other pertinent required to avail of a loan from a
documents from a worker despite specifically designated institution,
demand entity, or person.
s. Engaging in recruitment activities in aa. Refusing to condone or
places other than that specified in the renegotiate a loan incurred by an
license or branch authority without a OFW after the latter’s
special recruitment authority. employment contract has been
t. Appointing or designating, prematurely terminated through
representatives or employees without no fault of his/her own.
notice to the Administration, in bb. Facilitating, arranging or
accordance with Section 27 of these granting of a loan to an OFW
Rules. with interest exceeding eight
u. Allowing an accredited percent (8%) per annum which
principal/employer or its representative will be used for payment of legal
to conduct or participate in recruitment and allowable placement fees
activities outside the registered and making the OFW issue,
business address of the licensed either personally or through a
guarantor or accommodation

17
 party, postdated checks in
relation to the said loan.
cc. Failure to monitor and report
significant incidents regarding
the condition and status of the
deployed worker in relation to
Section 209.
dd. Collecting any amount as
payment for documentation
costs not prescribed by these
Rules or other issuances of the
Administration, or an amount
greater than the actual
documentation costs, as covered
by official receipts issued by
entities which received the
payments.
ee. Falsifying or altering
employment or travel documents
of applicant worker.
ff. Inducing a worker already pre-
qualified/ contracted, whether
deployed or not, to withdraw
from or to abandon his/her
employment in order to offer
him/her another, unless the
transfer is designed to liberate a
worker from oppressive terms
and conditions of employment.
gg. Willful disobedience of lawful
orders, notices, or other legal
processes issued by the
Administration.
hh. Failure to submit reports as
required under the rules and
other issuances of the
Administration.
ii. Influencing any person or entity
not to employ any worker who
has not applied for employment
through his/her agency, or
influencing any person or entity
not to employ any worker who
has formed, joined or supported,
or has contacted or is supported
by any union or workers’
organization;
jj. Failure to actually deploy a
contracted worker within sixty
(60) days from the issuance of
OEC without valid reason.
kk. Violations of other pertinent
provisions of the Labor Code and
other relevant laws, rules and
regulations, guidelines and other
issuances on recruitment and
placement of workers for
overseas employment and the
protection of their welfare.
(Section 143, Rule III, Part VI,
Revised POEA Rules And Regulations
Governing The Recruitment And
Employment Of Landbased Overseas
Filipino Workers Of 2016)
2. For Seafarers
a. Attempting to deploy or deploying a
seafarer who is below 18 years old or
below the minimum age requirement
for overseas employment.
b. Engaging in acts of misrepresentation
for the purpose of securing a license or
renewal thereof, such as giving false
information or documents.
c. Engaging in the recruitment or
placement of workers in jobs harmful
to public health or morality or to the
dignity of the Republic of the
Philippines.
d. Engaging in acts of misrepresentation
for the purpose of processing workers
through a job order that pertains to
non-existent work, work different from
the actual overseas work, or work with
a different employer whether
accredited or not with the POEA.
e. Engaging in any acts of
misrepresentation in connection with
recruitment and placement of workers,
such as furnishing or publishing any
false notice, information or document
in relation to recruitment or
employment.
f. Transfer or change of ownership,
directly or indirectly, of a single
proprietorship licensed to engage in
overseas employment.
g. Charging or accepting directly or
indirectly any amount of money, goods
18
 or services, or any fee or bond for any
purpose from an applicant seafarer.
h. Allowing a non-Filipino citizen to head
or manage a licensed manning agency.
i. Charging, imposing or accepting,
directly or indirectly, under any guise
whatsoever, any amount of money as
payment for the insurance premium for
compulsory insurance coverage.
j. Collecting any amount as payment for
processing, or documentation costs not
prescribed by the rules, or an amount
greater than the actual documentation
costs, as covered by official receipts
issued by entities where payments
were made.
k. Falsifying or altering travel documents
of an applicant seafarer in relation to
recruitment and deployment.
l. Obstructing or attempting to obstruct
inspection by the Secretary, the
Administrator or their duly authorized
representatives.
m. Substituting or altering to the prejudice
of the seafarer, employment contracts
approved and verified by the
Administration, from the time of actual
signing thereof by the parties up to and
including the period of expiration of the
same, without the approval of the
Administration.
n. Withholding or denying travel or other
pertinent documents from an applicant
seafarer for monetary or financial
considerations, or for any other
reasons, other than those authorized
under the Labor Code and its
implementing Rules and Regulations.
o. Engaging in recruitment activities in
places other than that specified in the
license without previous authorization
from the Administration.
p. Appointing or designating agents,
representatives or employees without
notice to the Administration within the
period prescribed under the Rules.
q. Withholding of seafarer’s salaries or
remittances, SSS contributions and
loan amortization or
shortchanging/reduction thereof
without justifiable reasons.
r. Allowing persons who are otherwise
disqualified from participating in the
overseas employment program under
existing laws, rules and regulations to
participate in the management and
operation of the agency.
s. Failure to reimburse expenses incurred
by the seafarer in connection with his
documentation and processing for
purposes of deployment, where
deployment does not take place
without the seafarer's fault.
t. Failure to comply with any of the
undertakings submitted to the
Administration.
u. Impose a compulsory and exclusive
arrangement whereby a seafarer is
required to undergo health
examinations (PEME), training,
seminar, instruction or schooling of any
kind only from specifically designated
institutions, entities, or clinics, as the
case may be, unless the cost is
shouldered by the principal/employer
or licensed manning agency.
v. Impose a compulsory and exclusive
arrangement whereby a seafarer is
required to avail of a loan from a
specifically designated institution,
entity, or person.
w. Granting a loan to a seafarer with
interest exceeding eight percent (8%)
per annum which will be used for
payment of legal and allowable fees
and making the seafarer issue, either
personally or through a guarantor or
accommodation party, post-dated
checks in relation to the said loan.
x. Refuse to condone or renegotiate a
loan incurred by the seafarer after the
latter’s employment contract has been
prematurely terminated through no
fault of his/her own.
y. Default on contractual obligations to
the principal/employer.
z. Failure to submit reports on serious
incidents involving piracy, death,
19
missing seafarer, serious illness and
injury requiring repatriation.
aa. For the owner, partner, or officer/s
of any licensed manning agency to
become an officer or member of
the Board of any corporation or
partnership engaged directly or
indirectly in the management of a
travel agency.
bb. Inducing or attempting to induce
an already contracted seafarer to
transfer from or leave his/her
employment for another unless the
transfer is designed to liberate a
seafarer from oppressive terms
and conditions of employment.
cc. Influencing or attempting to
influence any person or entity not
to employ any seafarer who has
not applied for employment
through his agency or who has
formed, joined or supported, or has
contacted or is supported by any
union or seafarer’s organization.
dd. Failure to actually deploy a
contracted seafarer within the
prescribed period without valid
reason.
ee. Coercing a seafarer to accept
prejudicial arrangements in
exchange for certain benefits that
rightfully belong to them.
ff. Disregard of orders, notices and
other legal processes issued by the
Administration.
gg. Failure to submit reports on the
status of the employment of
seafarers, placement vacancies,
remittance of foreign exchange
earnings, departures, and such
other matters or information as
may be required by the Secretary
or the Administration, such as
resignation and separation from
jobs of office staff members.
hh. Violation of other pertinent
provisions of the Code and other
relevant laws, rules and
regulations, guidelines and other
issuances on recruitment and
placement of seafarer for overseas
employment and the protection of
their welfare. (Section 123, Rule III,
Part V, 2016 Revised POEA Rules And
Regulations Governing The
Recruitment And Employment Of
Seafarers)
Preventive Suspension
1. For the Licensed Manning Agency:
a. There exist reasonable grounds to
believe that the continued operation of
the licensed manning agency will lead
to further violation or exploitation of
seafarer being recruited or will
adversely affect friendly relations with
any country or will prejudice national
interest; and
b. The evidence of guilt is strong that
there is a case for violation of the
pertinent provisions of the Labor Code,
its implementing rules and regulations,
and POEA Rules and Regulations
pertaining to serious or less serious
offenses as described in these Rules or
any issuance of the Administration.
2. For a Principal/Employer:
a. When the evidence of guilt is strong;
and
b. There is reasonable ground to believe
that the continued deployment to the
principal/employer will result in further
violation or exploitation of the seafarer.
3. For a Seafarer:
a. When the evidence of guilt is strong;
and
b. The charge involves a serious offense.
Petition for Review
POEA shall have exclusive jurisdiction to review
recruitment violation cases and other related
cases decided by the Administration motu
proprio or upon petition of parties in interest
(Sec. 1, Rule IV, Book VI, POEA Rules)
Petitions for review shall be filed within ten (10)
calendar days from receipt of the Order by the
parties.
20

All Motions for Reconsideration shall be treated
as a petition for review.
(2) Regulatory and Visitorial Powers of
the Department of Labor and
Employment Secretary
Art. 128. Visitorial and Enforcement
Power
The Secretary of Labor and Employment or his
duly authorized representatives, including labor
regulation officers, shall:
1. Have access to employer’s records and
premises at any time of the day or night
whenever work is being undertaken therein and
the right:
i. To copy therefrom,
ii. To question any employee and
iii. To investigate any fact, condition or
matter which may be necessary to
determine violations or which may aid in
the enforcement of this Code and of any
labor law, wage order or rules and
regulations issued pursuant thereto.
2. Have the power to issue compliance orders
Purpose: to give effect to the labor
standards provisions of the Labor Code and
other labor legislation based on the findings
of labor employment and enforcement
officers or industrial safety engineers made
in the course of inspection.
Notwithstanding the provisions of Arts. 129
and [224] of this Code to the contrary, and
in cases where the relationship of
employer-employee still exists.
3. Issue writs of execution to the appropriate
authority for the enforcement of their
orders
Exception: cases where the employer
contests the findings of the labor
employment and enforcement officer and
raises issues supported by documentary
proofs which were not considered in the
course of inspection.
The visitorial and enforcement powers
empowered the Secretary of Labor and
Employment, or his or her authorized
representative, to: (1) access the employer's
records and premises at any time of the day or
night, so long as work is being undertaken; (2)
issue compliance orders to give effect to the
labor standards provisions of the Labor Code;
and (3) order work stoppage or suspend an
establishment's operations when
noncompliance with labor standards poses
grave and imminent danger to the health and
safety of workers. (Ang v. Avila, G.R. No.
222889 , February 26, 2020)
Art. 37. Visitorial Power. – The Secretary of
Labor or his duly authorized representatives
may, at any time –
1. Inspect the premises, books of accounts
and records of any person or entity covered
by this Title
2. Require it to submit reports regularly on
prescribed forms, and
3. Act on violation of any provisions of this
Title.
Art. 289. Visitorial Power. –The Secretary of
Labor and Employment or his duly authorized
representative is hereby empowered:
1. To inquire into the financial activities of
legitimate labor organizations
a. Upon the filing of a complaint under
oath and duly supported by the written
consent of at least twenty percent
(20%) of the total membership of the
labor organization concerned
2. To examine their books of accounts and
other records to determine compliance or
non-compliance with the law
3. To prosecute any violations of the law and
the union constitution and by-laws
21
Provided, that such inquiry or examination shall
not be conducted during the sixty (60)-day
freedom period nor within the thirty (30) days
immediately preceding the date of election of
union officials.
RA 7730, or an Act Further Strengthening the
Visitorial and Enforcement Powers of the
Secretary of Labor, did away with the PhP5,000
limitation, allowing the DOLE Secretary to
exercise its visitorial and enforcement power for
claims beyond PhP5,000. The only qualification
to this expanded power of the DOLE was only
that there still be an existing employer-
employee relationship. (People's Broadcasting
Service v. Secretary of the Department of Labor and
Employment, G.R. No. 179652, March 6, 2012)
DOLE may determine whether employer-
employee relationship exists
The determination of the existence of an
employer-employee relationship by the DOLE
must be respected. The expanded visitorial and
enforcement power of the DOLE granted by RA
7730 would be rendered nugatory if the alleged
employer could, by the simple expedient of
disputing the employer-employee relationship,
force the referral of the matter to the NLRC.
(People's Broadcasting Service v. Secretary of the
Department of Labor and Employment, G.R. No.
179652 (Resolution), March 6, 2012)
If the DOLE makes a finding that there is an
existing employer-employee relationship, it
takes cognizance of the matter, to the exclusion
of the NLRC. The DOLE would have no
jurisdiction only if the employer-employee
relationship has already been terminated, or it
appears, upon review, that no employer-
employee relationship existed in the first place.
(supra)
The findings of the DOLE, however, may still
be questioned through a petition for certiorari
under Rule 65 of the Rules of Court.
The factual findings of the SOLE or the Regional
Directors made in the exercise of their visitorial
and enforcement powers are binding on Labor
Arbiters and the NLRC under the doctrine of res
judicata. (Norkis Trading v. Buenavista, G.R. No.
182018, October 10, 2012)
Art. 292 (b). Visitorial and Enforcement Power
- The SOLE may suspend the effects of a
termination pending resolution of the dispute in
the event of a prima facie finding by the
appropriate official of the DOLE that:
a. The termination may cause a serious labor
dispute (may or may not be a strike or a
lockout)
b. The termination is in implementation of a
mass lay-off
Remedies
The aggrieved party from a decision of the
SOLE may file one motion for reconsideration
within ten (10) days from receipt thereof.
If the motion for reconsideration is denied, the
party may appeal via Rule 65 to the CA 60 days
from receipt of the denial. Upon denial, the
party may proceed via Rule 45 to the SC. (Rule
65, Rules of Court)
Clearly, before a petition for certiorari under
Rule 65 of the Rules of Court may be availed of,
the filing of a motion for reconsideration is a
condition sine qua non to afford an opportunity
for the correction of the error or mistake
complained of. (PHILTRANCO Service Enterprises
Inc v. PWU – AGLO, G.R. No. 180962, February 26,
2014)
b) Ban on Direct Hiring
General Rule: No employer may hire a Filipino
worker for overseas employment.
Exception: Through the Boards and entities
authorized by the Secretary of Labor. (Article 18,
Labor Code)
Direct Hiring
Direct hiring refers to the process of directly
hiring workers by employers for overseas
employment as authorized by the DOLE
22
Secretary and processed by the POEA,
including:
a. Those hired by international organizations.
b. Those hired by members of the diplomatic
corps.
c. Name hires or workers who are able to
secure overseas employment opportunities
with an employer without the assistance or
participation of any agency. (Sec. 1[i], Rule
II, Omnibus Rules and Regulations
Implementing the Migrant Workers and
Overseas Filipinos Act of 1995, as amended by
R.A. No. 10022)
Exceptions
The following are exempted from the ban on
direct-hiring:
a. Members of the diplomatic corps.
b. International organizations.
c. Heads of state and government officials
with the rank of at least deputy minister.
d. Other employers as may be allowed by the
DOLE Secretary, such as:
i. Those provided in (a), (b) and © who
bear a lesser rank, if endorsed by the
Philippine Overseas Labor Office
(POLO), or Head of Mission in the
absence of the POLO;
ii. Professionals and skilled workers with
duly executed/authenticated contracts
containing terms and conditions over
and above the standards set by the
POEA. The number of professional and
skilled Overseas Filipino Workers hired
for the first time by the employer shall
not exceed five (5). For the purpose of
determining the number, workers hired
as a group shall be counted as one; or
iii. Workers hired by a relative/family
member who is a permanent resident
of the host country. (Section 124, 2016
POEA Rules on Land-based Overseas
Filipino Workers)
c) Entities Prohibited from Recruiting
A. Travel agencies and sales agencies of
airline companies, whether for profit or not;
(Art. 26, Labor Code, as amended)
- To avoid confusion that may arise to
the detriment and disadvantage of an
overseas applicant-worker or may lead
to exploitation of the applicant-worker
who will be at the economic mercy of
the travel agency or sales agencies of
airline company from the time his
papers are processed to the time he
departs. (Poquiz, Labor Standards and
Social Legislation Volume I, 2018, p.112)
- Illegal recruitment activities can be
traced to travel agencies that facilitate
papers of jobseekers for overseas.
They do the dirty job of legalizing the
travel on tourist-visas and with the
assurance that the same could be
converted into work-visas in the
country of employment. (Ibid)
B. Officers or members of the Board of any
corporation or partners in a partnership
engaged in the business of a travel agency;
C. Corporations and partnerships, where any
of its officers, members of the board or
partners is also an officer, member of the
board or partner of a corporation or
partnership engaged in the business of a
travel agency;
D. Individuals, partners, officers, or directors
of an insurance company who make,
propose or provide an insurance contract
under the compulsory insurance coverage
for agency-hired OFWs;
E. Sole proprietors, partners or officers and
members of the board with derogatory
records, such as, but not limited to the
following:
i. Those convicted or against whom
probable cause or prima facie finding of
guilt is determined by a competent
authority for illegal recruitment or for
other related crimes or offenses
committed in the course of, related to,
23
 or resulting from, illegal recruitment, or
for crimes involving moral turpitude, b.
Those agencies whose licenses have
been revoked for violation of RA 8042,
PD 442, RA 9208, and their IRRs;
Those agencies whose licenses have
been canceled, or those who, pursuant
to the order of the Administrator, were
included in the list of persons with
derogatory record for violation of
recruitment laws and regulations;
F. Any official employee of the DOLE, POEA,
OWWA, DFA, DOJ, DOH, BI, IC, NLRC,
TESDA, CFO, NBI, PNP, Civil Aviation
Authority of the Philippines, international
airport authorities, and other government
agencies directly involved in the
implementation of RA 8042, as amended,
and/or any of his/her relatives within the
fourth civil degree of consanguinity or
affinity. (Sec. 3, Rule I, Part II, Rule II, Part III,
Revised POEA Rules and Regulations Governing
the Recruitment and Employment of Land-Based
Overseas Filipino Workers of 2016)
d) Suspension or Cancellation of 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:
1. Violation of Rules and Regulations issued
by the Department of Labor and
Employment, the Overseas Employment
Development Board, and the National
Seamen Board; or
2. Violation of the provisions of this and other
applicable laws, General Orders and Letters
of Instructions. (Art. 35, Labor Code, as
amended)
Note: Illegal recruitment and acts prohibited
under Art. 34 or R.A. No. 8042, as amended by
R.A. No. 10022, as the case may be, are
grounds for suspension or cancellation of
license.
Who Can Suspend or Cancel the License?
1. Secretary of Labor and Employment, and
2. POEA Administrator (Article 35, Labor Code)
e) Prohibited Practices [Article 34,
Labor Code] (These prohibited acts also
constitute illegal recruitment as redefined by
R.A. No. 8042)
Article 34. Prohibited Practices. – It shall
be unlawful for any individual, entity, licensee,
or holder of authority:
a. To charge or accept, directly or indirectly,
any amount greater than that specified in
the schedule of allowable fees prescribed
by the Secretary of Labor, or to make a
worker pay any amount greater than that
actually received by him as a loan or
advance;
b. To furnish or publish any false notice or
information or document in relation to
recruitment or employment;
c. To give any false notice, testimony,
information or document or commit any act
of misrepresentation for the purpose of
securing a license or authority under this
Code;
d. To induce or attempt to induce a worker
already employed to quit his employment in
order to offer him to another unless the
transfer is designed to liberate the worker
from oppressive terms and conditions of
employment;
e. To influence or to attempt to influence any
person or entity not to employ any worker
who has not applied for employment
through his agency;
f. To engage in the recruitment or placement
of workers in jobs harmful to public health
or morality or to the dignity of the Republic
of the Philippines;
g. To obstruct or attempt to obstruct
inspection by the Secretary of Labor or by
his duly authorized representatives;
h. To fail to file reports on the status of
employment, placement vacancies,
remittance of foreign exchange earnings,
separation from jobs, departures and such
other matters or information as may be
required by the Secretary of Labor;
24
i. To substitute or alter employment contracts
approved and verified by the Department
of Labor from the time of actual signing
thereof by the parties up to and including
the periods of expiration of the same
without the approval of the Secretary of
Labor;
j. To become an officer or member of the
Board of any corporation engaged in travel
agency or to be engaged directly or
indirectly in the management of a travel
agency; and
k. To withhold or deny travel documents from
applicant workers before departure for
monetary or financial considerations other
than those authorized under this Code and
its implementing rules and regulations.
Under Section 6 of RA 8042:
a. Failure to actually deploy without valid
reason as determined by the Department
of Labor and Employment; and
b. Failure to reimburse expenses incurred by
the worker in connection with his
documentation and processing for
purposes of deployment, in cases where
the deployment does not actually take
place without the worker's fault. Illegal
recruitment when committed by a
syndicate or in large scale shall be
considered an offense involving economic
sabotage.
3. Illegal Recruitment [Labor Code and
the Migrant Workers and Overseas
Employment Act of 1995 (RA 8042),
as amended by RA 10022]
Illegal Recruitment - Any recruitment
activities, including the prohibited practices
enumerated under Article 34 of the Labor Code,
to be undertaken by non-licensees or non-
holders of authority. (Article 38, Labor Code)
RA 8042 broadened the concept of illegal
recruitment for overseas employment and
increased the penalties. Thus, while Article 38
of the Labor Code limits illegal recruitment to
recruitment activities undertaken by non-
licensees or non-holders of authority, Part II of
RA 8042 defines and penalizes illegal
recruitment for employment abroad, regardless
of whether it was undertaken by a non-licensee
or non-holder of authority or by a licensee or
holder of authority. (People v. Manalang, G.R. No.
198015, January 20, 2021)
To prove illegal Recruitment, it must be shown
that the accused gave the complainants the
distinct impression that he or she had the
power or ability to deploy the complainants
abroad in such a manner that they were
convinced to part with their money for that end.
(People v. Imperio y Antonio, G.R. No. 232623,
October 5, 2020, Per J. Hernando)
Illegal Recruitment is committed by persons
who, without authority from the government,
give the impression that they have the power
to send workers abroad for employment
purposes. (People v. Centeno, G.R. No. 225960,
October 13, 2021)
a) Elements
The essential elements of illegal recruitment
vary in accordance with the following
classifications:
1. Simple illegal recruitment;
a. For Local workers
b. For Migrant Workers
2. Illegal Recruitment involving economic
sabotage
a. When committed by a syndicate; or
b. When committed in large scale.
b) Types
Simple Illegal Recruitment
The crime of illegal recruitment is committed
when two elements concur, namely:
1. the offender has no valid license or
authority required by law to enable one to
lawfully engage in recruitment and
placement of workers; and
2. he undertakes either any activity within the
meaning of "recruitment and placement"
defined under Article 13 (b), or any
25
 prohibited practices enumerated under
Article 34 of the Labor Code.(Romero v.
People, G.R. No. 171644, November 23, 2011)
Illegal Recruitment of Local Workers
1. By a licensee/holder of authority
a. Offender has a valid license or
authority required by law to enable one
to lawfully engage in the recruitment
and placement of workers;
b. Offender undertakes any of the
prohibited acts under Art. 34. (Article
34, Labor Code)
2. By a non-licensee/non-holder of authority
a. Offender has no valid license or
authority required by law to enable one
to lawfully engage in the recruitment
and placement of workers;
b. Offender undertakes either:
i. Any activity within the meaning of
recruitment and placement under
Art. 13(b)
ii. Any of the prohibited practices
under Art. 34 (Article 38, Labor Code)
Illegal Recruitment of Migrant Workers
Illegal recruitment shall mean any act of
canvassing, enlisting, contracting, transporting,
utilizing, hiring, or procuring workers and
includes referring, contract services, promising
or advertising for employment abroad, whether
for profit or not, when undertaken by a non-
licensee or non-holder of authority
contemplated under Article 13(f) of the Labor
Code.
Provided, That any such non-licensee or non-
holder who, in any manner, offers or promises
for a fee employment abroad to two or more
persons shall be deemed so engaged. (Section
5, RA No. 10022)
RA 8042 broadened the concept of illegal
recruitment for overseas employment and
increased the penalties. Thus, while Article 38
of the Labor Code limits illegal recruitment to
recruitment activities undertaken by non-
licensees or non-holders of authority, Part II of
RA 8042 defines and penalizes illegal
recruitment for employment abroad, regardless
of whether it was undertaken by a non-licensee
or non-holder of authority or by a licensee or
holder of authority. (People v. Manalang, G.R. No.
198015, January 20, 2021, Per J. Hernando)
Profit immaterial
It is the absence of the necessary license or
authority to recruit and deploy workers that
renders the recruitment activity unlawful. To
prove illegal recruitment, it must be shown that
"the accused gave the complainants the distinct
impression that she had the power or ability to
deploy the complainants abroad in a manner
that they were convinced to part with their
money for that end. (People vs. Sison, G.R. No.
187160, August 9, 2017)
The absence of receipts issued by the accused
in an illegal recruitment case is not fatal to their
conviction if the prosecution establishes,
through credible evidence, that the accused has
engaged in illegal recruitment. (People v. Dela
Concepcion y Valdez, G.R. No. 251876, March 21,
2022)
Illegal Recruitment as Economic
Sabotage
Illegal recruitment is considered economic
sabotage when attended by the following
qualifying circumstances:
1. By a syndicate - carried out by a group of
3 or more persons conspiring and
confederating with one another;
2. In large scale - committed against 3 or
more persons individually or as a group.
The persons liable for the above offenses are
the principals, accomplices and accessories. In
case of juridical persons, the officers having
control, management or direction of their
business shall be liable. (People v. Manalang, G.R.
No. 198015, January 20, 2021, Per J. Hernando)
Illegal Recruitment may be undertaken by
either non-license or license holders. Non-
license holders are liable for the simple act of
26
engaging in recruitment and placement
activities, while license holders may also be
Illegal recruitment is Illegal recruitment is
held liable for committing the acts prohibited committed by a group carried out by a group
under Section 6 of RA 8042. Further, Illegal of 3 or more persons of 3 or more persons
Recruitment is deemed done in large scale and conspiring or conspiring and/or
is considered as an offense involving economic confederating with one confederating with one
sabotage if it is committed against three or another another in carrying out
more persons individually or as a group. (People any unlawful or illegal
v. Liwanag, G.R. No. 232245, March 2, 2022, Per J. transaction, enterprise
Hernando) or scheme.

By a Syndicate
Local Workers Migrant Workers
In Large Scale
Local Workers Migrant Workers
Offender undertakes Offender undertakes
either: either:
Offender undertakes Offender undertakes:
● Any activity ● Any activity either:
within the within the
meaning of ● Any of the
meaning of ● Any activity
“recruitment and prohibited
“recruitment and within the
placement” practices
placement” meaning of
defined under under Section 6
defined under “recruitment and
Art. 13(b) of RA 8042
Art. 13(b) placement”
defined under
● Any of the ● Any of the Art. 13(b)
prohibited prohibited
practices practices ● Any of the
under Art. 34 under Section 6 prohibited
of RA 8042 practices
under Art. 34

Offender has no valid Accused does not have

license or the valid license or Offender has not Offender has not
authority required by authority required by complied with the complied with the
law to enable one to law to engage in guidelines issued by the guidelines issued by the
lawfully engage in recruitment and SOLE, particularly with SOLE, particularly with
recruitment and placement of workers respect to the securing respect to the securing
placement of workers of license or an of license or an
authority to recruit and authority to recruit and
deploy workers, either deploy workers, either
locally or overseas locally or overseas

Offender commits the Offender committed

unlawful acts against 3 the same against 3 or
or more persons more persons
individually or as a individually or as a
group [Art. 38 (b)] group

27
c) Illegal Recruitment vs. Estafa intent of the accused is crucial for conviction.
Conviction for offenses under the Labor Code
ILLEGAL ESTAFA
RECRUITMENT does not bar conviction for offenses punishable
by other laws. Conversely, conviction for estafa
As to the Nature of the Criminal Offense under par. 2 (a) of Art. 315 of the Revised Penal
Code does not bar a conviction for illegal
recruitment under the Labor Code. It follows
Malum Prohibitum Malum In Se that one's acquittal of the crime of estafa will
not necessarily result in his acquittal of the
crime of illegal recruitment in large scale, and
As to Necessity of Criminal Intent vice versa. (People v. Rios y Catagbui, G.R. No.
226140, February 26, 2020)

Not necessary Required A conviction for illegal recruitment whether

simple or committed in large scale would not
preclude punishment for estafa under Article
As to the Law Punishing the Offense 315 (2) (a) of the RPC. This is because no
double jeopardy could attach from the
prosecution and conviction of the accused
Labor Code, a special Revised Penal Code, a for both crimes considering that they are
law general law penalized under different laws and involved
elements distinct from one another. Conviction
As to damage under Article 315 (2) (a) requires the
concurrence of the following elements: (1) the
accused defrauded another by abuse of
Not essential Essential confidence or by means of deceit; and (2) the
offended party, or a third party, suffered
damage or prejudice capable of pecuniary
As to the Scope
estimation. These are elements completely
different from those required for illegal
recruitment. (People v. Estrada, G.R. No. 225730,
Limited to recruitment Broader scope; covers
February 28, 2018)
and placement and applies to deceits
activities. whether or not related
to recruitment and Illegal recruitment and estafa are entirely
placement activities. different offenses and neither one necessarily
includes or is necessarily included in the other.
A person who is convicted of illegal recruitment
Illegal recruitment and estafa cases may may in addition, be convicted of estafa under
be filed simultaneously or separately; Art. 315, par 2(a) of the Revised Penal code
double jeopardy will not set in. (People vs. Billaber, G.R. No. 114967-68,
January 26, 2004). In the same manner, a
In this jurisdiction, it is settled that a person person acquitted of illegal recruitment may be
who commits illegal recruitment may be held liable for estafa. Double jeopardy will not
charged and convicted separately of illegal set in because illegal recruitment is malum
recruitment under the Labor Code and estafa prohibitum, in which there is no necessity to
under par. 2 (a) of Art. 315 of the Revised Penal prove criminal intent, whereas estafa is malum
Code. The offense of illegal recruitment is in se, in the prosecution of which, proof or
malum prohibitum where the criminal intent of criminal intent is necessary. (Sy vs. People, G.R
the accused is not necessary for conviction, No. 183879, April 14, 2010)
while estafa is malum in se where the criminal

28
Act Constituting Estafa
The offended party must have relied on the
false pretense, fraudulent act or fraudulent
means of the accused, and as a result thereof,
the offended party suffered damages.
Accused-appellant's false pretenses led private
complainants to part with various amounts of
money, hoping for a better life abroad.
Unfortunately, they were never deployed and
were never reimbursed. Thus, they suffered
damage. (People v. Dela Concepcion y Valdez, G.R.
No. 251876, March 21, 2022)
Accused, without any license or authority to do
so, promised private complainants overseas
employment, then required them to undergo
training and collected fees or payments from
them, while continually assuring them that they
would be deployed abroad, but failed to do so.
Persuaded by these assurances given by
Manalang, the private complainants paid their
placement fees, albeit partially. Thus, her
representation induced the victims to part with
their money, resulting in damage. (People v.
Manalang, G.R. No. 198015, January 20, 2021)
The accused represented themselves to
complainants to have the capacity to send
workers abroad although they did not have any
authority or license. It is by this representation
that they induced complainants to pay a
placement fee. Such an act constitutes estafa
under Art. 315 (2) of the RPC (People vs.
Hernandez, G.R No. 199211, June 4, 2014).
4. Liability of Local Recruitment Agency
and Foreign Employer
a) Solidary Liability
The liability of the principal/employer and the
recruitment/placement agency for any and 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 actual, moral,
exemplary and other forms of damages under
this section shall be joint and several. (Sec. 10,
R.A. No. 8042, as amended by Sec. 7, R.A. No.
10022)
One of the safeguards incorporated in R.A. No.
8042 is found in Sec. 10 which provides for the
solidary and continuing liability of recruitment
agencies against monetary claims of migrant
workers. These pecuniary claims may arise
from employer-employee relationship or
by virtue of law or contract, and may
include claims of overseas workers for
damages.(SRL International Manpower Agency v.
Yarza, Jr., G.R. No. 207828, February 14, 2022, Per
J. Hernando)
The liability of petitioners should be solidary,
"as provided under Section 10 of RA 8042,
which mandates that the principal/employer,
recruitment/placement agency, and its
corporate officers and directors in case of
corporations, shall be solidarily liable for money
claims arising out of employer-employee
relationship with OFWs. (SRL International
Manpower Agency v. Yarza, Jr., G.R. No. 207828,
February 14, 2022, Per J. Hernando)
Incorporation into the contract
The provision of joint and several liability shall
be incorporated in the contract for overseas
employment and shall be a condition precedent
for its approval.
Posting of bond by recruiter
The performance bond to be filed by the
recruitment/placement agency, as provided by
law, shall be answerable for all money claims or
damages that may be awarded to the workers.
If the recruitment/placement agency is a
juridical being, the corporate officers and
directors and partners as the case may be, shall
themselves be jointly and solidarily liable with
the corporation or partnership for the aforesaid
claims and damages. (Sec. 10, R.A. No. 8042, as
amended by Sec. 7, R.A. No. 10022)
29
Illegal Recruitment of Local Workers If the offender is a corporation, partnership,
association or entity, the penalty shall be
Act Penalty
imposed upon the officer or officers of the
corporation, partnership, association or entity
Licensee/authority 2-5 years imprisonment responsible for violation.
holder or P10k-P50k fine or
both If the offender is an alien, he or she shall, in
addition to the penalties herein prescribed, be
deported without further proceedings.

Non- licensee/authority 4-8 years imprisonment Effect of severance of agency agreement

holder or P20K-P100K fine or on liability
both
Such liabilities shall continue during the entire
Illegal recruitment Life imprisonment and period or duration of the employment contract
constituting economic P100k fine and shall not be affected by any substitution,
sabotage amendment or modification made locally or in
a foreign country of the said contract. (Sec. 10,
R.A. No. 8042, as amended by Sec. 7, R.A. No.
10022)
Illegal Recruitment of Migrant Workers
Act Penalty POEA Rules and Regulations are clear enough
that the manning agreement extends up to and
Illegal Recruitment 2-12 years until the expiration of the employment
imprisonment and P1M- contracts of the employees recruited and
P2M fine employed pursuant to the said recruitment
agreement. (Skippers United Pacific, Inc. v.
Illegal Recruitment Life imprisonment and
Maguad, G.R. No. 166363, August 15, 2006)
constituting economic P2M-P5M fine
sabotage
The obligations covenanted in the [manning]
Prohibited Acts Imprisonment of 6- 12 agreement between the local agent and its
years imprisonment foreign principal are not coterminus with the
and P500k-P1M fine term of such agreement so that if either or both
of the parties decide to end the agreement; the
responsibilities of such parties towards the
Conviction carries with it:
contracted employees under the agreement do
Automatic revocation of the license or not at all end, but the same extends up to and
registration of the recruitment/manning until the expiration of the employment
agency, lending institution, training school or contracts of the employees recruited and
medical clinic. (Sec. 7, R.A. No. 8042, as amended employed pursuant to the said recruitment
by Sec. 6, R.A. No. 10022) agreement. Otherwise, this will render nugatory
the very purpose for which the law governing
Automatic revocation of the license or authority
the employment of workers for foreign jobs
and all the permits and privileges granted to
abroad was enacted. (OSM Shipping Phil, Inc. vs.
such person or entity under this Title, and the
NLRC, G.R. No. 138193, March 5, 2003)
forfeiture of the cash and surety bonds in favor
of the Overseas Employment Development
Board or the National Seamen Board, as the
case may be, both of which are authorized to
use the same exclusively to promote their
objectives. (Article 39, Labor Code)

30
Liability of corporate directors and
officers not automatic
To make them jointly and solidarily liable with
their company, there must be a finding that
they were remiss in directing the affairs of that
company, such as sponsoring or tolerating the
conduct of illegal activities. (Gagui v. Dejero, G.R.
No. 196036, October 23, 2013)
Non-suability cannot defeat the solidary
nature of the liability
To allow petitioners to simply invoke the
immunity from suit of its foreign principal or to
wait for the judicial determination of the foreign
principal's liability before petitioner can be held
liable renders the law on joint and solidary
liability inutile. (ATCI Overseas Corp. vs. Echin,
G.R. No. 178551, October 11, 2010)
AWI cannot evade responsibility for the money
claims of Overseas Filipino Workers (OFWs)
whom it deploys abroad by the mere
expediency of claiming that its foreign principal
is a government agency clothed with immunity
from suit, or that such foreign principal's liability
must be established first before it, as agent, can
be held jointly and solidarily liable. (Cuartocruz
v. Active Works, Inc., G.R. No. 209072, July 24,
2019)
b) Theory of Imputed Knowledge
Knowledge of the agent is deemed
knowledge of the principal but not the
other way around
The theory of imputed knowledge ascribes the
knowledge of the agent to the principal, not the
other way around. The knowledge of the
principal-foreign employer cannot, therefore,
be imputed to its agent. (Sunace International
Management Services, Inc. vs. NLRC, G.R. No.
161757, January 25, 2006)
There was no substantial proof that Sunace
knew of and consented to be bound under the
2-year employment contract extension of the
domestic helper that Sunace deployed, it
cannot be said to be privy thereto. Thus,
Sunace cannot be solidarily liable for any of
Divina’s claim arising from the 2-year
employment extension. (supra)
The agency is revoked if the principal directly
manages the business entrusted to the agent,
dealing directly with third persons. (supra)
5. Termination of Contract of Migrant
Worker
The fact that respondent was a migrant worker
in Taiwan does not remove him from the
protective mantle of the Labor Code of the
Philippines when applicable. This
pronouncement is in keeping with the basic
public policy of the State to afford protection to
labor; promote full employment; ensure equal
work opportunities regardless of sex, race or
creed; and regulate the relations between
workers and employers. (Jerzon Manpower and
Trading, Inc. v. Nato, G.R. No. 230211, October 6,
2021)
The worker shall be entitled to full
reimbursement:
1. In case of termination of overseas
employment without just, valid or
authorized cause as defined by law or
contract, or
2. In case of any unauthorized deductions
from the migrant worker's salary. (Sec. 10,
R.A. No, 8042, as amended by Sec. 7, R.A. No.
10022)
The worker shall be entitled to full
reimbursement of:
1. His placement fee and the deductions made
with interest at twelve percent (12%) per
annum; and
2. His salaries for the unexpired portion of his
employment contract.
Exemplary, Moral and other forms of damages
may be awarded if the acts or omissions of the
employer is tainted with bad faith, malice, or
fraud. (Sec. 10, RA 8042)
31
In computing the award due to an illegally
dismissed employee, salary includes all other
benefits guaranteed in the employment
contract which were not made contingent upon
the performance of any task or the fulfilment of
any condition. The Court included in the
computation of salary the amount of seafarer's
vacation leave pay and tonnage bonus as the
same were guaranteed and fixed benefits as
provided in the contract. Hence, the total
compensation salary of Montealto, inclusive of
guaranteed benefits should be included in the
computation of his award. (International Skill
Development, Inc. v. Montealto, Jr., G.R. No. 237455
(Notice), October 7, 2020)
Allowing "foreign employers to determine for
and by themselves whether an overseas
contract worker may be dismissed on the
ground of illness would encourage illegal or
arbitrary pre-termination of [the] employment
contract." (Jerzon Manpower and Trading, Inc. v.
Nato, G.R. No. 230211, October 6, 2021)
The three-month salary rule
Rule before Serrano (1995-2009)
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 vs. Almanzor, G.R. No. 177948,
March 14, 2008)
Rule after Serrano (2009-present)
Invalidated the 3-month salary cap clause.
Sec. 10 of 8042, which limited the separation
pay to three months, was unconstitutional for
violating the equal protection clause. (Serrano
vs. Gallant, G.R. No. 167614, March 24, 2009)
The phrase “or for three (3) months for every
year of the unexpired term, whichever is less”
has been declared as unconstitutional.
Despite the fact that the clause “or for three (3)
months for every year of the unexpired term,
whichever is less” was reinstated in R.A 8042
upon promulgation of R.A. 10022 in 2010, the
Supreme Court reiterated its finding in Serrano
vs. Gallant Maritime that limiting wages that
could be recovered by an illegally dismissed
overseas worker to three months is both a
violation of due process and the equal
protection clauses of the Constitution. (Sameer
Overseas Placement Agency vs. Cabiles, G.R.
170139, August 5, 2014)
Sameer stresses that "when a law or a provision
of law is null because it is inconsistent with the
Constitution, the nullity cannot be cured by
reincorporation or reenactment of the same or
a similar law or provision. A law or provision of
law that was already declared unconstitutional
remains as such unless circumstances have so
changed as to warrant a reverse conclusion."
However, there are no noted relevant changes
in the surrounding circumstances, as RA 10022
merely reinstated the provision after the Court
already declared it unconstitutional in Serrano.
Additionally, the Court declared that an
unconstitutional clause in the law, being
inoperative at the outset, confers no rights,
imposes no duties and affords no protection.
Withal, even if Yarza's dismissal became
effective on May 22, 2011, or when RA 10022
was already in force, "the declaration of
unconstitutionality found in the Serrano case
promulgated in March 2009 [and subsequently
the Sameer case promulgated on August 5,
2014] shall retroactively apply." (SRL
International Manpower Agency v. Yarza, Jr., G.R.
No. 207828, [February 14, 2022, Per J. Hernando)
Gabriel's unjustified refusal to sign the
Romanian Labor Contract on the belief that it
was a falsified contract was the cause of the
pre-termination of his overseas employment
contract, as his stay in Romania became illegal.
Thus, Gabriel is not entitled to his salaries for
the unexpired portion of overseas employment
contract. In the same vein, that he is not
entitled to moral and exemplary damages, as
he failed to prove bad faith on the part of
Quintinians. (Gabriel v. Quintinians Placement
Agency, Inc., G.R. No. 238101 (Notice), September
30, 2020)
32
B. EMPLOYMENT OF NON-RESIDENT
ALIENS
Alien Employment Permit (AEP)
A document issued by the DOLE Secretary
through the DOLE-Regional Director who has
jurisdiction over the intended place of work of
the foreign national. All foreign nationals who
intend to engage in gainful employment in the
Philippines shall apply for an AEP. (Sec. 1 [1],
D.O. No. 221 s. 2021; D.O. No. 146 s. 2015)
Gainful Employment
Gainful Employment refers to a state or
condition that creates an employer-employee
relationship between the Philippine-based
employer and the foreign national, where the
former has the power to:
a. Hire/Dismiss the foreign national from
employment;
b. Pays the salaries or wages thereof; Has
authority to control the performance or
conduct of the tasks and duties. (Sec. 1,
D.O. No. 186, s. 2017)
Considering that McBurnie, an Australian,
alleged illegal dismissal and sought to claim
under our labor laws, it was necessary for him
to establish that he was qualified and duly
authorized to obtain employment within our
jurisdiction. His failure to obtain an employment
permit, by itself, necessitates the dismissal of
his labor complaint. (McBurnie vs. Ganzon, G.R.
Nos. 178034, 178117 & 186984-85 [Resolution],
October 17, 2013)
Persons required to secure Alien
Employment Permit [AEP]:
1. Any alien seeking admission to the
Philippines for employment purposes, and
2. any domestic or foreign employer who
desires to engage an alien for employment
in the Philippines (Article 40, Labor Code, as
amended).
The law and the rules are consistent in stating
that the employment permit must be acquired
prior to employment. (WPP Marketing
Communications, Inc. v. Galera, G.R. Nos. 169207 &
169239, March 25, 2010)
Galera cannot come to this Court with unclean
hands. To grant Galera's prayer is to sanction
the violation of the Philippine labor laws
requiring aliens to secure work permits before
their employment. We hold that the status quo
must prevail in the present case and we leave
the parties where they are. This ruling,
however, does not bar Galera from seeking
relief from other jurisdictions. (Ibid)
Resident aliens do not fall within the ambit of
this provision (Almodiel vs. NLRC, G.R. No. 100641,
June 14, 1993)
Qualifications to secure AEP:
In the case of a nonresident 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. (Article 40, Labor Code, as
amended).
For an enterprise registered in preferred areas
of investments, upon recommendation of the
government agency charged with the
supervision of said registered enterprise (Article
40, Labor Code, as amended).
Exceptions: [DOSBLART]
1. Members of the Diplomatic services and
foreign government officials accredited by
the Philippine government;
2. Officers and staff of international
Organizations of which the Philippine
government is a cooperating member, and
their legitimate Spouses desiring to work
in the Philippines;
3. Foreign nationals elected as members of
the Governing Board who do not occupy
any other position, but have only voting
rights in the corporation;
4. All foreign nationals granted exemption by
special Laws and all other laws that may
be promulgated by the Congress;
33
5. Owners and representatives of foreign
principals, whose companies are Accredited
by the Philippine Overseas Employment
Administration (POEA), who come to the
Philippines for a limited period solely for the
purpose of interviewing Filipino applicants
for employment abroad;
6. Resident foreign nationals and temporary
or probationary resident visa holders
employed or seeking employment in the
Philippines;
7. Foreign nationals who come 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 (Sec. 2, D.O. No. 186, s. 2017)
Exclusions From Permit Requirement
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-
owners of the company;
3. Those providing consultancy services who
do not have employees in the Philippines;
4. Intra-corporate transferee who is a
manager, executive or specialist as defined
below in accordance with Trade
Agreements and an employee of the
foreign service supplier for at least one (1)
year continuous employment prior to the
deployment to a branch, subsidiary,
affiliate or representative office in the
Philippines. (Sec. 3, D.O. No. 186, s. 2017)
Note: Pursuant to Sec. 4 of DO 186-17, all
foreign nationals excluded from securing
AEP shall secure Certificate of Exclusion
from the Regional Office. (Sec. 4, D.O. No.
186, s. 2017)
a. an Executive: a natural person within
the organization who primarily directs
the management of the organization
and exercises wide latitude in decision-
making and receives only general
supervision or direction from higher
level executives, the board of directors,
or stockholders of the business; an
executive would not directly perform
tasks related to the actual provision of
the service or services of the
organization;
b. a Manager: a natural person within the
organization who primarily directs the
organization/department/subdivision
and exercises supervisory and control
functions over other supervisory,
managerial or professional staff; does
not include first-line supervisors unless
employees supervised are
professionals; does not include
employees who primarily perform tasks
necessary for the provision of the
service; or
c. a Specialist: a natural person within the
organization who possesses knowledge
at an advanced level of expertise
essential to the
establishment/provision of the service
and/or possesses proprietary
knowledge of the organization’s
service, research equipment,
techniques or management; may
include, but not limited to, members of
a licensed profession.
5. Contractual service supplier who is a
manager, executive, or specialist and an
employee of a foreign service supplier
which has no commercial presence in the
Philippines:
a. Who enters the Philippines temporarily
to supply a service pursuant to a
contract between his/her employer and
a service consumer in the Philippines;
b. Must possess the appropriate
educational and professional
qualifications; and
c. Must be employed by the foreign
service supplier for at least one year
prior to the supply of service in the
Philippines
6. Representative of the Foreign
Principal/Employer assigned in the Office of
34
 Licensed Manning Agency (OLMA) in
accordance with the POEA law, rules and
regulations.
AEP Is Not an Exclusive Authority
Generally, the issuance of Alien Employment
Permit (AEP) is not an exclusive authority for a
foreign national to work in the Philippines (D.O.
No. 186, s. 2017)
A Foreign National Must Obtain
1. Alien Employment Permit (AEP) from the
DOLE; (Sec. 3, D.O. No. 97-09; Sec. 1[2], D.O.
No. 221, s. 2021)
2. Special Temporary Permit (STP) from the
PRC, in case the employment involves
practice of profession; (Policy Declaration,
D.O. No. 146 s. 2015; Sec. 1[22], D.O. No. 221,
s. 2021)
3. Authority to Employ Alien (AEA) from the
DOJ where the employment is in a
nationalized or partially nationalized
industry and DENR, in case of mining.
(Sec.1[4], D.O. No. 221, s. 2021)
Procedure in The Processing of
Applications for AEP
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. In case the foreign national will
be assigned in related companies of his
employer, the applications may be filed in the
Regional Office or Field Office having
jurisdiction over any of the applicant’s intended
place of work. Additional position of the foreign
national in the same company or subsequent
assignment in related companies during the
validity or renewal of the AEP will be subject for
publication requirement. A change of position
or employer shall require an application for new
AEP. (Sec. 5, D.O. No. 186, s. 2017)
ART. 42. Submission of List. Any employer
employing non- resident foreign nationals on
the effective date of this Code shall submit a list
of such nationals to the Secretary of Labor
within thirty (30) days after such date indicating
their names, citizenship, foreign and local
addresses, nature of employment and status of
stay in the country. The Secretary of Labor shall
then determine if they are entitled to an
employment permit.
Prohibitions against transfer of
employment
After the issuance of an employment permit,
the alien shall not transfer to another job or
change his employer without prior approval of
the Secretary of Labor (Article 41, Labor Code, as
amended).
Validity of AEP
The AEP shall be valid for the position and the
company for which it was issued for a period of
one (1) year, unless granted a longer period
vis-a-vis the employment duration, as stated in
the employment contract or other modes of
engagement, but in no case shall exceed three
(3) years. (Sec. 8, D.O. No. 221, s. 2021)
Renewal of AEP
An application for renewal of an AEP may be
filed as early as sixty (60) days before its
expiration. In case the foreign national needs
to leave the country or any other similar
circumstances that will hinder the filling of
renewal within the prescribed period, the
application may be filed earlier.
An application for renewal of an AEP where an
election or appointment is required for the
position, the procedure shall be as follows:
a. If the foreign national was elected or
appointed for the same position before
his/her AEP expires, the application for
renewal of AEP must be filed before its
expiration together with a duly notarized
Board Secretary's Certification stating such
fact;
b. If the foreign national still holds the same
position or office in a hold-over capacity, an
application for renewal of AEP shall be filed
before its expiration supported by a duly
notarized Board Resolution for that
purpose. The DOLERO shall issue an AEP
with one (1) year validity period to said
foreign national.
35
 If thereafter, the subject foreign national
has been elected and qualified for the same
position, the employer shall submit within
thirty (30) days after the date of
election/appointment a duly notarized
Board Secretary's Certification stating such
fact to the concerned DOLE-RO.
c. If the foreign national was
elected/appointed for a different
position, an application for a new AEP
must be filed within (15) working days
after the date of appointment or
election, together with a duly notarized
Board Secretary's Certification. (Sec. 9,
D.O. No. 221, s. 2021)
Grounds for DENIAL of Application for
New or Renewal of Permit
The DOLE-RO, after due process and
evaluation/assessment, may issue an Order
denying an application for new or renewal of an
AEP based on any of the following grounds:
a. misrepresentation of facts;
b. submission of falsified, tampered or
fraudulent documents;
c. submission of a visa not in accordance with
applicable rules and regulations.
d. meritorious objection filed by a Filipino
citizen who is competent, able and willing
to do the job intended for or being
performed by the foreign national;
e. grave misconduct in dealing with or ill
treatment of workers; and
f. verified information against the
employment of the foreign national. (Sec.
11, D.O. No. 221, s. 2021)
Grounds for Revocation of AEP
The DOLE-RO may, motu proprio or upon
petition/complaint, issue an Order revoking an
AEP after due process, based on any of the
following grounds:
a. any act of misrepresentation for purposes
of securing an AEP, including but not
limited to fraudulent application of facts,
falsification or tampering of documents,
and similar circumstances;
b. meritorious objection filed by a Filipino
citizen who is competent, able and willing
to do the job intended for or being
performed by the foreign national;
c. foreign national has been convicted or
found guilty of a criminal offense, or is a
fugitive from justice based on a verified
information;
d. verified information against the
employment of the foreign national;
e. verified information on grave misconduct in
dealing with or ill treatment of workers filed
with the DOLE-RO against the foreign
national;
f. violation and non-compliance of other
pertinent provisions of this rules and
regulations, the Labor Code, as amended
and other relevant guidelines for issuance
of AEP; and
g. failure to claim the AEP card within ten (10)
working days from date of notification of
availability. (Sec. 13, D.O. No. 221, s. 2021)
Additional Ground
Here, the alien, without the prior approval of
the DOLE secretary, is prohibited from
committing any of the following:
1. Transfer to another job;
2. Change his employer;
Such transfer to another job or change of
position or in employer requires the filing of an
application for new AEP. (par. (a), Art. 41, Labor
Code)
Effect of Denial or Revocation of AEP
A foreign national whose AEP has been denied
or revoked is disqualified to re-apply within a
period of:
1. Ten (10) years, in case the grounds for
revocation is any of the following:
a. foreign national has been convicted or
found guilty of a criminal offense, or is
a fugitive from justice based on a
verified information; or
b. verified information on grave
misconduct in dealing with or ill
treatment of workers filed with the
36
 DOLE-RO against the foreign national.
(Sec. 16 par. 1, D.O. No. 221, s. 2021)
2. Five (5) years, in case the denial or
revocation is based on grounds not
specified above. (Sec. 16 par. 2, D.O. No. 221,
s. 2021)
Effect of Fraudulent Application for AEP
Foreign nationals found to be working with
expired AEP or had been working without the
necessary AEP under the rules and employers
found to be employing such, shall be barred
from filing AEP application for five (5) years,
plus payment of penalties. (Sec. 10 par. 1, D.O.
No. 221, s. 2021)
Employers and/or foreign nationals, who are
found to possess fraudulent AEP, shall likewise
be barred indefinitely from applying for or
being granted an AEP, plus payment of
penalties. (Sec. 10 par. 2, D.O. No. 221, s. 2021)
Appeal
The foreign national or employer may file an
appeal to the DOLE-RO after a Motion for
Reconsideration with the order issued by the
DOLE-RO has been denied.
a. Jurisdiction and Period to Appeal.
An appeal may be filed with the DOLERO
within ten (10) days from receipt of a copy
of the order of the DOLE-RO.
An appeal filed beyond the reglementary
period shall not be accepted by the DOLE-
RO. As such, the order of the DOLE-RO
shall be deemed final and executory.
b. Requirements of Appeal.
The appealing party shall file a notice of
appeal and an appeal memorandum with
the concerned DOLE-RO. The appeal
memorandum must be verified and shall
clearly state the errors of law and/or fact in
the decision appealed from.
c. Transmittal of Records of the Case on
Appeal.
Within five (5) days from receipt of the
appeal timely filed, the concerned DOLE-
RO shall transmit the entire records of the
case to the office of the Secretary.
d. Effect of Filing an Appeal.
The order of the DOLE-RO shall be stayed
during the pendency of appeal except:
i. When the basis for denial or revocation
of AEP are any of the following:
a. Misrepresentation and/or
fraudulent application of facts,
b. Submission of falsified or tampered
documents or similar
circumstances,
c. Conviction of a criminal offense,
foreign national is a fugitive from
justice, or
d. Final finding on grave misconduct
in dealing with or ill treatment of
workers;
ii. When the basis for barring the
employers, employer and foreign
national's representatives, and/or
agents in filing an AEP application is:
a. Fraudulent application of AEP,
b. Working with an expired AEP, or
c. Working without an AEP.
e. Decision of the DOLE Secretary.
The DOLE Secretary shall render
his/her decision within sixty (60) days
from the receipt of transmittal of the
entire records of the case.
The decision of the DOLE Secretary
SHALL be final and executory unless a
Motion for Reconsideration is filed
within ten (10) days from the receipt
of the copy of the Order. The decision
on the Motion for Reconsideration shall
be final and executory. No second
Motion for Reconsideration shall be
allowed. (Sec. 15, D.O. No. 221, s. 2021)
37
C. DISCRIMINATORY PRACTICES
1. Age (RA 10911 or the Anti-Age
Discrimination in Employment
Act)
As provided under the Anti-Age Discrimination
in Employment Act or RA 10911, the prohibition
on discrimination in employment on account of
age shall apply to any employer, labor
contractors or subcontractors, if any, and labor
organizations. (Sec. 4, RA 10911)
Prohibition of Discrimination in
Employment on Account of Age
a. It shall be unlawful for an employer to:
1. Print or publish, or cause to be printed
or published, in any form of media,
including the internet, any notice of
advertisement relating to employment
suggesting preferences, limitations,
specifications, and discrimination
based on age;
2. Require the declaration of age or birth
date during the application process;
3. Decline any employment application
because of the individual’s age;
4. Discriminate against an individual in
terms of compensation, terms and
conditions or privileges of employment
on account of such individual’s age;
5. Deny any employee’s or worker’s
promotion or opportunity for training
because of age;
6. Forcibly lay off an employee or worker
because of old age; or
7. Impose early retirement on the basis of
such employee’s or worker’s age.
b. It shall be unlawful for a labor contractor or
subcontractor, if any, to refuse to refer for
employment or otherwise discriminate
against any individual because of such
person’s age.
c. It shall be unlawful for a labor organization
to:
1. Deny membership to any individual
because of such individual’s age;
2. Exclude from its membership any
individual because of such individual’s
age; or
1. Cause or attempt to cause an employer
to discriminate against an individual in
violation of this Act.
d. It shall be unlawful for a publisher to print or
publish any notice of advertisement relating to
employment suggesting preferences,
limitations, specifications, and discrimination
based on age. (Sec. 5, RA 10911)
Exceptions
It shall not be unlawful for an employer to set
age limitations in employment if:
a. Age is a bona fide occupational qualification
reasonably necessary in the normal
operation of a particular business or where
the differentiation is based on reasonable
factors other than age;
b. The intent is to observe the terms of a bona
fide seniority system that is not intended to
evade the purpose of this Act;
c. The intent is to observe the terms of a bona
fide employee retirement or a voluntary
early retirement plan consistent with the
purpose of this Act: Provided, That such
retirement or voluntary retirement plan is
in accordance with the Labor Code, as
amended, and other related laws; or
d. The action is duly certified by the Secretary
of Labor and Employment in accordance
with the purpose of this Act. (Sec. 6, RA
10911)
2. Gender and/or Marital Status (RA
9710 or the Magna Carta of Women)
"Discrimination Against Women" refers to
any gender-based distinction, exclusion, or
restriction which has the effect or purpose of
impairing or nullifying the recognition,
38
enjoyment, or exercise by women, irrespective
of their marital status, on a basis of equality of
men and women, of human rights and
fundamental freedoms in the political,
economic, social, cultural, civil, or any other
field.
It includes any act or omission, including by
law; policy, administrative measure, or practice,
that directly or indirectly excludes or restricts
women in the recognition and promotion of
their rights and their access to and enjoyment
of opportunities, benefits, or privileges.
A measure or practice of general application is
discrimination against women if it fails to
provide for mechanisms to offset or address sex
or gender-based disadvantages or limitations of
women, as a result of which women are denied
or restricted in the recognition and protection
of their rights and in their access to and
enjoyment of opportunities, benefits, or
privileges; or women, more than men, are
shown to have suffered the greater adverse
effects of those measures or practices.
Provided, finally, that discrimination
compounded by or intersecting with other
grounds, status, or condition, such as ethnicity,
age, poverty, or religion shall be considered
discrimination against women under this Act.
(Sec. 4 (b), RA 9710 or the Magna Carta for Women)
Right to Decent Work
The State shall progressively realize and ensure
decent work standards for women that involve
the creation of jobs of acceptable quality in
conditions of freedom, equity, security, and
human dignity.
a. Decent work involves opportunities for
work that are productive and fairly
remunerative as family living wage,
security in the workplace, and social
protection for families, better prospects for
personal development and social
integration, freedom for people to express
their concerns organize, participate in the
decisions that affect their lives, and equality
of opportunity and treatment for all women
and men.
b. The State shall further ensure:
1. Support services and gears to protect
them from occupational and health
hazards taking into account women's
maternal functions;
2. Support services that will enable
women to balance their family
obligations and work responsibilities
including, but not limited to, the
establishment of day care centers and
breast-feeding stations at the
workplace, and providing maternity
leave pursuant to the Labor Code and
other pertinent laws;
3. Membership in unions regardless of
status of employment and place of
employment; and
4. Respect for the observance of
indigenous peoples' cultural practices
even in the workplace.
c. In recognition of the temporary nature of
overseas work, the State shall exert all
efforts to address the causes of out-
migration by developing local employment
and other economic opportunities for
women and by introducing measures to
curb violence and forced and involuntary
displacement of local women. The State
shall ensure the protection and promotion
of the rights and welfare of migrant women
regardless of their work status, and protect
them against discrimination in wages,
conditions of work, and employment
opportunities in host countries. (Sec. 22, RA
9710 or the Magna Carta for Women)
3. Health Condition (RA 7277 or the
Magna Carta for Disabled Persons)
The Magna Carta for disabled persons ensures
equal opportunities for disabled persons and
prohibits discrimination against them.
39
Definition of Terms:
Disabled Persons are those suffering from
restriction of different abilities, as a result of a
mental, physical or sensory impairment, to
perform an activity in the manner or within the
range considered normal for a human being;
Impairment is any loss, diminution or
aberration of psychological, physiological, or
anatomical structure of function;
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; or
3. being regarded as having such an
impairment;
Handicap refers to a disadvantage for a given
individual resulting from an impairment or a
disability, that limits or prevents the functions
or activity that is considered normal given the
age and sex of the individual. (Sec. 4, RA 7277)
Equal Opportunity for Employment
No disabled persons shall be denied access to
opportunities for suitable employment. A
qualified disabled employee 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.
Five percent (5%) of all casual, emergency and
contractual positions in the Department of
Social Welfare and Development; Health;
Education, Culture and Sports; and other
government agencies, offices or corporations
engaged in social development shall be
reserved for disabled persons. (Title II, Chapter
1, Sec. 5, RA 7277)
Discrimination on Employment
No entity, whether public or private, shall
discriminate against a qualified disabled person
by reason of disability in regard to job
application procedures, the hiring, promotion,
or discharge of employees, employee
compensation, job training, and other terms,
conditions, and privileges of employment.
The following constitute acts of
discrimination:
a. Limiting, segregating or classifying a
disabled job applicant in such a manner
that adversely affects his work
opportunities;
b. Using qualification standards, employment
tests or other selection criteria that screen
out or tend to screen out a disabled person
unless such standards, tests or other
selection criteria are shown to be job
related for the position on question and are
consistent with business necessity;
c. Utilizing standards, criteria, or methods of
administration that:
1). have the effect of discrimination on the
basis of disability; or
2). perpetuate the discrimination of others
who are subject to common administrative
control;
d. Providing less compensation, such as salary,
wage or other forms of remuneration and
fringe benefits, to a qualified disabled
employee, by reason of his disability, than
the amount to which a non-disabled person
performing the same work is entitled;
e. Favoring a non-disabled employee over a
qualified disabled employee with respect to
promotion, training opportunities, study and
scholarship grants, solely on account of the
latter’s disability;
f. Re-assigning or transferring a disabled
employee to a job or position he cannot
perform by reason of his disability;
g. 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 involve to the prejudice of the
business entities; Provided, however, That
the employer first sought provide
reasonable accommodations for disabled
persons;
40
h. Failing to select or administer in the
effective manner employment tests which
accurately reflect the skills, aptitude or
other factor of the disabled applicant or
employee that such test purports to
measure, rather than the impaired sensory,
manual or speaking skills of such applicant
or employee, if any; and
i. Excluding disabled persons from
membership in labor unions or similar
organizations. (Title III, Chapter 1, Sec.
32, RA 7222)
4. Solo Parents (Sec. 7, RA 8972, as
amended by RA 11861)
On Discrimination Against Solo Parents
No employer shall discriminate against any solo
parent employee with respect to terms and
conditions of employment on account of his or
her status.
On Telecommuting Program for Solo
Parents
Employers may enter into agreements with
their solo parent employees for a away from the Philippines for an
telecommuting program, as provided in
Republic Act No. 11165, otherwise known as
the 'Telecommuting Act': Provided, That said
solo parent employees shall be given priority by
their employer." (Sec. 7, RA 8972 as amended by
RA 11861)
Categories of Solo Parent
A solo parent refers to any individual who falls
under any of the following categories:
a. A parent who provides sole parental care
and support of the child or children due to
–
i. Birth as a consequence of rape, even
without final conviction: Provided,
That the mother has the sole
parental care and support of the child
or children: Provided, further, That
the solo parent under this category
may still be considered a solo parent
under any of the categories in this
section;
ii. Death of the spouse;
iii. Detention of the spouse for at least
three (3) months or service of
sentence for a criminal conviction;
iv. Physical or mental incapacity of the
spouse as certified by a public or
private medical practitioner;
v. Legal separation or de facto
separation for at least six (6) months,
and the solo parent is entrusted with
the sole parental care and support of
the child or children;
vi. Declaration of nullity or annulment of
marriage, as decreed by a court
recognized by law, or due to divorce,
subject to existing laws, and the solo
parent is entrusted with the sole
parental care and support of the child
or children; or
vii. Abandonment by the spouse for at
least six (6) months;
b. Spouse or any family member of an
Overseas Filipino Worker (OFW), or the
guardian of the child or children of an OFW:
Provided, That the said OFW belongs to the
low/semi-skilled worker category and is
uninterrupted period of twelve (12)
months: Provided, further, That the OFW,
his or her spouse, family member, or
guardian of the child or children of an OFW
falls under the requirements of this section;
c. Unmarried mother or father who keeps and
rears the child or children;
d. Any legal guardian, adoptive or foster
parent who solely provides parental care
and support to a child or children;
e. Any relative within fourth (4th) civil degree
of consanguinity or affinity of the parent or
legal guardian who assumes parental care
and support of the child or children as a
result of the death, abandonment,
disappearance or absence of the parents or
solo parent for at least six (6) months:
Provided, That in cases of solo
grandparents who are senior citizens but
who have the sole parental care and
support over their grandchildren who are
41
 unmarried, or unemployed and twenty-two
(22) years old or below, or those twenty-
two (22) years old or over but who are
unable to fully take care or protect
themselves from abuse, neglect, cruelty,
exploitation, or discrimination because of a
physical or mental disability or condition,
they shall be entitled to the benefits of this
Act in addition to the benefits granted to
them by Republic Act No. 9257, otherwise
known as the ‘Expanded Senior Citizens Act
of 2003’; or
f. A pregnant woman who provides sole
parental care and support to the unborn
child or children.” (Sec. 7, RA 8972 as
amended by RA 11861)
III. Employment Proper
A. MANAGEMENT PREROGATIVE
Under the doctrine of management prerogative,
an employer possesses the inherent right to
regulate, according to its "own discretion and
judgment, all aspects of employment,
including:
1. hiring;
2. work assignments;
3. working methods
4. time
5. place and manner of work
6. work supervision
7. transfer of employees
8. lay-off of workers, and discipline, dismissal
9. recall of employees.
This wide sphere of authority to regulate its
own business may only be curbed by the
limitations imposed by labor laws and the
principles of equity and substantial justice. The
importance of discouraging interference is
necessary to ensure that the employer may in
turn expect good performance, satisfactory
work, diligence, good conduct and loyalty from
its employees. (Magante v. Wellcare Clinics and
Lab, Inc., G.R. No. 242498 (Notice), October 6,
2021)
Employers enjoy a wide sphere of authority
to regulate its own business, subject to
limitations imposed by labor laws and the
principles of equity and substantial justice.
Thus, an employer may determine work
assignments and corollarily, transfer or reassign
employees around various areas of its business
operation according to its sound judgment,
provided that the transfer is not unreasonable,
inconvenient, prejudicial, or involve a demotion
in rank or a diminution of salaries, benefits, and
other privileges. (Ibid)
Rights of an employer in the exercise of
management prerogative:
1. Right to discipline;
2. Right to dismiss;
3. Right to promulgate rules and regulations;
4. Right to impose penalty; proportionality
rule;
5. Right to determine who to punish;
6. Right to choose which penalty to impose;
and
7. Right to impose heavier penalty than what
the company rules prescribe. (Chan, Bar
Reviewer on Labor Law, 2019, p. 797)
It should be emphasized that absent showing
of illegality, bad faith, or arbitrariness, courts
often decline to interfere in employers'
legitimate business decisions considering that
our labor laws also discourage intrusion in
employers' judgment concerning the conduct of
their business. (Bognot vs. Picnic International,
G.R. No. 212471, March 11, 2019)
Management should not be hampered in the
operations of its business. (Manila Electric
Company vs. Quisumbing, G.R. No. 127598,
February 22, 2000)
The law authorizes neither the oppression nor
the self-destruction of the employer in
protecting the rights of the working class.
"Labor laws are not one-sided. Although the law
bends over backwards to accommodate the
needs of the working class, not every labor
dispute shall be decided in favor of labor."
(Lagamayo v. Cullinan Group, Inc., G.R. No. 227718,
November 11, 2021)
42
Management has a wide latitude to conduct its
own affairs, so long as it exercises its
management prerogative in good faith for the
advancement of its interest and not to defeat
or circumvent employee rights under the law or
valid agreements. Its management prerogative
must likewise not be used in a way that is
unreasonable, inconvenient, or prejudicial to
the employees involved. (Asian Marine Transport
Corp. v. Caseres, G.R. No. 212082, November 24,
2021)
1. DISCIPLINE
In general, management has the
prerogative to discipline its employees and
to impose appropriate penalties on erring
workers pursuant to company rules and
regulations." (Empas v. Mariwasa Siam
Ceramics, Inc., G.R. No. 246176 (Notice),
December 7, 2021)
Specific provision on the application of
company rules in disciplinary actions is
paramount over the general provision on
grievance procedures.(Visayan Electric Co.
Employees Union [VECEU] v. Visayan Electric
Co., Inc., G.R. No. 234556 (Notice), April 28,
2021)
This is consistent with jurisprudential rulings
supporting an employer's free reign and "wide
latitude of discretion to regulate all
aspects of employment, including the
prerogative to instill discipline in its
employees and to impose penalties,
including dismissal, upon erring
employees. x x x The Labor Code does not
excuse employees from complying with valid
company policies and reasonable regulations
for their governance and guidance. (Ibid)
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. vs. Sanchez, G.R. 212054, March 11,
2015)
Suspension for three months is a valid and
reasonable exercise of management
prerogative since mishandling the delivery of
highly flammable petroleum products could
result in enormous damage to properties and
loss of lives at the terminal and surrounding
areas. (Deles, Jr. vs. NLRC, G.R. No. 121348, March
9, 2000)
Dismissal should only be a last resort, a penalty
to be meted only after all the relevant
circumstances have been appreciated and
evaluated with the goal of ensuring that the
ground for dismissal was not only serious but
true. The cause of termination, to be lawful,
must be a serious and grave malfeasance to
justify the deprivation of a means of livelihood.
(Dongon vs. Rapid Movers and Forwarders Co., Inc.,
G.R. No. 163431, August 28, 2013)
Discipline Must be Fair and Reasonable
This right to discipline employees is subject to
reasonable regulation by the State in the
exercise of its police power. Accordingly, the
finding that an employee violated company
rules and regulations is subject to scrutiny by
the Court to determine if the dismissal is
justified and, if so, whether the penalty
imposed is commensurate to the gravity of his
offense. (Holcim Philippines, Inc. v. Obra, G.R. No.
220998, August 8, 2016)
Quantum of Proof Required to Impose
Disciplinary Action
Substantial proof is a sufficient basis for the
imposition of any disciplinary action upon the
employee. The standard of substantial evidence
is satisfied where the employer has reasonable
ground to believe that the employee is
responsible for the misconduct that renders the
latter unworthy of the trust and confidence
demanded by his or her position. (Ruiz vs.
Wendel Osaka Realty Corp., G.R. No. 189082, July
11, 2012)
2. TRANSFER OF EMPLOYEES
The transfer or assignment of employees in
good faith is one of the acknowledged valid
exercises of management prerogative "and
will not, in and of itself, sustain a charge of
43
 constructive dismissal." (Asian Marine
Transport Corp. v. Caseres, G.R. No. 212082,
November 24, 2021)
The right of employees to security of tenure
does not give them vested rights to their
positions to the extent of depriving
management of its inherent prerogative to
change their assignments or to transfer them.
(Mendoza vs. Rural Bank of Lucban, G.R. No.
155421, July 7, 2004)
It is the employer’s prerogative, based on its
assessment and perception of its employee’s
qualifications, aptitudes, and competence, to
move them around in the various areas of its
business operations in order to ascertain where
they will function with maximum benefit to the
company. (Pharmacia and Upjohn, Inc. vs. Albayda,
Jr., G.R. No. 172724, August 23, 2010)
Transfer Constituting Constructive
Dismissal
A transfer is tantamount to constructive
dismissal when it is "unreasonable, unlikely,
inconvenient, impossible, or prejudicial to the
employee." The employer has the burden of
proving that the transfer was for just and valid
grounds, and that it was compelled by a
genuine business necessity. Failure to
overcome this burden of proof taints the
transfer, making it constructive dismissal. |||
(Asian Marine Transport Corp. v. Caseres, G.R. No.
212082, November 24, 2021)
In case of a constructive dismissal, the
employer has the burden of proving that the
transfer and demotion of an employee are for a
valid and legitimate grounds such as genuine
business necessity. Particularly, for a transfer
not to be inconvenient, or prejudicial to the
employee; nor does it involve a demotion in
rank or diminution of his salaries, privileges,
and other benefits. Failure of the employer to
overcome this burden of proof, the employee’s
demotion shall no doubt be tantamount to
unlawful constructive dismissal. (Peckson v.
Robinson Supermarket Corporation, G.R. No.
198534, July 03, 2013)
Transfer Must Not Result to
Demotion/Diminution
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. (Pharmacia and Upjohn, Inc. vs. Albayda, Jr.,
G.R. No. 172724, August 23, 2010)
Demotion involves a situation in which an
employee is relegated to a subordinate or less
important position constituting a reduction to a
lower grade or rank, with a corresponding
decrease in duties and responsibilities, and
usually accompanied by a decrease in salary.
(Isabela-1 Electric Coop., Inc. vs. Del Rosario, Jr.,
G.R. No. 226369, July 17, 2019)
2 Kinds of Transfer:
1. A transfer from one position to another of
equivalent rank, level or salary, without a
break in the service; or
2. A transfer from one office to another within
the same business establishment (Chan, Bar
Reviewer on Labor Law, 2019, p. 800)
Instances of a Valid Transfer
a. Consensual transfer anywhere in the
Philippines
The employee consented to be transferred
anywhere in the Philippines in his employee’s
employment application and contract of
employment. This consent is binding to him.
Thus, the transfer is valid. (Pharmacia and
Upjohn, Inc. vs. Albayda, Jr., G.R. No. 172724,
August 23, 2010)
An employee has no valid reason to disobey the
order of transfer when he had tacitly given his
consent when he acceded to the policy of hiring
sales staff who are willing to be assigned
anywhere in the Philippines, which is demanded
by petitioner’s business. (Abbott Laboratories
[Phils], Inc. vs. NLRC, G.R. No. L-76959, October 12,
1987)
Management prerogative includes the right to
transfer employees to any branch, which their
44
employees also agreed to in their application for
employment, the employer's right to transfer
should not be taken in isolation, but rather, in
conjunction with the established company
practice of notifying the employees of the
transfer first before sending them abroad for
training. (Asian Marine Transport Corp. v. Caseres,
G.R. No. 212082, November 24, 2021)
b. Transfer to avoid conflict of interest
Tecson was transferred to another sales area
by Glaxo, a pharmaceutical company with trade
secrets, when the former married an employee
of the competitor company, in accordance with
the policy which prohibits the same.
Considering that Glaxo has trade secrets to
protect from competitor company, the transfer
of Tecson should not be considered as a
constructive dismissal. (Duncan Association of
Detailman-PTGWO vs. Glaxo Wellcome Philippines,
Inc., G.R. No. 162994, September 17, 2004)
The employer must be able to show that the
transfer is not unreasonable, inconvenient, or
prejudicial to the employee; nor does it involve
a demotion in rank or diminution of his salaries,
privileges and other benefits. The decision of
the company to transfer the employee pending
investigation was a valid exercise of
management prerogative to discipline its
employees. The transfer, while incidental to the
charges against the employee, was not meant
as a penalty, but rather as a preventive
measure to avoid further loss of sales and the
destruction of the company’s image and
goodwill (Endico vs. Quantum Foods Distribution
Center, G.R. No. 161615, January 30, 2009)
c. Reassignments pending investigation
Reassignments made pending investigation of
irregularities allegedly committed by an
employee fall within the ambit of management
prerogative. The transfer, while incidental to
the pending charges, was not meant to be a
penalty, but rather a preventive measure to
avoid further damage to the company (Duldulao
vs. CA, G.R. No. 164893, March 1, 2007)
d. Transfer due to business
transition or corporate
reorganization
The transfer was valid since the integration
and transfer was a necessary consequence
of the business transition or corporation
reorganization that had been undertaken,
which had the characteristics of a corporate
spin-off. The spin-off and the attendant
transfer of employees are legitimate
business interests. The transfer/absorption
of employees from one company to
another, as successor employer, was valid
as long as the transferor was not in bad
faith and the employees absorbed by a
successor-employer enjoy the continuity of
their employment status and their rights
and privileges with their former employer
(Marsman & Company, Inc. vs. Sta. Rita, G.R.
No. 194765, April 23, 2018)
e. In cases when an employee’s
position is abolished due to
corporate restructuring
The employee’s transfer from her old
position to the new one is a valid
management prerogative exercised in the
exigency of service since there is no
significant disparity between the former
position to that of the new one that
amounts to a demotion (Benguet Electric
Cooperative vs. Fianza, G.R. No. 158606, March
9, 2004)
f. Transfer as a standard practice
Change of assignment by rotation from one
shift to another as a standard practice is a
valid transfer especially if it is adopted
precisely to avoid any discrimination among
the employees (Castillo vs. CIR, G.R. No. L-
26124, May 29, 1971)
The transfer of employees to other theaters
was routine in nature and part of the
company’s policy to avoid connivance
among the employees and thus, valid
(Cinema, Stage & Radio Entertainment Free
Workers vs. CIR, G.R. No. L-19879, December
17, 1966)
45
g. Transfer based on breach of trust and
confidence
Breach of trust and confidence as a ground
for reassignment must be related to the
performance of the duties of the employee
such as would show him to be thereby unfit
to discharge the same task. The employee
having lost the employer’s trust and
confidence, the company had the right to
transfer the former to ensure that she
would no longer have access to the
company’s confidential files (Ruiz vs. Wendel
Osaka Realty Corp., G.R. No. 189082, July 11,
2012)
Refusal to obey a valid transfer order
constitutes willful disobedience of a
lawful order of an employer
Refusal to obey a valid transfer order
constitutes willful disobedience of a lawful order
of an employer. Refusal to comply with such
orders on the ground of parental obligations,
additional expenses, and the anguish he would
suffer is assigned away from his family is invalid
(Allied Banking Corporation vs. CA, G.R. No. 144412,
November 18, 2003)
However, this management prerogative cannot
be used as a subterfuge by the employer to rid
himself of an undesirable worker (Yuco Chemical
Industries, Inc. vs. Ministry of Labor and
Employment, G.R. No. 75656, May 28, 1990)
The employer must be able to show that such
transfer is not tantamount to constructive
dismissal. (Blue Dairy Corporation vs. NLRC, G.R.
No. 129843, September 14, 1999)
Burden of proof
Employers have to prove that an employee's
transfer is not tantamount to constructive
dismissal. (Pharmacia and Upjohn, Inc. vs. Albayda,
Jr., G.R. No. 172724, August 23, 2010)
The employer’s unexplained failure and delay in
the submission of evidence before the Labor
Arbiter is intolerable and cannot be permitted.
Thus, it failed to sufficiently support that the
transfer was for a legitimate purpose (Misamis
Oriental II Electric Service Cooperation
[MORESCO II] vs. Cagalawan, G.R. No. 175170,
September 5, 2012).
Instances wherein transfer may be
validly refused:
a. If the transfer is consequential to a
promotion
No law compels an employee to accept a
promotion (Dosch vs. NLRC, G.R. No. L-51182,
July 5, 1983)
Such refusal cannot be the basis for the
respondents’ dismissal from service (Echo
2000 Commercial Corporation vs. Obrero
Filipino-Echo 2000 Chapter-CLO).
b. If the transfer is an overseas assignment
The transfer of an employee to an overseas
post cannot be likened to a transfer from
one city to another (Allied Banking
Corporation vs. CA, G.R. No. 144412, November
18, 2003)
3. PRODUCTIVITY STANDARDS
An employer is entitled to impose
productivity standards for its workers, and
in fact, non-compliance may be visited with
a penalty even more severe than demotion.
(Aliling v. Feliciano, G.R. No. 185829, April 25,
2012)
The employer has the prerogative to prescribe
the standards of productivity which may be
used as:
1. Incentive scheme - Employees who
surpass the productivity standards or quota
are usually given additional benefits; and
2. Disciplinary scheme - Employees may be
sanctioned or dismissed for failure to meet
the productivity standards or quota. (Chan,
Bar Reviewer on Labor Law, 2019, p. 807)
Failure to meet the sales quota assigned to
each of them constitute a just cause of their
dismissal, regardless of the permanent or
probationary status of their employment.
Failure to observe prescribed standards of
work, or to fulfill reasonable work assignments
due to inefficiency may constitute just cause for
dismissal. Such inefficiency is understood to
mean failure to attain work goals or work
46
quotas, either by failing to complete the same
within the allotted reasonable period, or by
producing unsatisfactory results. This
management prerogative of requiring
standards may be availed of so long as they are
exercised in good faith for the advancement of
the employer's interest. (Aliling v. Feliciano, G.R.
No. 185829, April 25, 2012)
In order for the quota imposed to be considered
a valid productivity standard and thereby
validate a dismissal, management's prerogative
of fixing the quota must be exercised in good
faith for the advancement of its interest. (Ibid)
Gross inefficiency warrants the dismissal of an
employee. It is the prerogative of the school to
set high standards of efficiency for its teachers
since quality education is a mandate of the
Constitution. As long as the standards fixed are
reasonable and not arbitrary, courts are not at
liberty to set them aside. Several pieces of
evidence, in this case, point to numerous
instances when the teacher failed to observe
the prescribed standards of performance set by
the school in several areas of concern,
especially in her Filipino classes. Thus, the
school validly terminated her employment
(International School Manila vs. International School
Alliance of Educators, G.R. No. 167286, February 5,
2014)
The CHR Director, on two occasions, gave
wrong information regarding issues on leave
and holiday pay which generated confusion
among employees in the computation of
salaries and wages. Due to the nature of her
functions, she is expected to have strong
working knowledge of labor laws and
regulations. She also received a less than par
performance in her performance evaluation,
receiving deficient marks and low ratings on
areas of problem solving and decision making,
interpersonal relationships, planning and
organization, project management and integrity
notwithstanding an overall passing grade.
Thus, the company has sufficient and valid
reasons in terminating her services (Reyes-Rayel
vs. Philippine Luen Thai Holdings, Corporation/L&T
International Group Philippines, Inc., G.R. No.
174893, July 11, 2012)
The employee’s failure to observe simple
procedure resulted in delays in the delivery of
output, client dissatisfaction and additional cost
on the part of the company. Thus, dismissal is
valid. (Realda vs. New Age Graphics, Inc., G.R. No.
192190, April 25, 2012)
The employees’ failure to meet the sales quota
assigned to each of them constitute a just cause
of their dismissal, regardless of the permanent
or probationary status of their employment.
This management prerogative of requiring
standards may be availed of so long as they are
exercised in good faith for the advancement of
the employer’s interest. (Buiser vs. Leogardo, Jr.,
G.R. No. L-63316, July 31, 1984)
DOLE may intervene to establish
productivity standards
In appropriate cases such as in the case of
workers paid by results who are considered
“non-time” workers and in the case of
homeworkers, DOLE intervenes, motu proprio
or upon the initiative of any interested party, to
establish productivity standards. (Chan, Bar
Reviewer on Labor Law, 2019, p. 808)
Determination of productivity standards
The standard output rates or piece rates shall
be determined through any of the following
procedures:
1. Time and motion studies;
2. An individual/collective agreement between
the employer and its workers as approved
by the DOLE Secretary or his authorized
representative; or
3. Consultation with representatives of
employers’ and workers’ organization in a
tripartite conference called by the DOLE
Secretary (Chan, Bar Reviewer on Labor Law,
2019, p. 809)
Time and motion study is the more scientific
and preferred method. The basis for the
establishment of rates for piece, output or
contract work is the performance of an ordinary
worker of minimum skill or ability. (Section 5(b),
47
Rule VII-A, Book III, Rules to Implement the Labor
Code, as amended)
4. 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.
No company should be compelled to act
liberally and confer upon its employees’
additional benefits over and above those
mandated by law when it is plagued by
economic difficulties and financial losses.
(Manila Banking Corporation vs. NLRC, G.R. No.
83588, September 27, 1997)

It is an amount granted and paid to an Productivity Bonus vs. Sales Commission

employee for his industry and loyalty which
contributed to the success of the employer’s Productivity Bonus Sales Commission
business and made possible for the realization
of profits. (Producer’s Bank of the Philippines vs. Generally tied to the Intimately related to or
NLRC, G.R. No. 100701, March 28, 2001) productivity or profit directly proportional to
generation of the the extent or energy of
Bonus is NOT a demandable and employer corporation an employee’s
enforceable obligation endeavors
The grant 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 Not directly dependent Commissions are paid
other benefits aside from the employee's basic on the extent an upon the specific
salaries or wages. (Manila Electric Co. v. individual employee results achieved by the
Argentera, G.R. Nos. 224729 & 225049, February 8, exerts himself salesman-employee
2021)

When Demandable

A bonus, however, becomes a demandable or Something extra for It is a percentage of

enforceable obligation when: which no specific the sales closed by a
a. it is made part of the wage or salary or additional services are salesman and operate
rendered by any as an integral part of
compensation of the employee.
particular employee such salesman’s basic
b. It is stipulated in the collective bargaining
pay/wage
agreement or those granted as company
practice are demandable. (Manila Electric Co.
v. Argentera, G.R. Nos. 224729 & 225049,
February 8, 2021)
c. When the grant is mandated by law (Ungos Not legally demandable, Legally demandable
III, Labor Law 3: The Fundamentals of Labor absent a contractual
Law Review, 2021, p. 175-176) undertaking to pay it

Exception to the exception

Bonus is not demandable when employer can
no longer afford to pay.
An employer cannot be forced to distribute
bonuses which it can no longer afford to pay.
To hold otherwise would be to penalize the
employer for his past generosity. (Producer’s
Bank of the Philippines vs. NLRC, G.R. No. 100701,
March 28, 2001)
Bonus is forfeited when employee is
guilty of serious misconduct or
administrative charge
Employers may not be compelled to award a
bonus to private respondents whom it found
guilty of serious misconduct. (Philippine National

48
Construction Corporation vs. NLRC, G.R. No. 128345,
May 18, 1999)
In consonance with existing company policy,
the 1988 bonus should be forfeited in favor of
the Bank when records show that in 1988, the
employee was found guilty of an administrative
charge. (Republic Planters Bank (now known as
PNB-Republic Bank) vs. NLRC, G.R. No. 117460,
January 6, 1997)
5. CHANGE OF WORKING HOURS
Employers have the prerogative to
change working hours
Employers have the freedom and prerogative,
according to their discretion and best
judgment, to regulate and control the time
when workers should report for work and
perform their respective functions. (Philippine
Airlines, Inc. vs. NLRC, G.R. No. 115785, August 4,
2000)
It is a management prerogative, whenever
exigencies of the service require, to change the
working hours of its employees as long as such
prerogative is exercised in good faith and not
for the purpose of defeating or circumventing
the rights of the employees (Union Carbide Labor
Union vs. Union Carbide, G.R. No. L-41314,
November 13, 1992)
In a case, Section 1, Article IV of the collective
bargaining agreement provides for a 7-hour
work schedule from Mondays to Saturdays; and
Section 2, Article XI provides that the employer
has the prerogative to change the existing
methods and their scheduled working hours. In
accordance with such provision, the employer
changed the working hours of the monthly-paid
employees from 9:00am-5:00pm to 1:00pm-
8:00pm every Tuesday and Thursday, when
horse races are held.
In rationalizing such change, the employer
argued that when the CBA was signed, the
horse races started at 10:00am. When the
schedule was moved to a later time, the
employer was left with no choice but to also
change the working hours of its employees.
Thus, the Court held that such exercise of
management prerogative is justified. (Manila
Jockey Club Employees Labor Union — PTGWO vs.
Manila Jockey Club, Inc., G.R. No. 167760, March 7,
2007)
Interphil Laboratories had to adopt a
continuous 24-hour work daily schedule by
reason of the nature of its business and the
demands of its clients. It was established that
the employees adhered to the said work
schedule since 1988. The employees are
deemed to have waived the eight-hour
schedule since they followed, without any
question or complaint, the two-shift schedule
while their CBA was still in force and even prior
thereto. The two-shift schedule effectively
changed the working hours stipulated in the
CBA. As the employees assented by practice to
this arrangement, they cannot now be heard to
claim that the overtime boycott is justified
because they were not obliged to work beyond
eight hours. (Interphil Laboratories Employees
Union v. Interphil Laboratories, Inc., G.R. No.
142824, December 19, 2001)
6. BONA FIDE OCCUPATIONAL
QUALIFICATIONS (BFOQ)
BFOQ refers to the standard which employers
are allowed to consider in making decisions
about hiring or retention of employees (Ungos
III, Labor Law 3: The Fundamentals of Labor Law
Review, 2021, p. 490)
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.|||
(Yrasuegui v. Pilippine Airlines, Inc., G.R. No.
168081, October 17, 2008)
General rule: Employment in particular jobs
may not be limited to persons of a particular
sex, religion or national origin.
49
The BFOQ Exception applies upon hire
and while performing the job
These "qualifying standards" are norms that
apply prior to and after an employee is hired.
They apply prior to employment because these
are the standards a job applicant must initially
meet in order to be hired. They apply after
hiring because an employee must continue to
meet these standards while on the job in order
to keep his job. Under this perspective, a
violation is not one of the faults for which an
employee can be dismissed pursuant to pars.
(a) to (d) of Article 282; the employee can be
dismissed simply because he no longer
"qualifies" for his job irrespective of whether or
not the failure to qualify was willful or
intentional. (Yrasuegui v. Philippine Airlines, Inc.,
G.R. No. 168081, October 17, 2008)
Reasonable Necessity Rule
In order to justify a BFOQ, the employer must
show that:
1. The employment qualification is reasonably
related to the essential operation of the job
involved; and
2. There is factual basis for believing that all
or substantially all persons meeting the
qualification would be unable to properly
perform the duties of the job (Star Paper
Corporation, et. al. vs. Simbol, et. al., G.R. No.
164774, 2006)
Meiorin Test
1. In determining whether an employment
policy is justified, the employer must show
that it adopted the standard for a purpose
rationally connected to the performance of
the job;
2. the employer must establish that the
standard is reasonably necessary to the
accomplishment of that work-related
purpose; and
3. the employer must establish that the
standard is reasonably necessary in order
to accomplish the legitimate work-related
purpose. (Yrasuegui v. Pilippine Airlines, Inc.,
G.R. No. 168081, October 17, 2008)
Instances of a valid exercise of BFOQ:
a. Mandatory retirement ages for bus drivers
and airplane pilots for safety reasons
b. Churches requiring members of its clergy to
be of a certain denomination and may
lawfully bar from employment anyone who
is not a member;
c. Use of models and actors for the purpose
of authenticity or genuineness;
d. Requirement of emergency personnel to be
bilingual, judged on the language
competency (Chan, Bar Reviewer on Labor
Law, 2019, p.813)
e. On account of physical appearance.
The weight standards of PAL show its effort to
comply with the exacting obligations imposed
upon it by law as a common carrier. The
primary objective of PAL in the imposition of the
weight standards for cabin crew is flight safety.
Truly, airlines need cabin attendants who have
the necessary strength to open emergency
doors, the agility to attend to passengers in
cramped working conditions and the stamina to
withstand grueling flight schedules. Given the
cramped cabin space and narrow aisles and
emergency exit doors of the airplane, any
overweight cabin attendant would certainly
have difficulty navigating the cramped cabin
area. (Yrasuegui vs. Philippine Airlines, Inc., G.R.
No. 168081, October 17, 2008)
f. On account of civil status
A company policy which prohibits its employees
from marrying employees of a rival company is
reasonable considering that its purpose is the
protection of the interests of the company
against possible competitor infiltration on its
trade secrets and procedures. The company
has a right to guard its trade secrets and marital
or personal relationships might compromise the
interests of said company. (Duncan Association of
Detailman-PTGWTO vs. Glaxo Wellcome Philippines,
Inc., G.R. No. 162994, September 17, 2004).
50
Instances of an invalid exercise of BFOQ
a. On account of civil status
It shall be unlawful for an employer to require
as a condition of employment or continuation of
employment that a woman employee shall not
get married, or to stipulate expressly or tacitly
that upon getting married, a woman employee
shall be deemed resigned or separated, or to
dismiss, discharge, discriminate or otherwise
prejudice a woman employee merely by reason
of her marriage (Art. 134, Labor Code, as
amended)
The petitioners’ sole contention that “the
company did not just want to have two (2) or
more of its employees related between the third
degree by affinity and/or consanguinity” is
unjustified. The policy is premised on the mere
fear that employees married to each other will
be less efficient. If we uphold the questioned
rule without valid justification, the employer
can create policies based on an unproven
presumption of a perceived danger at the
expense of an employee’s right to security of
tenure. The failure to prove a legitimate
business concern in imposing the questioned
policy cannot prejudice the employee’s right to
be free from arbitrary discrimination based
upon stereotypes of married persons working
together in one company. (Star Paper
Corporation, et. al. vs. Simbol, et. al., G.R. No.
164774, 2006)
The employer imposed on Cadiz the condition
that she should subsequently contract marriage
with her then boyfriend for her to be reinstated.
According to the employer, this is “in
consonance with the policy against encouraging
illicit or common-law relations that would
subvert the sacrament of marriage.” Such
condition is coercive, oppressive and
discriminatory. There is no rhyme or reason for
it. It forces Capiz to marry for economic reasons
and deprives her of the freedom to choose her
status, which is a privilege that inheres in her
as an intangible and inalienable right. (Capin-
Cadiz vs. Brent Hospital and Colleges, Inc., G.R. No.
187417, February 24, 2016)
b. On account of age
The prerogative to choose whom to hire is
subject to the limitations imposed by the Anti-
Age Discrimination in Employment Act which
forbids employers from placing a job
advertisement which suggests age preference,
or declining an applicant for employment simply
because of age, among others. However,
employers can validly set age limitations when
age is a bona fide occupational qualification
(Ungos III, Labor Law 3: The Fundamentals of Labor
Law Review, 2021, p. 490).
No employer shall discriminate against any
person in respect to terms and conditions of
employment on account of his age (Art. 138, R.A.
No. 9231)
7. MARRIAGE BETWEEN EMPLOYEES OF
COMPETITOR-EMPLOYERS
It shall be unlawful for the employer to require
as a condition for or continuation of
employment that a woman employee shall not
get married, or to stipulate expressly or tacitly
that upon getting married, a woman employee
shall be deemed resigned or separated, or to
actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee merely
by reason of her marriage. (Article 134, Labor
Code, as amended)
A company policy of not accepting or
considering as disqualified from work any
woman worker who contracts marriage runs
afoul of the test of, and the right against,
discrimination afforded all women workers by
our labor laws and by no less than the
Constitution (PT&T Co. vs. NLRC, G.R. 118978, May
23, 1997)
The prohibition against personal or marital
relationships with employees of competitor-
companies upon its employees is reasonable
under the circumstances because relationships
of that nature might compromise the interests
of the company. The policy is not aimed at
restricting a personal prerogative that belong
only to the individual. However, an employee’s
personal decision does not detract the
51
employer from exercising management
prerogatives to ensure maximum profit and
business successes. (Duncan Association of
Detailman-PTGWO and Pedro A. Tecson vs. Glaxo
Wellcome Philippines, Inc., G.R. No. 162994,
September 17, 2004)
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. (Star Paper
Corporation vs. Ronaldo D. Simbol, G.R. 164774,
April 12, 2006)
8. POST-EMPLOYMENT RESTRICTIONS
The employer may insist on an agreement
with the employee, for certain restrictions
to take effect after the termination of the
employer-employee relationship.
The following stipulations in an employment
contract are illustrative of the prohibitions
normally agreed upon by the employer and the
employee:
1. Non-Compete Clause;
2. Confidentiality and Non-Disclosure Clause;
3. Non-Solicitation Clause;
4. Non-Recruitment or Anti-Piracy Clause; and
5. Inventions Assignment Clause (Intellectual
Property Clause) (Chan, Bar Reviewer on Labor
Law, 2019, p. 822)
A post-retirement competitive employment
restriction is designed to protect the employer
against competition by former employees who
may retire and obtain retirement or pension
benefits and, at the same time, engage in
competitive employment. (Rivera vs. Solidbank,
G.R. No. 163269, April 19, 2006)
The petitioner retired and received ₱963,619.28
under the Special Retirement Program from the
respondent. However, petitioner is not
proscribed, by waiver or estoppel, from
assailing the post-retirement competitive
employment ban since under Article 1409 of the
New Civil Code, those contracts whose cause,
object or purpose is contrary to law, morals,
good customs, public order or public policy are
inexistent or void from the beginning.
Respondent, as employer, is burdened to
establish that a restrictive covenant barring an
employee from accepting a competitive
employment after retirement or resignation is
not an unreasonable or oppressive, or in undue
or unreasonable restraint of trade, thus,
unenforceable for being repugnant to public
policy. (Ibid)
Non-Compete or Non-Involvement
Clause
The employer and the employee are free to
stipulate in an employment contract prohibiting
the employee within a certain period from and
after the termination of his employment, from:
a. Starting a similar business, profession or
trade; or
b. Working in an entity that is engaged in a
similar business that might compete with
the employer.
A non-compete clause is not necessarily void for
being in restraint of trade as long as there are
reasonable limitations as to time, place and
trade (Chan, Bar Reviewer on Labor Law, 2019, p.
822)
Confidentiality and Non-Disclosure
Clause
It reflects the commitment of the employee that
he shall not, either during the period of his
employment with the employer or at any time
thereafter, use or disclose to any person, firm
or corporation any information concerning the
business or affairs of his employment, for his
own benefit or to the detriment of the
employer. This clause may also cover Former
Employer Information and Third-Party
Information (Chan, Bar Reviewer on Labor Law,
2019, p. 822).
52
Non-Solicitation Clause
A non-solicitation agreement restricts someone
from soliciting or approaching employees or
customers of a business to protect the business
interests of the employer. If the restriction is on
recruiting employees, it may be denominated
as a “non-poaching agreement” or “non-
recruitment clause” (Chan, Bar Reviewer on Labor
Law, 2019, p. 822)
Non-Recruitment or Anti-Piracy Clause
It prohibits the recruitment by the employee of
personnel or employees of the employer for a
certain period after his termination of
employment, either on his own account or in
conjunction with or on behalf of any other
person (Chan, Bar Reviewer on Labor Law, 2019, p.
822).
Inventions Assignment Clause
(Intellectual Property Clause)
It requires the employee, within a certain
period, in confidence to the employer and its
subsidiaries and to assign all inventions,
improvement, design, original works of
authorship, formulas, processes, compositions
of matter, computer software programs,
databases, mass works and trade secrets,
whether or not patentable, copyrightable or
protectable as trade secrets (collectively the
“Inventions”), which the employee may solely
or jointly conceive or develop or reduce to
practice, or cause to be conceived or developed
or reduced to practice, during the period of his
employment with the employer (Chan, Bar
Reviewer on Labor Law, 2019, p. 822)
Two principal grounds on which the doctrine is
founded that a contract in restraint of trade is
void as against public policy:
1. The injury to the public by being deprived
of the restricted party’s industry; and
2. The injury to the party himself by being
precluded from pursuing his occupation,
and thus being prevented from supporting
himself and his family (Rivera vs. Solidbank,
G.R. No. 163269, April 19, 2006)
Factors to be considered by the trial court in
determining whether the contract is reasonable
or not
a. Whether the covenant protects a legitimate
business interest of the employer;
b. Whether the covenant creates an undue
burden on the employee;
c. Whether the covenant is injurious to the
public welfare;
d. Whether the time and territorial limitations
contained in the covenant are reasonable;
and
e. Whether the restraint is reasonable from
the standpoint of public policy (Rivera vs.
Solidbank, supra)
B. 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. CONDITIONS OF EMPLOYMENT
a) Coverage
Title I, Book III of the Labor Code deals with
hours of work, weekly rest periods, holidays,
service incentive leaves and service charges.
General Rule: It shall apply to employees in
all establishments and undertakings, whether
for profit or not (Art. 82, Labor Code, as amended).
EXCEPTIONS:
a. Government employees
b. Managerial employees
c. Field personnel
d. Officers and members of the managerial
staff
e. Members of the family of the employer who
are dependent on him for support
f. Workers who are paid by results
g. Persons in the personal service of another;
and
53
h. Domestic helpers (Kasambahays)
The aforementioned employees are not entitled
to overtime pay, premium pay for rest days and
holidays, night shift differential pay, holiday
pay, service incentive leave and service charges
(Poquiz, Labor Standards and Social Legislation,
2018, p. 219)
a. Government Employees
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.
b. Managerial Employees
Two Definitions of “Managerial Employee”
in the Labor Code:
1. 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].
2. 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:
1. Their primary duty consists of the
management of the establishment in which
they are employed or of a department or
subdivision thereof.
2. They customarily and regularly direct the
work of two or more employees therein.
3. 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).
c. Field Personnel
Field Personnel are Non-Agricultural
Employees:
1. Who regularly perform their duties
away from the principal or place of
business or branch office of the
employer; and
2. Whose actual hours of work in the field
cannot be determined with reasonable
certainty [Art. 82].
Legal Test: Control and 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 [Far East Agricultural Supply v. Lebatique,
G.R. No. 162813 (2007)].
d. Members of the Managerial Staff
(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)].
Art. 82 also includes managerial staff
(supervisory employees) in the definition of
managerial employees. The definition in
54
 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.
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)].
e. Members of the family of the
employer who are dependent on him
for support
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].
f. Workers who are paid by results
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)
g. 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:
1. Perform such services in the employer’s
home which are usually necessary or
desirable for the maintenance and
enjoyment thereof; or
2. 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).
h. Domestic helpers
Domestic worker or “Kasambahay”
refers to any person engaged in domestic
work within an employment relationship
such as but not limited to the following:
1. general househelp,
2. nursemaid or “yaya”,
3. Cook,
4. gardener, or
5. laundry person
"Domestic work" refers to work performed
in or for a household (Sec. 3(d), IRR of
RA10361).
"Household" refers to the immediate
members of the family or the occupants of the
house who are directly and regularly provided
services by the kasambahay (Sec. 3(g), IRR of RA
10361).
55
The definition of “Kasambahay” excludes:
1. Any person who performs domestic work
only occasionally or sporadically and not on
an occupational basis
2. 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)
3. Service providers
4. Family drivers [Sec. 2 of the IRR, RA 10361]
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)
b.) Hours of Work
(1) Normal Hours of Work and Hours
Worked
The normal hours of work of any employee shall
not exceed eight (8) hours a day. (Art. 83, Labor
Code, as amended)
The eight-hour work requirement does not,
however, preclude the employer in the exercise
of its management prerogatives to reduce the
number of working hours, provided that there
is no diminution of existing benefits (Poquiz,
Labor Standards and Social Legislation, 2018, p.
225).
If by the nature of employment, an employee
is required to be on the job for only six (6) hours
daily, the such period should be regarded as full
working day. (Ibid)
Minimum normal 8 working hours fixed by law
need not be continuous to constitute the legal
working day. It may mean broken hours of say,
4 hours in the morning and 4 hours in the
evening or variation thereof provided the total
of 8 hours is accomplished within the work day
(Chan, Labor Law Vol I, 2018, p. 381).
Compensable Hours worked shall include:
a. All time during which an employee is
required to be on duty or to be at the
employer’s premises or to be at a
prescribed workplace, and
b. All time during which an employee is
suffered or permitted to work. (Art. 84, Labor
Code, as amended).
Rest periods of short durations during working
hours shall be counted as hours worked. (Ibid.)
Note: all hours are hours worked which the
employee is required to give his employer,
regardless of whether or not such hours are
spent in productive labor or involve physical or
mental exertion. (Sec. 4, Rule I, Book III, Rules
Implementing the Labor Code.)
(2) Compressed work week, flexible
work arrangement alternative work
arrangements, telecommuting
program
COMPRESSED WORKWEEK
“Compressed Workweek” or “CWW” refers
to a situation where the normal workweek is
reduced to less than six (6) days but the total
number of work-hours of 48 hours per week
remains. The normal workday is increased to
more than eight (8) hours but not to exceed
twelve (12) hours, without corresponding
overtime premium. This concept can be
adjusted accordingly in cases where the normal
workweek of the firm is five (5) days.
(Department Advisory Order No. 2, Series of 2004).
Requisites:
1. The scheme is expressly and voluntarily
supported by majority of the employees.
2. In firms using substances, or operating in
conditions that are hazardous to health, a
certification is needed from an accredited
safety organization or the firm’s safety
committee that work beyond 8 hours is
within the limit or levels of exposure set by
DOLE’s occupational safety and health
standards.
56
3. The DOLE Regional Office is duly notified
(Ibid)
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 Article 85 of the Labor
Code, employees under a CWW scheme are
entitled to meal periods of not less than
sixty (60) minutes. Nothing herein shall
impair the right of employees to rest days
as well as to holiday pay, rest day 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 eight-
hour workday shall not constitute a
diminution of benefits. The reversion shall
be considered a legitimate exercise of
management prerogative, provided that
the employer shall give the employees prior
notice of such reversion within a reasonable
period of time. (Ibid)
Valid CWW
The validity of the reduction of working hours
can be upheld when the arrangement is:
1. Temporary;
2. It is a more humane solution instead of a
retrenchment of personnel;
3. There is notice and consultations with the
workers and supervisors;
4. A consensus is reached on how to deal with
deteriorating economic conditions; and
5. It is sufficiently proven that the company
was suffering from losses. (Philippine Graphic
Arts Inc. vs. NLRC, G.R. No. L-80737,
September 29, 1988)
Under the Bureau of Working Conditions’
bulletin, a reduction of the number of regular
working days (RWD) is valid where the
arrangement is resorted to by the Er to prevent
serious losses due to causes beyond his control,
such as when there is a substantial slump in the
demand for his goods or services or when there
is a lack of raw materials. (Linton Commercial vs.
Hellera, G.R. No. 163147, October 10, 2007)
FLEXIBLE WORK ARRANGEMENT/
ALTERNATIVE WORK ARRANGEMENTS
Flexible Work Arrangement
Refers to alternative arrangements or
schedules other than the traditional or standard
work hours, workdays, and workweek.
(Department Advisory No. 4, Guidelines on the
Implementation of Flexible Work Arrangement,
Series of 2010)
The following are the flexible work
arrangements which may be considered,
among others:
1. Compressed Workweek (as previously
discussed)
2. Gliding or Flexi-time schedule - refers to
one where the employees are required to
complete the core work hours in the
establishment but are free to determine
their arrival and departure time.
3. Flexi-holidays schedule - refers to one
where the employees agree to avail the
holidays at some other days provided there
is no diminution of existing benefits as a
result of such arrangement. (Ibid)
Note: The employers and employees may
likewise explore other alternative work
arrangements under any agreement and
company policy or practice in accordance with
existing laws and regulations. (Ibid)
Flexible Work Arrangement; Voluntary
The effectivity and implementation of any of the
flexible work arrangements shall be based on
voluntary agreements between the employer
and the employees. (Ibid)
57
Application of Non-Diminution of Benefits
The adoption of the flexible work arrangements
provided herein shall in no case result in
diminution of existing benefits of the
employees. (Ibid)
(3) 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)
Exception to the Exception: Shortened meal
breaks upon the employees’ request – NOT
compensable.
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)
Employees are not prohibited from going
out of the premises during meal period
As a general rule, employees are entitled to at
least one hour time-off for regular meals which
can be taken inside or outside company
premises. No where in the law may it be
inferred that employees must take their meals
within the company premises. Employees are
not prohibited from going out of the premises
as long as they return to their post on time. (PAL
vs. NLRC, GR No. 138205, February 2, 1999)
For a full one-hour undisturbed lunch break, the
employees can freely and effectively use this
hour not only for eating but also for their rest
and comfort which are conducive to more
efficiency and better performance in their work.
(Sime Darby Pilipinas, Inc. vs. NLRC, G.R. No.
119205, April 15, 1998).
Meal break is not compensable
Since the employees are no longer required to
work during this one-hour lunch break, there is
no more need for them to be compensated for
this period. (Ibid)
58
(4) 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
ten o’clock in the evening and six o’clock in the
morning. (Sec. 2, Rule II, Book III, Rules
Implementing the Labor Code)
The computation is:
General Rule: All employees are entitled to
NSD.
Exceptions:
1. Government employees including those
employed in government-owned or
controlled corporations with original
charters;
2. Employees of retail and service
establishments regularly employing not
more than five (5) workers;
3. Domestic helpers
4. Persons in the personal service of another;
5. Managerial employees as defined in Book
Three of this Code;
6. Field personnel and other employees
whose time and performance is
unsupervised by the employer
7. Workers 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 (Sec
1, Rule II, Book III, Rules Implementing the
Labor Code).
8. Members of the family of the employer who
are dependent upon him for support (Art.
82, Labor Code, as amended).
Where the night-time work of an employee
overlaps with overtime work, the receipt of
overtime pay does not preclude the receipt of
night differential pay. The latter is night pay;
the former is payment beyond eight-hour work.
(Poquiz, Labor Standards and Social Legislation,
2018, page 234)
(5) 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).
In computing overtime work, "regular wage" or
"basic salary" means "cash" wage only without
deduction for facilities provided by the
employer. (Chan, Bar Reviewer on Labor Law,
2019, p. 131)
"Premium pay" means the additional
compensation required by law for work
performed within eight (8) hours on non-
working days, such as regular holidays, special
holidays and rest days while "Overtime pay"
means the additional compensation for work
performed beyond eight (8) hours. (No. III and
IV, DOLE Handbook on Workers Statutory Monetary
Benefits)
Rationale Behind the Overtime Pay
Employee is made to work longer than what is
commensurate with his agreed compensation
for the statutory fixed or voluntarily agreed
hours of labor he is supposed to do. (PNB vs.
PEMA and CIR, G.R. No. L-30279, July 30, 1982)
Undertime Not Offset by Overtime nor by
Holiday
Undertime work on any particular day shall not
be offset by overtime work on any other day.
Permission given to the employee to go on
leave on some other day of the week shall not
exempt the employer from paying the
additional compensation required. (Art. 88, Labor
Code, as amended)
Offsetting the overtime with the undertime and
at the same time charging said undertime to the
accrued leave of the employee is unfair, for
under such method the employee is made to
59
pay twice for his undertime because his leave is
reduced to that extent while he was made to
pay for it with work beyond the regular working
hours. The proper method should be to deduct
the undertime from the accrued leave but pay
the employee the overtime to which he is
entitled. This method also obviates the irregular
schedule that would result if the overtime
should be set off against the undertime for that
would place the schedule for working hours
dependent on the employee. (NAWASA vs NWSA
Consolidated Unions, GR No. L-18939, August 31,
1964)
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 vs. NLRC,
G.R. No. 121004, January 28, 1988)
Emergency overtime work
General Rule: No employee may be compelled
to render overtime work against his will. (Chan,
Bar Reviewer on Labor Law, 2019, p. 132).
Exceptions:
1. When the country is at war or when any
other national or local emergency has been
declared by the National Assembly or the
Chief Executive;
2. When overtime work is necessary to
prevent loss of life or property or in case
of imminent danger to public safety due to
actual or impending emergency in the
locality caused by serious accident, fire,
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 causes of
similar nature;
4. When the work is necessary to prevent loss
or damage to perishable goods; and
5. When the completion or continuation of the
work started before the 8th hour is
necessary to prevent serious obstruction or
prejudice to the business or operations of
the employer (Article 89, Labor Code); and
6. When overtime work is necessary to avail
of favorable weather or environmental
conditions where performance or quality of
work is dependent thereon. (Chan, Bar
Reviewer on Labor Law, 2019, p. 133)
Refusal to render emergency overtime
work is insubordination
When an employee refuses to render
emergency overtime work under any of the
foregoing conditions, he may be dismissed on
the ground of insubordination or willful
disobedience of the lawful order of the
employer (Chan, Bar Reviewer on Labor Law,
supra).
The right to claim overtime pay is not subject
to a waiver. Such right is governed by law and
not merely by the agreement of the parties.
(Mercader vs. Manila Polo Club, G.R. No. L-8373,
September 28, 1956)
(6) Computation of Additional
Compensation (Rates only)
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. (Article 90, Labor Code)
Premium Pay Rates
(Handbook on Workers Statutory Monetary
Benefits, 2022)
60

c) 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. (Sec. 3,
Rule III, Book III, IRR)
Scope
It shall apply to all ERs whether operating for
profit or not, including public utilities operated
by private persons. (Sec. 1, Rule III, Book III, IRR)
Rest Day Not Necessarily Sunday or
Holiday
All establishments and enterprises may operate
or open for business on Sundays and holidays
provided that the employees are given the
weekly rest day and the benefits provided
under the law. (Sec. 2, Rule III, Book III, IRR)
The employer shall determine and schedule the
weekly rest day of his employees subject to the
CBA and to such rules and regulations as the
DOLE Secretary may provide. (Art 91, Labor
Code)
Preference of Employee If Based on
Religious Grounds
The employer shall respect the preference of
employees as to their weekly rest day when
such preference is based on religious grounds.
(Ibid)
The employee shall make known his preference
to the employer in writing at least seven (7)
days before the desired effectivity of the initial
rest day so preferred. (Poquiz, Labor Standards
and Social Legislation, 2018, p. 243)
When Employer May Require Work on a
Rest Day
The employer may require any of its employees
to work on their scheduled rest day for the
duration of the following emergency and
exceptional conditions:
a. In case of actual or impending emergencies
caused by serious accident, fire, flood,
typhoon, earthquake, epidemic or other
disaster or calamity to prevent loss of life
and property, or imminent danger to public
safety;
b. In cases of urgent work to be performed on
the machinery, equipment, or installation,
to avoid serious loss which the employer
would otherwise suffer;
c. In the event of abnormal pressure of work
due to special circumstances, where the
employer cannot ordinarily be expected to
resort to other measures;
d. To prevent serious loss or damage to
perishable goods;
e. 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
f. Under other circumstances analogous or
similar to the foregoing as determined by
the Secretary of Labor and Employment
(Article 92, Labor Code)
Note: No employee shall be required against
his will to work on his scheduled rest day except
under the above-mentioned circumstances
provided, however, where an employee
volunteers to work on his rest day under other
circumstances, he shall express such desire in
writing, subject to the provision regarding
61
additional compensation. (Sec. 6, Rule III, Book
III, Rules Implementing the Labor Code)
d) Holidays
Types of Holidays:
1. Regular Holiday
2. Special Non-Working Holiday
General Rule:
They are compensable whether worked or
unworked subject to certain conditions. They
are also called legal holidays (Sec. 94, Labor Code
as amended).
Exception:
A legal holiday falling on a Sunday creates no
legal obligation for the employer to pay extra,
aside from the usual holiday pay, to its monthly-
paid employees. There is no provision of law
requiring any employer to make such
adjustments in the monthly salary rate set by
him to take account of legal holidays falling on
Sundays in a given year, or, contrary to the
legal provisions bearing on the point, otherwise
to reckon a year at more than 365 days
(Wellington Investment and Manufacturing
Corporation vs. Trajano et al., G.R. No. 114698, July
3, 1995)
Proclamation No. 42, as amended by
Proclamation No. 90 fixed the dates for the
observance of the regular and special holidays
including additional special holidays for 2023.
1. Regular Holiday
● New Year’s Day – January 1
● Araw ng Kagitingan - April 10 (Monday
nearest April 9)
● Maundy Thursday - April 6
● Good Friday - April 7
● Labor Day – May 1
● Independence Day – June 12
● National Heroes Day – August 28 (Last
Monday of August)
● Bonifacio Day – November (Monday
nearest November 30)
● Christmas Day – December 25
● Rizal Day – December 30
2. Special Non-working Days
● EDSA People Power Revolution
Anniversary – February 25
● Black Saturday – April 8
● Ninoy Aquino Day – August 21
● All Saints’ Day – November 1
● Feast of the Immaculate
Conception of Mary – December 8
● Last Day of the Year – December
31
Additional Special Non-working days
● January 2, 2023 (Monday)
● November 2, 2023 (Thursday)
The dates for Eid’l Fitr and Eid’l Adha
(special holidays) shall follow after
approximate dates of the Islamic
holidays have been determined.
e) Service Charge [Article 96 of the
Labor Code, as amended by RA
11360]
Service Charge is the amount that is added to
a bill for any work or services rendered in all a
hotel, restaurant, or similar establishments,
which shall be distributed completely and
equally among the covered workers, except
managerial employees. (Sec. 1, RA 11360; Sec.
2(e), DO 206-19)
Coverage
Establishments covered
All establishments collecting service charges for
work or service they offer, such as hotels,
restaurants, lodging houses, night clubs,
cocktail lounges, massage clinics, bars, casinos
and gambling houses, and sports clubs,
including those entities operating primarily as
private subsidiaries of the government.
Employees covered
All employees, except managerial employees,
under the direct employ of the covered
establishment, regardless of their positions,
designations, or employment status, and
irrespective of the method by which their wages
are paid. (Sec. 2, Rule VI, Book III, Rule VI, IRR)
62
Employees not covered
Specifically excluded from coverage are
managerial employees, or those vested with
powers or prerogatives to lay down and execute
management policies or hire, transfer, suspend,
lay-off, recall, discharge, assign or discipline
employees or to effectively recommend such
managerial action. (Sec 2., Rule VI, Book III, IRR)
Distribution
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).
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).
f) Occupational Safety and Health
Standards Law (RA 11058)
Occupational Safety and Health (OSH)
standards refers to a set of rules issued by
DOLE which mandates the adoption and use
of appropriate practices, means, methods,
operations or processes, and working
conditions reasonably necessary to ensure
safe and healthful employment. (Sec. 3 (p),
Chapter II, IRR, RA 11058)
(1) Coverage Workplaces [Section 3(c)]
Covered workplaces refer to
establishments, projects, sites and all other
places where work is being undertaken
wherein the number of employees, nature of
operations, and risks or hazards involved in
the business, as determined by the Secretary
of Labor and Employment, require compliance
with the provisions of this Rules. (Sec. 3 (c),
Chapter II, IRR, RA 11058)
Establishments covered
This Rules shall apply to all establishments,
projects and sites, and all other places where
work is being undertaken in all branches of
economic activity, including:
a. Establishments located inside special
economic zones and other investment
promotion agencies (e.g., Philippine Economic
Zone Authority [PEZA], Clark Development
Corporation [CDC]);
b. Utilities engaged in air, sea, and land
transportation;
c. Industries such as mining, fishing,
construction, agriculture, and maritime;
d. Contractors and subcontractors including
those engaged in the projects of the public
sector (Sec. 2, Chapter II, IRR, RA 11058)
Establishments not covered
This Rules does not apply to:
a. Public sector such as national government
agencies, government-owned and
controlled corporations with original
charters, government financial
institutions, state universities and
colleges; and
b. Local government units which shall be
governed by appropriate rules and
regulations issued by the Civil Service
Commission and other government
agencies. (Sec. 2, Chapter II, IRR, RA 11058)
63
(2) Duties of Employers, Workers and
Other Persons [Sec. 4]
Duties of Employers
Every employer, contractor or subcontractor, if
any, and any person who manages, controls or
supervises the work being undertaken shall:
1. Equip a place of employment for workers
free from hazardous conditions that are
causing or are likely to cause death, illness
or physical harm to the workers;
2. Provide complete job safety instructions
and proper orientation to all workers
including, but not limited to, those relating
to familiarization with their work
environment;
3. Ensure that, so far as is reasonably
practicable, the chemical, physical and
biological substances and agents, and
ergonomic and psychosocial stresses
under their control are without risk to
health when the appropriate measures of
protection are taken;
4. Use only approved specific industry set
of standards of devices and equipment
for the workplace, as applicable;
5. Comply with OSH standards including
training, medical examination, and when
necessary, provisions on protective and
safety devices such as PPE and machine
guards. Training for workers shall include
health promotion, hazards associated with
their work , health risks involved or to
which they are exposed to, preventive
measures to eliminate or minimize risks,
steps to be taken in cases of emergency,
and safety instructions for the jobs,
activities and tasks to be handled by
workers;
6. Make arrangements for workers and their
representatives to have the time and
resource to participate actively in the
processes of organizing, planning and
implementation , monitoring, evaluation
and action for improvement of the OSH
management system;
7. Provide, when necessary, for measures
identifYing trainings and drills, evacuation
plans , etc., to deal with emergencies, fires
and accidents including first-aid
arrangements;
8. Comply with all reportorial requirements of
the OSH standards; and
9. Register establishment to DOLE as
provided under the OSH standards. (Sec. 4,
Chapter II, IRR, RA 11058)
Duties of Workers
Every worker, in order to ensure compliance
with OSH standards shall:
1. Participate in capacity building activities on
safety and health and other OSH related
topics and programs;
2. Proper use of all safeguards and safety
devices furnished for workers' protection
and that of others;
3. Comply with instructions to prevent
accidents or imminent danger situations in
the workplace;
4. Observe prescribed steps to be taken in
cases of emergency including
participation in the conduct of national or
local disaster drills; an
5. Report to their immediate supervisor or any
other responsible safety and health
personnel any work hazard that may be
discovered in the workplace. (Section 4(b),
Chapter III, DOLE Department Order NO. 198,
Series of 2018)
Duties of Other Persons
Any other person, including the builder or
contractor who visits, builds, renovates or
installs devices or conducts business in any
establishments or workplace, shall comply
with the provisions of this Rules and all other
regulations issued by the Secretary of Labor
and Employment.
(3) Workers’ Right to Know [Sec. 5]
The right to safety and health at work shall be
guaranteed.
64
All workers, including new hires, shall be:
1. Informed by the employer about all types
of hazards in the workplace; and
2. Be provided access to training, education,
and orientation on chemical safety,
electrical safety, mechanical safety,
ergonomics, and other hazards and risks
in a language and dialect that workers can
understand. (Section 5, RA 11058)
Re-orientation in high-risk
establishments
A re-orientation on safety and health for
workers in high risk establishments must be
conducted regularly, not less than once a
quarter, and to be conducted immediately
following any changes in the operations and
production process.
High risk establishment refers to a
workplace wherein the presence of hazard or
potential hazard within the company may
affect the safety and/or health of workers
not only within but also persons outside the
premises of the workplace. There is a high
level of exposure to safety and health
hazards, and the probability of a major
accident resulting in disability or death or
major illness is likely to occur if no preventive
or control measures are in place. (Sec. 3 (h),
Chapter II, IRR, RA 11058)
(4) Workers' Right to Refuse Unsafe
Work [Sec. 6]
The worker has the right of refusal to work
without threat or reprisal from the employer if,
as determined by DOLE, an imminent danger
situation exists in the workplace that may
result in illness, injury or death, and corrective
actions to eliminate the danger have not been
taken by the employer. (Section 6, RA 11058)
As a preventive measure, the safety officer
may, following his/her own determination and
without fear of reprisal, implement a work
stoppage or suspend operations in cases of
imminent danger. The employer, safety officer
or worker shall immediately notify the DOLE
that an imminent danger situation exists in the
workplace. (Section 6, Chapter III, DOLE
Department Order NO. 198, Series of 2018)
The employer or safety officer cannot require
the workers to return to work where there is
a continuing imminent danger. A worker may
also refuse to work until the lifting of the
Work Stoppage Order (WSO) after
implementing the appropriate corrective
measures. (Ibid)
Workers affected by the existence of an
imminent danger situation may be
temporarily assigned to other areas within
the workplace provided there is no
impending issue with safety and health.
(Ibid)
(5) Workers' Right to Personal Protective
Equipment (PPE) [Sec. 8]
Every employer, contractor or subcontractor,
if any, shall provide his/her workers, free of
charge:
1. PPE for any part of the body that may be
exposed to hazards
2. Lifeline, safety belt or harness
3. Gas or dust respirators or masks, and
4. Protective shields whenever necessary by
reason of the hazardous work process or
environment, chemical, radiological,
mechanical, and other irritants or hazards
capable of causing injury or impairment in
the function of any part of the body
through absorption, inhalation or physical
contact.
Failure to provide appropriate PPE in high risk
activities shall give rise to the right of the
worker to refuse unsafe work. (Section 8, RA
11058)
PPE
● The cost of PPE shall be part of the safety
and health program and shall be an
integral part of the operations cost. It shall
be a separate pay item in construction and
65
 in all contracting or subcontracting
arrangements.
● All PPE shall be of the appropriate type as
tested and approved by the DOLE based
on its standards and/or other means of
verification.
● All PPE must be of appropriate size,
weight, and type to specific workers
exposed to hazards from which PPE are
meant to ensure effective protection.
● Issuance of PPE shall be supplemented by
training on the application, use, handling,
cleaning and maintenance of said PPE in
accordance with the manufacturer's
recommendations.
Basic Salary
The term includes remunerations or
earnings paid by the employer to employee,
but excludes cost-of-living allowances,
profit-sharing, payments, and all allowances
and monetary benefits which have not been
considered as part of the basic salary of the
employee (Duka, Labor Laws and Social
Legislation, A Barrister’s Companion, 2016, p.
161)
Wages and salary are in essence synonymous
(Songco v. NLRC, G.R. No. L-50999, 1990)
Wage Salary

2. Wages
Paid for skilled or Paid to white collar
a) Definitions unskilled manual labor workers and denote
a higher grade of
employment
(1) Wage vs. Salary

Basic wage
Not subject to Subject to execution,
All the remuneration or earnings paid by an
execution, garnishment or
employer to a worker for services rendered garnishment or attachment (Gaa v.
on normal working days and hours but does attachment except for CA, G.R. No. L-
not include cost-of-living allowances, profit- debts related to 44169, 1985)
sharing payments, premium payments, 13th necessities [Art.
month pay or other monetary benefits which 1708]
are not considered as part of or integrated
into the regular salary of the workers (IRR;
Wage Rationalization Act; R.A. 6727).

Statutory minimum wage (2) Facilities vs. Supplements

Refers simply to the lowest basic wage rate
fixed by law that an employer can pay his
workers (Ibid.).
Salary
It denotes a higher degree of employment,
or a superior grade of services, and implies
a position of office and is suggestive of a
larger and more important service. The
word salary is understood to relate to
position of office, to be the compensation
given for official or other service. It is
subject to execution or attachment. (Gaa vs.
CA, G.R. No. L-44169, December 3, 1985)
Facilities
Facilities include those articles or services of
benefit to the employee and his family such as
rice ration, housing, recreational facilities,
medical treatment to dependents, school
facilities, cost of light, water, fuel, meals or
snacks. (Mayon Hotel vs. Adana, G.R. No. 157634,
May 16, 2005)
Requirements For Deducting Values For
Facilities:
1. Proof must be shown that such facilities are
customarily furnished by the trade;
2. The provision of deductible facilities must
be voluntarily accepted in writing; and,

66
3. The facilities must be charged at fair and
reasonable value (Mabeza vs. NLRC, G.R. No.
118506, April 18, 1997)
Supplements
Supplements are extra remuneration or
benefits given to, or received by laborers, over
and above their ordinary earnings or wages
(e.g., vacation leave pay, overtime pay in
excess of the legal rate, profit-sharing benefits,
sick pension, retirement and death benefits,
family allowances, Christmas bonus, war-risk or
cost-of-living bonuses or other bonuses other
than those paid as reward for extra output or
time spent on the jobs. (Atok-Big Wedge Mutual
Benefit Assn. vs. Atok-Big Wedge Mining Co.,
Inc., supra)
The benefit or privilege given to the employee
which constitutes an extra remuneration over
and above his basic or ordinary earning or wage
is supplement; and when said benefit or
privilege is made part of the laborer’s basic
wage, it is a facility. The criterion is not so much
with the kind of the benefit or item (food,
lodging, bonus or sick leave) given but its
purpose. Thus, free meals supplied by the ship
operator to crew members, out of necessity,
cannot be considered as facilities but
supplements which could not be reduced
having been given not as part of wages but as
a necessary matter in the maintenance of the
health and efficiency of the crew during the
voyage. Facilities are deductible from wage but
not supplement (Chan, 2018 Last-Minute Pre-Week
Notes on Labor Law, p.23-24)
b) Principles
(1) No Work, No Pay
General Rule: If there is no work
performed by the employee, there can be no
wage or pay.
Exception: Unless the laborer was able,
willing and ready to work but was prevented
by management or was illegally locked out,
suspended or dismissed (Azucena, citing
Philippine Airlines v. NLRC, G.R. No. 55159,
1989)
(2) Equal Pay for Equal Work
Employees working in the Philippines, if they
are performing similar functions and
responsibilities under similar working
conditions, should be paid equally. If an
employer accords employees the same
position and rank, the presumption is that
these employees perform equal work.
(International School Alliance of Educators v.
Hon. Quisumbing, G.R. No. 128845, 2000)
(3) Fair Wage for Fair Work
General Rule: With respect to back wages,
the principle of a "fair day's wage for a fair
day's labor" remains as the basic factor in
determining the award thereof. If there is no
work performed by the employee there can
be no wage or pay. (Ergonomic Systems
Philippines, Inc. v. Enaje, G.R. No. 195163,
December 13, 2017)
Exception: Unless the laborer was able,
willing and ready to work but was illegally
locked out, suspended or dismissed or
otherwise illegally prevented from working.
(Ibid)
(4) Non-Diminution of Benefits
The principle against diminution of benefits is
applicable if it is shown that:
1. The grant of benefit is based on a
policy or has ripened into a practice
over a long period;
2. The practice is consistent and
deliberate;
3. The practice is not due to an error in
the construction or application of a
doubtful or difficult question of law;
and
4. It is done unilaterally by the employer.
(Vergara vs. Coca-Cola Bottlers Philippines,
Inc., GR No. 176985, April 1, 2013)
Nothing in the Labor Code shall be construed to
eliminate or in any way diminish supplements,
67
or other employee benefits being enjoyed at
the time of the promulgation of the Code (Art.
100, Labor Code, as amended).
Employers are prohibited from reducing
benefits already enjoyed by employees
The non-diminution rule under Art. 100 of the
Labor Code explicitly prohibits employers from
eliminating or reducing the benefits already
enjoyed by their employees. (Wesleyan
University-Philippines vs. Wesleyan University-
Philippines Faculty and Staff Association, GR
No. 181806, March 12, 2014). Employees have
vested right over such existing benefits (Poquiz,
Labor Standards and Social Legislation, 2018, p.
294).
Exception; Payment by mistake provided
corrected immediately; Principle of
solutio indebiti applies
An exception to the rule is when "the practice
is due to error in the construction or application
of a doubtful or difficult question of law." The
error, however, must be corrected immediately
after its discovery; otherwise, the rule on Non-
Diminution of Benefits would still apply.
(Wesleyan University-Philippines vs. Wesleyan
University-Philippines Faculty and Staff Association,
GR No. 181806, March 12, 2014)
An employer does not violate the rule on non-
diminution of benefits if it discontinues a benefit
that has been paid by mistake. ((Poquiz, Labor
Standards and Social Legislation, 2018, p. 296).
Exceptions:
1. Correction of error
2. Contingent benefit or conditional bonus
3. Wage order compliance
4. Benefits on reimbursement basis
5. Reclassification of position
6. Negotiated benefits
7. Productivity incentives (Ibid.)
Purpose Of Non-Diminution of Benefits
The philosophy behind the law is to prohibit
employers from reducing benefits already
enjoyed by employees. A contrary rule will
corrupt the employer's mind to abuse and
exploit employees, prostituting the social
justice and protection to labor clauses
enshrined in the fundamental charter. (Poquiz,
Labor Standards and Social Legislation, 2018, p. 294;
Opinion of the Secretary of Labor, October 7, 1975).
c) Payment of Wages
General Rule: Legal Tender Only
Exception: Check/Money Order if customary
OR necessary because of special
circumstances, as specified by the Secretary of
Labor or the CBA.
Not allowed:
1. Promissory Notes
2. Vouchers
3. Tokens
4. Tickets
5. Chits; or
6. Any other form alleged to represent a
legal tender, even when expressly
requested by the employee [Art. 102].
When Payment Through Check, Postal
Orders or Money Orders is Allowed:
1. When payment is customary (on the date
of Code effectivity);
2. Where it is so stipulated in a collective
agreement;
3. Where all of the following conditions are
met:
a. Bank/Facility for encashment is within
1-km radius from the workplace
b. ER did not receive any pecuniary
benefit because of said arrangement
c. EEs are given reasonable time during
banking hours to withdraw their wages
(compensable hours, if during working
hours)
d. The payment by check is with the
written consent of the EEs concerned,
in the absence of a CBA (Sec. 2, Rule
VIII)
68
Time of payment (Art. 103; Sec. 3, Rule VIII, of money or things representing money,
Book III, IRR) except in the case of persons employees in
such places.
Particulars Time of Payment
Condition for ATM Payment ATM system of
payment is with the written consent of the EEs.
Frequency At least once every 2 weeks
or 2x per month 1. EEs are given reasonable time to withdraw
their wages from the banking facility
(compensable hours, if during work hours).
Intervals Must not be more than 16 2. System shall allow workers to receive their
days
wages within the period/frequency
Force Majeure or Valid excuse for delayed
provided by law.
Circumstances payment BUT ER must pay 3. There is a bank/ATM facility within a 1km
Beyond ER’s immediately after radius from the place of work.
Control cessation and not less than 4. Upon request of the concerned EEs, the ER
once a month shall issue a record of payment of wages,
benefits and deductions for a particular
period.
Tasks Which Payments should be made 5. There shall be no additional expenses and
Cannot Be with intervals not more than no diminution of benefits and privileges.
Completed in 2 16 days, in proportion to 6. The ER shall assume responsibility in case
Weeks work completed the wage protection provisions of law and
regulations are not complied with under the
Final settlement is made arrangement. (Labor Advisory on Payment of
upon completion of the work. Salaries thru ATM, 1996)

Place of Payment
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.
(Art. 104; Sec. 4, Rule VIII, Book III, IRR)
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
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 on his behalf
by his natural guardian or next of kin.
(Sec. 5, Rule VIII, Book III, IRR)

69
 d) Prohibitions Regarding Wages
1. Against interference in disposal of
wages
Interference with disposal of wages
also includes forcing, compelling, or
obliging employees to purchase
merchandise, commodities or other
property from any other person. (Art.
112)
2. Against Wage Deduction
General Rule: No employer, in his
own behalf or in behalf of any person,
shall make any deduction from the
wages of his employees.
Exceptions:
1. where the worker is insured with his
consent, and the deduction is to
recompense the employer for the premium
paid
2. for union dues
3. where the employer is authorized by law or
regulations issued by SOLE (Art. 113)
3. Against Requirements to Make
Deposits for Loss or Damage
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. (Art. 114)
Exception: When the employer is engaged in a
business where the practice of making
deductions or deposits is a recognized one, or
is necessary or desirable as determined by
SOLE.
No deduction from the deposits of an employee
for the actual amount of the loss or damage
shall be made unless the employee has been
heard thereon, and his responsibility has been
clearly shown (Art. 115)
4. Against Withholding of Wage
It is unlawful for any person 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 any
other means without his consent. (Art. 116)
5. Against Deduction to Ensure
Employment
It is unlawful to make any deduction from
the wages of any employee for the benefit
of the employer as consideration of promise
for employment or retention. (Art. 117)
6. Against Retaliatory Measures
It is unlawful for an employer to
discriminate (e.g. to refuse to pay or reduce
the wages and benefits, discharge) against
any employee who has filed any complaint
or instituted any proceeding under Title II
of the LC. (Art. 118)
7. Against False Reporting
It is unlawful for any person to make a
statement, report or record filed or kept
pursuant to the LC knowing it to be false in
any material respect. (Art. 119)
Civil Code Provisions on Non-Interference
In Disposal Of Wages
Art. 1705. The laborer's wages shall be paid in
legal currency.
Art. 1706. Withholding of the wages, except for
a debt due, shall not be made by the employer.
Art. 1707. The laborer's wages shall be a lien
on the goods manufactured or the work done.
Art. 1708. The laborer's wages shall not be
subject to execution or attachment, except for
debts incurred for food, shelter, clothing and
medical attendance.
Art. 1709. The employer shall neither seize nor
retain any tool or other articles belonging to the
laborer.
70
e) Wage Distortion
(1) Concept
A situation where an increase in wage results in
the elimination or severe contraction of
intentional quantitative differences in wage or
salary rates between and among- the
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. (Rules Implementing R.A. No.
6727)
Elements of Wage Distortion:
1. An existing hierarchy of positions with
corresponding salary rates.
2. A significant change or increase in the
salary rate of a lower pay class without a
corresponding increase in the salary rate of
a higher one;
3. The elimination of the distinction between
the 2 groups or classes; and
4. The WD exists in the same region of the
country. (Alliance Trade Unions vs. NLRC, G.R.
No. 140689, February 17, 2004)
Causes of Wage distortions:
1. Government-decreed increases in minimum
wages
2. Merger of two companies (with differing
classifications of employees and different
wage rates) where the surviving company
absorbs all the employees of the dissolved
corporation,
3. Wage distortion arose because the
effectivity dates of wage increases given to
each of the two classes of employees (rank-
and-file and supervisory) had not been
synchronized in their respective CBAs
(Metro Transit Organization, Inc. vs. NLRC, G.R.
No. 116008, July 11, 1995)
f) Minimum Wage Law
Minimum wage is the lowest wage rate fixed
by law that an employer can pay his workers
(Sec. 1, Rule VII-A, Book III, Rules to Implement the
Labor Code, as amended by Memorandum Circular
No, 3, Series of 1992).
The term “statutory minimum wage” refers
to the lowest basic wage rate fixed by law that
an employer can pay his workers (Rules
Implementing R.A. No. 6727).
Regional minimum wage rates is the lowest
basic wage rates that an employer can pay his
workers, as fixed by the Regional Tripartite
Wages and Productivity Boards (RTWPBs),
which shall not be lower than the applicable
statutory minimum wage rates (Sec. 4[k], Rule I,
NWPC Guidelines No. 01, Series of 2007; Chan, Bar
Reviewer on Labor Law, 2019, p. 159).
Minimum Wage is mandatory
The minimum wage fixed by law is mandatory;
thus it is non-waivable and non-negotiable. The
enactment is compulsory in nature in order to
ensure decent living conditions (PAM Co. vs.
PAMEA-FFW, G.R. No. L-35254, May 25, 1973).
National Wages and Productivity
Commission (NWPC)
The NWPC was created by the Wage
Rationalization Act (R.A. No. 6727).
g) Holiday Pay
Holiday Pay
Holiday pay is a form of premium accorded to
an employee who does not work on regular
holidays. If he works on said regular holidays,
he is entitled to an additional compensation
over his regular or basic remuneration known
as premium pay. (Poquiz, Labor Standards and
Social Legislation, 2018, p. 248).
The payment of the regular daily wage for any
unworked regular holiday (Handbook on Workers’
Statutory Monetary Benefits, Bureau of Working
Conditions, 2016).
General Rule: Every worker shall be paid his
regular daily wage during regular holidays (Art.
94, Labor Code, as amended).
71
Exceptions:
1. Government employees and any of its
political subdivisions, including GOCCs
(with original charter);
2. Retail and service establishments regularly
employing less than 10 workers;
3. Domestic helpers or kasambahays and
persons in the personal service of another;
4. Employee engaged on task or contract
basis or purely commission basis;
5. Members of the Family of the Employer
who are dependent on him for support;
6. Managerial Employee and other members
of the managerial staff;
7. Field personnel and other Employee whose
time and performance are unsupervised by
the Employer; and
8. Employee paid fixed amount for performing
work irrespective of the time consumed in
the performance thereof (Sec. 1, Rule IV,
Book III, IRR)
Rules on Holiday Pay
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, Rules Implementing the Labor
Code).
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, Rules Implementing the
Labor Code).
h) 13th Month Pay
It is a form of monetary benefit equivalent to
the monthly basic compensation received by an
employee, computed pro-rata according to the
number of months within a year that the
employee has rendered service to the employer
(DOLE’s BWC issues Q & A on 13th month pay)
Coverage
All rank-and-file employees who have worked
for at least one (1) month during the calendar
year, are entitled to receive 13th month pay
regardless of the nature of their employment
and irrespective of the methods by which their
wages are paid (Presidential Decree No. 851;
Memorandum Order No. 28, Revised Guidelines on
the Implementation of the 13th Month Pay Law).
When should be paid?
It should be paid not later than December 24 of
each year. An employer, however, may give to
his employees one-half of the 13th month pay
before the opening of the regular school year
and the other half on or before the 24th day of
December of every year (Section 1, IRR; Ibid).
Persons Covered (PD 851)
1. Employees
General Rule: All rank-and-file EEs are
covered by P.D. 851 regardless of the
amount of basic salary that they receive in
a month, if their Ers are not otherwise
exempted from paying the 13th month pay.
Such Ees are entitled to the 13th month pay
regardless of said designation of
employment status, and irrespective of the
method by which their wages are paid.
Provided that they have worked for at least
1 month, during a calendar year (Revised
Guidelines on the Implementation of the 13th
Month Pay Law).
Exceptions:
a. Government EEs;
b. EEs paid purely on commission basis;
c. EEs already receiving 13th month pay;
d. Managers; and
e. Seafarers
2. Employers
General Rule: All Employers are covered by
PD 851.
Exceptions:
The Government and any of its political
subdivisions, including GOCCs;
72
XPN to XPN: Corporations operating
essentially as private subsidiaries of the
Government.
a. ERs already paying their EEs 13th month
pay, or more in a calendar year in its
equivalent at the time of the issuance of the
Revised Guidelines;
b. ERs of those who are paid on purely basis
of:
i. Commission;
NOTE: Bus drivers and conductors who are
paid a fixed or guaranteed minimum wage in
case their commission be less than the
statutory minimum are entitled to a 13th-month
pay equivalent to one-twelfth of their total
earnings during the calendar year (Philippine
Agricultural Commercial and Industrial Workers
Union vs. NLRC, GR No. 107994, 14 August 1995)
ii. Boundary; or
iii. Task; and
iv. Fixed amount for performing a specific work
irrespective of the time consumed in the
performance thereof.
EXCEPTION:
Where the workers are paid on a piece-rate
basis, in which case, the employer shall be
covered by the Revised Guidelines insofar as
the workers are concerned.
d. Distressed ERs:
i. Currently incurring substantial losses; or
ii. In the case of non-profit institutions and
organizations, where their income,
whether from donations, contributions,
grants and other earnings from any
source, has consistently declined by more
than 40% of their normal income
for the last 2 years (Sec. 7, IRR; P.D. 851).
Equivalent forms of the 13th month pay:
1. Christmas Bonus
2. Midyear Bonus
3. Profit Sharing Scheme
4. Other Cash bonuses amounting to not less
than 1/12 of its basic salary (Sec. 3, P.D. No. 851)
Things Not Proper Substitutes For 13th
Month Pay
1. Free rice;
2. Electricity;
3. Cash and stock dividends; and
4. Cost-of-living Allowance (Ibid.)
Coverage from Income Tax
New Tax Obligation Rate under TRAIN Law for
2018 Onwards
● The 13th month pay is generally exempt
from taxation. However, there is a
prescribed limit to this exemption provided
under Section 32 (B)(7)(e) of the National
Internal Revenue Code (NIRC) – which was
amended by Republic Act No. 10963 or the
TRAIN law on January 2018. The
amendment stipulates that the 13th month
pay and other equivalent benefits shall not
be subject to tax for a maximum of
P90,000. This new amount is a relative
increase from the previous tax exclusion
rate of P82,000.
● Anything beyond the maximum exclusion
rate of P90,000 must be included in the
computation of the employee’s gross
income for the applicable taxable year (Sec.
9, R.A. No. 10963)
3. LEAVES
a) Service Incentive Leave
It is a five (5)-day leave with pay for every
employee who has rendered at least one (1)
year of service whether continuous or broken.
(Art. 95, Labor Code)
The term “leave with pay” means that the
employee is entitled to his full compensation
during his leave of absence from work.
(Escocura vs. San Miguel Brewery Inc., G.R. No. L-
16696; Jan. 31, 1962)
73
The term “at least one year of service” should
mean service within twelve (12) months,
whether continuous or broken, reckoned from
the date the employee started working,
including authorized absences, unworked
weekly rest days, and paid regular holidays,
unless the number of working days in the
establishment as a matter of practice or policy,
or that provided in the employment contract, is
less than twelve (12) months, in which case,
said period should be considered as one (1)
year for the purpose of determining entitlement
to the service incentive leave benefit. (Sec. 3,
Rule V, Book IIII, IRR)
In JPL vs. CA, where an employee was never
paid his service incentive leave during all the
time he was employed, it was held that the
same should be computed not from the start of
employment but a year after commencement of
service, for it is only then that the employee is
entitled to said benefit. This is because the
entitlement to said benefit accrues only from
the time he has rendered at least one year of
service to his employer. The computation
thereof should only be up to the date of
termination of employment. There is no cause
for granting said incentive to one who has
already terminated his relationship with the
employer. (JPL Marketing Promotions vs. CA, G.R.
No. 151966, July 8, 2005)
Purpose of the law:
The stipulation in the contract for the allowance
of vacation to employees is merely a
recognition by management and labor that a
short interval of complete rest and relaxation
from daily routine with the benefit of full pay is
essential to the mental and physical well-being
of the workmen. (Sunripe Coconut Products vs.
NLU, G.R. No. L-7964, October 18, 1955)
The service incentive leave may be used for sick
and vacation leave purposes. The unused
service incentive leave is commutable to its
money equivalent at the end of the year. In
computing, the basis shall be the salary rate at
the date of conversion. (DOLE, Bureau of Working
Conditions, Handbook on Worker’s Statutory
Monetary Benefits, 2022 Edition, Pg. 26)
EXCEPTIONS:
1. Government employees, whether
employed by the National Government or
any of its political subdivisions, including
those employed in GOCCs with original
charters or created under special laws;
2. Persons in the personal service of another;
3. Managerial employees, if they meet all of the
following conditions:
a. Their primary duty is to manage the
establishment in which they are employed or
of a department or subdivision thereof;
b. They customarily and regularly direct the
work of two or more employees therein; and
c. They have the authority to hire or fire
other employees of lower rank; or their
suggestions and recommendations as to
hiring, firing, and promotion, or any other
change of status of other employees are
given particular weight.
4. Officers or members of managerial staff, if
they perform the following duties and
responsibilities:
a. Primarily perform work directly related
to management policies of their
employer;
b. Customarily and regularly exercise
discretion and independent judgment;
c. Regularly and directly assist a
proprietor or managerial employee in
the management of the establishment
or subdivision thereof in which he or
she is employed; or (ii) execute, under
general supervision, work along
specialized or technical lines requiring
special training, experience, or
knowledge; or (iii) execute, under
general supervision, special
assignments and tasks; and
d. Do not devote more than twenty
percent (20%) of their hours worked in
a workweek to activities which are not
directly and closely related to the
performance of the work described in
paragraphs 4.a, 4.b, and 4.c above;
74
5. Field personnel and those whose time and
performance are unsupervised by the
employer, including those who are engaged
on task or contract basis, purely
commission basis, or those who are paid a
fixed amount for performing work
irrespective of the time consumed in the
performance thereof;
6. Those already enjoying this benefit;
7. Those enjoying vacation leave with pay of
at least five (5) days; and
8. Those employed in establishments regularly
employing less than ten (10) employees. (No. 7
[A], 2019 Handbook on Workers’ Statutory Monetary
Benefits; Chan, 2019 Reviewer on Labor Law, p. 151)
Teachers of private schools on contract basis
are entitled to service incentive leave. (Cebu
Institute of Technology vs. Ople, G.R. No. L-58870,
December 18, 1987).
Kasambahays are now entitled to SIL
The grant of 5-day SIL to domestic workers or
kasambahay is not based on Article 95 of the
Labor Code but on the following provision of RA
10361:
Sec. 29 Leave Benefits. - A domestic worker
who has rendered at least one year of service
shall be entitled to an annual service incentive
leave of five days with pay: Provided, that any
unused portion of said annual leave shall not be
cumulative or carried over to succeeding years.
Unused leaves shall not be convertible to cash.
Clearly as distinguished from the SIL under Art.
95, this kind of SIL benefit is not convertible to
cash, if unused. (Chan, Bar Reviewer on Labor Law,
4th Revised Edition, 2019)
Right of Part-time workers to SIL
In an Advisory Opinion issued by DOLE’s
Bureau of Working Conditions, it was declared
that part-time workers are entitled to the full
benefit of the yearly five days SIL with pay. The
reason is that the provision of Art. 95 of the
Labor Code and its implementing rules, speaks
of the number of months in a year for
entitlement to said benefit. Resultantly, part-
time employees are also entitled to the full SIL
benefit and not on a pro-rata basis. (Advisory
Opinion of the Bureau of Working Conditions,
Department of Labor and Employment, on
Conditions of Employment of Part-time workers;
Cebu Institute of Technology vs. Ople, G.R. No. L-
58870, Dec. 18, 1987, 156 SCRA 629)
Curious Animal Doctrine
Auto Bus Transport System, Inc. vs. Bautista,
clarified the correct reckoning of the
prescriptive period for SIL pay in that it is a
curious animal in relation to other benefits
granted by law to every employee. This is so
because in the case of SIL, the employee may
choose to either use his leave credits or
commute it to its monetary equivalent if not
exhausted at the end of the year. Furthermore,
if the employee entitled to SIL does not use or
commute the same, he is entitled upon his
resignation or separation from work to the
commutation of his accrued service incentive
leave. In other words, an employee who has
served for one year is entitled to it. He may use
it as leave days or he may collect its monetary
value.
Correspondingly, it can be conscientiously
deduced that the cause of action of an entitled
employee to claim his SIL pay accrues from the
moment the employer refuses to remunerate its
monetary equivalent if the employee did not
make use of said leave credits but instead
chose to avail of its commutation. Accordingly,
if the employee wishes to accumulate his leave
credits and opts for its commutation upon his
resignation or separation from employment, his
cause of action to claim the whole amount of
his accumulated SIL shall arise when the
employer fails to pay such 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.
Applying Art. 306 [291] of the Labor Code in
light of this peculiarity of the SIL, it can be
concluded that the three year prescriptive
75
period commences, not at the end of the year
when the employee becomes entitled to the
commutation of his SIL, but from the time when
the employer refuses to pay its monetary
equivalent after demand of commutation or
upon termination or the employee’s services, as
the case may be.
Thus, in the 2017 case of Lourdes C. Rodriguez
vs. Park N Ride, Inc. involving an employee who
has not availed of SIL for the entire 25 years of
her employment, it was held that the
prescriptive period with respect to petitioner’s
claim for her entire SIL pay commenced only
from the time of her resignation or separation
from employment. Since petitioner had filed her
complaint for illegal dismissal on Oct. 7, 2009,
or for a few days after her resignation in
September 2009, her claim for SIL pay has not
prescribed. Accordingly, petitioner was
awarded SIL pay for her entire 25 years of
service-from 1984 to 2009- and not only three
years’ worth (2006 to 2009) as determined by
the Court of Appeals. (Chan, Bar Reviewer on
Labor Law, 4th Revised Edition, 2019)
b) Maternity Leave
Expanded Maternity leave
R.A. NO. 11210 – “105-DAY EXPANDED
MATERNITY LEAVE LAW” This is the new
prevailing law on maternity leave benefits.
(effective March 2019)
Maternity leave is the period of time which may
be availed of by a woman employee, married or
unmarried, to undergo and recuperate from
childbirth, miscarriage or complete abortion
during which she is permitted to retain her
rights and benefits flowing from her
employment. (Chan, 2018 Pre-week Notes on
Labor Law, p. 29)
Coverage:
The Expanded Maternity Leave Law shall cover
the following:
1. Female workers in the Public Sector;
2. Female workers in the Private Sector;
3. Female workers in the Informal Economy;
4. Female members who are voluntary
contributors to the Social Security System
(SSS); and
5. Female national athletes. (Sec. 1, Rule III,
IRR of R.A. No. 11210)
All covered females, regardless of civil status
(married/unmarried), employment status, and
the legitimacy of her child, shall be granted one
hundred five (105) days maternity leave with
full pay, and an additional fifteen (15) days with
full pay in case the female worker qualifies as a
solo parent under R.A. No. 8972, or the Solo
Parents’ Welfare Act of 2000.
This is applicable to both live childbirth,
regardless of the mode of delivery, miscarriage,
and emergency termination of pregnancy. (Sec.
3, R.A. No. 11210)
All female workers in the government and
female members of the SSS, regardless of their
civil status, shall be granted maternity leave,
with full pay. (Sec. 7, R.A. No. 11210)
In cases of miscarriage or emergency
termination of pregnancy, sixty (60) days
maternity leave with full pay shall be granted.
(Sec. 1 Rule IV, Id.; Sec. 3 R.A. No. 11210)
Requirements In Order That Maternity
Benefits May Be Claimed
1. There is childbirth, abortion or miscarriage
2. She has paid at least three (3) monthly
semester of her childbirth or miscarriage.
Extended Maternity Leave
In cases of Live childbirth, an additional
maternity leave of thirty (30) days without pay
can be availed of, at the option of the female
worker, provided that the employer shall be
given due notice. Due notice to the employer
must be in writing and must be given at least
forty-five (45) days before the end of the
female worker’s maternity leave. However, no
prior notice shall be necessary in the event of
a medical emergency but subsequent notice
shall be given to the employer. The above
period of extended maternity leave without pay
76
shall not be considered as gap in the service.
ALLOCATION A female Not available
(Sec. 2, Rule IV) OF worker entitled
MATERNITY to maternity
Under Sec 4, R.A. No. 11210: LEAVE leave benefits
Paid leave benefit granted to a qualified female CREDITS to may, at her
worker in both the PUBLIC SECTOR and the the child's option,
PRIVATE SECTOR (which is covered by the SSS, father OR allocate up to
including those in the informal economy) for alternate seven (7) days
caregiver of said
the duration of:
benefits to the
child's father
Maternity LIVE MISCARRI or
Benefit CHILDBIRTH AGE AND alternate
TERMINATIO , regardless EMERGENC caregiver
N OF of the Y
PREGNANCY mode of TERMINAT
delivery ION OF
PREGNANC Grant of Maternity Leave Benefits after
Y Termination of Employment

Period of 105 days of 60 days of Maternity leave with full pay shall be granted
maternity paid leave paid leave even if the childbirth, miscarriage, or
leave emergency termination of pregnancy occurs
not more than fifteen (15) calendar days after
For female 105 days, with N/A the termination of an employee’s service, as her
workers additional
right thereto has already accrued. Such period
qualified as a fifteen (15)
solo parent days of paid is not applicable when the employment of the
under R.A. No. leave pregnant woman worker has been terminated
8972, or the without just cause, in which case the employer
"Solo Parents' will pay her the full amount equivalent to her
Welfare Act of salary for one hundred five (105) days
2000" childbirth and sixty (60) days for miscarriage or
emergency termination of pregnancy based on
her full pay, in addition to the other applicable
EXTENDED Additional N/A
daily cash maternity benefits that she should
MATERNITY thirty (30)
LEAVE days without have received had her employment not been
pay illegally terminated. (Sec. 5, Rule IV, Id.)

FREQUENCY In every In every The maternity leave benefits granted under

OF THE instance of live instance of R.A. No. 11210 and the Rules shall be enjoyed
GRANT childbirth, pregnancy, by a female worker in the public sector and in
regardless of miscarriage the private sector even if she has a pending
frequency or administrative case. (Sec. 6, Rule IV, id.; Sec. 12,
emergency R.A. No. 11210)
termination
of
Maternity Leave For Female National
pregnancy,
regardless of Athletes
frequency
In the event that a national athlete who is in
the roster of national athletes of the National
Sports Association (NSA) to which she is

77
affiliated becomes pregnant, she will be
referred to a physician of the Philippine Sports
Commission (PSC) or an obstetrician-
gynecologist to determine ger fitness to
continue training. She will be allowed to
participate in all team-related activities, unless
the physician advises that participation is not
medically safe or should be limited. Upon
medical advice, she shall go on maternity leave
until cleared to return to training. She shall
continue receiving her allowance and be
entitled to the same benefits while on maternity
leave prior to childbirth and up to six (6)
months after, unless she can resume sooner as
advised by her physician, in which case, she will
continue to receive the same allowances and
benefits she received prior to and during the
pregnancy: provided, that a female national
athlete employed in the public sector shall not
receive double compensation or benefits. (Sec.
1, Rule IX, id.; Sec. 113, R.A. No. 11210)
c) Paternity Leave (R.A. No. 8187 -
Paternity Leave Act of 1996)
Paternity Leave is granted to all married male
employees in the private sector, regardless of
their employment status (e.g., probationary,
regular, contractual, project basis).
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.
Government employees are also entitled to the
paternity leave benefit. They shall be governed
by the Civil Service rules. (DOLE, Bureau of
Working Conditions, Handbook on Workers Statutory
Monetary Benefits, 2022 Edition, P.28)
Concept of paternity leave benefits
Every married male Ee in the private and public
sectors shall be entitled to a paternity leave of
7 days with full pay for the first 4 deliveries of
the legitimate spouse with whom he is
cohabiting.
For this purpose, “cohabiting” means the
obligation of the husband and wife to live
together. 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.
Conditions for Entitlement To Paternity
Leave
A married male employee shall be entitled to
paternity leave benefit provided that he has
met the following conditions:
1. He is an employee at the time of the
delivery of his child;
2. He is cohabiting with his spouse at the
time that she gives birth or suffers a
miscarriage;
3. He has applied for paternity leave with his
employer within a reasonable period of
time from the expected date of delivery by
his pregnant spouse, or within such period
as may be provided by company rules and
regulations, or by collective bargaining
agreement; and
4. His wife has given birth or suffered a
miscarriage.
NOTE: Delivery shall include childbirth or any
miscarriage.
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 (except if a more
favorable company policy exists)
Crediting of Existing Benefits
If the existing paternity leave benefit under the
collective bargaining agreement, contract, or
company policy is greater than 7 calendar days
as provided for in RA 8187, the greater benefit
shall prevail.
If the existing paternity leave benefit is less
than that provided in RA 8187, the employer
shall adjust the existing benefit to cover the
difference.
NOTE: Where a company policy, contract, or
collective bargaining agreement provides for an
emergency or contingency leave without
78
specific provisions on paternity leave, the
employer shall grant to the employee 7
calendar days of paternity leave (Handbook on
Workers’ Statutory Monetary Benefits, Bureau of
Working Conditions, 2016).
d) Solo Parent Leave (RA 8972, as
amended by RA 11861)
Leave benefits granted to a solo parent to
enable him/her to perform parental duties and
responsibilities - where physical presence is
required. (Sec. 8, R.A. No. 8972)
In addition to leave privileges under existing
laws, parental leave of not more than 7 working
days every year shall be granted to any solo
parent Ee who has rendered service of at least
1 year (Sec. 8, R.A. No. 8972).
Persons considered as solo parents
entitled to parental leave
Parental leave for solo parents is granted to any
solo parent or individual who is left alone with
the responsibility of parenthood due to:
1. Giving birth as a result of rape or, as used
by the law, other crimes against chastity;
2. Death of spouse;
3. Spouse is detained or is serving sentence
for a criminal conviction for at least one (1)
year;
4. Physical and/or mental incapacity of spouse
as certified by a public medical practitioner;
5. 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;
6. 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;
7. Abandonment of spouse for at least one (1)
year;
8. 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;
9. 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
10. Any family member who assumes the
responsibility of head of family as a result
of the death, abandonment,
disappearance, or prolonged absence of
the parents or solo parent: Provided, that
such abandonment, disappearance, or
prolonged absence lasts for at least one (1)
year.
A solo parent kasambahay shall also be entitled
to the seven-day parental leave benefits,
provided that they have rendered service of at
least six (6) months to the same employer. (Sec.
22, Art. V, Revised Implementing Rules and
Regulations of R.A. No. 8972 as amended by R.A.
No. 11861)
“Child” refers to a person living with and
dependent on the solo parent for support.
He/she is unmarried, unemployed, and below
eighteen (18) years of age, or even eighteen
(18) years old and above but is incapable of
self-support because he/she is mentally- and/or
physically-challenged.
Conditions for Entitlement
A solo parent employee shall be entitled to the
parental leave, provided that:
1. He/she has rendered at least one (1) year
of service, whether continuous or broken;
2. He/she has notified his/her employer that
he/she will avail himself/herself of it, within
a reasonable period of time; and
3. 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.
Non-conversion to Cash
In the event that the parental leave is not
availed of, it shall not be convertible to cash,
unless specifically agreed on previously.
79
Crediting of Existing Leave
If there is an existing or similar benefit under a
company policy or a collective bargaining
agreement, the same shall be credited as such.
If the same is greater than the seven (7) days
provided for in RA 8972, the greater benefit
shall prevail.
Emergency or contingency leave provided
under a company policy or a collective
bargaining agreement shall not be credited as
compliance with the parental leave provided for
under 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 this benefit. (DOLE, Bureau
of Working Conditions, Handbook on Worker’s
Statutory Monetary Benefits, 2022 Edition, P.31)
e) Leave Benefits for Women Workers
Under Magna Carta of Women (RA
9710) and Anti-Violence Against
Women and their Children of 2004
(RA 9262)
Violence Against Women and their Children
(VAWC) refers to any act or a series of acts
committed by any person against a woman
who is his:
A. wife; former wife; or against a woman with
whom the person has or had sexual or
dating relationship; or
B. with whom he has a common child; or
C. against her child whether legitimate or
illegitimate within or without the family
abode, which result in or is likely to result
in physical, sexual, psychological harm or
suffering, or economic abuse including
threats of such acts, battery, assault,
coercion, harassment or arbitrary
deprivation of liberty. (Sec 3[a], R.A. No.
9262)
Leave Entitlement
It allows the victim of violence, which may be
physical, sexual, or psychological, to apply for
the issuance of a protection order. If such
victim is an employee, she is entitled to a paid
leave of up to 10 days in addition to other paid
leaves under the Labor Code, other laws and
company policies. (Sec. 43, R.A. No. 9262)
The employee has to submit a certification from
the Punong Barangay or Kagawad, prosecutor
or clerk of court that an action under R.A. 9262
has been filed and is pending.
For government employees in addition to the
certification, the employee concerned must file
an application for leave citing R.A. 9262.
Penalties for Violation
Any employer who prejudices the right of the
person under this section shall be penalized in
accordance with the provisions of the Labor
Code and Civil Service Rules and Regulations.
Likewise, an employer who shall prejudice any
person for assisting a co-employee who is a
victim under this Act shall likewise be liable for
discrimination. (Sec. 6, R.A. 9262)
Noncumulative/ Non-Conversion to Cash
The availment of the ten day-leave shall be at
the option of the woman employee, which shall
cover the days that she has to attend to medical
and legal concerns. Leaves not availed of are
noncumulative and not convertible to cash.
Special Leave for Women (RA 9710)
Any female employee regardless of age and
civil status shall be entitled to a special leave
benefit under such terms and conditions
provided.
Gynecological disorders
Disorders that would require surgical
procedures such as, but not limited to,
dilatation and curettage and those involving
female reproductive organs such as the vagina,
cervix, uterus, fallopian tubes, ovaries, breast,
adnexa and pelvic floor, as certified by a
80
competent physician. Gynecological surgeries
shall also include hysterectomy, ovariectomy,
and mastectomy.
Conditions for Entitlement
For a female employee to be entitled to the
special leave benefits, she must comply with
the following conditions.
1. She has rendered at least six (6) months
continuous aggregate employment service
for the last twelve (12) months prior to
surgery;
2. She has filed an application for special
leave with her employer within a
reasonable period of time from the
expected date of surgery or within such
period as may be provided by company
rules and regulations or collective
bargaining agreement; and
3. She has undergone surgery due to
gynecological disorders as certified by a
competent physician.
The female employee is entitled to special leave
benefit of two (2) months with full pay based
on her gross monthly compensation following
surgery caused by gynecological disorders.
The two (2) months special leave is the
maximum period of leave with pay that a
woman employee may avail of under R.A. 9710.
The special leave shall be granted to the
qualified employee after she has undergone
surgery without prejudice to an employer
allowing an employee to receive her pay before
or during the surgery.
Non-conversion to Cash
The special leave shall be non-cumulative and
non-convertible to cash unless otherwise
provided by a collective bargaining agreement
(CBA).
f) Compassionate Leaves
Bereavement Leave
Bereavement leave and other death benefits
are granted to an employee to give aid to, and
if possible, lessen the grief of, the said
employee and his family who suffered the loss
of a loved one.
4. SPECIAL GROUPS OF EMPLOYEES
a) Women
Laws protecting women Workers:
1. The State recognizes the role of women in
nation-building, and shall ensure the
fundamental equality before the law of
women and men (Art. II, Sec. 14, 1987
Constitution).
2. The State shall protect working women by
providing safe and healthful working
conditions, taking into account their
maternal functions, and such facilities and
opportunities that will enhance their
welfare and enable them to realize their full
potential in the service of the nation (Art.
XIII, Sec. 14, 1987 Constitution).
3. R.A. No. 6725 – which explicitly prohibits
discrimination against women with respect
to terms and conditions of employment,
promotion, and training opportunities.
4. R.A. No. 6955 – which bans the “mail-
order-bride” practice for a fee and the
export of female labor to countries that
cannot guarantee protection to the rights of
women workers.
5. R.A. No. 7192 or “Women in Development
and Nation Building Act.” – which affords
women equal opportunities with men to act
and to enter into contracts, and for
appointment, admission, training,
graduation, and commissioning in all
military or similar schools.
6. R.A. No. 7322 – increasing the maternity
benefits granted to women in the private
sector.
7. R.A. No. 7877 or “Anti-Sexual Harassment
Act”
8. R.A. No. 8042 or the “Migrant Workers and
Overseas Filipinos Act of 1995” – which
81
 prescribes as a matter of policy, the
deployment of migrant workers, with
emphasis on women, only in countries
where their rights are secure (Philippine
Telegraph and Telephone Co. vs. NLRC, G.R.
No. 118978, May 23, 1997).
9. R.A. No. 9710 or “the Magna Carta of
Women”
10. R.A. No. 9262 or the “Anti-Violence against
Women and Children”
State Policy on Non-Discrimination
Against Women
The State condemns discrimination against
women in all its forms and 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 other international instruments
consistent with Philippine law. The State shall
accord women the rights, protection, and
opportunities available to every member of
society. (Sec. 2, R.A. 9710 or the Magna Carta of
Women)
The State shall take steps to review and, when
necessary, amend and/or repeal existing laws
that are discriminatory to women within 3 years
from the effectivity of this Act. (Sec. 12, R.A.
9710)
(1) Discrimination
1. Discrimination with respect to the
terms and conditions of employment
solely on account of sex. Sex refers to
gender, not sexual orientation.
[UNGOS, Agrarian Law and Social
Legislation, 2021, p. 251]
a. Discrimination in pay - Payment of
a lesser compensation including
wage, salary or other forms of
remuneration and fringe benefits,
to a female employee as against a
male employee;
b. Discrimination in employment
opportunity Favoring a male
employee over a female employee
with respect to promotion,
assignment, transfer, training
opportunities, study and
scholarship grants solely in account
or their sexes (Art. 133, Labor
Code, as amended);
c. Discrimination in hiring – favoring
a male applicant with respect to
hiring where the particular job can
equally be handled by a woman;
d. Discrimination in dismissal –
favoring a male employee over a
female employee with respect to
dismissal of personnel or the
application of the last in / first out
principle or other retrenchment
policy of the employer (Poquiz,
Labor Standards and Social Legislation,
2018, p. 405).
2. Stipulating, whether as a condition for
employmet or continuation of employment:
a. That a woman employee shall not get
married; or
b. That upon marriage, such woman
employee shall be deemed resigned or
separated (Art. 134, Labor Code, as
amended)
c. Dismissing, discriminating or otherwise
prejudice a woman employee by
reason of her being married. (Art. 134,
Labor Code, as amended)
Reasonable Business Necessity Rule
To justify a bona fide occupational qualification,
the employer must prove two factors: (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. 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.
(Star Paper Corp. vs. Simbol, G.R. No. 164774, April
12, 2006).
82
(2) Stipulation Against Marriage
It shall be unlawful for the employer to require
as a condition for or continuation of
employment that a woman employee shall not
get married, or to stipulate expressly or tacitly
that upon getting married, a woman employee
shall be deemed resigned or separated, or to
actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee merely
by reason of her marriage. (Article 134, Labor
Code, as amended).
Glaxo’s policy prohibiting an employee from
having a relationship with an employee of a
competitor company is a valid exercise of
management prerogative. The prohibition
against personal or marital relationships with
employees of competitor companies upon
Glaxo’s employees is reasonable under the
circumstances because relationships of that
nature might compromise the interests of the
company. In laying down the assailed company
policy, Glaxo only aims to protect its interests
against the possibility that a competitor
company will gain access to its secrets and
procedures. (Duncan Association vs. Glaxo
Wellcome, G.R. No. 162994, September 17, 2004).
No-Spouse Employment Policy
It is a policy banning spouses from working in
the same company. Generally, spouses are
allowed from working in the same company,
provided it is not in the same department,
where there is direct supervision or control. In
case spouses are in the same department, one
of them may be reassigned to another
department.
Exception:
Bona Fide Occupational Qualification (BFOQ)
Rule where the job itself necessarily requires a
particular question, then the job applicant or
worker who does not possess it may be
disqualified on that basis. This will not be
unlawful discrimination (1, Azucena, 2016, p. 481)
There must be a finding of any BFOQ to justify
an ER’s no spouse employment rule. There
must be a compelling business necessity for
which no alternative exists other than the
discriminating practice. To justify a BFOQ, the
ER must prove two factors:
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. (Star
Paper vs. Simbol, G.R. No. 164774, April 12,
2006).
(3) Prohibited Acts
It shall be unlawful for any employer to:
1. Deny any woman employee benefits
provided by law.
2. Discharge any woman for the purpose of
preventing her from enjoying any of the
benefits provided by law.
3. Discharge such woman on account of her
pregnancy, or while on leave or in
confinement due to her pregnancy.
4. Discharge or refuse the admission of such
woman upon returning to her work for fear
that she may again be pregnant (Article 135,
Labor Code, as amended)
Discharging a woman due to pregnancy
Article 137 contemplates the following
prohibited acts in connection with the
pregnancy of a woman employee:
1. 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;
2. To discharge such woman on account of
her pregnancy, while on leave or in
confinement due to her pregnancy; or
3. To discharge or refuse the admission of
such woman upon returning to her work
for fear that she may again be pregnant.
The Court is convinced that the petitioner
terminated the services of respondent on
account of her pregnancy which justified her
83
absences and, thus, committed a prohibited act
rendering the dismissal illegal. (Del Monte
Philippines, Inc. v. Velasco, G.R. No. 153477, March
6, 2007)
b) Minors (R.A. No. 7610, as amended
by R.A. No. 9231)
“Children” refers to person below eighteen
(18) years of age or those over but are unable
to fully take care of themselves or protect
themselves from abuse, neglect, cruelty,
exploitation or discrimination because of a
physical or mental disability or condition.
(Section 3, RA 7610)
A “working child” refers to any child engaged
as follows:
I. when the child is below eighteen (18)
years of age, in work or economic
activity that is not “child labor;” and
II. when the child below fifteen (15) years
of age:
● in work where he/she is directly
under the responsibility of his/her
parents or legal guardian and
where only members of the child’s
family are employed; or
● in “public entertainment or
information” which refers to
artistic, literary, and cultural
performances for television show,
radio program, cinema or film,
theater, commercial
advertisement, public relations
activities or campaigns, print
materials, internet, and other
media.(Azucena, Everyone’s Labor
Code, 2021, p187-188)
Instances when the state can intervene in
behalf of the child
1. When the parent, guardian, teacher or
person having care or custody of the child
fails or is unable to protect the child against
abuse, exploitation and discrimination; or
2. When such acts are committed against the
child by the said parent, guardian, teacher
or person having care and custody over the
child. (Sec. 2, Article I, RA 7610)
a. Child Labor vs. Working Child
Child Labor
Any work or economic activity performed by a
child that subjects him or her to any form of
exploitation or is harmful to his or her health
and safety or physical, mental or psychosocial
development (Sec. 3, R.A. No. 9231)
Worst forms of Child Labor
1. All forms of slavery (Anti-Trafficking of
Persons Act of 2003) or practices similar to
slavery such as sale and trafficking of
children, debt bondage and serfdom and
forced or compulsory labor, including
recruitment of children for use in armed
conflict;
2. The use, procuring, offering of a child for
prostitution, for the production of
pornography or for pornographic
performances;
3. The use, procuring, offering or exposing of
a child for illegal or illicit activities, including
the production and trafficking of dangerous
drugs and volatile substances prohibited
under existing laws;
4. Employing child models in all commercials
or advertisements promoting alcoholic
beverages, intoxicating drinks, tobacco and
its by-products and violence; and
5. Work which, by its nature or circumstances
in which it is carried out, is hazardous or
likely to be harmful to the health, safety or
morals of children. (Chan, Labor Code, Vol. 1,
pp. 686-687)
Working child
Any child engaged as follows:
1. When the child is below 18 years of age in
a work or economic activity that is not child
labor; or
2. When the child is below 15 years of age:
a. In work where he/she is directly under
the responsibility of his/her parents or
legal guardian and where only
84
 members of the child’s family are
employed; or
b. In public entertainment or information
(Sec. 3, R.A. No. 9231)
b. Allowed working hours and industries
of a working child
Working Hours for a Working Child:
The following hours of work shall be observed
for any child allowed to work under R.A. No.
9231 and its Implementing Rules:
a. For a child below 15 years of age, the hours
of work shall not be more than twenty (20)
hours per week, provided that the work
shall not be more than four (4) hours at any
given day;
b. For a child 15 years of age but below 18,
the hours of work shall not be more than
eight (8) hours a day, and in no case
beyond forty (40) hours a week; and
c. No child below 15 years of age shall be
allowed to work between eight (8) o’clock
in the evening and six (6) o’clock in the
morning of the following day and no child
15 years of age but below 18 shall be
allowed to work between ten (10) o’clock in
the evening and six (6) o’clock in the
morning of the following day.
Working Child Permit (WCP)
A working child permit is required if a child
below 15 years of age:
1. Will be engaged in public entertainment or
information regardless of his/her role in a
project. This includes projects which are
non-profit, advocacy materials or
political advertisements; or
2. Is a foreign national and will be engaged in
public entertainment in the Philippines;
3. Will be engaged as regular extra or as part
of a crowd and is included in the script or
storyboard;
4. Has been selected for a project after
undergoing auditions, workshops or VTR
screenings; or
5. Has been selected as semi-finalist in a
singing, dance or talent contest for a
television show. (1.1 DOLE Department Order
no. 02 s. 2018, Guidelines in Issuing Work
Permit to Children)
WCP Not required
1. Is a spot extra or is cast outright on the day
of filming or taping of a project;
2. Will join auditions or VTR screenings;
3. Is part of the audience of a live television
show unless the child’s participation is
expected;
4. Is picked or chosen as contestant from the
audience of a live television show;
5. Is a contestant for a television show but has
not yet been selected as a semi-finalist;
6. Is a recipient of gift-giving activities in
television;
7. Is a participant in school-related
performance;
8. Is a participant in sports activities, trainings
or workshops; or
9. Will be featured in a documentary material
(1.2 DOLE Department Order no. 02 s. 2018,
Guidelines in Issuing Work Permit to Children)
Work at Home Arrangement
A child below 15 years of age may be allowed
to participate in public entertainment or
information during the community quarantine
period provided that the following conditions
are complied with:
a. The child's performance of the assigned
task, such as photo shoot or audio-video
recording, shall be done in the child's home
under the supervision of the child's adult
family members;
b. Representatives of the employer or
production staff may be allowed to go to
the child's residence, when necessary, to
assist the child in performing the assigned
task; and
c. The employer must secure a permit from
the Department of Labor and Employment
(DOLE) prior to engaging the child for work.
(Sec. 2, Labor Advisory No. 23 s. 2020)
85
c. Prohibited Acts
Prohibition of employing minors in
certain undertakings and advertisements
No child below 18 years of age is allowed to be
employed as a model in any advertisement
directly or indirectly promoting alcoholic
beverages, intoxicating drinks, tobacco and its
by-products, gambling or any form of violence
or pornography. (Sec. 5, R.A. No. 9231)
The wages, salaries, earnings and other income
of the working child shall belong to him/her in
ownership and shall be set aside primarily for
his/her support, education or skills acquisition
and secondarily to the collective needs of the
family: Provided, That not more than twenty
percent (20%) of the child's income may be
used for the collective needs of the family (Sec.
12-B, R.A. No. 7610)
The parent or legal guardian of a working child
below eighteen (18) years of age shall set up a
trust fund for at least thirty percent (30%) of
the earnings of the child whose wages and
salaries from work and other income amount to
at least two hundred thousand pesos (P200,
000.00) annually, for which he/she shall render
a semi-annual accounting of the fund to the
Department of Labor and Employment. The
child shall have full control over the trust fund
upon reaching the age of majority (Sec. 12-C,
R.A. No. 7610).
No employer shall make a child work during
his/her school hours, and hinder his/her access
to education during school days. [Sec 19 (a),
Department Order No. 65-04]
Duty of the employer
The employer shall first secure a work permit
from the DOLE which shall ensure observance
of the requirements (Sec. 12, R.A. No. 7160).
c) Kasambahays
Domestic worker” or “kasambahay” refers
to any person engaged in domestic work within
an employment relationship, whether on a live-
in or live-out arrangement, such as, but not
limited to, general househelp, "yaya", cook,
gardener, or laundry person, but shall exclude
service providers, family drivers, children who
are under foster family arrangement, or any
person who performs domestic work only
occasionally or sporadically and not on an
occupational basis.
"Domestic work" refers to work performed in or
for a household [Sec. 3(d), IRR of RA10361]
"Household" refers to the immediate members
of the family or the occupants of the house who
are directly and regularly provided services by
the kasambahay [Sec. 3(g), IRR of RA 10361]
Persons covered by R.A. 10361 otherwise
known as “Batas Kasambahay”
All kasambahay engaged in domestic work,
whether on a live-in or live-out arrangement,
such as, but not limited to, the following:
1. General househelp;
2. Nursemaid or Yaya;
3. Cook;
4. Gardener;
5. Laundry person;
6. Working children or domestic workers 15
years and above but below 18 years of age;
or
7. Any person who regularly performs
domestic work in one household on an
occupational basis (live-out arrangement)
(Sec. 3[d], R.A. 10361)
The definition of “Kasambahay” excludes:
1. Any person who performs domestic work
only occasionally or sporadically and not on
an occupational basis (sideline)
2. 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]
3. Service providers
4. Family drivers [Sec. 2 of the IRR, RA 10361]
86
Exclusivity of Function Required
The term 'househelper' as used herein is
synonymous to the term 'domestic servant' and
shall refer to any person, whether male or
female, who renders services in and about the
employer's home and which services are usually
necessary or desirable for the maintenance and
enjoyment thereof, and ministers exclusively to
the personal comfort and enjoyment of the
employer's family. (Remington Industrial Sales
Corp. v. Castaneda, G.R. Nos. 169295-96, November
20, 2006)
Hiring of Kasambahay
Mode of Hiring:
a. Directy by the employer
b. Indirectly through a licensed Private
Employment Agency (Sec. 1, Rule II,IRR of
R.A. 10361).
Deployment Expenses
Deployment expenses” refers to expenses
that are directly used for the transfer of the
Kasambahay from place of origin to the place
of work covering the cost of transportation,
meals, communication expense, and other
incidental expenses. Advances or loans by the
Kasambahay are not included in the definition
of deployment expenses. (Sec. 3c, Rule I,IRR of
R.A. 10361).
● The employer, whether the Kasambahay is
hired directly or through a PEA, shall pay
the expenses directly used for his/her
transfer from place of origin to the place of
work. (Sec. 3, Rule II, IRR of R.A. 10361).
Recovery of Deployment Expenses:
The employer may recover deployment costs
from the Kasambahay whenever the
employment relationship is terminated within
six (6) months without just cause. (Sec. 3, Rule
II,IRR of R.A. 10361)
Employment Contract
1. The contract between the Kasambahay and
the employer shall be accomplished in
three (3) copies.
2. The contract shall be in a language or
dialect understood by both the
Kasambahay and the employer,
3. The contract shall include the
following:
(a)Duties and responsibilities of the
Kasambahay, which include the
responsibility to render satisfactory
service at all times;
(b) Period of employment;
(c) Compensation;
(d) Authorized deductions;
(e) Hours of work and proportionate
additional payment;
(f) Rest days and allowable leaves;
(g) Board, lodging and medical
attention;
(h) Agreements on deployment
expenses, if any;
(i) Loan agreement, if any;
(j) Termination of employment;and
(k) Any other lawful condition agreed
upon by both parties.
4. If the Kasambahay is below 18 years
old, the employment contract shall be
signed by his/her parent or lawful
guardian on his/ her behalf.
5. Upon the request of either party, the
Punong Barangay or his/her designated
officer shall read and explain the
contents of the contract to both parties
and shall serve as witness.
6. The employer shall have the obligation
to furnish a copy of the employment
contract to the Kasambahay and a copy
to the Office of the Punong Barangay in
the barangay where the employer
resides.
Renewal of Contract
Should the parties mutually agree to continue
their employment relationship upon expiration
of the contract, the parties shall execute a new
contract to be registered with the concerned
barangay pursuant to Rule IX of this IRR.
● Should the parties fail to execute a new
contract, the terms and conditions of the
original contract and other improvements
87
 granted during the effectivity of the
contract are deemed renewed.
Recruitment and Deployment of
Kasambahay by Private Employment
Agencies
“Private Employment Agency (PEA)”
refers to any individual, partnership,
corporation or entity licensed by the
Department of Labor and Employment (DOLE)
to engage in the recruitment and placement of
Kasambahay for local employment.
“Recruitment and finder’s fees” refers to
charges and any amount collected by the
private employment agency, recruiter, entity or
any third party for the recruitment and
placement of the Kasambahay, which shall not
be charged to the Kasambahay.
Requirement of License
1. The PEAs shall secure a license from the
DOLE prior to any recruitment and
deployment activities.
2. The PEAs shall also register and secure
written authorization from the local
government unit where they recruit.
Responsibilities of PEAs:
(a) Ensure that the Kasambahay is qualified as
required by the employer;
(b) Secure the best terms and conditions of
employment for the Kasambahay;
(c) Ensure that the employment agreement
between the Kasambahay and the employer
stipulates the terms and conditions of
employment and all the benefits in accordance
with this IRR;
(d) Provide a pre-employment orientation
briefing to the Kasambahay and the employer
about their rights and responsibilities in
accordance with this IRR;
(e) Ensure that the Kasambahay is not charged
or required to pay any recruitment or
placement fees;
(f) Keep copies of employment contracts and
agreements pertaining to recruited
Kasambahay which shall be made available
during inspections or whenever required by the
DOLE or local government officials;
(g) Assist the Kasambahay in filing his/her
complaints or grievances against the
employers;
(h)Cooperate with government agencies in
rescue operations involving abused or exploited
Kasambahay; and
(i) Assume joint and solidary liability with the
employer for payment of wages, wage-related
and other benefits, including monthly
contribution for SSS, PhilHealth, and Pag-IBIG
membership.
Replacement of Kasambahay Hired
Through PEAs
In case the Kasambahay was hired through the
PEA and the circumstances listed below
occurred within one (1) month from the first
day the Kasambahay reported for work, the
PEA shall provide qualified replacement at no
additional cost to the employer.
a. The Kasambahay is found to be suffering
from an incurable or contagious disease, or
mental illness as certified by a competent
or government physician;
b. The Kasambahay abandons the job without
justifiable cause, voluntarily resigns,
commits theft or any other analogous acts
prejudicial to the employer or his/her
family; or
c. The Kasambahay is physically or mentally
incapable of discharging the minimum
normal requirements of the job, as
specified in the employment contract.
● If such replacement is not provided,
the employer shall be entitled to a
refund of seventy-five percent (75%)
of the deployment expenses or fees
paid to the PEA.
88
Rights and Privileges
The rights and privileges of the kasambahay are
as follows:
(a) Minimum wage;
● Minimum wage of kasambahay -
P6,000.00 for NCR (WO NCR-DW-03,
13 July 2022)
Mode of Payment:
The Kasambahay shall be paid his/her wages in
cash. No payment by means of promissory
notes, vouchers, coupons, tokens, tickets,
chits, or any object other than cash shall be
allowed.
Frequency of Payment of Wages.
The Kasambahay shall be paid his/her wages at
least once a month.
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]
(b) Other mandatory benefits, such as the
daily and weekly rest periods, service
incentive leave, and 13th month pay.
Rest Periods
Daily Rest Period Weekly Rest Period
The Kasambahay The Kasambahay shall be
shall be entitled to an entitled to at least
aggregate daily rest twenty-four
period of eight (8) consecutive hours of rest
hours per day. in a week.
The employer and the Kasambahay shall agree
in writing on the schedule of the weekly rest
day but the preference of the Kasambahay,
when based on religious grounds, shall be
respected.
The Kasambahay and the employer may agree
on the following:
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.
Service Incentive Leave
A Kasambahay who has rendered at least one
(1) year of service shall be entitled to an annual
service incentive leave of at least five (5) days
with pay.
Any unused portion of said annual leave shall
not be cumulative or carried over to the
succeeding years. Unused leaves shall not be
convertible to cash.
Thirteenth-Month Pay
The Kasambahay who has rendered at least
one (1) month of service is entitled to a
thirteenth-month pay which shall not be less
than one-twelfth (1/12) of his/her total basic
salary earned in a calendar year.
The thirteenth-month pay shall be paid not later
than December 24 of every year.
(c) Freedom from employers'
interference in the disposal of wages;
It shall be unlawful for the employer to interfere
with the freedom of the Kasambahay in the
disposition of his/her wages, such as:
a. Forcing, compelling, or obliging the
(24) Kasambahay to purchase merchandise,
commodities or other properties from the
employer or from any other person; or
b. Making use of any store or services of such
employer or any other person.
(d) Coverage under the SSS, PhilHealth
and Pag-IBIG laws;
A Kasambahay who has rendered at least one
(1) month of service shall be covered by the
Social Security System (SSS), Employees
Compensation Commission (ECC), Philippine
89
Health Insurance Corporation (PhilHealth), and
Home Development Mutual Fund or Pag-IBIG,
and shall be entitled to all the benefits in
accordance with their respective laws, rules and
regulations.
Mandatory premium payments or contributions
shall be shouldered by the employer. However,
if the Kasambahay is receiving a monthly wage
rate of Five Thousand Pesos (Php5,000.00) and
above, the Kasambahay shall pay the
proportionate share in the premium payments
or contributions, as provided by law.
In the event the Kasambahay avails of certain
loan privileges from Pag-IBIG Fund which
require the payment of additional or upgraded
contributions, the said additional or upgraded
contributions shall be shouldered solely by the
Kasambahay.
The SSS, Pag-IBIG and PhilHealth shall develop
a unified system of registration and enrollment
within six (6) months from the issuance of this
IRR.
(e) Standard of treatment;
The employer or any member of the household
or Domestic Worker’s Act shall not subject a
domestic worker or any form of physical
violence or harassment or any act tending to
degrade the dignity of a domestic worker.
[Sec. 5, RA 10361]
(f) Board, lodging and medical
attendance;
The Kasambahay shall be provided by the
employer free basic necessities to include the
following:
a. At least three (3) adequate meals a day
taking into consideration the Kasambahay’s
religious beliefs and cultural practices.
b. Humane sleeping condition that respects
the person’s privacy for live-in
arrangement; and
c. Appropriate rest and medical assistance,
including first-aid medicine, in case of
illnesses and injuries sustained during
service without loss of benefits.
For Kasambahay under live-out arrangement,
he/she shall be provided space for rest and
access to toilet.
At no instance shall the employer withdraw or
hold in abeyance the provision of these basic
necessities as punishment or disciplinary action
to the Kasambahay.
(g) Right to privacy;
The Kasambahay shall, at all times, be
respected of his/her privacy, including his/her
privacy of communication and personal effects.
(h) Access to outside communication;
The Kasambahay shall be granted access to
outside communication during free time. In
case of emergency, access to communication
shall be granted even during work time.
Should the Kasambahay use the employer’s
telephone or other communication facilities, the
costs shall be borne by the Kasambahay, unless
waived by the employer.
(i) Access to education and training;
The Kasambahay shall be afforded the
opportunity to finish basic education, consisting
of elementary and secondary education. He/she
may be allowed access to alternative learning
systems and, as far as practicable, higher
education or technical vocational education and
training.
The employer shall adjust the work schedule of
the Kasambahay to allow his/her access to
education or training without hampering the
services required by the employer. Access to
education may include financial assistance at
the option of the employer.
The Department of Education (DepEd) shall
ensure continued access of Kasambahay to
alternative learning system education.
(j) Right to form, join, or assist labor
organization;
The Kasambahay shall have the right to join a
labor organization of his/her own choosing for
90
purposes of mutual aid and collective
negotiation.
The Kasambahay shall be afforded opportunity
to attend organization meetings.
The Regional Tripartite Industrial Peace Council
(RTIPC), chaired by the DOLE Regional
Director, shall create within the council a sub-
committee to ensure adequate representation
of the Kasambahay in social dialogue on issues
and concerns peculiar to Kasambahay work and
their welfare.
(k) Right to be provided a copy of the
employment contract;
(I) Right to certificate of employment;
Upon the termination of employment, the
employer shall issue the Kasambahay, within
five (5) days from request, a certificate of
employment (Form BK-3) indicating the nature,
duration of the service and work description.
(m) Right to terminate the employment;
SECTION 2. Termination of Employment
Initiated by the Kasambahay. – The
Kasambahay may terminate the employment
relationship at any time before the expiration of
the contract for any of the following causes:
a. Verbal or emotional abuse of the
Kasambahay by the employer or any
member of the household;
b. Inhuman treatment including physical
abuse of the Kasambahay by the employer
or any member of the household;
c. Commission of a crime or offense against
the Kasambahay by the employer or any
member of the household;
d. Violation by the employer of the terms and
conditions of the employment contract and
other standards set forth under this IRR;
e. Any disease prejudicial to the health of the
Kasambahay, the employer, or member/s
of the household; and
f. Other causes analogous to the foregoing.
If the Kasambahay leaves without cause, any
unpaid salary due, not exceeding the equivalent
of fifteen (15) days work, shall be forfeited. In
addition, the employer may recover from the
Kasambahay deployment expenses, if any, if
the services have been terminated within six (6)
months from employment.
(n) Right to exercise their own religious
beliefs and cultural practices (Chan,
Labor Code Vol. 1, 2018, pp 694-695)
Employable age for a kasambahay
The employable age for a kasambahay is 15
years old and above, provided that the
employment contract is signed by his/her
parent or lawful guardian on his/behalf. (Sec.
11, Art. III, R.A. No. 10361)
d) Homeworkers
They are those who perform in or about his own
home any processing or fabrication of goods or
materials, in whole or in part, which have been
furnished directly or indirectly, by an employer
and sold thereafter to the latter. (D.O. No. 05
(1992), Rule XIV of the Rules Implementing Book III
of the Labor Code on Employment of Homeworkers)
Industrial homework
It is a system of production under which work
for an employer or contractor is carried out by
a homeworker at his/her home. Materials may
or may not be furnished by the employer or
contractor.
It differs from regular factory production
principally in that, it is a decentralized form of
production where there is ordinarily very little
supervision or regulation of methods of work.
(D.O. No. 05 (1992), Rule XIV of the Rules
Implementing Book III of the Labor Code on
Employment of Homeworkers)
Employer of a homeworker
Includes any person, natural or artificial who,
for his account or benefit, or on behalf of any
person residing outside the country, directly or
indirectly, or through an employee, agent
contractor, subcontractor or any other person:
1. Delivers or causes to be delivered, any
goods, articles or materials to be processed
91
 or fabricated in or about a home and
thereafter to be returned or to be disposed
of or distributed in accordance with his
directions;
2. Sells any goods, articles or materials to be
processed or fabricated in or abut a home
and then rebuys them after such
processing or fabrication, either by himself
or through some other person (DO No. 05-
92, Sec. 2[d]).
Prohibitions
No homework shall be performed on the
following:
1. Explosives, fireworks and articles of like
character;
2. Drugs and poisons; and
3. Other articles, the processing of which
requires exposure to toxic substances.
(D.O. No. 05 (1992), Rule XIV of the Rules
Implementing Book III of the Labor Code on
Employment of Homeworkers)
The Magna Carta for Disabled Persons (R.A. No.
7277) ensures equal opportunities for disabled
persons and prohibits discrimination against
them.
The Magna Carta for Disabled Persons
mandates that qualified disabled persons be
granted the same terms and conditions of
employment as qualified able-bodied
employees. Once they have attained the status
of regular workers, they should be accorded all
the benefits granted by law, notwithstanding
written or verbal contracts to the contrary. This
treatment is rooted not merely on charity or
accommodation, but on justice for all. (Bernardo
vs. NLRC, G.R. No. 122917, July 12, 1999)
e) Night workers
"Night worker" means any employed person
whose work covers the period from 10 o'clock
in the evening to 6 o'clock the following
morning provided that the worker performs no
less than seven (7) consecutive hours of work.
(Chan, 2018 Pre-Week Notes on Labor Law, p.38)
Coverage
General Rule:
All persons who shall be employed or permitted
or suffered to work at night.
Exception:
Those employed in agriculture, stock raising,
fishing, maritime transport and inland
navigation, during a period of not less than 7
consecutive hours, including the interval from
midnight to 5 in the morning, to be determined
by the SLE after consulting the workers’
representatives/labor organizations and ERs.
(Chan, Labor Code Vol.1, p. 715)
Right of the Workers to Health
Assessment
At their request, workers shall have the right to
undergo health assessment without charge and
to receive advice on how to reduce or avoid
health problems associated with their work:
1. Before taking up an assignment as a night
worker;
2. At regular intervals during such an
assignment; and
3. If they experience health problems during
such an assignment which are not caused
by factors other than the performance of
night work (Art. 155, Labor Code)
Mandatory Facilities
1. Suitable first-aid facilities, including
arrangements where such workers, where
necessary, can be taken immediately to a
place for appropriate treatment.
2. Safe and healthful working conditions and
adequate or reasonable facilities, i.e.
sleeping or resting quarters in the
establishment, and transportation from the
work premises to the nearest point of their
residence subject to exceptions and
guidelines to be provided by the DOLE (Art.
156, Labor Code, as amended)
Transfer of Night Workers
Night workers who are certified as unfit for
night work, due to health reasons, shall be
92
transferred, whenever practicable, to a similar Learnership agreement refers to the
job for which they are fit to work. employment and training contract entered into
between the employer and the learner.
Transfer to a similar job is not practicable
- these workers shall be granted the same
APPRENTICES LEARNERS
benefits as other workers who are unable to
work, or to secure employment during such Both involves on-the-job practical training
period.

"A night worker certified as temporarily unfit for Training Agreement

night work shall be given the same protection
against dismissal or notice of dismissal as other Governed by Governed by
workers who are prevented from working for apprenticeship learnership agreement
reasons of health. agreement

f) Apprentices and Learners Occupation

Definition of Terms
Only employers in the Learnable occupations
highly technical consisting of semi-
Apprenticeship means practical training on industries may employ skilled and other
the job supplemented by related theoretical apprentices and only in industrial occupations
instruction. apprenticeable which are non-
occupations approved apprenticeable
"On the job training" is the practical work by the DOLE Secretary
experience through actual participation in
productive activities given to or acquired by an Theoretical Instructions
apprentice.
Should always be May or may not be
An apprentice is a worker who is covered by supplemented by supplemented by
a written apprenticeship agreement with an related theoretical related theoretical
individual employer or any of the entities instructions instructions
recognized under the law.
Competency-based System
Learners are persons hired as trainees in semi-
skilled and other industrial occupations which No requirement Must implemented
are non-apprenticeable and which may be based on the TESDA-
learned through practical training on the job in approved competency-
a relatively short period of time which shall not based system
exceed three (3) months.
Duration of Training
An apprenticeable occupation means any
trade, form of employment or occupation
Apprenticeship requires Learnership involves
which requires more than three (3) months of proficiency, more than practical training on
practical training on the job supplemented by three (3) months but the job for a period not
related theoretical instruction. not over six (6) exceeding three (3)
months of practical months
Apprenticeship agreement is an training on the job.
employment contract wherein the employer
binds himself to train the apprentice and the Qualifications
apprentice in turn accepts the terms of training.

93
a. Be at least fifteen No requirement opportunities; and
(15) years of age; c. The employment
b. Possess vocational does not create
aptitude and unfair competition
capacity for in terms of labor
appropriate tests; costs or impair or
and lower working
c. Possess the ability standards.
to comprehend
and follow oral and
written TESDA Approval a Requisite for the
instructions. Validity of Apprenticeship Program
The requisite TESDA approval of the
Limitation on the Number apprenticeship program prior to the hiring of
apprentices was further emphasized by the
DOLE with the issuance of Department Order
No limitation An enterprise is
allowed to take in
No. 68-04 on 18 August 2004. Department
learners only up to a Order No. 68-04, which provides the guidelines
maximum of twenty in the implementation of the Apprenticeship
percent (20%) of its and Employment Program of the government,
total regular workforce specifically states that no enterprise shall be
allowed to hire apprentices unless its
Option to Employ apprenticeship program is registered and
approved by TESDA. (Century Canning
Corporation vs. CA, G.R. No. 152894, August 17,
Only an “option” to Enterprise is obliged to
2007)
hire the apprentice as hire the learner after
an employee. the lapse of the
learnership period g) Persons With Disabilities

Wage Rate Persons with disability (PWD)

The wage rate of a learner or an apprentice is set
at seventy-five percent (75%) of the statutory
minimum wage.
Circumstances Justifying Hiring of Trainees
Those who are 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. (Rule III,
Sec. 5.1, R.A. No. 7277, as amended by R.A. No.
9442)

The prerequisites Those whose earning capacity is impaired by:

before learners may be 1. Physical deficiency
validly employed, to 2. Age
wit: 3. Injury
a. When no 4. Disease
experienced
5. Mental deficiency
workers are
available; 6. Illness
b. The employment
of learners is Impairment
necessary to
prevent Any loss, diminution or aberration of
curtailment of psychological, physiological, or anatomical
employment

94
structure or function. (R.A. No. 7277, as amended
by R.A. No. 9442)
Disability
Means any of the following:
a. a physical or mental impairment that
substantially limits one or more
psychological, physiological or anatomical
functions of an individual or activities of
such individual;
b. a record of such an impairment; or
c. being regarded as having such an
impairment. (R.A. No. 7277, as amended by
R.A. No. 9442)
Handicap
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. (R.A. No. 7277, as amended by R.A. No.
9442)
(1) Discrimination
(a) Magna Carta for Disabled Persons
(RA 7277)
R.A. No. 7277, Title III, Prohibition on
Discrimination Against Disabled Persons
No entity, whether public or private, shall
discriminate against a qualified PWD by reason
of disability in regard to job application
procedures, the hiring, promotion, or discharge
of employees, employee compensation, job
training, and other terms, conditions and
privileges of employment. The following
constitute acts of discrimination:
a. Limiting, segregating or classifying a job
applicant with disability in such a manner
that adversely affects his work
opportunities;
b. Using qualification standards, employment
tests or other selection criteria that screen
out or tend to screen out a PWD unless
such standards, tests or other selection
criteria are shown to be job-related for the
position in question and are consistent with
business necessity;
c. Utilizing standards, criteria, or methods of
administration that:
i. have the effect of discrimination on
the basis of disability; or
ii. perpetuate the discrimination of
others who are subject to common
administrative control.
d. Providing less compensation, such as
salary, wage or other forms of
remuneration and fringe benefits, to a
qualified employee with disability, by
reason of his disability, than the amount to
which a non-disabled person performing
the same work is entitled;
e. Favoring a non-disabled employee over a
qualified employee with disability with
respect to promotion, training
opportunities, study and scholarship
grants, solely on account of the latter’s
disability;
f. Re-assigning or transferring an employee
with a disability to a job or position he
cannot perform by reason of his disability;
g. Dismissing or terminating the services of an
employee with disability by reason of his
disability unless the employer can prove
that he impairs the satisfactory
performance of the work involved to the
prejudice of the business entity; provided,
however, that the employer first sought to
provide reasonable accommodations for
persons with disability;
h. Failing to select or administer in the most
effective manner employment tests which
accurately reflect the skills, aptitude or
other factor of the applicant or employee
with disability that such tests purports to
measure, rather than the impaired sensory,
manual or speaking skills of such applicant
or employee, if any; and
i. Excluding PWD from membership in labor
unions or similar organizations. (Title III,
R.A. No. 7277).
The Magna Carta for Disabled Persons
mandates that a qualified disabled employee
should be given the same terms and conditions
95
of employment as a qualified able-bodied
person. Section 5 of the Magna Carta provides:
Sec. 5. Equal Opportunity for Employment. —
No disabled person shall be denied access to
opportunities for suitable employment. A
qualified disabled employee 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.
The fact that the employees were qualified
disabled persons necessarily removes the
employment contracts from the ambit of Article
80. Since the Magna Carta accords them the
rights of qualified able-bodied persons, they are
thus covered by Article 280 of the Labor Code.
(Bernardo vs. NLRC, G.R. No. 122917, July 12, 1999)
(b) Mental Health Act (RA 11036)
Section 2. Declaration of Policy. - The state
affirms the basic right of all Filipinos to mental
health as well as the fundamental rights of
people who require mental health services.
The state commits itself to promoting the well-
being of people by ensuring that; mental health
is valued, promoted and protected; mental
health conditions are treated and prevented;
timely, affordable, high quality, and culturally-
appropriate mental health case is made
available to the public; mental health service
are free from coercion and accountable to the
service users; and persons affected by mental
health conditions are able to exercise the full
range of human rights, and participate fully in
society and at work free from stigmatization
and discrimination. (Sec. 2, R.A. No. 11036)
Under this law, the Congress, after consultation
with a wide range of public mental health
individuals, experts, academics, professionals,
governmental and non-government
associations, declared as policy that mental
health conditions be treated and that persons
affected by mental health conditions are able to
exercise the full range of human rights. RA
11036 further states as an objective the
protection of the rights and freedoms of
persons with psychiatric, neurologic, and
psychosocial health needs. (Versoza vs. People,
G.R. No. 184535, Sep. 3, 2019)
Discrimination
Discrimination refers to any distinction,
exclusion or restriction which has the purpose
or effect of nullifying the recognition,
enjoyment or exercise, on an equal basis with
others, of all human rights and fundamental
freedoms in the political, economic, social,
cultural, civil or any other field. It includes all
forms of discrimination, including denial of
reasonable accommodation. Special measures
solely to protect the rights or secure the
advancement of persons with decision-making
impairment capacity shall not be deemed to be
discriminatory. (Sec. 4, R.A. No. 11036)
Right of Service Users
Service users shall enjoy , on an equal and
nondiscriminatory basis, all rights guaranteed
by the Constitution as well as those recognizes
under the United Nations Universal Declaration
of Human Rights and the Convention on the
Rights of Persons with Disabilities and all other
relevant international and regional human
rights conventions and declarations, including
the right to:
(a) Freedom from social economic, and political
discrimination and stigmatization, whether
committed by public or private actors;
(b) Exercise all their inherit civil, political,
economic, social, religious, educational, and
cultural rights respecting individual qualities,
abilities, and diversity of background , without
discrimination on the basis of physical disability,
age, gender, sexual orientation, race, color,
language, religion or nationality, ethnic, or
social origin. (Sec. 5, R.A. No. 11036)
Education, promotion of mental health in
Educational Institutions and in the
Workplace
Section 25. Mental Health Promotion and
Policies in the Workplace. - Employers shall
develop appropriate policies and programs on
96
mental health issues, correct the stigma and
discrimination associated with mental
conditions, identify and provide support for
individuals with mental health conditions to
treatment and psychosocial support. (Sec. 25,
R.A. No. 11036)
Duties and Responsibilities of the
Government Agencies
The DOLE and CSC shall develop policies that
promote mental health in the workplace and
address stigma and discrimination suffered by
people with mental health conditions. (Sec. 35
(b), R.A. No. 11036)
Penalty
Section 44. Penalty Clause. - Any person who
commits any of the following acts shall, upon
conviction by final judgment, be punished by
imprisonment of not less than six (6) months,
but not more than two (2) years, or a fine of
not less than Ten thousand pesos (P10,000.00),
but not more than Two hundred thousand
pesos (P200,000.00), or both, at the discretion
of the court:
(a) Failure to secure informed consent of the
service user, unless it falls under the exceptions
provided under Section 18 of this Act;
(b) Violation of confidentiality of information, as
defined under Section 4(c) of this Act;
(c) Discrimination against a person with mental-
health condition, as defined under Section 4(e)
of this Act; and
(d) Administering inhumane, cruel, degrading
or harmful treatment not based on medical or
scientific evidence as indicated in Section 5(h)
of this Act;
If the violation is committed by a juridical
person, the penalty provided for in this Act shall
be imposed [on] the directors, officers,
employees or other officials or persons therein
responsible for the offense.
If the violation is committed by an alien, the
alien offender shall be immediately deported
after service of sentence without need of
further proceedings.
These penalties shall be without prejudice to
the administrative or civil liability of the
offender, or the facility where such violation
occurred. (Sec. 44, R.A. No. 11036)
(2) Incentives for Employers
Entitled to an additional deduction, from their
gross income, equivalent to 25% of the total
amount paid as salaries and wages to disabled
persons Provided, however, that such entities
present proof as certified by the DOLE that
disabled persons are under their employ;
Provided further, that the disabled Ee is
accredited with the DOLE and the Department
of Health as to his disability, skills and
qualifications.
Private entities that improve or modify their
physical facilities in order to provide reasonable
accommodation for disabled persons shall also
be entitled to an additional deduction from their
net taxable income, equivalent to 50% of the
direct costs of the improvements or
modifications (Sec. 8, R.A. No. 7277)
5. SEXUAL HARASSMENT IN THE WORK
ENVIRONMENT
a) Anti Sexual Harassment Act (RA 7877)
Work, education or training-related
sexual harassment
- is 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 in a work or
training or education environment,
demands, requests or otherwise requires
any sexual favor from the other, regardless
of whether the demand, request or
requirement for submission is accepted by
the object of said act. (Sec. 3, R.A. No. 7877)
97
Requisites:
1. Act is committed in a work, education, or
training-related environment;
2. The doer, the harasser, is any person who
has authority, influence or moral
ascendancy over another;
3. Doer demands or requests, or requires a
sexual favor from the victim;
4. It does not matter whether such demand is
accepted or not (Sec. 3, R.A. No. 7877).
In a work-related or employment
environment, sexual harassment is
committed when:
1. The sexual favor is made a condition in the
hiring or in the employment, re-
employment or continued employment of
said individual or in granting said individual
favorable compensation, terms, conditions,
promotions, or privileges; or the refusal to
grant the sexual favor results in limiting,
segregating or classifying the employee
which in any way would discriminate,
deprive or diminish employment
opportunities or otherwise adversely affect
said employee;
2. The above acts would impair the
employee’s rights or privileges under
existing labor laws; or
3. The above acts would result in an
intimidating, hostile, or offensive
environment for the employee.
In an education or training environment
sexual harassment is employed:
1. Against one who is under the care, custody
or supervision of the offender;
2. Against one whose education, training,
apprenticeship or tutorship is entrusted to
the offender;
3. When sexual favor is made a condition to
the giving of a passing grade, or the
granting of honors and scholarships, or the
payment of a stipend, allowance or other
benefits, privileges, or considerations; or
4. When sexual advances result in an
intimidating, hostile or offensive
environment for the student, trainee or
apprentice.
Duty of the Employer or Head of Office in
a Work-related, Education or Trainings
Environment:
(A) Promulgate appropriate rules and
regulations, prescribing the procedure for
the investigation of sexual harassment
cases and the administrative sanctions
therefor. Administrative sanctions shall not
be a bar to prosecution in the proper courts
for unlawful acts of sexual harassment. The
said rules and regulations shall include,
guidelines on proper decorum in the
workplace and educational or training
institutions;
(B) Create a committee on decorum and
investigation of cases on sexual
harassment. In the case of a work-related
environment, the committee shall be
composed of at least one (1) representative
each from the management, the union, if
any, the employees from the supervisory
rank, and from the rank and file employees.
In the case of the educational or training
institution, the committee shall be
composed of at least one (1) representative
from the administration, the trainors,
teachers, instructors, professors or coaches
and students or trainees, as the case may
be.
(C) Disseminate or post a copy of this Act for
the information of all concerned. (Sec 4, R.A.
No. 7877)
Liabilities of the Employer or Head of
Office in a Work-related, Education or
Trainings Environment:
The employer or head of office, educational or
training institution shall be solidarily liable for
damages arising from the acts of sexual
harassment committed in the employment,
education or training environment if the
employer or head of office, educational or
training institution is informed of such acts by
the offended party and no immediate action is
taken thereon. (Sec 5, R.A. No. 7877)
Workplace sexual harassment
Workplace sexual harassment occurs when a
supervisor, or agent of an employer, or any
other person who has authority over another in
98
a work environment, imposes sexual favors on
another, which creates an intimidating, hostile,
or offensive environment for the latter; “the
gravamen of the offense in sexual harassment
is not the violation of the employee’s sexuality
but the abuse of f power by the employer. (LBC
Express Vis, Inc. vs. Palco, G.R. No. 217101, Feb. 12,
2020)
Seafarers entitlement
A unique circumstance in this case is that the
alleged illness is not caused by the duties and
responsibilities of a Messman, but is due to the
seafarer's work environment. Petitioner was
harassed twice in one night. Though he
managed to escape in both instances, there
was no way for him to avoid. CO Oleksiy. The
only way he could protect himself from further
sexual advances or unwanted sexual contact
was to request for repatriation.
In cases like these, it is possible that the
seafarer's fear is heightened because there is
no way to escape from the environment where
sexual harassment occurred. Being out at sea,
the seafarer has to wait for the ship to dock at
the nearest port before the seafarer can
disembark and be repatriated. Thus, from the
time the incident of sexual harassment
occurred until the time the seafarer is able to
disembark, it is probable that the seafarer is
cowered by fear. In addition, the sexual
predator, knowing there is no room for the
victim to escape, is capable of continuously
committing such acts of sexual harassment.
The unique condition of working on board a
ship empowers the harassment. The unique
condition of working on board a ship empowers
the sexual predator and leaves the victim
feeling helpless because they are in the same
enclosed space. (Toliongco vs. CA, G.R. No.
231748, July 8, 2020)
Sexual Harassment not limited to Women
Sexual harassment can happen to anyone and
everyone. Our society has often depicted
women as being the weaker sex, and the only
victims of sexual harassment. It is high-time
that this notion is corrected. To consider
women as the weaker sex is discriminatory. To
think that only women can be victims of sexual
harassment is discriminatory against men who
have suffered the same plight; men who have
been victimized by sexual predators. (Toliongco
v. Court of Appeals, G.R. No. 231748, July 8, 2020)
The distinction between the employer and an
erring managerial officer is likewise present in
sexual harassment cases; under Section 5 of
the Anti-Sexual Harassment Act, the employer
is only solidarity liable for damages with the
perpetrator in case an act of sexual harassment
was reported and it did not take immediate
action on the matter; this provision thus
illustrates that the employer must first be
informed of the acts of the erring managerial
officer before it can be held liable for the latter’s
acts; conversely, if the employer has been
informed of the acts of its managerial staff, and
does not contest or question it, it is deemed to
have authorized or be complicit to the acts of
its erring employee. (LBC Express-Vis, Inc. vs.
Palco, G.R. No. 217101, Feb. 12, 2020)
An employee is considered constructively
dismissed if he or she was sexually harassed by
her superior and her employer failed to act on
his or her complaint with prompt and
sensitivity. (Ibid)
b) Safe Spaces Act (Article IV of RA
11313 only; Exclude: Liability of
Employers)
The State's policy against sexual harassment
has been strengthened through Republic Act
No. 11313, otherwise known as the Safe Spaces
Act. This law has expanded the definition of
gender-based sexual harassment in the
workplace and has added to the duties of an
employer as to its prevention, deterrence, and
punishment. It explicitly requires that
complaints be investigated and resolved within
10 days or less upon its reporting. It likewise
expressly provides for the liability of employers
and duties of co-workers as to sexual
harassment. The law likewise specifies the
confidentiality of proceedings, and the issuance
of a restraining order for the offended person.
Moreover, it allows local government units to
99
impose heavier penalties on perpetrators. (LBC
Express-Vis, Inc. v. Palco, G.R. No. 217101, February
12, 2020)
Gender-Based Sexual Harassment in the
Workplace includes the following:
a. An act or series of acts involving any
unwelcome sexual advances, requests or
demand for sexual favors or any act of
sexual nature, whether done verbally,
physically or through the use of technology
such as text messaging or electronic mail or
through any other forms of information and
communication systems, that has or could
have a detrimental effect on the conditions
of an individual's employment or education,
job performance or opportunities;
b. A conduct of sexual nature and other
conduct-based on sex affecting the dignity
of a person, which is unwelcome,
unreasonable, and offensive to the
recipient, whether done verbally, physically
or through the use of technology such as
text messaging or electronic mail or
through any other forms of information and
communication systems;
c. A conduct that is unwelcome and pervasive
and creates an intimidating, hostile or
humiliating environment for the recipient:
Provided, That the crime of gender-based
sexual harassment may also be committed
between peers and those committed to a
superior officer by a subordinate, or to a
teacher by a student, or to a trainer by a
trainee; and
d. Information and communication system
refers to a system for generating, sending,
receiving, storing or otherwise processing
electronic data messages or electronic
documents and includes the computer
system or other similar devices by or in
which data are recorded or stored and any
procedure related to the recording or
storage of electronic data messages or
electronic documents. (Sec. 16, Article IV of
R.A. No. 11313)
Duties of Employers:
a. Disseminate or post in a conspicuous place
a copy of this Act to all persons in the
workplace;
b. Provide measures to prevent gender-based
sexual harassment in the workplace, such
as the conduct of anti-sexual harassment
seminars;
c. Create an independent internal mechanism
or a committee on decorum and
investigation to investigate and address
complaints of gender-based sexual
harassment which shall:
(1) Adequately represent the
management, the employees from the
supervisory rank, the rank-and-file
employees, and the union, if any;
(2) Designate a woman as its head and not
less than half of its members should be
women;
(3) Be composed of members who should
be impartial and not connected or
related to the alleged perpetrator;
(4) Investigate and decide on the
complaints within ten (10) days or less
upon receipt thereof;
(5) Observe due process;
(6) Protect the complainant from
retaliation; and
(7) Guarantee confidentiality to the
greatest extent possible.
d. Provide and disseminate, in consultation
with all persons in the workplace, a code of
conduct or workplace policy which shall:
1. Expressly reiterate the prohibition on
gender-based sexual harassment;
2. Describe the procedures of the internal
mechanism created under Section 17
(c) of this Act; and
3. Set administrative penalties. (Section
17, Article IV of R.A. No. 11313)
Duties of Employees and Co-workers:
1. Refrain from committing acts of gender-
based sexual harassment;
2. Discourage the conduct of gender-based
sexual harassment in the workplace;
3. Provide emotional or social support to
fellow employees, co- workers, colleagues
100
 or peers who are victims of gender-based
sexual harassment; and
4. Report acts of gender-based sexual
harassment witnessed in the workplace
C. SOCIAL WELFARE LEGISLATION
1. SSS Law (RA 8282, as amended by
RA 11199)
R.A. 8282, REPEALED BY R.A.11199
R.A. No. 11199 (“Social Security Act of 2018”)
which was signed by President Duterte on
February 07, 2019, expressly repealed R.A. No.
8282.
Republic Act No. 1161 and Republic Act No.
8282 and all other laws, proclamations,
executive orders, rules and regulations or parts
thereof inconsistent with this Act are hereby
repealed, modified or amended accordingly:
Provided, that no person shall be deemed to be
vested with any property or other right by virtue
of the enactment or operation of this Act. (Sec.
33 of RA 11199)
Declaration of Policy
It is the policy of the State to establish, develop,
promote and perfect a sound and viable tax-
exempt social security system suitable to the
needs of the people throughout the Philippines
which shall promote social justice through
savings, and ensure meaningful social security
protection to members and their beneficiaries
against the hazards of disability, sickness,
maternity, old age, death, and other
contingencies resulting in loss of income or
financial burden. Towards this end. the State
shall endeavor to extend social security
protection to Filipino workers, local or overseas,
and their beneficiaries.
In the pursuit of this policy, a social security
program shall be developed emphasizing the
value of "work, save, invest and prosper". The
maximum profitability of investible funds and
resources of the program shall be ensured
through a culture of excellence in management
grounded upon sound and efficient policies
employing internationally recognized best
practices. (Sec. 2 of RA 11199)
The SSS is mandated by law to establish a
provident fund for the members which will
consist of voluntary contributions of employers
and/or employees, self-employed and voluntary
members and their earnings, for the payment
of benefits to such members or their
beneficiaries. (Duka, Labor Laws and Social
Legislations: A Barrister’s Companion ,2019 p.818)
a) Coverage
A. Compulsory
a. Employees And Their
Employers
Coverage in the SSS shall be
compulsory upon all employees
including domestic workers or
“kasambahays” not over sixty
(60) years of age (up to the day
of his/her 60th birthday) and their
employers. (Sec. 1, Rule 13, IRR)
b. Covered Employees with
Private Benefit Plans
The following are rules which governs
employees with private benefit plans:
i. The benefit already earned by the
employees under private benefit plans
existing at the time of the approval of the
Social Security Act of 2018 shall not be
discontinued, reduced or otherwise
impaired;
ii. Private benefit plans which are existing
and in force at the time of compulsory
coverage shall be integrated with the plan
of the SSS. If the employer's contribution
to his/her private plan is more than that
required of him/her in the Social Security
Act of 2018, he/she shall pay to the SSS
only the contribution required of him/her
and he/she shall continue his/her
contribution to such private plan less
his/her contribution to the SSS so that the
employer's total contribution to his/her
101
 benefit plan and to the SSS shall be the
same as his/her contribution to his/her
private benefit plan before the compulsory
coverage; [Sec 9, (a)]
iii. Any changes, adjustments, modifications,
eliminations or improvements in the
benefits to be available under the
remaining private plan, which may be
necessary to adopt by reason of the
reduced contributions thereto as a result
of the integration, shall be subject to
agreements between the employers and
employees concerned; [Sec 9, (a)]
iv. The private benefit plan which the
employer shall continue for his/her
employees shall remain under the
employer's management and control
unless there is an existing agreement to
the contrary; [Sec 9, (a)]
v. Nothing in the Social Security Act of 2018
shall be construed as a limitation to the
right of employers and employees to agree
on and adopt benefits which are over and
above those provided under the Social
Security Act of 2018; and [Sec 9, (a)]
vi. The guidelines on the single employer
registration process shall continue to
apply, subject to Section 33 of the Social
Security Act of 2018 (SSC Circular No. 2009-
00, 2009).
c. Self-Employed Person
Coverage in the SSS shall be compulsory
upon such self-employed persons as may
be determined by the Commission under such
rules and regulations as it may prescribe,
including, but not limited to the following:
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" in Section 8(d) of this Act;
d. Professional athletes, coaches, trainers
and jockeys; and
e. Individual farmers and fishermen.
Unless otherwise specified herein, all
provisions of this Act applicable to
covered employees shall also be
applicable to the covered self-
employed persons. [Sec. 9(a)]
d. Overseas Filipino Workers (OFW)
Coverage in the SSS shall be compulsory
upon all sea-based and land-based OFWs
as defined under R.A. No. 8042 or the
Migrant Workers and Overseas Filipinos Act
of 1995 as amended [by R.A. No. 10022],
provided they are not over sixty (60) years of
age (par 1., Sec 9-B, [a])
Sea-based OFWs are compulsory members
of the SSS. Manning Agencies are agents of
their principals (employer or foreign
placement agency hiring or engaging
Filipino workers for overseas employment)
and considered as the employers of sea-
based OFWs.
For purposes of the implementation of the
Social Security Act of 2018, manning
agencies are jointly and severally or
solidarily liable with their principals with
respect to the civil liabilities incurred for any
violation of the Social Security Act of 2018,
any law to the contrary notwithstanding.
[Sec 9-B, (b), 1st par]
Land-based OFWs are compulsory
members of the SSS and considered in the
same manner as self-employed persons,
until a Bilateral Labor Agreement (BLA)
shall have been entered into, under the
provisions of the Social Security Act of 2018
and such other rules and regulations that
the Commission. [Sec. 9-B(c)]
A land-based OFW member shall pay
both the employer and the employee
contributions; and [Sec 19-A, 1st proviso]
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 If the land-based OFW realizes no income
in any given month, he/she shall not be
required to pay contributions for that
month; [Sec 11-A]
The monthly earnings declared by a land-
based OFW at the time of his/her
registration with the SSS shall be the basis
of his/her initial MSC and the corresponding
amount of monthly contribution; [Sec 19-A,
1st proviso]
The DFA, the DOLE and the SSS shall
ensure compulsory coverage of OFWs
through bilateral social security and labor
agreements and other measures for
enforcement (Sec. 9-B, [e])
B. Voluntary
Voluntary SSS Coverage
The following may be covered by the SSS on a
voluntary basis:
a. A spouse of a member who devotes full
time to managing the household and family
affairs, but does not engage in other
vocation or employment which is subject to
compulsory or mandatory coverage; [Sec 9,
(b)]
b. An OFW upon the termination of his/her
employment overseas; [Sec 9-B, (f)]
c. A covered employee who was separated
from employment who continues to pay
his/her contributions; [Sec 11]
d. A self-employed member who realizes no
income in any given month who continues
to pay his/her contributions. [Sec 11-A]
e. Filipino permanent migrants, including
Filipino immigrants, permanent residents
and naturalized citizens of their host
countries may be covered by the SSS on a
voluntary basis [Sec. 9-B(g)]
A voluntary member (VM) shall pay his/her
contribution in accordance with the
guidelines on payment deadline applicable
to self-employed members (Sec. 4, Rule 13,
IRR)
EXCLUSIONS
Excluded employers
The government and any of its political
subdivisions, branches or instrumentalities,
including corporations owned or controlled by
the Government [Sec. 8(c), R.A. No. 11199]
Excluded employees:
A. Services where there is no employer-
employee relationship in accordance with
existing labor laws, rules, regulations and
jurisprudence;
B. Service performed in the employ of the
Philippine Government or instrumentality or
agency thereof;
C. Service performed in the employ of a
foreign government or international
organization, or their wholly-owned
instrumentality: they may however enter
into an agreement with the Philippine
Government for the inclusion of such
employees in the SSS except those already
covered by their respective civil service
retirement systems.
D. Such other services performed by
temporary and other employees which may
be excluded by regulation of the
Commission. Employees of bona fide
independent contractors shall not be
deemed employees of the employer
engaging the service of said contractors.
(8(j), R.A. No. 11199)
Effect of separation from employment
When an employee under compulsory coverage
is separated from employment, his employer's
contribution on his account and his obligation
to pay contributions arising from that
employment shall cease at the end of the
month of separation but said employee shall be
credited with all contributions paid on his behalf
and entitled to benefits according to the
provisions of R.A. No. 11199. He may, however,
continue to pay the total contributions to
maintain his right to full benefit. (Last Minute
Notes for the 2022 Bar Exam in Labor Law by Prof.
Johanna Celine Mari A. Chan)
103
Effect of interruption of business or
professional income
If the self-employed member realizes no
income in any given month, he shall not be
required to pay contributions for that month.
He may, however, be allowed to continue
paying contributions under the same rules and
regulations applicable to a separated employee
member: Provided, That no retroactive
payment of contributions shall be allowed other
than as prescribed under Section 22-A of R.A.
No. 11199 (Last Minute Notes for the 2022 Bar
Exam in Labor Law by Prof. Johanna Celine Mari A.
Chan)
Effective Date of Coverage
For Compulsory Coverage:
Employer - Compulsory coverage of the
employer shall take effect on the first day of his
operation or on the first day he hires
employee/s. The employer is given only 30 days
from the date of employment of the employee
to report the person for coverage to the SSS.
(Sec. 10)
Employee - Compulsory coverage of the
employee shall take effect on the first day of
his/her employment. (Sec. 10)
Self-employed - Compulsory coverage of the
self-employed person shall take effect upon
his/her registration with the SSS. Registration
shall mean payment of first contribution (Sec. 3,
Rule 15, R.A. No. 11199 IRR).
OFWs
i. A sea-based OFW shall take effect on the
first day of his/her employment;
ii. A land-based OFW covered under BLAs
shall take effect based on the provisions of
the Agreement and its implementing
arrangement;
iii. Compulsory coverage of a land-based
OFW not covered under BLAs shall take
effect on the applicable month and year of
the first contribution payment.
For Voluntary Coverage:
Land-based OFWS -Voluntary coverage of
land-based overseas Filipinos shall take effect
on the applicable month and year of the first
contribution payment. (Sec. 4, Rule 15, R.A. No.
11199, IRR)
Non-working spouse – upon first payment
of contribution.
Separated member – on the month he/she
resumed payment of contribution.
b) Dependents and Beneficiaries
DEPENDENTS
The dependents shall be the following:
(1) The legal spouse entitled by law to receive
support from the member; [Sec 8, (e),
(1)];
(2) The legitimate, legitimated or legally
adopted and illegitimate child who is:
a) Unmarried,
b) Not gainfully employed, and
c) Has not reached twenty-one (21) years
of age, or if over 21 years of age,
he/she is congenitally or while still a
minor has been permanently
incapacitated and incapable of self-
support, physically or mentally. [Sec 8,
(e), (2)]
A child who has entered in a common-
law relationship and has not reached
the age of eighteen (18) is still a
dependent. However, upon reaching
the age of 18, the child is no longer
qualified as a dependent.
(3) The parent who is receiving regular support
from the member. [Sec 8, (e), (3)]
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BENEFICIARIES
A. Primary
The following are considered as primary
beneficiaries:
i. The dependent spouse who has not re-
married [Sec 8, (k)], cohabited or
entered in a “live-in” relationship
before or after the death of the
member, and
ii. The dependent legitimate, legitimated
or legally adopted and illegitimate
children. Where there are legitimate or
illegitimate children, the former shall be
preferred. The dependent illegitimate
children shall be entitled to fifty percent
(50%) of the share of the legitimate,
legitimated or legally adopted children.
In the absence of the dependent
legitimate, legitimated or legally
adopted children of the member,
his/her dependent illegitimate children
shall be entitled to one hundred
percent (100%) of the benefits. (Sec
8, [k], Rule 12 Sec 12 IRR)
B. Secondary
In the absence of primary beneficiaries, the
secondary beneficiaries are as follows:
i. The dependent parents of the deceased
member; and
ii. In the absence of dependent parents,
any other person/s designated and
reported by the member to the SSS [Sec
8, (k)]. The person designated by the
member shall be someone who has a
right to claim for support from the
deceased member under the Family
Code of the Philippines, including
dependent children who have reached
the age of majority. (Sec. 13, Rule 12,
IRR)
c) Benefits
A. Monthly Pension (Sec. 12)
B. Dependent’s Pension (Sec.12-A)
C. Retirement (Sec.12-B)
D. Death (Sec.13)
E. Permanent Disability (Sec. 13-A)
F. Funeral (Sec. 13-B)
G. Sickness (Sec. 14)
H. Maternity Leave (Sec. 14-A)
I. Unemployment Insurance or Involuntary
Separation Benefits (Sec.14-B)
Non-Transferability of Benefits
The SSS shall promptly pay the benefits
provided in this Act to such persons as may be
entitled thereto in accordance with the
provisions of this Act.
Such benefits are not transferable, and no
power of attorney or other document executed
by those entitled thereto in favor of any agent,
attorney or any other person for the collection
thereof on their behalf shall be recognized,
except when they are physically unable to
collect personally such benefits:
In case of death benefits, if no beneficiary
qualifies under this Act, said benefits shall be
paid to the legal heirs in accordance with the
law of succession (Sec 15).
A. MONTHLY PENSION
The Monthly Pension is a monthly specified
cash amount that a qualified member or a
qualified beneficiary will receive on account of
permanent total disability, retirement or death.
(Sec 1, Rule 18, IRR of RA 11199)
The monthly pension shall be the highest of the
following amounts:
i. P300.00 + (20% x AMSC) + (2% x AMSC) x
(CYS – 10); or
ii. 40% x AMSC; or
iii. Minimum monthly pension
For Retirement:
- P1,200.00, if with at least 10 CYS
105
- P2,400.00 if with at least 20 CYS
For Death/Disability benefit:
- P1,000.00 if with less than 10 CYS,
- P1,200.00, if with at least 10 CYS, or
- P2,400.00 if with at least 20 CYS.
Provided that the monthly pension shall not be
paid in a total amount of less than sixty (60)
months. (Sec 2, Rule 18, IRR of RA 11199)
B. DEPENDENT’S PENSION
Where monthly pension is payable on account
of death, permanent total disability or
retirement, dependents’ pension equivalent to
ten percent (10%) of the monthly pension or
Two hundred fifty pesos (P250.00), whichever
is higher, shall also be paid for each dependent
child conceived or legally adopted on or before
the date of the contingency. [Sec 12-A in
relation to Sec 8, (e), (2)]
i. The dependent’s pension shall be paid to
dependent children, not exceeding five (5),
beginning from the youngest and without
substitution. [Sec 12-A]
ii. Where there are legitimate and illegitimate
children, the former shall be preferred. [Sec
12-A, proviso]
(Sec 1, Rule 20, IRR of RA 11199)
C. RETIREMENT BENEFIT
The Retirement Benefit is a monthly pension or
lump sum granted to a member who can no
longer work due to old age.
TWO TYPES OF RETIREMENT BENEFITS
1. Monthly pension - a lifetime cash benefit
paid to a retiree who has paid at least 120
monthly contributions to the SSS prior to
the semester of retirement.
2. Lump sum amount - is granted to a
retiree who has not paid the required 120
monthly contributions. It is equal to the
total contributions paid by the member and
by the employer including interest.
WHO ARE QUALIFIED
A member must have at least one hundred
twenty (120) monthly contributions prior to
semester of retirement; and
i. Has reached sixty (60) years old and is
separated from employment or has ceased
to be self-employed (Optional
Retirement)
ii. Is at least sixty-five (65) years old
(Technical Retirement)
iii. A separated member who has paid less
than one hundred twenty (120) monthly
contributions who continues as a voluntary-
paying member to complete the required
monthly contributions to qualify for full
pension benefit (Sec. 11 and 11-A).
Exceptions as to age:
Underground Mineworker whose date of
actual retirement is not earlier than March 13,
1998:
Optional Retirement - 55 y/o
Technical Retirement - 60 y/o
Underground Mineworker whose date of
actual retirement is not earlier than April 27,
2016:
Optional Retirement - 50 y/o
Technical Retirement -60 y/o (Rule 21, Sec. 2
IRR)
13TH MONTH PENSION
A retired member is entitled to a thirteenth
(13th) month pension equivalent to the amount
of the monthly pension due and additional
benefit allowance, payable every month of
December of the applicable year.
REEMPLOYMENT OR RESUMPTION OF
SELF-EMPLOYMENT
The monthly pension shall be suspended upon
the reemployment or resumption of self-
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employment of a retired member who is less
than sixty-five (65) years old. He shall again be
subject to Section Eighteen and his employer to
Section Nineteen of this Act. (12-B[C])
DEATH OF A RETIRED MEMBER
His primary beneficiaries as of the date of his
retirement shall be entitled to receive the
monthly pension Provided, That if he has no
primary beneficiaries and he dies within sixty
(60) months from the start of his monthly
pension, his secondary beneficiaries shall be
entitled to a lump sum benefit equivalent to the
total monthly pensions corresponding to the
balance of the five-year guaranteed period,
excluding the dependents’ pension.
D. DEATH BENEFITS
The Death Benefit is a cash benefit either in
monthly pension or lump sum paid to the
beneficiaries of a deceased member (Sec. 1,
Rule 22, IRR R.A. No. 11199)
Upon death of the member:
1. If a member has paid at least 36 monthly
contributions prior to the semester of
death:
a. Primary Beneficiaries - entitled to
monthly pension;
b. Secondary Beneficiaries - entitled to a
lump sum benefit equivalent to thirty-
six (36) times the monthly pension;
and
c. If a member has not paid the required
36 monthly contributions the primary
or secondary beneficiaries shall be
entitled to whichever is higher
between.
2. a lump sum benefit equivalent to the
monthly pension times the number of
monthly contributions paid to the SSS; and
3. twelve (12) times the monthly pension (Sec.
13, R.A No. 11199)
Settled is the rule that for a non-occupational
disease to be compensable, substantial
evidence must be presented to prove that the
risk of contracting the illness was aggravated
by the employee's working conditions. It
suffices that the evidence presented establish a
reasonable work connection. It is not necessary
that a direct causal relation be proven. (Social
Security System v. Simacas, G.R. No. 217866, June
20, 2022)
E. PERMANENT DISABILITY BENEFIT
The Permanent Disability Benefit is a cash
benefit granted to a member who becomes
permanently disabled either partially or totally.
(Sec. 1 Rule 23, IRR R.A. No. 11199)
DISABILITY BENEFITS
i. Monthly pension
ii. Lump sum
MONTHLY PENSION
The disabled member is entitled to a monthly
pension if he/she has paid at least thirty-six
(36) monthly contributions prior to the
semester of disability. (Sec 13-A, [a])
LUMP SUM
For members who have not met the required
thirty-six (36) monthly contributions prior to the
semester of disability, a lump sum disability
benefit is granted. [Sec 13-A, (a)]
F. FUNERAL BENEFIT
The Funeral Benefit is intended to help defray
the cost of funeral expenses upon the death of
a member, including permanently totally
disabled or retired members. (Sec 13-B)
Twelve thousand pesos (₱12,000.00) shall be
paid, in cash or in kind, to help defray the cost
upon the death of a member, including
permanently totally disabled member or retiree.
Starting August 1, 2015, a variable amount
ranging from a minimum of twenty thousand
pesos (P20,000.00) to a maximum of forty
thousand pesos (P40,000.00), depending on
the member's number of contributions and
AMSC, (Sec. 2, Rule 24, IRR R.A 11199)
107
* AMSC - average monthly salary credit
G. SICKNESS BENEFIT
The Sickness Benefit is a daily cash allowance
to the member who is unable to work due to
sickness or injury for each day of compensable
confinement or a fraction thereof. (Sec 1 Rule 25,
IRR R.A 11199)
Requisites for Eligibility
i. Has paid at least three (3) monthly
contributions within the twelve-month (12)
period immediately before the semester of
sickness or injury; (Sec 14, [a])
No contributions paid retroactively by
SE/VM/OFWs shall be used in determining
his/her eligibility to sickness benefit wherein the
date of payment is within or after the semester
of contingency;
ii. Was confined for at least four (4) days
either in a hospital or elsewhere as defined
by the SSS; (Sec. 14, [a])
iii. Has notified the employer, if employed, or
the SSS, if unemployed or SE/VM of the
sickness or injury; (Sec. 14, [a], 3); and
iv. Has used up all current company sick leave
with pay for the current year, if employed,
except sea-based OFWs. (Sec. 14, [b])
Notification by the EMPLOYER
i. For Hospital confinement - employer
shall notify the SSS in the prescribed
manner within one (1) year from date of
discharge [Sec. 14, (c)]
ii. For confinement elsewhere - employer
shall notify the SSS in the prescribed
manner within five (5) calendar days after
receipt of notification from the employee;
[Sec. 14, (c)]
iii. For sickness/injury that occurred
while working or within company’s
premises- The employer shall notify the
SSS of such sickness/injury/confinement in
the prescribed manner within five (5)
calendar days after onset of
sickness/injury. [Sec. 14, (a) (3)]
Notification by the unemployed or self-
employed member, land-based OFWs, or
voluntary members
They shall directly notify the SSS of the
confinement in the prescribed manner within
five (5) calendar days after the start of
confinement, except when such confinement is
in a hospital, notification to the SSS in the
prescribed manner shall be within one (1) year
from date of discharge; and [Sec. 14, (a) (3)]
Amount of Benefit
The daily sickness allowance shall be equivalent
to ninety-percent (90%) of the member's
average daily salary credit. [Sec 14, (a)]
begin on the first (1st) day of sickness and the
payment of such allowances shall be made by
the employer every :
a. regular payday or on
b. the fifteenth (15th) and last day of each
month
Sickness and disability benefits may be availed
of simultaneously, provided, that the following
conditions are satisfied:
a) Sickness/injury and disability are not
related; and
b) Member meets all the qualifying conditions
for the grant of sickness and disability
benefits.
H. MATERNITY LEAVE
(R.A No. 11210)
Maternity Leave Benefit is a daily cash
allowance granted to female members who
gave birth via normal delivery or caesarean
108
 section or suffered miscarriage, regardless of
civil status or legitimacy of the child.
Amount of Benefit
Covered female workers must receive their full
pay. Full payment of the maternity leave benefit
shall be advanced by the employer within thirty
(30) days from the filing of the maternity leave
application.
In the case of self-employed female members,
including those in the informal economy, OFWs
and voluntary SSS members, the SSS shall
directly pay the maternity benefit. (Sec. 3, Rule
3, IRR R.A 11210)
I. UNEMPLOYMENT INSURANCE OR
INVOLUNTARY SEPARATION
BENEFITS
The unemployment insurance or involuntary
separation benefit is a monthly cash payment
equivalent to fifty percent (50%) of the AMSC
for a maximum of two (2) months, subject to
the rules and regulations that the Commission
may prescribe. (Sec. 14-B)
Eligibility
i. Not over sixty (60) years old at the time of
involuntary separation, except;
a) In the case of underground mineworker or
surface mineworker [R.A. No. 10757], not
over fifty (50) years old; or
b) In the case of racehorse jockey [R.A. No.
10789], not over 55 years old.
ii. Has paid at least thirty-six (36) monthly
contributions, twelve (12) months of which
should be in the eighteen (18) month
period immediately preceding the
unemployment or involuntary separation;
iii. Involuntarily separated from employment
provided that such separation did not arise
from fault or negligence of the employee
and which may be attributed to any of, but
not limited to, the following:
a) Installation of labor-saving devices;
b) Redundancy;
c) Retrenchment to prevent loss;
d) Closure or cessation of operation; or
e) Disease/illness. (Sec. 2, Rule 27, IRR)
Limitation
A covered employee who is involuntarily
unemployed can only claim unemployment
benefits once every three (3) years starting
from the date of involuntary separation or
unemployment. (Sec. 14-B)
Overlapping Benefits
In case of concurrence of two (2) or more
contingencies within the same compensable
period, only the highest benefit shall be paid.
(Sec. 14-B)
2. GSIS LAW (RA 8291)
a) Coverage
1. All government personnel, whether
elective or appointive, irrespective of
status of appointment, provided they
are receiving fixed monthly
compensation and have not reached
the mandatory retirement age of 65
years, are compulsorily covered as
members of the GSIS and shall be
required to pay contributions.
2. Employees who have reached the
retirement age of 65 or more shall also
be covered, subject to the following
rules:
An employee who is already beyond the
mandatory retirement age of 65 shall be
compulsorily covered and be required to pay
both the life and retirement premiums
under the following situations:
a. An elective official who at the time of
election to public office is below 65 years of
age and will be 65 years or more at the end
of his term of office, including the period/s
of his re-election to public office thereafter
without interruption.
109
b. Appointive officials who, before
reaching the mandatory age of 65, are
appointed to government position by the
President of the Republic of the Philippines
and shall remain in government service at
age beyond 65.
c. Contractual employees including
casuals and other employees with an
employee-government agency relationship
are also compulsorily covered, provided
they are receiving fixed monthly
compensation and rendering the required
number of working hours for the month
(Sec. 2, Rule 2, IRR RA 8291)
Compulsory Membership
Membership in the GSIS shall be compulsory for
a. All employees receiving compensation who
have not reached the compulsory
retirement age, irrespective of employment
status,
Except:
i. members of the Armed Forces of the
Philippines;
ii. member of the Philippine National Police,
subject to the condition that they must settle
first their financial obligation with the GSIS,
and contractuals who have no employer and
employee relationship with the agencies
they serve.
b. Members of the judiciary and constitutional
commissions who shall have life
insurance only.
All members of the GSIS shall have life
insurance, retirement, and all other social
security protection such as disability,
survivorship, separation, and unemployment
benefits.
Exclusion from compulsory coverage
i. Uniformed personnel of the Armed Forces
of the Philippines (AFP), Philippine National
Police (PNP), Bureau of Fire Protection
(BFP) and Bureau of Jail Management and
Penology (BJMP);
ii. Barangay and Sanggunian Officials who
are not receiving fixed monthly
compensation;
iii. Contractual Employees who are not
receiving fixed monthly compensation;
and
iv. Employees who do not have monthly
regular hours of work and are not
receiving fixed monthly compensation.
(Sec. 3, Rule 2, IRR)
b) Dependents and Beneficiaries
Dependents
(a) the legitimate spouse dependent for
support upon the member or pensioner;
(b) the legitimate, legitimated, legally
adopted child, including the illegitimate
child, who is unmarried, not gainfully
employed, not over the age of majority, or
is over the age of majority but
incapacitated and incapable of self-
support due to a mental or physical defect
acquired prior to age of majority; and
(c) the parents dependent upon the
member for support; (Sec. 2(f), R.A. No.
8291):
Gainful Occupation - Any productive activity
that provided the member with income at least
equal to the minimum compensation of
government employees (Sec. 2[p], R.A. No. 8291)
Beneficiaries
A. Primary beneficiaries
The legal dependent spouse until he/she
remarries and the dependent children [Sec.
1(g), R.A. No. 8291]
110
B. Secondary beneficiaries
The dependent parents and, subject to the
restrictions on dependent children, the
legitimate descendants; [Sec. 1(h), R.A. No.
8291]
Effectivity of Membership
The effective date of membership shall be the
date of the member’s assumption to duty on his
original appointment or election to public office.
(Sec. 5, Rule 2, IRR R.A. No. 8291)
c) Benefits
A. Compulsory Life Insurance Benefits
under the Life Endowment Policy (LEP)
B. Compulsory Life Insurance Benefits
under the Enhanced Life Policy (ELP)
C. Death Benefit
D. Retirement Benefits
E. Disability
F. Survivorship
G. Separation
H. Unemployment benefits
I. Funeral
A. Compulsory Life Insurance Benefits
under the Life Endowment Policy
(LEP)
A member under this policy may be entitled to
any of the following benefits, depending on the
circumstances:
1. Maturity benefits is the face amount
payable to the member upon maturity of
the policy.
2. Cash Surrender Value is earned values
during the term of the insurance payable to
the member when he is separated from the
service before maturity date of the policy or
when he is considered as a case of PTD.
3. Death Benefit is the face value of the
policy payable to the designated
beneficiary/beneficiaries or legal heirs, in
the absence of the former, upon the death
of a member.
4. Accidental Death Benefit (ADB) is an
additional benefit equivalent to the amount
of Death Benefit when the member dies by
accident; Proof must be presented to
sufficiently establish that the cause of the
member’s death is accidental & must be
filed within four (4) years after the death.
5. Cash Dividend - A policy holder is entitled
to dividends subject to the guidelines as
approved by the GSIS Board. This is not a
guaranteed benefit. (Sec. 18.1. to 18.5, Rule
IV, IRR of R.A. No. 8291).
B. Compulsory Life Insurance Benefits
under the Enhanced Life Policy (ELP)
A member under this policy may be entitled to
any of the following benefits, depending on the
circumstances:
C. Death Benefit - equivalent to the latest
annual salary multiplied by amount of
insurance (AOI) factor which is 1.5 or 18
times the current monthly salary of the
member or as determined by the GSIS,
payable to the legal heirs, less all
outstanding obligations of the member in
accordance with the CLIP;
● Termination Value - The policy earns a
Termination Value during the life of the
policy computed from the percentage of
life insurance premiums actually remitted
and paid to GSIS.
○ Termination value is equivalent to a
percentage of monthly life insurance
premiums as determined by the
GSIS, due and paid in full, either by
direct remittance or through an APL
facility.
○ The accumulated termination value
will grow at such rate as determined
by the Actuary.
○ The termination value shall be paid to
the member upon his separation
from the government service less all
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 indebtedness of the member with the
GSIS in accordance with CLIP.
● Cash Dividend - A policyholder is entitled
to dividends, subject to the guidelines as
approved by the GSIS Board. This is not a
guaranteed benefit. (Sec. 19, IRR of R.A. No.
8291)
D. Retirement Benefits
The retirement benefit consists of a
monthly pension which is computed based
on years of creditable service and AMC for
the last 3 years.
Eligibility:
1. has rendered at least Fifteen (15) years of
service;
2. is at least Sixty (60) years of age; and
3. is not receiving a monthly pension benefit
from permanent total disability.
Retirement Benefit Options
A retiring member has the following options:
1. Five (5) year lump sum equivalent to sixty
(60) months of the BMP, subject to
qualification requirements, less all
outstanding obligations of the member in
accordance with the CLIP, plus an old-age
pension benefit equal to the BMP payable for
life, starting on the first day of the month
following the expiration of the five-year
guaranteed period; or
2. A cash payment benefit equivalent to
eighteen (18) times of the BMP, subject to
qualification requirements, less all
outstanding obligations of the member in
accordance with the CLIP, plus monthly
pension for life payable on the first month
following the date of retirement.
Conversion in the Mode of Retirement
Conversion in the mode of retirement from R.A.
No. 8291 to any other retirement laws and vice
versa administered by the GSIS shall not be
allowed.
Those who became GSIS members prior to the
implementation of this Act shall have the option
to retire under PD 1146, RA 660, or RA 1616,
subject to eligibility.
Change of Retirement Benefit Option
under RA 8291
Change of retirement benefit option from
eighteen (18) months cash payment plus
immediate pension to five (5) year lump sum,
or vice versa, shall not be allowed. The GSIS
shall process the claim for retirement benefits
based on the member’s records in the GSIS
database.
Effects of Re-Employment
1. When a retired/separated member is re-
employed or reinstated in the service,
his/her previous services credited at the
time of his/her retirement/separation for
which a corresponding benefit had been
awarded, shall be excluded in the
computation of service. In effect, he/she
shall be considered a new entrant.
2. However, for those who retired prior to the
enactment of R.A. No. 8291, the previous
services of a retired/separated member
may be added in the computation of his
creditable services (subject to premium-
based policy) upon subsequent retirement
under R.A. No. 8291 only when both
conditions are met:
a. the retiree re-entered government
service before June 24, 1997; and
b. the total amount of benefit previously
received, if any, including the
prescribed interest was refunded to
GSIS on or before March 2, 2006 (Sec.
20, IRR of RA 8291)
E. Disability Benefit
Disability refers to any loss or impairment of
the normal functions of the physical and/or
mental faculties of a member, which
permanently or temporarily prevents him to
continue with his work or engage in any other
gainful occupation resulting in the loss of
income.
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The corresponding disability benefits for each
kind of disability shall be granted to a member
based on the duration of incapacity to work and
actual loss of income.
There are three (3) kinds of disability which
shall be determined by the GSIS based on
established medical standards:
1. Permanent Total Disability
2. Permanent Partial Disability
3. Temporary Total Disability
Policies Governing Disability Benefits
Temporary Total Disability (TTD) – accrues
or arises when the impaired physical and/or
mental faculties can be rehabilitated and/or
restored to their normal functions, but such
disability shall result in temporary incapacity to
work or to engage in any gainful occupation.
**Any disability or injury as a result of, or due
to grave misconduct, participation in riots,
gross and inexcusable negligence, under the
influence of drugs or alcohol or willful intention
to injure or kill himself or another, shall not be
compensable.

Permanent Total Disability (PTD) –
disability due to injury or disease causing
complete, irreversible and permanent
incapacity that will permanently disable a
member to work or to engage in any gainful
occupation resulting to loss of income.
The following disabilities shall be deemed total
and permanent:
1. complete loss of sight for both eyes;
2. loss of two limbs at or above the ankle or
wrists;
3. permanent complete paralysis of two limbs;
and
4. brain injury resulting in incurable imbecility
or insanity.
5. such other cases as may be determined and
approved by the GSIS
The actual loss of income shall refer to the
number of days when a member went on leave
of absence without pay (LWOP) reckoned
immediately from the date of commencement
of disability and for the duration of entitlement
thereto, based on medical evaluation. Any
LWOP incurred after the duration of entitlement
to the benefit shall not be compensable.
If the member has two or more different
contingencies during the same period of benefit
entitlement, he shall be compensated only once
for the overlapping periods.
All injuries, disabilities, illnesses and all other
infirmities compensable under PD 626 shall not
be compensable under this Act.

Permanent Partial Disability (PPD) – arises Suspension of Disability Benefit

due to the complete and permanent loss of the
use of any of the following resulting to the Any applicable disability benefit shall be
disability to work for a limited period of time: suspended when he/she:
1. is re-employed; or
1. any finger 2. recovers from his/her disability as
2. any toe determined by the GSIS, whose decision
3. one arm; shall be final and binding; or
4. one hand; 3. fails to present himself for medical
5. one foot; examination when required by GSIS; or
6. one leg; 4. is receiving any other pension either from
7. one or both ears; GSIS or another local or foreign institution
8. hearing of one or both ears; or organization.
9. sight of one eye;
10. such other cases as may be determined and Computation of Benefit
approved by the GSIS
Permanent Total Disability (PTD) - A
member who becomes permanently and totally

113
disabled shall be entitled to the monthly income
benefits for life equivalent to the basic monthly
pension (BMP) effective from the date of
disability.
Permanent Partial Disability (PPD) - The
period of entitlement to PPD benefit shall be
determined after due medical evaluation; but
such period of entitlement to the benefit shall
not exceed 12 months for the same
contingency. Only the leave of absence/s
without pay incurred during the period of
entitlement, duly certified by the authorized
officer of the agency where he is employed,
shall be compensable.
The amount of PPD benefit shall be computed
by dividing the BMP by 30 days and multiplying
the quotient by the number of compensable
calendar days of leave of absence without pay
(LWOP).
Temporary Total Disability (TTD) - The
period of entitlement to TTD benefit shall be
determined after due medical evaluation and
proof of actual loss of work resulting in loss of
income by way of the incurred actual number
of days of leave of absence/s without pay duly
certified by the authorized officer of the agency
where he is employed; but such period of
entitlement to the benefit shall not exceed 120
days in one calendar year. However, if the
disability requires more extensive treatment
that lasts beyond 120 days, the payment of the
TTD may be extended by the GSIS but not to
exceed a total of 240 days.
Only the leave of absence/s without pay
incurred during the period of entitlement shall
be compensable. Entitlement, however, shall
start from the fourth day of the disability.
The amount of TTD benefit shall be computed
by multiplying 75% of the daily salary of the
member by the number of days of disability
based on the medical evaluation but not to
exceed 240 days for the same contingency.
However, the computed daily salary shall not be
less than seventy pesos (P70.00) but not to
exceed P340.00 per day.
**For the purpose of computing the
corresponding benefit of inactive members for
each kind of disability, the BMP, with respect to
PTD and PPD, and daily salary, with respect to
TTD, shall be computed as of the time of
separation from GSIS.
F. Survivorship Benefits
Survivorship benefits upon death of
member or pensioner
When a member or pensioner dies, the
beneficiaries shall be entitled to the following
survivorship benefits, whichever is applicable:
1. Surviving pension consisting of:
a. The basic survivorship pension which is
fifty percent (50%) of the BMP; and
b. The dependent children’s pension
equivalent to 10% of the BMP for each
child but not to exceed fifty percent
(50%) of the BMP (Sec. 24.1.1, Rule IV, IRR
of R.A. No. 8291).
2. Cash payment equivalent to eighteen (18)
months BMP (Sec. 24.1.2, Rule IV, IRR of R.A.
No. 8291);
3. Cash payment equivalent to one hundred
percent (100%) of the AMC for every year
of service with paid contributions but not
less than Twelve Thousand Pesos
(P12,000.00) (Sec. 24.1.3, Rule IV, IRR of R.A.
No. 8291).
Conditions for entitlement to survivorship
benefits
The primary and secondary beneficiaries,
except dependent children, shall be entitled to
applicable survivorship benefits, subject to the
following:
a. Not engaged in any gainful occupation as
defined in Sec. 2(p) of R.A. No. 8291;
b. The surviving spouse and the deceased
member were living together as husband
and wife;
114
c. Not gainfully engaged in a business or
economic activity (self- employed);
d. Employed/engaged in a business or
economic activity but receiving income less
than the minimum compensation of
government employees;
e. Not receiving any other pension from the
GSIS or another local or foreign institution
or organization; and
f. In the case of the dependent spouse,
payment of the basic survivorship pension
shall discontinue when he remarries,
cohabits, or engages in common-law
relationship.
The foregoing conditions, except the last one,
must be present immediately preceding the
death of the member or pensioner (Sec. 24.5,
Rule IV, IRR of R.A. No. 8291).
G. Separation Benefits
Is either one of the following:
1. For those members who are separated
from service and who have at least 3 years
of service but less than 15 years shall be
entitled to cash payment equivalent to
100% of the member’s AMC for each year
of creditable service, but not less than
P12,000.00, payable upon reaching age 60,
or upon his separation if he is already 60
years of age at the time of separation.
2. A cash payment equivalent to eighteen (18)
times the basic monthly pension payable at
the time of resignation or separation,
provided the member resigns or separates
from the service after he has rendered at
least 15 years of service and is below 60
years of age, plus an old-age pension
benefit equal to the basic monthly pension
payable monthly for life upon reaching the
age of sixty (60).
3. Reckoning Date of Separation of Uniformed
PNP, BJMP and BFP Personnel shall be
February 1, 1996. The computation of
benefit shall be based on their basic
monthly salary (premium-based) when
they ceased to be members of the GSIS.
4. Processing of Separation Benefit of
Members Who Died While Their Claims are
Being Processed
a. If the member dies during the
pendency of his claim for separation
benefit and he has rendered at least 15
years of creditable service, his legal
heirs shall be entitled to receive cash
payment equivalent to eighteen (18)
times the basic monthly pension, plus
accrued BMP, if any, up to the date of
death of the member. Thereafter, the
primary beneficiaries shall be entitled
to survivorship pension.
b. If the member dies during the
pendency of his claim for separation
benefit and he has rendered less than
15 years of creditable service, his legal
heirs shall be entitled to cash payment
equivalent to one hundred percent
(100%) of AMC for each year of
creditable service, but not less than
Twelve Thousand Pesos (P12,000.00)
(Sec. 21, IRR of R.A. No. 8291).
H. Unemployment Benefit
Conditions for Entitlement to
Unemployment Benefit:
A member shall be entitled to the
unemployment benefits if the following
conditions are met:
1. he/she was a permanent employee at time
of separation;
2. his/her separation was involuntary due to
the abolition of his/her office or position
resulting from reorganization; and
3. he/she has been paying the required
premium contributions for at least one (1)
year but less than 15 years prior to
separation.
115
 Amount, Duration and Payment of
Unemployment Benefit
The amount of unemployment benefit is
equivalent to 50% of the AMC and shall be paid
in accordance with the following Schedule:
Contributions Made Benefit Duration
1 year 2 months
but less than 3 years
3 or more years 3 months
but less than 6 years
6 or more years 4 months
but less than 9 years
9 or more years 5 months
but less than 11 years
11 or more years 6 months
but less than 15 years
Those entitled to more than two (2) months of
Unemployment Benefits shall initially receive
two (2) monthly payments. A seven-day (7-
day) waiting period shall be imposed on
succeeding monthly payments to determine
whether the separated member has found
gainful employment either in the public or
private sector.
In cases of reemployment, all accumulated
unemployment benefit paid to the employee
during his/her entire membership with the GSIS
shall be deducted without interest from the
separation or retirement benefits, as the case
maybe, to which the member may be entitled
upon his voluntary resignation, separation or
retirement. (Sec. 22, IRR of R.A. No. 8291)
I. Funeral Benefits
Funeral benefits is intended to help defray the
expenses incident to the burial and
funeral of the deceased member, pensioner or
retiree under R.A. No. 660 (“Magic 87”), R.A.
No. 1616 (“Take All Retirement Mode”), P.D.
No. 1146 (“Revised Government Service
Insurance Act of 1977”) and R.A. No. 8291 (Sec.
25, Rule IV, IRR of R.A. No. 8291).
Contingency for the Payment of Funeral
Benefit (Revised Guidelines on Funeral
Benefit, 25 April 2018)
The funeral benefit shall be paid upon the death
of:
1. A member who:
a. died while in active service; or
b. although separated from government
service, is entitled to future separation
or retirement benefits under Section 11
(Separation Benefits) or Section 13
(Retirement Benefits) of R.A. No. 8291,
respectively, subject to the provisions
of Section III of Policy and Procedural
Guidelines No. 329-18;
c. retired under R.A. No. 1616 prior to 24
June 1997 with at least 20 years of
service, regardless of age; or,
d. retirement under R.A. No. 1616 on or
after 24 June 1997, with at least 20
years of service, and is at least 60 years
of age at the time of his/her
retirement; and
2. An old-age or disability pensioner.
Order of Priority in the Payment of
Benefit
The funeral benefit shall be payable to any
qualified individual, in accordance with the
following order of priority:
1. Surviving legitimate spouse;
2. Any of the following persons who can
present receipt/s, provided that the
surviving spouse has acknowledged that
this person shouldered the funeral
expenses:
a. Children of the deceased member or
pensioner; or,
b. Any other person who can show
incontrovertible proof that he or she
shouldered the funeral expenses of the
deceased.
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3. DISABILITY AND DEATH BENEFITS
a) Labor Code
The State shall promote and develop a tax-
exempt employees’ compensation program
whereby employees and their dependents, in
the event of work connected disability or death,
may promptly secure adequate income benefit
and medical related benefits (Art. 172, Labor
Code, as amended)
EMPLOYEES COMPENSATION AND STATE
INSURANCE FUND
The State Insurance Fund (SIF) is built up by
the contributions of employers based on the
salaries of their employees as provided under
the Labor Code.
There are two (2) separate and distinct State
Insurance Funds: one established under the
SSS for private sector employees; and the
other, under the GSIS for public sector
employees. The management and investment
of the Funds are done separately and distinctly
by the SSS and the GSIS. It is used exclusively
for payment of the employees’ compensation
benefits and no amount thereof is authorized to
be used for any other purpose.
There are three (3) agencies involved in the
implementation of the Employees’
Compensation Program (ECP). These are: (1)
The Employees’ Compensation Commission
(ECC) which is mandated to initiate, rationalize
and coordinate policies of the ECP and to review
appealed cases from (2) the Government
Service Insurance System (GSIS) and (3) the
Social Security System (SSS), the administering
agencies of the ECP. (Last Minutes Notes for the
2022 Bar Exam in Labor Law, Prof. Johanna Celine
Mari A. Chan, p. 43)
Compulsory Coverage
Coverage in the State Insurance Fund shall be
compulsory upon:
● All employers and their employees not
over sixty (60) years of age;
● An employee who is over sixty (60) years
of age and paying contributions to qualify
for the retirement or life insurance benefit
administered by the System (Art. 174 LC as
amended)
● An employee who is coverable by both the
GSIS and SSS and should be compulsorily
covered by both Systems (Art 174, Labor
Code, as amended; Rule I, Sec. 2, Amended
Rules on Employees’ Compensation).
Sectors of employees covered by the ECP
The following sectors are covered under the
ECP:
1. All public sector employees including those
of government-owned and/or controlled
corporations and local government units
covered by the GSIS;
2. All private sector employees covered by
the SSS; and
3. Overseas Filipino workers (OFWs),
namely: a. Filipino seafarers compulsorily
covered under the SSS
b. Land-based contract workers provided that
their employer, natural or juridical, is
engaged in any trade, industry or business
undertaking in the Philippines; otherwise,
they shall not be covered by the ECP. (Last
Minutes Notes for the 2022 Bar Exam in Labor
Law, Prof. Johanna Celine Mari A. Chan, p. 43)
Effective Date of Coverage
● Employer- on the first day of his operation
● Employee- on the date of his employment
(Art. 176, Labor Code, as amended)
STATE INSURANCE FUND
The state insurance fund is built up by the
contributions of the employers based on the
salaries of their employees as provided under
117
the Labor Code (Chan, Labor Law Reviewer 2019,
p.301)
Kinds of State Insurance Funds
● SSS- for private sector employees
● GSIS- for public sector employees
Types of benefits
The benefits under Employees Compensation
are in the form of income or services, and
consist of the following: (Rule VII, Sec. 1,
Amended Rules on Employees’ Compensation)
a. Medical services, appliances and supplies
b. Rehabilitation services
c. Disability Benefits
1. Temporary total disability
2. Permanent total disability
3. Permanent partial disability
d. Death Benefit
e. Funeral Benefit
f. Carer’s Allowance (as provided under BR No.
90-12-0090, dated Dec. 20, 1990 and under
Executive Order (E.O.) No. 134 [“Granting of
Carer’s Allowance to EC PPD and PTD
Pensioners in the Public Sector, date of
effectivity: May 31, 2013)
Disability Benefits
1. 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, except as otherwise provided
for in Rule X of the Rules (Rule VII, Sec. 2,
Amended Rules on Employees’ Compensation)
Amount of Benefit - for each day of such a
disability or fraction thereof, be paid by the
System an income benefit equivalent to 90%
of his average daily salary credit, subject to the
following conditions:
● The daily income benefit shall not be less
than PhP 10.00 nor more than PhP
200.00.
● The income benefit shall be paid
beginning on the first day of such
disability.
● If caused by an injury or sickness 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 in which case benefit for
temporary total disability shall be paid.
● The System (SSS or GSIS) shall be notified
of the injury or sickness.
(Rule X, Sec. 2, Amended Rules on Employees’
Compensation)
Period of Entitlement
The income benefit shall be paid beginning on
the first day of such disability. If caused by
an injury or sickness 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 in
which case benefit for temporary total disability
shall be paid. However, the System may declare
the total and permanent status at any time after
120 days of continuous temporary total
disability as may be warranted by the degree of
actual loss or impairment of physical or mental
functions as determined by the System.
2. 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,
except as otherwise provided for in Rule X of
the Rules. (Rule VII, Sec. 2, Amended Rules on
Employees’ Compensation)
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Amount of Benefit - for each month until his Amount of Benefit - shall be paid by the
death, be paid by the System during such a System a monthly income benefit for the
disability number of months indicated below. If the
indicated number of months exceed twelve, the
● an amount equivalent to the monthly income benefit shall be paid in monthly
income benefit, plus 10% thereof for each pension; otherwise, the System may pay
dependent child, but not exceeding five, income benefit in lump sum or in monthly
beginning with the youngest and without pension
substitution. Provided, that the monthly
income benefit shall be the new amount of In case of permanent partial disability less than
the monthly benefit for all covered the total loss of the member, the same monthly
pensioners, effective upon approval of this income shall be paid for a portion of the period
Decree. established for the total loss of the member in
accordance with the proportion that the partial
The monthly income benefit shall be loss bears to the total loss. If the result is a
guaranteed for five years, and shall be decimal fraction, the same shall be rounded off
suspended if the employee is gainfully to the next higher integer.
employed, or recovers from his permanent total
disability, or fails to present himself for In case of simultaneous loss of more than one
examination at least once a year upon notice by member or a part thereof, the same monthly
the System. income shall be paid for a period equivalent to
the sum of the periods established for the loss
The following disabilities shall be deemed total of the member or part thereof but not
and permanent: exceeding 75. If the result is a decimal fraction,
the same shall be rounded off to the higher
1. Temporary total disability lasting integer.
continuously for more than 120 days,
except as otherwise provided for in the The benefit shall be paid for not more than the
Rules; period designated in the following schedules:
2. Complete loss of sight of both eyes; Complete and permanent No. of Months
3. Loss of two limbs at or above the ankle or loss of the use of
wrist; One thumb 10
4. Permanent complete paralysis of two limbs; One index finger 8
One middle finger 6
5. Brain injury resulting in incurable imbecility
One ring finger 5
or insanity; and One little finger 3
6. Such cases as determined by the Medical One big toe 6
Director of the System and approved by the One toe 3
Commission. One arm 50
One hand 39
(Art. 198, Labor Code, as amended) One foot 31
Period of Entitlement - The full monthly One leg 46
income benefit shall be paid for all compensable One ear 10
Both ears 20
months of disability.
Hearing of one ear 10
Hearing of both ears 50
3. Permanent partial disability - A disability Sight of one eye 25
is partial and permanent if as a result of the (Art. 199, Labor Code, as amended)
injury or sickness the employee suffers a
permanent partial loss of the use of any part of
his body. (Rule XII, Sec. 2, Amended Rules on
Employees’ Compensation)

119
Death Benefits
Eligibility
The beneficiaries of a deceased employee shall
be entitled to an income benefit if all of the
following conditions are satisfied:
(1) The employee has been duly reported to the
System;
(2) He died as a result of an injury or sickness;
and
(3) The System has been duly notified of his
death, as well as the injury or sickness which
caused his death. His employer shall be liable
for the benefit if such death occurred before the
employee is duly reported for coverage to the
System.
If the employee has been receiving monthly
income benefit for permanent total disability at
the time of his death, the surviving spouse must
show that the marriage has been validly
subsisting at the time of his disability.
In addition, the cause of death must be a
complication or natural consequence of the
compensated Permanent Total Disability. (as
provided under Board Resolution No. 19-09-116,
dated Sept. 2, 2010) (Rule XIII, Sec. 1, Amended
Rules on Employees’ Compensation)
Beneficiaries
a. Primary Beneficiaries
● Dependent spouse until he remarries;
and
● Dependent children (legitimate,
legitimated, natural-born, or legally
adopted).
b. Secondary Beneficiaries
● Illegitimate children and legitimate
descendants; and
● ii. Parents, grandparents, grandchildren
[Art. 173(j), Labor Code, as amended]
Benefits
Primary beneficiaries
An amount equivalent to his monthly
income benefit, plus 10% thereof for each
dependent child, but not exceeding five,
beginning with the youngest and without
substitution, That the monthly income benefit
shall be guaranteed for five years
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.
The minimum income benefit shall not be less
than Fifteen Thousand Pesos (P15,000.00).
Secondary beneficiaries
The 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.
If the employee has been receiving monthly
income benefit for permanent total disability at
the time of his death, the secondary
beneficiaries shall be paid the monthly pension,
excluding the dependent's pension of the
remaining balance of the five year guaranteed
period. (ECC Resolution No. 2799, July 25, 1984).
A funeral benefit of Three Thousand Pesos
(P3,000.00) shall be paid upon the death of a
covered employee or permanently totally
disabled pensioner.
b) POEA-Standard Employment Contract
Commencement of contract
The employment contract between the
employer and the seafarer shall commence
upon actual departure of the seafare from the
Philippine airport or seaport in the point of hire
and with a POEA approved contract. It shall be
effective until the seafarer’s date of arrival at
the point of hire upon termination of his
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employment pursuant to Section 18 of this
Contract [Sec.2(a)]
Duration
The period of employment shall be a period
mutually agreed upon by the seafarer and the
employer but not to exceed 12 months. Any
extension of the contract shall be subject to
mutual consent of both parties.
Benefits for Injury or Illness
The liabilities of the employer when the
seafarer suffers work-related injury or illness
during the term of his contract are as follows:
1. The employer shall continue to pay the
seafarer his wages during the time he is on
board the vessel;
2. 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 repatriated.
However, if after repatriation, the seafarer
still requires medical attention arising from
said injury or illness, he shall be so provided
at cost to the employer until such time he
is declared fit or the degree of his disability
has been established by the company-
designated physician.
3. Upon sign-off from the vessel for medical
treatment, the seafarer is entitled to
sickness allowance equivalent to his basic
wage until he is declared fit to work or the
degree of permanent disability has been
assessed by the company-designated
physician but in no case shall this period
exceed one hundred twenty (120) days.
For this purpose, the seafarer shall submit
himself to a post employment medical
examination by a company-designated
physician within three working days upon his
return except when he is physically
incapacitated to do so, in which case, a written
notice to the agency within the same period is
deemed as compliance. Failure of the seafarer
to comply with the mandatory reporting
requirement shall result in his forfeiture of the
right to claim the above benefits.
If a doctor appointed by the seafarer disagrees
with the assessment, a third doctor may be
agreed jointly between the Employer and the
seafarer. The third doctor’s decision shall be
final and binding on both parties.
4. Those illnesses not listed in Section 32 of
this Contract are disputably presumed as
work related.
5. Upon sign-off of the seafarer from the
vessel for medical treatment, the employer
shall bear the full cost of repatriation in the
event the seafarer is declared (1) fit for
repatriation; or (2) fit to work but the
employer is unable to find employment for
the seafarer on board his former vessel or
another vessel of the employer despite
earnest efforts.
6. In case of permanent total or partial
disability of the seafarer caused by either
injury or illness the seafarer shall be
compensated in accordance with the
schedule of benefits arising from an illness
or disease shall be governed by the rates
and the rules of compensation applicable at
the time the illness or disease was
contracted.
Requisites for compensability of Injury or
Illness
To be compensable under Section 20(A) of the
2010 POEA-SEC:
(1) The injury must be work-related; and
(2) The work-related injury or illness
must have existed during the term of
the seafarer’s employment contract
(Labor Law Reviewer, Chan,2019 p.336)
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Benefits for Death
i. In case of work-related death the
employer: shall pay his beneficiaries the
Philippines currency equivalent to the
amount of Fifty Thousand US dollars
(US$50,000) and 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.
ii. In case death is caused by warlike
activity while sailing within a declared
war zone or war risk area
The compensation payable shall be doubled.
The employer shall undertake appropriate war
zone insurance coverage for this purpose.
These benefits shall be separate and distinct
from and will be in addition to whatever
benefits which the seafarer is entitled to under
Philippine laws from SSS, OWWA, ECC,
PhilHealth and Pag-IBIG Fund.
Liabilities of the Employer
The 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).
D. LABOR RELATIONS
Labor relations define the status, rights and
duties, as well as the institutional mechanisms
that govern the individual and collective
interactions between employers, employees
and their representatives. Unionization,
negotiation, and dispute settlements fall in the
area of labor relations. (Everyone’s Labor Code,
Azucena, 2021, p.11)
1. Right to Self-Organization
a) Coverage
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.
(Article 253, Labor Code of the Philippines)
The right to self-organization includes the right
to form, join or assist labor organizations for the
purpose of collective bargaining through
representatives of their own choosing and to
engage in lawful concerted activities for the
same purpose for their mutual aid and
protection. This is in line with the policy of the
State to foster the free and voluntary
organization of a strong and united labor
movement as well as to make sure that workers
participate in policy and decision-making
processes affecting their rights, duties and
welfare. (Confederation for Unity, Recognition and
Advancement of Government Employees v. Abad,
G.R. No. 200418, November 10, 2020)
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The right to form a union or association or to
self-organization comprehends two notions, to
wit:
a. the liberty or freedom, that is, the absence
of restraint which guarantees that the
employee may act for himself without
being prevented by law; and
b. the power, by virtue of which an employee
may, as he pleases, join or refrain from
joining an association. (Ibid)
A labor organization is defined as "any union or
association of employees which exists in whole
or in part for the purpose of collective
bargaining or of dealing with employers
concerning terms and conditions of
employment.
A labor organization has two broad rights:
1. to bargain collectively and
2. to deal with the employer concerning terms
and conditions of employment.
To bargain collectively is a right given to a union
once it registers itself with the DOLE. Dealing
with the employer, on the other hand, is a
generic description of interaction between
employer and employees concerning
grievances, wages, work hours and other terms
and conditions of employment, even if the
employees' group is not registered with the
DOLE. (Confederation for Unity, Recognition and
Advancement of Government Employees v. Abad,
G.R. No. 200418, November 10, 2020)
b) Eligibility for Membership
Who May Join, Form, or Assist a Labor
Organization for the Purpose of Collective
Bargaining
The following are eligible to join, form or assist
a labor organization.
1. In the private sector:
i. All persons employed in commercial,
industrial and agricultural enterprises;
ii. Employees of GOCCs without original
charters established under the
Corporation Code;
iii. Employees of religious, charitable,
medical or educational institutions,
whether operating for profit or not;
iv. Supervisory employees;
v. Alien employees;
vi. Working children;
vii. Homeworkers;
viii. Employees of cooperatives;
ix. Employees of legitimate contractors
not with principal but with the
contractor;
x. Security Guards
2. In the public/government sector:
i. All rank-and-file employees of all
branches, subdivisions, instrumentalities,
and agencies of government, including
GOCCs with original charters.
Right of Supervisory Employees/ Front-
line Managers to Join a Union
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), Labor
Code of the Philippines)
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. (Article 255, Labor Code of the Philippines)
The employees so improperly included are
automatically deemed removed from the list of
members of said union. In other words, their
removal from the said list is by operation of law.
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Alien employees
For an alien employee to exercise his right to
self-organization, the following requisites must
be complied with:
a. He should have a valid working permit
issued by the DOLE; and
b. He is a national of a country which grants
the same or similar rights to Filipino
workers or which has ratified either ILO
Convention No. 87 or 98, as certified by the
Philippine DFA (Par. 2, Rule II, DOLE
Department Order NO. 40, Series of 2003)
Working children
Working children have the same freedom as
adults to join the collective bargaining union of
their own choosing in accordance with law.
Neither management nor any collective
bargaining union shall threaten or coerce
working children to join, continue or withdraw
as members of such union. (Article 11, P.D No.
603)
Homeworkers
Homeworkers have the right to form, join or
assist organizations of their own choosing in
accordance with law. (Section 3, Department
Order 05-92, Series of 1992)
Employees of cooperatives
Employees who are not members-consumers
may form, join or assist labor organizations for
purposes of collective bargaining
notwithstanding the fact that employees of
SAJELCO who are not members-consumers
were employed ONLY because they are
members of the immediate family of members-
consumers. The fact remains that they are not
themselves members-consumers, and as such,
they are entitled to exercise the rights of all
workers to organization, collective bargaining,
negotiations and others as are enshrined in the
Constitution and the Labor Code. (San Jose City
Electric Service Cooperative, Inc. v. Ministry of Labor
and Employment, G.R. No. 77231, May 31, 1989)
Owner cannot bargain with himself
Members-consumers are not qualified to form,
join or assist labor organizations for purposes
of collective bargaining. The reason for
withholding from employees of a cooperative
who are members-co-owners the right to
collective bargaining is clear: an owner cannot
bargain with himself. (Ibid)
Employees of legitimate contractors not
with the principals but with the
contractors
There is a legitimate job contracting or
subcontracting if there is an agreement
between the principal and the contractor or
subcontractor that assure the contractual
employee’s entitlement to all labor and
occupational safety and health standards, free
exercise of the right to self-organization,
security of tenure, and social welfare benefits
(Mago vs. Sun Power Manufacturing, Ltd., G.R. No.
210961, January 24, 2018)
But this right cannot be exercised and invoked
against the principal but only against the
independent contractor which employed them.
(Chan, Bar Reviewer on Labor Law, 2019, p. 381)
Security Guards
The security guards and other personnel
employed by the security service contractor
shall have the right to form, join or assist in the
formation of a labor organization of their own
choosing for purposes of collective bargaining
and to engage in concerted activities which are
not contrary to law including the right to strike.
(Section 10, Department Order No. 14, Series of
2001)
In the public sector
All rank-and-file employees of all branches,
subdivisions, instrumentalities, and agencies of
government, including GOCCs with original
charters.
Non-Employees are not entitled to join or
form a labor organization for purposes of
collective bargaining
Persons who are not employees of a company
are not entitled to the constitutional right to join
or form a labor organization for purposes of
collective bargaining. The question of whether
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ER-EE relationship exists is a primordial
consideration before extending labor benefits
under the workmen's compensation, social
security, Medicare, termination pay and labor
relations law. (Singer Sewing Machine Co. vs.
Drilon, G.R. No. 91307, January 24, 1991)
Worker’s Association
The following are allowed to form labor
organizations for their mutual aid and
protection and other legitimate purposes
except collective bargaining:
1. Ambulant workers;
2. intermittent and other workers;
3. the self-employed;
4. rural workers and
5. those without any definite employers.
(Article 253, Labor Code of the Philippines)
The reason for this rule is that these persons
have no employers with whom they can
collectively bargain.
Workers in Export Processing Zones
Export processing zones are still part of the
Philippine territory which is subject to
sovereignty and laws. Therefore, the
Constitution that guarantees workers’ right to
organize applies to them with undiminished
force. (Azucena, The Labor Code With Comments
and Cases, Vol. II-A, 2021, p. 241)
Religious objectors
Members of said religious sects cannot be
compelled or coerced to join labor unions even
when said unions have closed shop agreements
with the employers; that in spite of any closed
shop agreement, members of said religious
sects cannot be refused employment or
dismissed from their jobs on the sole ground
that they are not members of the collective
bargaining union. (Gonzales v. Central Azucarera
de Tarlac Labor Union, G.R. No. L-38178, October 3,
1985)
Religious objectors can form and join
their own union
Recognition of the tenets of a sect should not
infringe on the basic right of self-organization
granted by the Constitution to workers,
regardless of religious affiliation (Kapatiran sa
Meat and Canning Division vs. Hon. Pura Calleja, G.
R. No. L-82914, June 20, 1988)
NOTE: Religious objectors also have the right
to vote in a certification election (Reyes vs.
Trajano, G. R. No. 84433, June 2, 1992).
Persons Not Allowed to Form, Join, or
Assist Labor Organizations
a. In the Private Sector
i. Managerial employees; and
ii. Confidential employees.
b. In the Public Sector
i. High-level employees whose functions
are normally considered as policy-
making or managerial or whose duties
are of a highly confidential nature;
ii. Members of the Armed Forces of the
Philippines;
iii. Police officers;
iv. Firemen; and
v. Jail guards.
a. Restrictions as to Managerial
Employees to Join any Labor
Organization
Managerial employees are not eligible to
join, assist or form any labor organization
(Art. 255, Labor Code)
Managerial Employee is one who is vested
with powers or prerogatives to lay down and
execute management policies and/or to hire,
transfer, suspend, layoff, recall, discharge,
assign or discipline employees (Art. 219(m),
Labor Code)
There are 3 types of managerial employees:
1. Top Management – responsible for the
overall management of the organization. It
establishes operating policies and guides to
the organization’s interactions with its
environment.
2. Middle Management – Direct the
activities of other managers and sometimes
also those of operating employees. Their
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 principal responsibilities are to direct the
activities that implement their
organization’s policies and to balance the
demands of their superiors with the
capacities of their subordinates.
3. First-Line Management (also called
supervisory level) – Direct and supervise
work of employees only; they do not
supervise other managers.
The first two above are absolutely prohibited;
but the third, being supervisors, are allowed to
organize but only among themselves (Chan, Bar
Reviewer on Labor Law, 2019, p. 384-385)
Job Description Determines Nature of
Employment
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 for it is
the job description that determines the nature
of employment. (Asia Pacific Chartering (Phils.)
Inc. v. Farolan, G.R. No. 151370, December 4, 2002)
b. Restrictions as to Confidential
Employees
Confidential employees are those who:
1. assist or act in a confidential capacity, in
regard
2. to persons who formulate, determine, and
effectuate management policies [specially
in the field of labor relations].
The two criteria are cumulative, and both must
be met if an employee is to be considered a
confidential employee — that is, the
confidential relationship must exist between the
employee and his superior officer; and that
officer must handle the prescribed
responsibilities relating to labor relations.
(Sugbuanon Rural Bank, Inc. v. Laguesma, G.R. No.
116194, February 2, 2000)
Although Article 245 of the Labor Code limits
the ineligibility to join, form and assist any labor
organization to managerial employees,
jurisprudence has extended this prohibition to
confidential employees or those who by reason
of their positions or nature of work are required
to assist or act in a fiduciary manner to
managerial employees and, hence, are likewise
privy to sensitive and highly confidential
records.
Confidential employees are thus excluded from
the rank-and-file bargaining unit. The rationale
for their separate category and disqualification
to join any labor organization is similar to the
inhibition for managerial employees, because if
allowed to be affiliated with a union, the latter
might not be assured of their loyalty in view of
evident conflict of interests and the union can
also become company-denominated with the
presence of managerial employees in the union
membership. Having access to confidential
information, confidential employees may also
become the source of undue advantage. Said
employees may act as a spy or spies of either
party to a collective bargaining agreement. |||
(San Miguel Foods, Inc. v. San Miguel Corp.
Supervisors and Exempt Union, G.R. No. 146206,
August 1, 2011)
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 business operations of the company is
not per se a ground for the exclusion in the
bargaining unit. (Tunay na Pagkakaisa ng
Manggagawa sa Asia Brewery vs. Asia Brewery, G.R.
No. 162025, August 3, 2010)
Restrictions as to Employee-Member of
Cooperative
Employees who at the same time are members
of an electric cooperative are not entitled to
form or join a union. (Central Negros Electric
Cooperative, Inc. v. Secretary, Department of Labor
and Employment, G.R. No. 94045, September 13,
1991)
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Members of cooperatives are not eligible even
though they do not participate in the actual
management of the cooperative. Irrespective of
their degree of participation, they are still co-
owners. (Benguet Electric Cooperative vs. Ferrer-
Calleja, G.R. No. 79025, December 29, 1989)
Exception
Employees who withdrew their membership
from the cooperative are not entitled to form or
join a labor union for the negotiations of a
Collective Bargaining Agreement. (CENECO vs.
DOLE, G.R. No. 94045, September 13, 1991)
NOTE: Even as regards the employees who are
members of the cooperative, their incapacity to
bargain does not stop them from forming their
organization which is not a union. Its purpose
is not to collectively bargain with the
cooperative but to extend aid and protection to
its members. The capacity of such an
association to sue the cooperative which
forcibly required members to sign applications
for retirement, resignation or separation.
(Azucena, Everyone’s Labor Code 2, 2021, p. 305)
Government employees have the right to
self-organization but are prohibited to
strike
All government employees can form, join or
assist employees' organizations of their own
choosing for the furtherance and protection of
their interests. They can also form, in
conjunction with appropriate government
authorities, labor-management committees,
works councils and other forms of workers'
participation schemes to achieve the same
objectives. (Section 2, E.O. No. 80)
The right to self-organization of government
employees pertains to all branches, subdivision,
instrumentalities and agencies of the
Government, including government-owned or
controlled corporations (GOCCs) with original
charters. (Section 1, E.O. No. 80)
Government employees’ right to organize
is for furtherance and protection of their
interests
The right of government employees to "form,
join or assist employees organizations of their
own choosing" under Executive Order No. 180
is not regarded as existing or available for
"purposes of collective bargaining," but simply
"for the furtherance and protection of their
interests." (Arizala vs. CA, G.R. No. 43633-34,
September 14, 1990)
Right not Extensive
The right of Government employees to deal and
negotiate with their respective employers is not
quite as extensive as that of private employees.
Excluded from negotiation by government
employees are the "terms and conditions of
employment that are fixed by law." Only those
terms and conditions not otherwise fixed by law
are negotiable. (Azucena, Everyone’s Labor
Code 2, 2021, p. 301)
NOTE: Employees of government corporations
established under the Corporation Code shall
have the right to organize and to bargain
collectively (Art. 254, Labor Code of the Philippines)
Members of AFP, police officers,
policemen, firemen, and jail guards
excluded from unionizing; Exception
Section 4 of E.O. No. 180 excludes members of
AFP, police officers, policemen, firemen, and jail
guards from unionizing for reasons of security
and safety.
c) Doctrine of Necessary Implication
The doctrine states that what is implied in a
statute is as much a part thereof as that which
is expressed. Every statute is understood, by
implication, to contain all such provisions as
may be necessary to effectuate its object and
purpose, or to make effective rights, powers,
privileges or jurisdiction which it grants,
including all such collateral and subsidiary
consequences as may be fairly and logically
inferred from its terms. Ex necessitate legis.
And every statutory grant of power, right or
privilege is deemed to include all incidental
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power, right or privilege. This is so because the
greater includes the lesser, expressed in the
maxim, in eo plus sit, simper inest et minus.
(Robustum Agricultural Corp. v. Department of
Agrarian Reform, G.R. No. 221484, November 19,
2018)
Article 245 of the Labor Code does not directly
prohibit confidential employees from engaging
in union activities. However, under the doctrine
of necessary implication, the disqualification
of managerial employees equally applies
to confidential employees. The confidential-
employee rule justifies exclusion of confidential
employees because in the normal course of
their duties they become aware of management
policies relating to labor relations. It must be
stressed, however, that when the employee
does not have access to confidential labor
relations information, there is no legal
prohibition against confidential employees from
forming, assisting, or joining a union.
(Sugbuanon Rural Bank, Inc. v. Laguesma, G.R. No.
116194, February 2, 2000)
In applying the doctrine of necessary
implication, we took into consideration the
rationale behind the disqualification of
managerial employees expressed in Bulletin
Publishing Corporation vs. Sanchez, thus ". . . if
these managerial employees would belong to or
be affiliated with a Union, the latter might not
be assured of their loyalty to the Union in view
of evident conflict of interests. The Union can
also become company — dominated with the
presence of managerial employees in Union
membership." Stated differently, in the
collective bargaining process, managerial
employees are supposed to be on the side of
the employer, to act as its representatives, and
to see to it that its interest are well protected.
The employer is not assured of such protection
if these employees themselves are union
members. (Pepsi-Cola Products Philippines, Inc. v.
Secretary of Labor, G.R. Nos. 96663 & 103300,
August 10, 1999)
d) Commingling or Mixed Membership
Commingling or mixed membership is the
inclusion of workers who are not part of the
collective bargaining unit (CBU).
The inclusion in a union of disqualified
employees is not among the grounds for
cancellation, unless such inclusion is due to
misrepresentation, false statement or fraud
under the circumstances enumerated in
Sections (a) and (c) of Article 239 of the Labor
Code. (Holy Child Catholic School v. Sto. Tomas,
G.R. No. 179146, July 23, 2013)
The mixed membership does not result in the
illegitimacy of the registered labor union unless
the same was done through misrepresentation,
false statement or fraud. (Heritage Hotel Manila v.
Secretary of Labor and Employment, G.R. No.
172132, July 23, 2014)
While there is a prohibition against the mingling
of supervisory and rank-and-file employees in
one labor organization, the Labor Code does
not provide for the effects thereof. Thus, the
Court said that after a labor organization has
been registered, it may exercise all the rights
and privileges of a legitimate labor
organization. Any mingling between
supervisory and rank-and-file employees in its
membership (or, by analogy, any inclusion of
workers outside the CBU) cannot affect its
legitimacy for that is NOT among the grounds
for cancellation of its registration, unless such
mingling was brought about by
misrepresentation, false statement or
fraud under Article 239 of the Labor Code.
(SMCC-SUPER vs Charter Chemical and Coating
Corporation, G.R. No. 169717, MArch 16, 2011)
e) Effect of Inclusion as Members of
Employees Outside of the Bargaining
Unit
The inclusion as union members of employees
outside the bargaining unit shall not be ground
for the cancellation of the registration of the
union. Said employees are automatically
deemed removed from the list of membership
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of said union. (Art. 256, Labor Code of the
Philippines)
EXCEPTION: Unless such mingling was
brought about by misrepresentation, false
statement or fraud under Article 247 (Grounds
for Cancellation of Union Registration) of the
Labor Code. (SMCC-Super vs. Charter Chemical and
Coating Corporation, G.R. No. 169717, March 16,
2011)
Non-Abridgement of Right to Self-
Organization
It shall be unlawful for any person to restrain,
coerce, discriminate against or unduly interfere
with employees and workers in their exercise of
the right to self-organization. (Art. 257, Labor
Code)
The 1987 Constitution provides that “the right
of the people, including those employed in the
public and private sectors, to form unions,
associations, or societies for purposes not
contrary to law shall not be abridged.” Clearly,
the said right guaranteed by the Constitution is
subject to the condition that its exercise should
be for purposes “not contrary to law”. (United
Pepsi-Cola Supervisory Union vs. Laguesma, G. R.
No. 122226, March 25, 1998)
The right to self-organization includes the right
to:
a. Form unions;
b. Take part in its formation;
c. Join a union;
d. Collectively bargain;
e. Collectively negotiate; or
f. Engage in concerted activities for mutual
aid and protection (Art. 253, Labor Code)
Worker Should Personally Decide
Whether to Join in a Labor Union
It is therefore the employee who should decide
for himself whether he should join or not an
association; and should he choose to join, he
himself makes up his mind as to which
association he would join; and even after he
has joined, he still retains the liberty and the
power to leave and cancel his membership with
said organization at any time. (Bank of the
Philippine Islands v. BPI Employees Union-Davao
Chapter-Federation of Unions in BPI Unibank, G.R.
No. 164301, August 10, 2010)
It is clear, therefore, that the right to join a
union includes the right to abstain from joining
any union. Inasmuch as what both the
Constitution and the Industrial Peace Act have
recognized, and guaranteed to the employee, is
the 'right' to join associations of his choice, it
would be absurd to say that the law also
imposes, in the same breath, upon the
employee the duty to join associations. The law
does not enjoin an employee to sign up with
any association. (Ibid)
Right to self-organization present on
their first day of service
Any employee, whether employed for a definite
period or not, shall, beginning on his first day
of service, be considered as an employee for
purposes of membership in any labor union.
(Art. 292(c), Labor Code, as amended)
2. BARGAINING UNIT
“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. (Holy Child Catholic School v. Sto. Tomas, G.R.
No. 179146)
An appropriate bargaining unit is a group of
employees of a given employer, composed of
all or less than the entire body of employees,
which the collective interests of all the
employees, consistent with equity to the
employer, indicate to be best suited to serve
reciprocal rights and duties of the parties under
the collective bargaining provisions of law.
Otherwise stated, it is a legal collectivity for
collective bargaining purposes whose members
have substantially mutual bargaining interests
in terms and conditions of employment as will
assure to all employees their collective
bargaining rights. A unit to be appropriate must
effect a grouping of employees who have
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substantial, mutual interests in wages, hours,
working conditions and other subjects of
collective bargaining.” (Dunlop Slazenger (Phils.),
Inc. v. Secretary of Labor and Employment, G.R. No.
131248, December 11, 1998)
The existence of a prior collective bargaining
history is neither decisive nor conclusive in the
determination of what constitutes an
appropriate bargaining unit. However,
employees in two corporations cannot be
treated as a single bargaining unit even if the
businesses of the two corporations are related.
(Sta. Lucia East Commercial Corporation vs. Hon.
Secretary of Labor, G.R. No. 162355, August 14,
2009)
No Hard and Fast Rule
The basic test of a bargaining unit's
acceptability is whether it will best assure to all
employees the exercise of their collective
bargaining rights, industrial experience
indicates that the most efficacious bargaining
unit is one which is comprised of constituents
enjoying a community of interest and economic
or occupational unity. This community of
interest is reflected in groups having substantial
similarity of work and duties or similarity of
compensation and working conditions, among
others. (Democratic Labor Union vs. Cebu
Stevedoring Co., G.R. No. L-10321, February 28,
1958)
The Bureau of Labor Relations enjoys a wide
discretion in determining the procedure
necessary to ensure the fair and free choice of
bargaining representation by employees. Its
action “in deciding upon an appropriate unit for
collective bargaining purposes is discretionary
and its judgment in this respect is entitled to
almost complete finality, unless its action is
arbitrary or capricious and absent and grave
abuse of discretion as to justify the Court’s
intervention. (Filoil Refinery Corp. vs. Filoil
Supervisory and Confidential Employees, G.R. No. L-
26736, August 18, 1972)
Tests in determining the appropriate
collective bargaining unit
1. Community or mutuality of interest;
2. Globe doctrine or will of the members;
3. Prior Collective bargaining history; and
4. Employment status doctrine.
Community or mutuality of interest
Law and jurisprudence, thus, provide that the
commonality or mutuality of interest is the most
fundamental standard of an appropriate
bargaining unit. This standard requires that the
employees in an asserted bargaining unit be
similarly situated in their terms and conditions
of employment relations. This commonality or
mutuality may be appreciated with greater
certainty if their areas of differences with other
groups of employees are considered. (Holy Child
Catholic School v. Sto. Tomas, G.R. No. 179146, July
23, 2013)
Factors in Determining Community or
Mutuality of Interest
1. Similarity in the scale and manner of
determining earnings
2. Similarity in employment benefits, hours of
work and other terms and conditions of
employment.
3. Similarity in the kinds of work performed.
4. Similarity in the qualifications, skills and
training of the employees
5. Frequency of contact or interchange among
the employees
6. Geographic proximity
7. Continuity or integration of production
process
8. Common supervision and determination of
labor-relations policy
9. History of collective bargaining
10. Desires of the affected employees
11. Extent of union organization (Azucena, The
Labor Code with Comments and Cases Volume
I, 7th Edition, p. 461)
Globe doctrine
The will of employees should be respected as
they had manifested their desire to be
represented by only one bargaining unit. (Holy
Child Catholic School v. Sto. Tomas, G.R. No.
179146, July 23, 2013)
Collective bargaining history doctrine
This principle puts a premium to the prior
collective bargaining history and affinity of the
130
employees in determining the appropriate
bargaining unit.
Collective bargaining history of a company is
not decisive of what should comprise the
collective bargaining unit. (San Miguel Corp. v.
Laguesma, G.R. No. 100485, September 21, 1994)
Employment status doctrine
The determination of the appropriate
bargaining unit based on the employment
status of the employees is considered an
acceptable mode. For instance, casual
employees and those employed on a day-to-
day basis do not have the mutuality or
community of interest with regular and
permanent employees. Hence, their inclusion in
the bargaining unit composed of the latter is
not justified.
3. BARGAINING REPRESENTATIVE
Bargaining representative means a legitimate
labor organization or any officer or agent of
such organization whether or not employed by
the employer. (Article 219(j), Labor Code)
Exclusive Bargaining Agent/
Representative
“Exclusive Bargaining Representative” refers to
a legitimate labor union duly recognized or
certified as the sole and exclusive bargaining
representative or agent of all the employees in
a bargaining unit. (Section I, Article I, Department
Order No. 40-03,As amended by A-I)
The labor organization designated or selected
by the majority of the employees in an
appropriate collective bargaining unit. (Article
267, Labor Code)
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. (Ibid)
Selection/Designation of an exclusive
bargaining representative
General Rule: The labor organization
designated/selected by the majority of the
employees in an Appropriate Bargaining Unit
shall be the exclusive bargaining representative
of the employees in such unit for the purpose
of collective bargaining. (Art. 267, Labor Code)
EXCEPTIONS:
1. An individual employee or group of
employees shall have the right at any time
to present grievances to their employer.
2. Any provision of law to the contrary
notwithstanding, workers shall have the
right 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. Workers and
employees may also form labor
management councils for the same
purpose. In such case, its representatives
shall be elected by a majority of all
employees in said establishment. (Art. 267,
Labor Code, as amended)
When a legitimate labor organization has been
certified as the sole and exclusive bargaining
agent of the rank-and-file employees of a given
employer, it means that it shall remain as such
during the existence of the CBA, to the
exclusion of other labor organizations, and no
petition questioning the majority status of said
incumbent agent or any certification election be
conducted outside the sixty-day freedom period
immediately before the expiry date of the CBA.
(Republic Planters Bank General Services Employees
Union, G.R. No. 119675, November 21, 1996)
A union certified as an exclusive bargaining
agent represents not only its members but also
other employees who are not union members.
(Holy Child Catholic School v. Sto. Tomas, G.R. No.
179146, July 23, 2013)
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Non-certified Union Cannot Collectively
Bargain with Employer
Only the labor organization designated or
selected by the majority of the employees in an
appropriate collective bargaining unit is the
exclusive representative of the employees in
such unit for the purpose of collective
bargaining.
The union is admittedly not the exclusive
representative of the majority of the employees
of petitioner, hence, it could not demand from
petitioner the right to bargain collectively in
their behalf. (Philippine Diamond Hotel & Resort,
Inc. v. Manila Diamond Hotel Employees Union, G.R.
No. 158075, June 30, 2006)
The designation of a SEBA does not deprive an
individual employee or group of employees to
exercise their right at any time to present
grievances to their employer, with or without
the intervention of the SEBA (Art. 267, Labor
Code)
An individual employee or group of employees
cannot be allowed to submit or refer unsettled
grievances for voluntary arbitration without
the participation of the SEBA. The reason is that
it is the SEBA which is a party to the CBA which
contains the provision on voluntary arbitration.
Being a party thereto, the SEBA cannot be
disregarded when a grievable issue will be
submitted for voluntary arbitration.
In order to have legal standing, the individual
members should be shown to have been duly
authorized to represent the SEBA. (Insular Hotel
Employees Union-NFL vs. Waterfront Insular Hotel
Davao, G.R. No. 174040-41, September 22, 2010)
Modes of Determining the SEBA
1. Voluntary recognition;
2. Certification election;
3. Consent election;
4. Run-off election;
5. Re-run election.
1. Voluntary recognition
"Voluntary Recognition" refers to the process
by which a legitimate labor union is recognized
by the employer as the exclusive bargaining
representative or agent in a bargaining unit,
reported with the Regional Office in accordance
with IRR of the Labor Code. (Section 1(bbb),
Department Order NO. 40-03, Series of 2003)
The determination of an exclusive bargaining
agent shall be through voluntary recognition in
cases where there is only one legitimate labor
organization operating within the bargaining
unit, or through certification, run-off or consent
election as provided in these Rules. (Section 2,
Rule VI, Department Order NO. 40-03, Series of
2003)
The voluntary recognition by the employer of a
union while a petition for certification election
filed by a rival union is pending does not have
any valid effect. (Me-Shurn Corp. v. Me-Shurn
Workers Union-FSM, G.R. No. 156292, January 11,
2005)
2. Certification election
"Certification Election" or "Consent Election"
refers to 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. (Section
1(h), Department Order NO. 40-03, Series of 2003)
Most Democratic Method
The holding of a certification election is the
most democratic method of determining the
employees' choice of their bargaining
representative. It is the appropriate means
whereby controversies and disputes on
representation may be laid to rest, by the
unequivocal vote of the employees themselves.
Indeed, it is the keystone of industrial
democracy." (Oriental Tin Can Labor Union v.
Secretary of Labor and Employment, G.R. Nos.
116751 & 116779, August 28, 1998)
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Not a Litigation Proceeding
A certification proceeding is not a "litigation" in
the sense in which this term is commonly
understood, but a mere investigation of a non-
adversary, fact-finding character, in which the
investigating agency plays the part of a
disinterested investigator seeking merely to
ascertain the desires of the employees as to the
matter of their representation. (Sandoval
Shipyards, Inc. v. Pepito, G.R. No. 143428, June 25,
2001)
Who May File
1. Any legitimate labor organization;
a. an independent union; or
b. a national union or federation which
has already issued a charter certificate
to its local chapter participating in the
certification election;96 or
c. a local chapter which has been issued
a charter certificate by the national
union or federation
2. Employer, when requested to bargain
collectively. (Section 2, Rule VIII, Department
Order No. 40-03, Series of 2003)
Where two or more petitions involving the same
bargaining unit are filed in one Regional Office,
the same shall be automatically consolidated
with the Med-Arbiter who first acquired
jurisdiction. Where the petitions are filed in
different Regional Offices, the Regional Office
in which the petition was first filed shall exclude
all others; in which case, the latter shall indorse
the petition to the former for consolidation.
(Section 3, Rule VIII, Department Order No. 40-03,
Series of 2003)
When To File
General Rule: A petition for certification
election may be filed anytime.
Exceptions:
1. Certification year bar rule;
2. Negotiations bar rule;
3. Bargaining deadlock bar rule; or
4. Contract bar rule.
XPS 1. Certification year bar rule
A petition for certification election may not be
filed within 1 year from:
a. Date of fact of voluntary recognition has
been entered or
b. Date a valid certification, consent or run-off
election has been conducted within the
bargaining unit.
Where an appeal has been filed from the order
of the Med-Arbiter certifying the results of the
election, the running of the one year period
shall be suspended until the decision on the
appeal has become final and executory. (Section
3(a), Rule VIII, Department Order No. 40-03, Series
of 2003)
XPS 2. Negotiations bar rule
No petition for certification election should be
entertained while the sole and exclusive
bargaining agent and the employer have
commenced and sustained negotiations in good
faith within the period of one (1) year from the
date of a valid certification, consent, run-off or
re-run election or from the date of voluntary
recognition.
XPS 3. Bargaining deadlock bar rule
A petition for certification election may not be
entertained when a bargaining deadlock to
which an incumbent or certified bargaining
agent is a party has been submitted to
conciliation or arbitration or has become the
subject of a valid notice of strike or lockout.
Collective Bargaining Deadlock is defined as
"the situation between the labor and the
management of the company where there is
failure in the collective bargaining negotiations
resulting in a stalemate". (San Miguel Corp. v.
National Labor Relations Commission, G.R. No.
99266, March 2, 1999)
There is a deadlock when there is a complete
blocking or stoppage resulting from the action
of equal and opposed forces . . . . The word is
synonymous with the word impasse, which . . .
'presupposes reasonable effort at good faith
bargaining which, despite noble intentions,
133
does not conclude in agreement between the
parties. (Tabangao Shell Refinery Employees
Association v. Pilipinas Shell Petroleum Corp., G.R.
No. 170007, April 7, 2014)
XPS 4. Contract bar rule
A petition for certification election may not be
filed when a CBA between the employer and a
duly recognized or certified bargaining agent
has been registered with the Bureau of Labor
Relations (BLR) in accordance with the Labor
Code. Where the CBA is duly registered, a
petition for certification election may be filed
only within the 60-day freedom period prior to
its expiry.
The purpose of this rule is to ensure stability in
the relationship of the workers and the
employer by preventing frequent modifications
of any CBA earlier entered into by them in good
faith and for the stipulated original period.
Certification Election in an Unorganized
Establishment
“Unorganized establishment” is an employer
entity where there is no recognized or certified
collective bargaining union or agent.
A company remains unorganized even if there
is a duly recognized or certified bargaining
agent for rank-and-file employees, for purposes
of the petition for certification election filed by
supervisors. The reason is that the bargaining
unit composed of supervisors is separate and
distinct from the unionized bargaining unit of
rank-and-file employees.
The bargaining unit sought to be represented
by the appellee are the capataz employees of
the appellant. There is no other labor
organization of capatazes within the employer
unit except herein appellant. Thus, appellant is
an unorganized establishment in so far as the
bargaining unit of capatazes is concerned.
(Lepanto Consolidated Mining Co. v. Lepanto
Capataz Union, G.R. No. 157086, February 18, 2013)
Med-Arbiter Required to Automatically
Conduct Certification Election
In a petition filed by a legitimate labor
organization involving an unorganized
establishment, the Med-Arbiter shall, pursuant
to Article 257 of the Code, automatically order
the conduct of certification election after
determining that the petition has complied with
all requirements rules and that none of the
grounds for dismissal thereof exists. (Ibid)
Certification Election in an Organized
Establishment
The Med-Arbiter is required to automatically
order the conduct of a certification election by
secret ballot in an organized establishment as
soon as the following requisites are fully met:
1. That a petition questioning the majority
status of the incumbent bargaining agent is
filed before the DOLE within the 60-day
freedom period;
2. That such petition is verified; and
3. That the petition is supported by the
written consent of at least twenty-five
percent (25%) all the employees in the
bargaining unit. (Article 268, Labor Code)
25% written consent not strictly
enforced
The 25% written consent requirement is
relevant if it becomes mandatory to hold a
certification election. In all other instances,
discretion should be ordinarily be exercised in
favor of holding a certification election. This
means the 25% requirement may not be strictly
enforced. (Bar Reviewer on Labor Law, Chan, 2019,
p. 421)
3. Consent election
A consent election is an agreed one, its purpose
being merely to determine the issue of majority
representation of all the workers in the
appropriate collective bargaining unit. (Warren
Manufacturing Workers Union v. Bureau of Labor
Relations, G.R. No. 76185, March 30, 1988)
It is a separate and distinct process and has
nothing to do with the import and effect of a
certification election. Neither does it shorten
134
the terms of an existing CBA nor entitle the
circumstances, the less than the majority
participants thereof to immediately renegotiate election is nullified and of the number of
an existing CBA although it does not preclude another one is ordered eligible voters and
the workers from exercising their right to to truly reflect the will there are no challenged
choose their sole and exclusive bargaining and sentiment of the votes that could
representative after the expiration of the sixty electorate-employees materially change the
(60) day freedom period. (Ibid) in the choice of their results thereof.
bargaining
representative.
4. 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 BYSTANDER RULE
election with three (3) or more choices, where In certification election, the employer is a mere
such a certified or consent results in none of the bystander with no concomitant right to oppose
three (3) or more choices receiving the majority the same. The employer has no standing to
of the valid votes cast; provided that the total question the election, which is the sole concern
number of votes for all contending unions is at of the workers.
least fifty percent (50%) of the number of votes
cast. (Section 1(ss), Department Order NO. 40- The employer's participation in such
03, Series of 2003) proceedings shall be limited to:
1. being notified or informed of petitions of
When an election which provides for three or such nature; and
more choices results in no choice receiving a 2. submitting the list of employees during the
majority of the valid cast, a run-off election pre-election conference should the
shall be conducted between the choices Mediator-Arbiter act favorably on the
receiving the two highest number of votes." petition. (Coca-Cola FEMSA Philippines, Inc. v.
(National Association of Free Trade Unions v. Bureau Coca-Cola FEMSA Phils., G.R. No. 238633,
of Labor Relations, G.R. No. 77818, August 3, 1988) November 17, 2021)

5. Re-run election Exceptions to the By-Stander Principle

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 election Mediator-Arbiter. (Section 2(tt),
Further Amending Department Order No. 40, Series
of 2003, Amending the Implementing Rules and
Regulations of Book V of the Labor Code of the
Philippines, as Amended, DOLE Department Order
No. 040-I-15)
Re-run Election vs Failure of Election
Re-Run Election Failure of Election
There is a valid The number of votes
certification election cast in the certification
but because of certain or consent election is
1. Lack of ER-EE Relationship - an employer
can validly oppose a petition for
certification election when the relationship
of employer and employee does not exist
between the company and the employees
sought to be represented by the petitioning
union.
2. Lack of Legitimacy - An employer can
validly oppose a petition for certification
election when the petitioning union is not a
legitimate labor organization because it is
not listed in the Registry of Legitimate
Labor Unions or its registration has been
cancelled with finality.
3. Inappropriate Bargaining Unit - An
employer can validly oppose a petition for
certification election when the bargaining
unit sought to be represented by the
petitioning union is not an appropriate
bargaining unit.

135
4. Lack of 25% Consent - In an organized
establishment, an employer can validly
oppose a petition for certification election
when the petition is not supported by the
written consent of 25% of the employees
covered by the bargaining unit.
5. Election Year Bar and Certification Year Bar
- An employer can validly oppose a petition
for certification election when the petition
was filed within one(1) year from a valid
certification election or from certification of
a union as bargaining unit.
6. Deadlock Bar and Contract Bar - An
employer can validly oppose a petition for
certification election when there is a duly
registered CBA, or when there is a
bargaining deadlock that has been
submitted to conciliation or arbitration or
has become the subject of a valid notice of
strike or lockout. (The Fundamentals of Labor
Law Review, Ungos, 2021, p. 377-378)
Legitimate Labor Organization
Labor Organization means any union or
association of employees which exists in whole
or in part for the purpose of collective
bargaining or of dealing with employers
concerning terms and conditions of
employment (Art. 219(g), Labor Code)
Legitimate labor organization means any
labor organization duly registered with the
Department of Labor and Employment, and
includes any branch or local thereof. (Art.
219(h), Labor Code)
Two modes of creating a labor
organization
The Labor Code provides two modes of creating
or establishing a labor organization, through:
a. Independent registration, and
b. Chartering of local/chartered local (Chan,
Bar Reviewer on Labor Law, 2019, p. 397-398)
Chartering and Creation of a Local
Chapter
A duly-registered federation or national union
may directly create a local/chapter by issuing a
charter certificate indicating the establishment
of the local/chapter. The local/chapter shall
acquire legal personality only for purposes of
filing a petition for certification election from
the date it was issued a charter certificate.
The local/chapter shall be entitled to all other
rights and privileges of a legitimate labor
organization only upon the submission of the
following documents in addition to its charter
certificate:
a. The names of the chapter's officers, their
addresses, and the principal office of the
chapter; and
b. The chapter's constitution and by-laws:
Provided that where the chapter's
constitution and by-laws are the same as
that of the federation or the national union,
this fact shall be indicated accordingly.
The additional supporting requirements shall be
certified under oath by the secretary or
treasurer of the chapter and attested by its
president. (Section 2, Rule III, DOLE Dept. Order
No. 40-03-A-I)
It is clear that the authority to directly create a
local chapter/chartered local is vested only with
the federation or national union, to the
exclusion of all others. It is only a federation or
a national union which is empowered to directly
issue a charter certificate indicating the
establishment of the local chapter/chartered
local. (Chan, Bar Reviewer on Labor Law, 2019, p.
398, citing Sec. 2(E), Rule III, D.O. No. 40-03 as
amended)
Trade union centers not allowed
Though Article 240 of the Labor Code now
includes “trade union center" as among the
organizations which may register as a
legitimate labor organization, Article 241, the
provision enunciating the procedure for
chartering of a local chapter/chartered local,
does not include “trade union center" as among
the labor organizations that is empowered,
besides the federation or national union, to
create such local chapter/chartered local
through the process of chartering.
136
Applying the Latin maxim expressio unius est
exclusio alterius, held that trade union centers
are not allowed to charter directly a local
chapter/chartered local because the pertinent
statutes and applicable implementing rules do
not grant such authority thereto. The power
granted to labor organizations to directly create
a local chapter/chartered local through
chartering is given only to a federation or
national union. (SMCEU-PTGWO vs. SMPPEU–
PDMP, G.R. No. 171153, September 12, 2007)
Action on Application
The Regional Office or the Bureau, as the case
may be, shall act on all applications for
registration or notice of change of name,
affiliation, merger and consolidation within one
(1) day from receipt thereof, either by:
a. approving the application and issuing the
certificate of registration/ acknowledging
the notice/report; or
b. denying the application/notice for failure of
the applicant to comply with the
requirements for registration/ notice. (DOLE
DO No. 40-03-A-I)
Denial of Registration and Appeal
The denial may be appealed to the Bureau if
denial is made by the Regional Office or to the
Secretary if denial is made by the Bureau,
within ten (10) days from receipt of such notice,
on the ground of grave abuse of discretion or
violation of these Rules. (DO No. 40-03-A-I)
2. Cancellation of registration
The certificate of registration of any legitimate
labor organization, whether national or local,
may be canceled by the Bureau of Labor
Relations, after due hearing, only on the
grounds specified in Article 247 hereof (Art.
245, Labor Code, as amended)
Effect of a Petition for Cancellation of
Registration
A petition for cancellation of union registration
shall not suspend the proceedings for
certification election nor shall it prevent the
filing of a petition for certification election.
In case of cancellation, nothing herein shall
restrict the right of the union to seek just and
equitable remedies in the appropriate courts
(Art. 246, Labor Code, as amended)
Cancellation, where and who may file
Subject to the requirements of notice and due
process, the registration of any legitimate
independent labor union, local/chapter and
workers’ association may be cancelled by the
Regional Director upon the filing of a petition
for cancellation of union registration, or
application by the organization itself for
voluntary dissolution.
The petition for cancellation or application for
voluntary dissolution shall be filed in the
Regional Office which issued its certificate of
registration or creation.
In the case of federations, national or industry
unions and trade union centers, the Bureau
Director may cancel the registration upon the
filing of a petition for cancellation or application
for voluntary dissolution in the Bureau of Labor
Relations (Sec. 1, Rule XIV, D.O. No. 40-03 as
amended).
Any party-in-interest may commence a petition
for cancellation of registration, except in actions
involving violations of Article 250
(renumbered), which can only be commenced
by members of the labor organization
concerned. (Sec. 2, Rule XIV, D.O. No. 40-03 as
amended)
Grounds for cancellation
Any of the following may constitute as ground/s
for cancellation of registration of labor
organizations:
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, the list of members who took
part in the ratification;
b. misrepresentation, false statements or
fraud in connection with the election of
officers, minutes of the election of officers,
and the list of voters; or
137
c. voluntary dissolution by the members. (Art.
247, Labor Code, as amended; Sec. 3, Rule XIV,
D.O. No. 40-03 as amended)
Misrepresentation to be a ground for the
cancellation of the certificate of registration, it
must be done maliciously and deliberately.
Further, the mistakes appearing in the
application or attachments must be grave or
refer to significant matters. The details as to
how the alleged fraud was committed must also
be indubitably shown. (Samahan ng Manggagawa
sa Hanjin Shipyard vs. Bureau of Labor Relations,
G.R. No. 211145, October 14, 2015)
Prohibited grounds for cancellation
The inclusion as union members of employees
who are outside the bargaining unit shall not be
a ground to cancel the union registration. The
ineligible employees are automatically deemed
removed from the list of membership of the
union.
The affiliation of the rank-and-file and
supervisory unions operating within the same
establishment to the same federation or
national union shall not be a ground to cancel
the registration of either union. (Sec. 6, Rule XIV,
D.O. No. 40-03 as amended)
Voluntary Cancellation of Registration
The registration of a legitimate labor
organization may be canceled by the
organization itself: Provided, that at least two-
thirds of its general membership votes, in a
meeting duly called for that purpose to dissolve
the organization: Provided, further, That an
application to cancel registration is thereafter
submitted by the board of the organization,
attested to by the president thereof. (Art. 248,
Labor Code, as amended)
Equity of the Incumbent
All existing federations and national unions
which meet the qualifications of a legitimate
labor organization and none of the grounds for
cancellation shall continue to maintain their
existing affiliates regardless of the nature of the
industry and the location of the affiliates. (Art.
249, Labor Code, as amended)
3. Affiliation/disaffiliation from national
union or federation
The right of the affiliate union to disaffiliate
from its mother federation or national union is
a constitutionally-guaranteed right which may
be invoked by the former at any time. (Heirs of
Cruz vs. CIR, G.R. No. L-23331-32, December 27,
1969)
Reasons for Affiliation
Some common reasons for affiliation:
1. Secure support or assistance especially
during the formative stage of unionization
2. Utilize expertise in preparing and pursuing
bargaining proposals
3. To marshal mind and manpower in the
course of a group action such as a strike
(Azucena, Labor Code 2, 2016, p. 201)
NOTE:
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 (Ibid. at p. 203)
Nature of relationship
a. Between Member and Labor Union
The union may be considered the agent of its
members for the purpose of securing for them
fair and just wages and good working
conditions and is subject to the obligation of
giving the members as its principals all
information relevant to union and matters
entrusted to it. (Heirs of Teodolo M. Cruz vs. Court
of Industrial Relations, G.R. No. L-23331-32,
December 27, 1969)
The relationship of the members and the labor
union is governed by their mutual agreement,
the terms and conditions of which are set forth
in the union constitution and by-laws and
binding on the members, as well as the
organization itself, provided that it is not
against the law, morals, good customs, public
order and public policy. (Manggagawa sa Ang
Tibay vs. Ang Tibay, G.R. No. L-8259, December 23,
1957)
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Labor Union – Federation
Relationship between a union and the
federation or national union is generally
understood to be that of agency, where the
local is the principal and the federation is the
agent.
The mother union (or Federation), acting for
and in behalf of its affiliate, has the status of an
agent while the local union remains as a
principal – the basic unit of the association free
to serve the common interest of all its
members, subject only to restraints imposed by
the constitution and by-laws of the association
(Phil. Skylanders, et. al. vs. NLRC, et. al. G.R. No.
127374, January 21, 2002)
Local union does not lose its legal
personality when it affiliates with a
federation
A local union does not owe its existence to the
federation with which it is affiliated. It is a
separate and distinct voluntary association
owing its creation to the will of its members.
Mere affiliation does not divest the local union
of its own personality, neither does it give the
mother federation the license to act
independently of the local union. (Insular Hotel
Employees Union-NFL vs. Waterfront Insular Hotel
Davao, G.R. Nos. 174040-41, September 22, 2010)
Affiliate
An affiliate refers to an independently
registered union that enters into an agreement
of affiliation with a federation or national union;
or a chartered local which applies for and is
granted an independent registration but does
not disaffiliate from its mother federation or
national union, reported to the DOLE Regional
Office and the Bureau of Labor Relations in
accordance with Rule III, Sections 6 and 7 of
these Rules. (Sec. 1(b), Rule I, D.O. No. 40-03 as
amended)
How local chapter is created
A duly registered federation or national union
may directly create a local/chapter by issuing a
charter certificate indicating the establishment
of a local/chapter. (Sec. 2(E), Rule III, D.O. No.
40-03 as amended)
Consequences:
1. The chapter shall acquire legal personality
only for purposes of filing a PCE from the
date it was issued a charter certificate
2. The chapter shall be entitled to all other
rights and privileges of a LLO only upon the
submission of the following documents in
addition to its charter certificate:
a. Names of the chapter’s officers, their
addresses, and the principal office of
the chapter;
b. Chapter’s constitution and by-laws;
c. Where the chapter’s constitution and
by- laws are the same as that of the
federation or the national union, this
fact shall be indicated accordingly
3. The genuineness and due execution of the
supporting requirements shall be Certified
under oath by the Secretary or Treasurer of
the local/chapter and attested to by its
President. (Ibid.)
Reportorial requirements in affiliation
The report of affiliation of independently
registered labor unions with a federation or
national union shall be accompanied by the
following documents:
1. Resolution of the labor union's board of
directors approving the affiliation;
2. Minutes of the general membership
meeting approving the affiliation;
3. The total number of members comprising
the labor union and the names of members
who approved the affiliation;
4. The certificate of affiliation issued by the
federation in favor of the independently
registered labor union; and
5. Written notice to the employer concerned if
the affiliating union is the incumbent
bargaining (Sec. 7, Rule III, D.O. No. 40-03, as
amended).
Independently registered union is
required to report affiliation with the
Regional Office
A union affiliating with a federation or national
union is required to report such affiliation to the
Regional Office that issued its certificate of
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registration (Sec. 6, Rule III, D.O. No. 40-03, as
amended)
Disaffiliation of local union from the
federation
G.R.: A labor union may disaffiliate from the
mother union to form an independent union
only during the 60-day freedom period
immediately preceding the expiration of the
CBA. (National Union of Bank Employees vs.
Philnabank Employees Association, G.R. No. 174287,
August 12, 2013)
EXCEPTION: Even before the onset of the
freedom period, disaffiliation may still be
carried out, but such disaffiliation must be
effected by the majority of the union members
in the bargaining unit.
Disaffiliation must be decided by the entire
membership through secret balloting in
accordance with Article 250(d).
This happens when there is a substantial shift
in allegiance on the part of the majority of the
members of the union. In such a case,
however, the CBA continues to bind the
members of the new or disaffiliated and
independent union to determine the union
which shall administer the CBA up to the CBA’s
expiration date. (ANGLO-KMU vs. Samahan ng
Manggagawang Nagkakaisasa Manila Bay Spinning
Mills at J.P. Coats, G.R. No.118562, July 5, 1996)
Disaffiliation must be by majority
decision
Disaffiliation has to be decided by the entire
membership through secret balloting in
accordance with Art. 250(d) of the Labor Code,
as amended.
An individual member or any number of
members may disaffiliate from the union during
the 60-day “freedom period.” But disaffiliating
the union itself from the mother union must be
supported by the majority of the members.
(Villar vs. Inciong, G.R. No. L-50283-84, April 20,
1983)
Imitation to disaffiliation
To disaffiliate is a right, but to observe the
terms of affiliation is an obligation. (Azucena,
Labor Code with Comments and Cases, Vol. II-A,
2021, p. 167)
Disaffiliation should be in accordance with the
rules and procedures stated in the Constitution
and by-laws of the federation. A local union
may disaffiliate with its mother federation
provided that there is no enforceable provision
in the federation’s constitution preventing
disaffiliation of a local union. (Tropical Hut
Employees Union vs. Tropical Hut, G.R. Nos. L-
43495-99, January 20, 1990)
A prohibition to disaffiliate in the Federation’s
constitution and by-laws is valid. Therefore,
absent any 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 Samahan ng mga
Manggagawa sa M. Greenfield vs. Hon. Ramos, G.R.
No. 113907, February 28, 2000)
Effect of Disaffiliation
1. Union Dues – the obligation of an
employee to pay union dues is coterminous
with his affiliation or membership
2. Existing CBA – the CBA continues to bind
the members of the new or disaffiliated and
independent union up to the CBA’s
expiration date based on the
“substitutionary doctrine”.
The pendency of an election protest does
not bar the valid disaffiliation of the local
union which was supported by the
majority of its members.
The right of a local union to disaffiliate with the
federation in the absence of any stipulation in
the Constitution and by-laws of the federation
prohibiting disaffiliation is well settled. Local
unions remain as the basic unit of association,
free to serve their own interest subject to the
restraints imposed by the Constitution and by-
laws of national federation and are free to
renounce such affiliation upon the terms and
conditions laid down in the agreement which
140
brought such affiliation to existence. In the case
at bar, no prohibition existed under the
Constitution and by-laws of the federation.
Hence, the union may freely disaffiliate with the
federation. (Philippine Skylanders vs. NLRC, G.R.
No. 127374, January 31, 2002)
Substitutionary Doctrine
This doctrine holds that the employees cannot
revoke the validly executed collective
bargaining contract with their employer by the
simple expedient of changing their bargaining
agent. The new agent must respect the
contract. The employees, thru their new
bargaining agent, cannot renege on the
collective bargaining contract, except to
negotiate with the management for the
shortening thereof. (Elisco-Elirol Labor Union vs.
Noriel et al., G.R. No. L-41955, December 29, 1977)
In formulating the "substitutionary" doctrine,
the only consideration involved as the
employees' interest in the existing bargaining
agreement. The agent's interest never entered
the picture. In fact, the justification for said
doctrine was: ... that the majority of the
employees, as an entity under the statute, is
the true party in interest to the contract,
holding rights through the agency of the union
representative. Thus, any exclusive interest
claimed by the agent is defeasible at the will of
the principal. (Elisco-Elirol Labor Union vs. Noriel et
al., G.R. No. L-41955, December 29, 1977)
Change of Bargaining Representative
during the life of a CBA
This refers to the substitution of the bargaining
agent by a newly certified agent. As a new
bargaining agent, it is duty-bound to respect
the existing CBA but it can renegotiate for new
terms and conditions therein.
The “substitutionary” doctrine only provided
that the employees cannot revoke the validly
executed collective bargaining contract with
their employer by simple expedient of changing
their bargaining agent. And it is in the light of
this that the phrase “said new agent would
have to respect said contract” must be
understood, it only means that the employees,
thru their new bargaining agent, cannot renege
on their collective bargaining contract, except
of course to negotiate with management for the
shortening thereof. (Benguet Consolidated vs. BCI
Employees and Workers Union–PAFLU, G.R. No. L-
24711, April 30, 1968)
In case of change of bargaining agent under
the substitutionary doctrine, the new
bargaining agent is not bound by the personal
undertakings of the deposed union like the “no
strike, no lockout” clause in the CBA which is
the personal undertaking of the bargaining unit
which negotiated it. (Ibid)
The "substitutionary" doctrine, therefore,
cannot be invoked to support the contention
that a newly certified collective bargaining
agent automatically assumes all the personal
undertakings — like the no-strike stipulation
here — in the collective bargaining agreement
made by the deposed union. (Ibid)
4. RIGHTS OF LABOR ORGANIZATIONS
A legitimate labor organization shall have the
right:
a. To act as the representative of its
members for the purpose of collective
bargaining;
b. To be certified as the exclusive
representative of all the employees in an
appropriate bargaining unit for purposes of
collective bargaining;
c. To be furnished by the employer, upon
written request, with its annual audited
financial statements, including the balance
sheet and the profit and loss statement,
within thirty (30) calendar days from the
date of receipt of the request, after the
union has been duly recognized by the
employer or certified as the sole and
exclusive bargaining representative of the
employees in the bargaining unit, or within
sixty (60) calendar days before the
expiration of the existing collective
bargaining agreement, or during the
collective bargaining negotiation;
d. To own property, real or personal, for the
use and benefit of the labor organization
and its members;
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e. To sue and be sued in its registered name;
f. To undertake all other activities designed to
benefit the organization and its members,
including cooperative, housing, welfare and
other projects not contrary to law; and
g. Right to draw up their constitutions and
rules to elect their representatives in full
freedom, to organize their administration
and activities and to formulate their
programs. (Minette Baptista, et al. v. Rosario
Villanueva, et al., G.R. No. 194709 2013)
Notwithstanding any provision of a general or
special law to the contrary, the income and the
properties of legitimate labor organizations,
including grants, endowments, gifts, donations
and contributions they may receive from
fraternal and similar organizations, local or
foreign, which are actually, directly and
exclusively used for their lawful purposes, shall
be free from taxes, duties and other
assessments. The exemptions provided herein
may be withdrawn only by a special law
expressly repealing this provision. (Art. 251,
Labor Code)
Nature of the legal personality of a
legitimate labor organization and its
effects in certain circumstances
The labor union or workers’ association shall be
deemed registered and vested with legal
personality on the date of issuance of its
certificate of registration or certificate of
creation of chartered local. (Sec. 8, Rule IV, D.O.
No. 40-03 as amended)
NOTE:
Such legal personality may be questioned only
through an independent petition for
cancellation of union registration in accordance
with Rule XIV of these Rules, and not by way of
collateral attack in petition for certification
election proceedings under Rule VIII. (Ibid)
1. Change in name – It shall not affect its
legal personality. All the rights and
obligations of a labor organization under its
old name shall continue to be exercised by
the labor organization under its new name.
(Sec. 9, Rule IV, D.O. No. 40-03 as amended)
2. Merger of labor organizations – The
legal existence of the absorbed labor
organization(s) ceases, while the legal
existence of the absorbing labor
organization subsists. All the rights,
interests and obligations of the absorbed
labor organizations are transferred to the
absorbing organization. (Sec. 10, Rule IV,
D.O. No. 40-03 as amended)
3. Consolidation of labor organizations –
The legal existence of the consolidating
labor organizations shall cease and a new
labor organization is created. The newly
created labor organization shall acquire all
the rights, interests and obligations of the
consolidating labor organizations. (Ibid.)
Reportorial requirements of labor unions
and workers’ associations
It shall be the duty of every legitimate labor
unions and workers’ association to submit to
the Regional Office or the Bureau which issued
its certificate of registration or certificate of
creation of local/chapter, as the case may be,
two (2) copies of each of the following
documents:
a. its constitution and by-laws or amendments
thereto, the minutes of adoption or
ratification and the list of members who
took part therein, within thirty (30) days
from its adoption or ratification;
b. its list of elected and appointed officers and
agents entrusted with the handling of union
funds, the minutes of election of officers,
and the list of voters, within thirty (30) days
from the date of election or appointment;
c. its annual financial report within thirty (30)
days after the close of every fiscal year; and
d. its list of members at least once a year or
whenever required by the Bureau.
The fiscal year of a labor organization shall
coincide with the calendar year unless a
different period is provided in its constitution
and by-laws. (Sec. 1, Rule V, D.O. No. 40-03 as
amended)
142
Rights and conditions of membership in
legitimate labor organizations
The following are the rights and conditions of
membership in a labor organization:
a. No arbitrary or excessive initiation fees
shall be required of the members of a
legitimate labor organization nor shall
arbitrary, excessive or oppressive fine and
forfeiture be imposed;
b. The members shall be entitled to full and
detailed reports from their officers and
representatives of all financial transactions
as provided for in the constitution and by-
laws of the organization;
c. The members shall directly elect their
officers in the local union, as well as their
national officers in the national union or
federation to which they or their local union
is affiliated, by secret ballot at intervals of
five (5) years. No qualification requirement
for candidacy to any position shall be
imposed other than membership in good
standing in subject labor organization. The
secretary or any other responsible union
officer shall furnish the Secretary of Labor
and Employment with a list of the newly-
elected officers, together with the
appointive officers or agents who are
entrusted with the handling of funds within
thirty (30) calendar days after the election
of officers or from the occurrence of any
change in the list of officers of the labor
organization;
d. The members shall determine by secret
ballot, after due deliberation, any question
of major policy affecting the entire
membership of the organization, unless the
nature of the organization or force majeure
renders such secret ballot impractical, in
which case, the board of directors of the
organization may make the decision in
behalf of the general membership;
e. 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;
f. 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;
g. No officer, agent or member of a labor
organization shall collect any fees, dues, or
other contributions in its behalf or make
any disbursement of its money or funds
unless he is duly authorized pursuant to its
constitution and by-laws;
h. Every payment of fees, dues or other
contributions by a member shall be
evidenced by a receipt signed by the officer
or agent making the collection and entered
into the record of the organization to be
kept and maintained for the purpose;
i. The funds of the organization shall not be
applied for any purpose or object other
than those expressly provided by its
constitution and by-laws or those expressly
authorized by written resolution adopted by
the majority of the members at a general
meeting duly called for the purpose;
j. 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
from the person to whom the payment is
made, which shall state the date, place and
purpose of such payment. Such record or
receipt shall form part of the financial
records of the organization.
Any action involving the funds of the
organization shall prescribe after three (3)
years from the date of submission of the
annual financial report to the Department
of Labor and Employment or from the date
the same should have been submitted as
required by law, whichever comes earlier:
Provided, That this provision shall apply
only to a legitimate labor organization
which has submitted the financial report
requirements under this Code: Provided,
further, That failure of any labor
organization to comply with the periodic
financial reports required by law and such
rules and regulations promulgated
thereunder six (6) months after the
effectivity of this Act shall automatically
result in the cancellation of union
registration of such labor organization;
143
k. The officers of any labor organization shall
not be paid any compensation other than
the salaries and expenses due to their
positions as specifically provided for in its
constitution and by-laws, or in a written
resolution duly authorized by a majority of
all the members at a general membership
meeting duly called for the purpose. The
minutes of the meeting and the list of
participants and ballots cast shall be
subject to inspection by the Secretary of
Labor or his duly authorized
representatives. Any irregularities in the
approval of the resolutions shall be a
ground for impeachment or expulsion from
the organization;
l. The treasurer of any labor organization and
every officer thereof who is responsible for
the account of such organization or for the
collection, management, disbursement,
custody or control of the funds, moneys
and other properties of the organization,
shall render to the organization and to its
members a true and correct account of all
moneys received and paid by him since he
assumed office or since the last day on
which he rendered such account, and of all
bonds, securities and other properties of
the organization entrusted to his custody or
under his control. The rendering of such
account shall be made:
i. At least once a year within thirty (30)
days after the close of its fiscal year;
ii. At such other times as may be
required by a resolution of the
majority of the members of the
organization; and
iii. Upon vacating his office. The account
shall be duly audited and verified by
affidavit and a copy thereof shall be
furnished the Secretary of Labor.
m. The books of accounts and other records of
the financial activities of any labor
organization shall be open to inspection by
any officer or member thereof during office
hours;
n. 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 in a general
membership meeting duly called for the
purpose. The secretary of the organization
shall record the minutes of the meeting
including the list of all members present,
the votes cast, the purpose of the special
assessment or fees and the recipient of
such assessment or fees. The record shall
be attested to by the president.
o. Other than for mandatory activities under
the 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; and
p. It shall be the duty of any labor
organization and its officers to inform its
members on the provisions of its
constitution and by-laws, collective
bargaining agreement, the prevailing labor
relations system and all their rights and
obligations under existing labor laws.
For this purpose, registered labor organizations
may assess reasonable dues to finance labor
relations seminars and other labor education
activities.
Any violation of the above rights and conditions
of membership shall be a ground for
cancellation of union registration or expulsion
of officers from office, whichever is appropriate.
At least thirty percent (30%) of the members of
a union or any member or members specially
concerned may report such violation to the
Bureau. The Bureau shall have the power to
hear and decide any reported violation to mete
the appropriate penalty.
Criminal and civil liabilities arising from
violations of above rights and conditions of
membership shall continue to be under the
jurisdiction of ordinary courts (Art. 250, Labor
Code, as amended).
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The rights of union members under Article 250
may be summarized as follows: (PRRD)
1. Political rights
2. Right over money matters (fiscal rights)
3. Right to information
4. Deliberative and decision-making right
Political rights
It includes:
1. Right to vote and be voted for as an officer
of the union, subject to the qualifications
and disqualifications mentioned in Article
250 of the Labor Code; and
2. Right to be appointed to appointive
positions in the organization, subject to the
qualifications and disqualifications
mentioned in Article 250 of the Code. (Chan,
Bar Reviewer on Labor Law, 2019, p. 396)
Right over money matters (Fiscal Rights)
Financial rights including the following:
1. Right against arbitrary, oppressive or
excessive fees, fines and forfeitures
2. Right to full and detailed reports on all
financial transactions in accordance with
the constitution and by-laws of the union;
3. Right against unauthorized collection of any
fees, dues or other contributions;
4. Right to claim receipt for every payment of
fees, dues or other contributions;
5. Right to prevent funds of the organization
from being applied for any purpose or
object other than those expressly provided
by the union's constitution and by-laws or
allowed expressly by written resolution
adopted by the majority of the members at
a general meeting duly called for the
purpose;
6. Right to or require that every income or
revenue as well as every expenditure of the
union shall be recorded or receipted, which
record or receipt shall form part of the
financial records of the union;
7. Right against unauthorized check-off for
special assessments, attorney’s fees,
negotiation fees or any other extraordinary
fees without an individual authorization
duly signed by the employee;
8. Right to vote on the compensation of union
officers; and
9. Right against unreasonable assessments to
finance labor relations seminars and other
labor education activities (Id., p. 395)
Right to information
Right to information includes the following:
1. Right to require the treasurer and the other
officers of the union responsible for the
account of the union as well as for the
collection, management, disbursement,
custody or control of the funds, moneys
and other properties, to render a true and
correct account thereof, at least once a
year within thirty (30) days after close of its
fiscal year and at such other times as may
be required by a resolution of the majority
of members of the union and upon vacating
his office;
2. Right to require that the account be duly
audited and verified by affidavit and a copy
thereof be furnished to the DOLE
Secretary;
3. Right to inspect the books of accounts and
other financial records of the union and to
require full and detailed reports from their
officers and representatives on all financial
transactions as provided for in the
constitution and by-laws of the
organization;
4. Right to be informed of the provisions of
the constitution and by-laws, CBA, the
prevailing labor relations system and all
their rights and obligations under existing
labor laws through the medium of labor
relations seminars or other labor education
activities; and
5. Right to seek investigation of any
irregularity (Ibid.)
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, Labor Code, as
amended)
145
Deliberative and decision-making right
The right to participate in decision-making
process includes the following:
1. Right to vote by secret ballot on any
question of major policy affecting the enüe
membership of the organization; and
2. Right to initiate and participate in
impeachment or expulsion proceedings
against an erring officer or of the union.
(Chan, Bar Reviewer on Labor Law, 2019,
p. 396)
a) Check Off, Assessment, and Agency
Fees
All unions are authorized to collect
reasonable amounts of:
1. membership fees;
2. union dues;
3. assessments;
4. Fines;
5. contributions for labor education and
research, mutual death and hospitalization
benefits, welfare fund, strike fund and
credit and cooperative undertakings; and
6. agency fees. (Article 292(a), 259(e),
Labor Code)
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 its
employees, deducts union dues or agency fees
from the latter's wages and remits them directly
to the union.
The legal basis of check-off is found in stature
or in contract. Statutory limitations on check-
offs generally require written authorization
from each employee to deduct wages;
however, a resolution approved and adopted
by a majority to the union members at a
general meeting will suffice when the right to
check-off has been recognized by the
employer, including collection of reasonable
assessments in connection with mandatory
activities of the union, or other special
assessments and extraordinary fees. (In Re:
Petition to Declare the Officers of the Medical
City Employees Association Guilty of Article
241, Paragraph (g), (n), and (o), in Relation to
Paragraph (B) Article 222 of the Labor Code of
the Philippines, as Amended, BLR-A-TR-11-2-2-
12 (NCR-P-IN-03-31-1-11) (Resolution),
November 28, 2014)
Right to check-off, available only to the
SEBA (sole and exclusive bargaining
agent)
The minority union, not being the collective
bargaining agent, has no such right. The
employer therefore is not under any legal
obligation to check-off any union dues and
assessments for the minority union. (Chan, Bar
Reviewer on Labor Law, 2019, p. 452)
Two (2) Kinds of Check-Off
1. Collection of union dues, special
assessments, and fees (such as attorney’s
fees, negotiation fees or any other
extraordinary fees) by the SEBA from its
members; and
2. Collection of agency fees from non-
members of the SEBA but covered by and
included in the Collective Bargaining Unit
who accept the benefits provided in the
CBA.
Distinction: The first kind mentioned above
requires for its validity, the execution by the
employees of individual written authorization
which should specifically state the amount,
purpose and beneficiary of the deduction; but
the second kind does not require any such
authorization since the law itself recognizes and
allows it upon the non-SEBA member’s
acceptance of benefits resulting from the CBA
(Holy Cross of Davao College, Inc. vs. Joaquin, G.R.
No. 110007, October 18, 1996)
Requisites for validity of union dues and
special assessments
No special assessment or other extraordinary
fees may be levied upon the members of a labor
organization unless;
146
1. Authorized by a written resolution of a
majority of all the members in a general
membership meeting duly called for the
purpose.
2. The secretary of the organization shall
record the minutes of the meeting
including:
a. the list of all members present;
b. the votes cast;
c. the purpose of the special assessment
or fees; and
d. the recipient of such assessment or
fees.
3. The record shall be attested to by the
president. (Art. 250(n), Labor Code, as
amended)
Authorization to effect a check-off of union
dues is co-terminous with the union affiliation
or membership of employees. (Holy Cross of
Davao College, Inc. v. Joaquin, G.R. No. 110007,
October 18, 1996)
Non-Union Members May Not Unjustly
Enriched Themselves
The collection of agency fees in an amount
equivalent to union dues and fees, from
employees who are not union members, is
recognized by Article 248 (e) of the Labor Code.
No requirement of written authorization from
the non-union employee is imposed. The
employee's acceptance of benefits resulting
from a collective bargaining agreement justifies
the deduction of agency fees from his pay and
the union's entitlement thereto. In this aspect,
the legal basis of the union's right to agency
fees is neither contractual nor statutory, but
quasi-contractual, deriving from the established
principle that non-union employees may not
unjustly enrich themselves by benefiting from
employment conditions negotiated by the
bargaining union. (Holy Cross of Davao College,
Inc. v. Joaquin, G.R. No. 110007, October 18, 1996)
Assessment for Attorney’s Fees,
Negotiation Fees and Similar Charges
Article 222(b) of the Labor Code prohibits the
payment of attorney's fees only when it is
effected through forced contributions from the
employees from their own funds as
distinguished from union funds. Hence, the
general rule is that attorney's fees, negotiation
fees, and other similar charges may only be
collected from union funds, not from the
amounts that pertain to individual union
members. As an exception to the general rule,
special assessments or other extraordinary fees
may be levied upon or checked off from any
amount due an employee for as long as there
is proper authorization by the employee. (In
Re: Petition to Declare the Officers of the
Medical City Employees Association Guilty of
Article 241, Paragraph (g), (n), and (o), in
Relation to Paragraph (B) Article 222 of the
Labor Code of the Philippines, as Amended,
BLR-A-TR-11-2-2-12 (NCR-P-IN-03-31-1-11)
(Resolution), November 28, 2014)
Individual Written Authorization, WHEN
REQUIRED
No special assessment, 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 employees.
The authorization should specifically state the
amount, purpose and beneficiary of the
deduction."
Article 241 has three (3) requisites for the
validity of the special assessment for union's
incidental expenses, attorney's fees and
representation expenses. These are:
1. authorization by a written resolution of the
majority of all the members at the general
membership meeting called for the
purpose;
2. secretary's record of the minutes of the
meeting; and
3. individual written authorization for check
off duly signed by the employees
concerned.
Clearly, attorney's fees may not be deducted or
checked off from any amount due to an
employee without his written consent. (Gabriel
v. Secretary of Labor and Employment, G.R. No.
115949, March 16, 2000)
147
Express consent of employees is required, and
this consent must be obtained in accordance
with the steps outlined by law, which must be
followed to the letter. No shortcuts are allowed.
(Gabriel v. Secretary of Labor and Employment, G.R.
No. 115949, March 16, 2000)
Purpose: To protect the employees from
unwarranted practices which diminish their
compensation without their knowledge or
consent.
The purpose of the provision is to prevent
imposition on the workers of the duty to
individually contribute their respective shares in
the fee to be paid the attorney for his services
on behalf of the union in its negotiations with
management. The obligation to pay the
attorney's fees belongs to the union and cannot
be shunted to the workers as their direct
responsibility. Neither the lawyer nor the union
itself may require the individual worker to
assume the obligation to pay attorney's fees
from their own pockets. So categorical is this
intent that the law makes it clear that any
agreement to the contrary shall be null and void
ab initio." (Gabriel v. Secretary of Labor and
Employment, G.R. No. 115949, March 16, 2000)
Individual Written Authorization, WHEN
NOT REQUIRED
a. Assessment from non-members of the
bargaining agent of “agency fees” which
should be equivalent to the dues and other
fees paid by members of the recognized
bargaining agent, if such non-members
accept the benefits under the CBA. (Article
259(e), Labor Code, as amended)
b. Deductions for fees for mandatory activities
such as labor relations seminars and labor
education activities.
c. Deductions for withholding tax mandated
under the National Internal Revenue Code.
d. Deductions for withholding of wages
because of employee’s debt to the
employer which is already due.
e. Deductions made pursuant to a judgment
against the worker under circumstances
where the wages may be the subject of
attachment or execution but only for debts
incurred for food, clothing, shelter and
medical attendance.
f. Deductions from wages ordered by the
court.
g. Deductions authorized by law such as for
premiums for PhilHealth, SSS, PAG-IBIG,
employees’ compensation and the like. (Id.,
p. 455-456)
UNION DUES
Union dues are payments to meet the union’s
general and current obligations. The payment
must be regular, periodic, and uniform.
All unions are authorized to collect reasonable
membership fees, union dues, assessments and
fines and other contributions for labor
education and research, mutual death and
hospitalization benefits, welfare fund, strike
fund and credit and cooperative undertakings.
(Article 292(a), Labor Code, as amended)
Every payment of fees, dues or other
contributions by a member shall be evidenced
by a receipt signed by the officer or agent
making the collection and entered into the
record of the organization to be kept and
maintained for the purpose. (Article 250(h), Labor
Code)
Right of union to collect dues and agency
fees despite the pendency of a
representation case
The incumbent bargaining agent shall continue
to be entitled to check-off and collect dues and
agency fees despite the pendency of a
representation case, other inter/intra-union
disputes or related labor relations disputes.
(Sec. 1, Rule XIII, D.O. No. 40-03, as amended)
AGENCY FEES
The recognized collective bargaining union
which successfully negotiated the CBA with the
employer is given the right to collect a
reasonable fee called "agency fee" from non-
union members who are employees of the
appropriate bargaining unit, in an amount
equivalent to the dues and other fees paid by
union members, in case they accept the
benefits under the CBA.
148
It is called “agency fees” because by availing of
the benefits of the CBA, they, in effect,
recognize and accept the bargaining union as
their “agent” as well. (Chan, Labor Law Reviewer,
Chapter 7, p.24)
While the collection of agency fees is
recognized by Article 259, the legal basis of the
union's right to agency fees is neither
contractual nor statutory, but quasi-
contractual, deriving from the established
principle that non-union employees may not
unjustly enrich themselves by benefiting from
employment conditions negotiated by the
bargaining union. (Peninsula Employees Union v.
Esquivel, G.R. No. 218454, [December 1, 2016], 801
PHIL 667-679)
Requisites:
a. He is a member of the bargaining unit as a
rank-and-file employee;
b. He avails of the benefits of the existing
CBA; and
c. He is not a member of any union.
A non-SEBA member has right to accept
or not the benefits of CBA
There is no law that compels a non-SEBA
member to accept the benefits provided in the
CBA. He has the freedom to choose between
accepting and rejecting the CBA itself or the
benefits flowing therefrom. Consequently, if a
non-SEBA member does not accept or refuses
to avail of the CBA-based benefits, he is not
under any obligation to pay the agency fees to
the SEBA since, in effect, he does not recognize
the status of the SEBA as his agent. (Chan, Bar
Reviewer on Labor Law, 2019, p. 458)
Limitations on the Amount of Agency fee:
The bargaining union cannot capriciously fix the
amount of agency fees it may collect from its
non-members. Article 259(e) of the Labor Code
expressly sets forth the limitation in fixing the
amount of the agency fees, thus:
a. It should be reasonable in amount;
b. It should be equivalent to the dues and
other fees paid by members of the
recognized collective bargaining agent.
(Sec. 4, Rule XXV, D.O. No. 40-03 as amended)
Thus, any agency fee collected in excess of this
limitation is a nullity (Chan, Bar Reviewer on Labor
Law, 2019, p. 458)
Non-members of the Certified Bargaining
Agent Need Not Become Members
Thereof
The employees who are not members of the
certified bargaining agent which successfully
concluded the CBA are not required to become
members of the latter. Their acceptance of the
benefits flowing from the CBA and their act of
paying the agency fees do not make them
members thereof. (Ibid)
Accrual of Right of Bargaining Union to
Demand Check-off of Agency Fees
The right of the bargaining union to demand
check-off of agency fees accrues from the
moment the non-bargaining union member
accepts and receives the benefits from the CBA.
This is the operative fact that would trigger
such liability. (Sec. 4, Rule XXV, D.O. No. 40-03 as
amended)
No Individual Written Authorization by
Non-Members Required to check-off
To effect the check-off of agency fees, no
individual written authorization from the non-
bargaining union members who accept the
benefits resulting from the CBA is necessary.
(Del Pilar Academy vs. Del Pilar Academy Employees
Union, G.R. No. 170112, April 30, 2008)
Employer’s Duty to Check-off Agency
Fees
It is the duty of the employer to deduct or
“check-off” the sum equivalent to the amount
of agency fees from the non-bargaining union
members’ wages for direct remittance to the
bargaining union. (Holy Cross of Davao College
Inc. vs. Joaquin, G.R. No. 110007, October 18, 1996)
Minority Union Cannot Demand from the
Employer to Grant it the Right to Check-
off of Union Dues and Assessments from
the Members
The obligation on the part of the employer to
undertake the duty to check-off union dues and
special assessments holds and applies only to
149
the bargaining agent and not to any other
union/s (called “Minority Union/s). (Chan, Bar
Reviewer on Labor Law, 2019, p. 456)
b) Collective Bargaining
The code defines “to bargain collectively” as the
the performance of a mutual obligation to
meet and convene promptly and
expeditiously in good faith for the
purpose of negotiating an agreement
with respect to wages, hours of work, and
all other terms and conditions of
employment, including proposals for
adjusting any grievances or questions arising
under such agreement and executing a contract
incorporating such agreements if requested by
either party but such duty does not compel any
party to agree to a proposal or make any
concession. (Article 263, Labor Code)
CBA - Contract Between the Parties
Collective bargaining agreement refers to the
contract between a legitimate labor union and
the employer concerning wages, hours or work,
and all other terms and conditions of
employment in a bargaining unit. (Del Monte
Land Transport Bus Labor Union-Association of
Genuine Labor Organizations v. Del Monte Land
Transport Bus Labor Union-Philippine Trade
and General Workers Organization, BLR-A-C-
CBA-31-28-10-17 (NCR-MPFO-DC-05-2017-001),
November 17, 2017)
Collective bargaining agreement refers to the
negotiated contract between a duly recognized
or certified exclusive bargaining agent of
workers and the employer concern of wages,
hours of work and all other terms and
conditions of employment in the appropriate
bargaining unit, including mandatory provisions
for grievances and arbitration machineries.
(Sagara Metro Plastic Industrial Corp. v. Samahan ng
Manggagawa sa Sagara-National Mine and Allied
Workers' Union Local 180, BLR-A-TR-23-17-08-16
(Resolution), November 17, 2016)
Characteristics of Collective Bargaining
1. Continuing legal relations
2. Process of adjustment
3. Contract of reasonable benefits
4. Contract of relative equality
5. Agency of participatory democracy
(1) Economic Terms and Conditions
Economic provisions refer to those that have
direct and measurable monetary cost
consequences such as wage rates, paid
vacations, pensions, health and welfare plans,
and other fringe benefits. (No. 9, NCMB Primer on
Grievance Settlement and Voluntary Arbitration)
(2) Non-economic Terms and Conditions
Non-economic provisions refer to those whose
monetary cost cannot be directly computed
such as the no-strike no-lockout, union security
and check-off clauses, grievance procedures,
etc. (No. 9, NCMB Primer on Grievance Settlement
and Voluntary Arbitration)
(3) Duty to Bargain Collectively
The duty to bargain collectively means the
performance of a mutual obligation to meet and
convene promptly and expeditiously in good
faith for the purpose of negotiating an
agreement with respect to wages, hours of
work and all other terms and conditions of
employment including proposals for adjusting
any grievances or questions arising under such
agreement and executing a contract
incorporating such agreements if requested by
either party but such duty does not compel any
party to agree to a proposal or to make any
concession. (Article 263, Labor Code)
Bargaining in Bad Faith / Good Faith
There is no per se test of good faith in
bargaining. Good faith or bad faith is an
inference to be drawn from the facts. To some
degree, the question of good faith may be a
question of credibility. The effect of an
employer's or a union's actions individually is
not the test of good-faith bargaining, but the
impact of all such occasions or actions,
considered as a whole, and the inferences fairly
drawn therefrom. (Hongkong and Shanghai
150
Banking Corp. Employees Union vs. NLRC, G.R. No.
125038, November 6, 1997)
There is no per se test of good faith in
bargaining, it was held that bad faith cannot be
imputed on an employer which simply refused
to negotiate over the company’s retirement
program. It is but natural that the management
and labor adopt proposals and
counterproposals during negotiations (Union
Filipro Employees vs Nestle Philippines, G.R. Nos.
158930-31, March 3, 2008).
Standards followed in collective
bargaining
The definition of collective bargaining provided
under the law established the standards to be
followed:
a. The obligation to bargain collectively is
mutual;
b. The parties are required to meet and confer
promptly and expeditiously and in good
faith;
c. The parties are required to bargain on a
reasonable terms and conditions of
employment;
d. They are required in good faith to negotiate
an agreement;
e. They must execute a contract incorporating
the agreement reached by the parties.
(PNEI v. NLRC, 259 SCRA 161); and
f. The duty to bargain does not compel any
party to agree to a proposal or to make any
concession (Article 263, Labor Code)
Employer’s duty to bargain exists only
with SEBA
The duty to bargain collectively does not exist
when the majority status of the employees’
representative is not established. The employer
has no such duty to bargain with the individual
workers or with the minority union. (Lakas ng
Manggagawang Makabayan vs. Marcelo Enterprises,
G.R. No. L-38258, November 19, 1982)
The duty does not compel any party to agree
blindly to a proposal nor to make concession.
While the law imposes on both the employer
and the bargaining union the mutual duty to
bargain collectively, the employer is not under
any legal obligation to initiate collective
bargaining negotiations. (Union of Filipro
Employees-Drug, Food and Allied Industries Unions-
Kilusang Mayo Uno [UFE-DFA-KMU] vs. Nestle
Philippines, Inc., G.R. Nos. 158930-31, March 3,
2008)
Purpose: To stabilize the relation between
labor and management and to create a climate
of sound and stable industrial peace (Kiok Loy
vs. NLRC G.R. No. L-54334, January 22, 1986)
It is a mutual responsibility of the employer and
the Union and is characterized as a legal
obligation (Kiok Loy vs. NLRC G.R. No. L-54334,
January 22, 1986).
Two (2) Situations Contemplated when
the duty to bargain exist:
1. Duty to bargain collectively in the absence
of CBA (Art. 262, Labor Code); and
2. Duty to bargain collectively when there is
an existing CBA (Art. 264, Labor Code)
1) Duty to bargain collectively in the
absence of CBA
In the absence of an agreement or other
voluntary arrangement providing for a more
expeditious manner of collective bargaining, it
shall be the duty of employer and the
representatives of the employees to bargain
collectively in accordance with the provisions of
this Code.||(Art. 262, Labor Code)
2) Duty to bargain where a CBA exists
When there is a collective bargaining
agreement, the duty to bargain collectively shall
also mean that neither party shall terminate nor
modify such agreement during its lifetime.
However, either party can serve a written
notice to terminate or modify the agreement at
least sixty (60) days prior to its expiration date.
It shall be the duty of both parties to keep the
status quo and to continue in full force and
effect the terms and conditions of the existing
agreement during the 60-day period and/or
until a new agreement is reached by the
parties. (Art. 264, Labor Code)
151
DUTY TO BARGAIN to bargain does not include the obligation to
reach an agreement. Thus, the Company's
insistence on a bargaining position to the point
DUTY TO BARGAIN
of stalemate does not establish bad faith.
(Tabangao Shell Refinery Employees Association v.
No CBA CBA exists Pilipinas Shell Petroleum Corp., G.R. No. 170007,
April 7, 2014)

The mutual The mutual obligation of Ratification by the majority of the

obligation of the the employer and the members of the bargaining
employer and the employees’ majority The law requires the CBA to be ratified by the
employees’ majority union to meet and majority of the members of the bargaining unit
union to meet and convene and, which is represented by the collective
convene. additionally, the bargaining agent in the bargaining
obligation not to negotiations.
terminate or modify the
CBA during its lifetime.
Procedure/steps in collective bargaining
a. Preliminary process;
b. Negotiation;
c. Execution;
d. Publication;
While it is a mutual obligation of the parties to e. Ratification;
bargain, the employer, however, is not under f. Registration;
any legal duty to initiate contract negotiation. g. Administration; and
(Kiok Loy vs. NLRC, G.R. No. L-54334, January 22,
h. Interpretation and Enforcement
1986)
Boulwarism, an unfair labor practice
Proposal embodied in minutes of the
Boulwarism is the tactic of making a "take-it-
negotiation do not form part of the CBA.
(Samahang Manggagawa sa Top Farm vs. NLRC,
or-leave-it" offer in a negotiation, with no
G.R. No. 113856, September 7, 1998) further concessions or discussion.

Duty to bargain “does not compel either
party to agree to a proposal”
The duty to bargain “does not compel either
party to agree to a proposal or require the
making of a concession. (Standard Chartered
Bank Employees Union v. Confesor, G.R. No. 114974,
June 16, 2004)
Duty to bargain does not compel any party to
accept a proposal, or make any concession, as
recognized by Article 252 of the Labor Code.
The purpose of collective bargaining is the
reaching of an agreement resulting in a
contract binding on the parties; however, the
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. The duty
Employer’s bargaining proposal on a rigid “fair-
and-firm” offer or on a “take-it of leave-it” basis
is illegal, known as Boulwareism. This Collective
bargaining technique provides that the “fair-
and firm offer” on the table or “take-it or leave-
it” proposal for the union “to accept it or reject
it,” cannot be changed unless “a new
information will show that the employer was
indeed wrong.” (Labor Relations and Law on
Dismissal with Notes and Comments, Poquiz, 2018,
p. 252)
"Although the law cannot open a man's mind, it
can at least compel him to conduct himself as if
he were trying to persuade and were willing to
be persuaded. To offer the union a contract
saying, 'Take it or leave it,' is not bargaining
collectively within the meaning of the act."
These are among the indicia referred to by him

152
to indicate lack of good faith: "Stalling the
negotiations by unexplained delays in
answering correspondence and … unnecessary
postponement of meetings."||| (Herald Delivery
Carriers Union v. Herald Publication, Inc., G.R. No. L-
29966, February 28, 1974)
Jurisdictional preconditions of collective
bargaining:
The mechanics of collective bargaining are set
in motion only when the following jurisdictional
preconditions are present:
1. Possession of the status of majority
representation of the employees’
representative in accordance with any of
the means of selection or designation
provided for by the Labor Code;
2. Proof of majority representation; and
3. A demand to bargain (Kiok Loy vs. NLRC, G.R.
No. L-54334, January 22, 1986)
Procedure in Collective Bargaining
a. When there is no CBA yet:
1. In accordance with any agreement or
voluntary arrangement between the
employer and the bargaining agent; or
2. In the absence of any agreement, in
accordance with the provisions of Art.
250 of the Labor Code.
Procedure under Article 261 of the Labor
Code
a. Party desiring to negotiate an
agreement shall serve written notice
upon the other party with a statement
of its proposals;
A demand to bargain should be in
writing. When a party desires to
negotiate an agreement, it should be
expressed through a written notice
upon other party with a statement of
its proposals (American President Lines
v. Clave, 114 SCRA 866)
b. Other party replies not later than 10
calendar days from receipt of such
notice;
c. If difference arises on the basis of the
notice and reply, either party may
request for a conference; Conference
shall begin no later than ten (10)
calendar days from the date of request.
d. If the dispute is not settled, the NCMB
shall intervene upon request of either
or both parties or at its own initiative.
i. NCMB shall immediately call parties
to conciliation meetings.
ii. NCMB has the power to issue
subpoena requiring attendance of
the parties.
iii. Duty of the parties to participate
fully and promptly in the
conciliation meetings.
e. During the conciliation proceedings,
parties are prohibited from doing any
act which may disrupt or impede the
early settlement of the dispute;
f. Board shall exert all efforts to settle
disputes amicably and encourage the
parties to submit their case to a
voluntary arbitrator. (Labor Laws and
Social Legislations, Duka, 2016, p. 548)
Employer’s failure to timely reply
indicative of bad faith
Employer’s failure to make a timely reply to the
proposals presented by the union is indicative
of its utter lack of interest in bargaining with the
union. (General Milling Corp.-Independent Labor
Union v. General Milling Corp., G.R. Nos. 183122 &
183889, June 15, 2011)
Utter lack of interest in bargaining with the
union is obvious in its failure to make a timely
reply to the proposals presented by the latter.
More than a month after the proposals were
submitted by the union, petitioner still had not
made any counter-proposals. (Colegio de San
Juan de Letran v. Association of Employees and
Faculty of Letran, G.R. No. 141471, September 18,
2000)
Its refusal to make a counter-proposal for the
CBA negotiation is an indication of its bad faith
and it is clear evasion of the duty to bargain
collectively which is an unfair labor practice
(General Milling Corp. v. Hon. C.A., G.R. No. 146728,
11 February 2004)
153
b. When there is a CBA – when there is CBA,
the duty to bargain collectively shall mean that
neither party shall terminate nor modify such
agreement during its lifetime. However, either
party can serve a written notice to terminate
the agreement at least 60 days prior to its
expiration date, otherwise known as the
Freedom Period.
60-day Freedom Period
The last sixty (60) days of the 5-year lifetime of
a CBA immediately prior to its expiration is
called the “freedom period”. This is the time
when the parties may terminate or modify the
terms and conditions of the CBA.
No petition for certification election may be
entertained if filed outside the sixty-day period
immediately before the expiration of the
collective bargaining agreement. The purpose
of the prohibition against the filing of a petition
for certification election outside the so called
freedom period is to ensure industrial peace
between the employer and its employees
during the existence of the CBA. (Republic
Planters Bank General Services Employees Union,
G.R. No. 119675, November 21, 1996)
When there is an existing CBA, the parties
thereto are bound to observe the terms and
conditions therein set forth until its expiration.
Neither party is allowed to terminate or modify
such agreement during its lifetime. The only
time the parties are allowed to terminate or
modify such agreement is within the 60-day
freedom period. (Art. 264, Labor Code)
It is also the time when the majority status of
the SEBA may be challenged by another union
by filing the appropriate petition for certification
election. (MRR Yard Crew vs. PNR, G.R. No. L-
33621, July 26, 1976)
Automatic Renewal Clause
The automatic renewal clause is deemed
incorporated in all CBA's. The automatic
renewal clause mandates the parties to keep
the status quo and to continue in full force and
effect the terms and conditions of the existing
agreement during the sixty-day period prior to
the expiration of the old CBA and/or until a new
agreement is reached by the parties.||| (In Re:
Petition for Certification Election Among the Rank-
and-File Monthly Employees of Contract Packaging
Corporation of the Philippines, OS-A-15-5-12 (NCR-
C-CE-02-30-01-12), [October 29, 2012])
The CBA shall remain effective and enforceable
even after the expiration of the period fixed by
the parties as long as no new agreement is
reached by them and no petition for
certification is filed. (Labor Laws and Social
Legislations, Duka, 2016, p. 561)
(4) Mandatory Provisions in the Collective
Bargaining Agreement (CBA)
A CBA refers to the negotiated contract
between a duly certified SEBA of workers and
the employer incorporating the agreement
reached after negotiations with respect to
wages, hours of work, and all other terms and
conditions of employment in the appropriate
bargaining unit, including mandatory provisions
for grievances and arbitration machineries.
(Sec. 1(f), Rule II, NCMB Revised Procedural
Guidelines in the Conduct of Voluntary Arbitration
Proceedings, October 15, 2014)
Primary Purpose
The primary purpose of a CBA is the
stabilization of labor-management
relations in order to create a climate of a
sound and stable industrial peace. In
construing a CBA, the courts must be practical
and realistic and give due consideration to the
context in which it is negotiated and the
purpose which it is intended to serve. (Insular
Hotel Employees Union-NFL v. Waterfront Insular
Hotel Davao, G.R. No. 174040-41, September 22,
2010)
Essential Requisites of a CBA
1. Employer-employee relationship between
the employer and the members of the
bargaining unit being represented by the
bargaining agent;
2. Bargaining agent must have the majority
support of the members of the bargaining
unit;
154
3. A lawful demand to bargain is made in
accordance with law. (Chan, Pre-Week Notes
for Labor Law, 2019, p. 60)
Employees entitled to a CBA
1. Members of the bargaining union;
2. Non-member of the bargaining union but
members of the bargaining unit;
3. Members of minority union/s who paid
agency fees to the bargaining union; and
4. Employees hired after the expiration of the
CBA. (Bar Reviewer on Labor Law, Chan, 2019,
p. 475)
CBA extends to Non-Members
When a collective bargaining contract is
entered into by the union representing the
employees and the employer, even the non-
member employees are entitled to the benefits
of the contract. To accord its benefits only to
members of the union without any valid reason
would constitute undue discrimination against
nonmembers. (New Pacific Timber & Supply Co.,
Inc. v. National Labor Relations Commission, G.R.
No. 124224, March 17, 2000)
A laborer can claim benefits from a CBA entered
into between the company and the union of
which he is a member at the time of the
conclusion of the agreement, after he has
resigned from said union. (Ibid)
To exclude them would constitute undue
discrimination and deprive them of monetary
benefits they would otherwise be entitled to
under a new collective bargaining contract to
which they would have been parties. Since in
this particular case, no new agreement had
been entered into after the CBA's stipulated
term, it is only fair and just that the employees
hired thereafter be included in the existing CBA.
This is in consonance with our ruling that the
terms and conditions of a collective bargaining
agreement continue to have force and effect
beyond the stipulated term when no new
agreement is executed by and between the
parties to avoid or prevent the situation where
no collective bargaining agreement at all would
govern between the employer company and its
employees.(Ibid)
Generally, a wage increase not included in the
CBA is not demandable. However, if it was
withheld by the employer as part of its unfair
labor practice against the union members, this
benefit should be granted. By granting this
increase, SC is eliminating the discrimination
against them, which was a result of an unfair
labor practice. (Sonedco Workers Free Labor Union
vs. Universal Robina Corporation, G.R. No 220383,
July 5, 2017)
CBA- Law Between the Parties
It is a well-settled rule firmly entrenched in the
annals of our jurisprudence that the terms and
conditions of a collective bargaining
contract constitute the law between the
contracting parties. (In Re: Voluntary
Arbitration of the Labor Dispute Between Alencor
Workers Union-Federation of Free Workers and Alen
Engineering Corporation, Unnumbered Case,
October 14, 1991)
In fact, it has been rightly said that a collective
bargaining agreement entered into by Officers
of a Union, as agent of the member, and an
employer, gives rise to valid enforceable
contractual relations, against the individual
Union members in the matter that affect them
peculiarly, the Union in matters that affect the
entire membership. (Ibid)
A Union member who is employed under an
agreement between the union and his employer
is bound by the provision thereof, since it is a
joint and several contract of the members of
the Union entered into by the Union and their
agent. (Ibid)
Ratification of the CBA by majority of all the
workers in the bargaining unit makes the same
binding on all employees therein. (Art. 237, Labor
Code)
Mandatory provisions of CBA
a. Grievance Procedure
b. Voluntary Arbitration
c. No Strike-No Lockout Clause
155
d. Labor Management Council
a. GRIEVANCE PROCEDURE
Legally speaking, the grievance procedure is
an appeal procedure and is a "must" provision
in every collective agreement. It is that part
of the agreement which provides for a
peaceful way of settling differences and
misunderstanding between the parties.
(Primer on Grievance Settlement and
Voluntary Arbitration)
The grievance procedure is the series of
formal steps that parties to a collective
bargaining agreement agreed to take for the
adjustment of grievances or questions arising
out of the interpretation or implementation of
the CBA or company personnel policies
including voluntary arbitration as the terminal
step. (Ibid)
The grievance procedure provides the parties
a first crack in addressing problems in CBA
administration and its use is an essential
requisite before a voluntary arbitrator can
take cognizance of the unresolved grievance.
(Ibid)
It usually consists of a multi-step procedure
starting from a discussion of the grievance
between the employee and/or the Union
Steward on the one-hand and the foreman
and supervisor on the other hand, and ending
with the highest decision-making officials of
the company, reflecting the hierarchy of
command or responsibility. (Ibid)
Grievance or Grievable Issue – any
question raised by either employer or the union
regarding any of the following issues or
controversies:
1. Interpretation or implementation of the
CBA;
2. Interpretation or enforcement of company
personnel policies;
3. Any claim by either party that the other
party is violating any provisions of the CBA
or company personnel policies. (Ibid)
Grievance procedure is part of the
continuous process of collective
bargaining. (Master Iron Labor Union v. National
Labor Relations Commission, G.R. No. 92009,
February 17, 1993)
It is intended to promote a friendly dialogue
between labor and management as a means of
maintaining industrial peace. The Corporation's
refusal to heed petitioners' request to undergo
the grievance procedure clearly demonstrated
its lack of intent to abide by the terms of the
CBA. (Ibid)
In order to be grievable, violations of a
Collective Bargaining Agreement, except those
which are gross in character, shall no longer be
treated as unfair labor practice and shall be
resolved as grievances under the Collective
Bargaining Agreement. (UST Faculty Union vs.
UST, G.R. No. 203957, July 30, 2014).
● Gross violation of the CBA is defined as
flagrant and/or malicious refusal by a party
thereto to comply with the economic
provisions thereof. (Art. 261, LC, as
amended).
● Any violation of the economic or non-
economic provisions of the CBA, may
constitute a grievance and is often referred
to as “rights dispute”. However, it must be
pointed out that when the violation of the
CBA consists in the flagrant and/or
malicious refusal to comply with the
economic provisions, the same shall not be
considered as ULP and therefore, not a
grievable issue that is properly cognizable
under the grievance machinery of the CBA.
(Bar Reviewer on Labor Law, Chan, 2019, p.
475).
Grievance Machinery - the mechanism for
the adjustment and resolution of grievance
arising from the interpretation or
implementation of a CBA and those arising from
the interpretation or implementation of the CBA
and those arising from the interpretation and
enforcement of company personnel policies.
(Art. 273, Labor Code)
156
The parties to a CBA shall include therein
provisions that will ensure the mutual
observance of its terms and conditions. They
shall establish a machinery for the adjustment
and resolution off grievances arising from the
interpretation or implementation or
enforcement of company personnel policies
(Ibid)
A grievance procedure is part of the continuous
process of collective bargaining. It intends to
promote a friendly dialogue between labor and
management as a means of maintaining
industrial peace. (Master Iron Labor Union vs. G.R.
No. 92009, February 17, 1993)
No particular grievance machinery is mandated
by law. (Caltex Refinery Employees Association vs.
Brilliantes, G.R. No. 123782, September 16, 1997)
A CBA will not be registered with the
Department of Labor and Employment if it does
not contain a provision on grievance
procedure/machinery which is a “must”
provision required of all CBAs. In the event that
a CBA without such provision is submitted for
registration, the registrar should advise the
parties to include a grievance
procedure/machinery therein before it is
considered duly registered. (Azucena, Labor Code
2, 2016, p. 537)
In the absence of a specific provision in the CBA
or existing company practice prescribing for the
procedures in handling grievance, the following
shall apply:
a. An employee shall present this grievance or
complaint orally or in writing to the shop
steward. Upon receipt thereof, the shop
steward shall verify the facts and determine
whether the grievance is valid.
b. If the grievance is valid, the shop steward
shall immediately bring the complaint to the
employee’s immediate supervisor. The
shop steward, the employee and his
immediate supervisor shall exert efforts to
settle the grievance at their level.
c. If no settlement is reached, the grievance
shall be referred to the grievance
committee which shall have ten (10) days
to decide the case.
Where the issue involves or arises from the
interpretation or implementation of a provision
in the collective bargaining agreement, or from
any order, memorandum, circular or
assignment issued by the appropriate authority
in the establishment, and such issue cannot be
resolved at the level of the shop steward or the
supervisor, the same may be referred
immediately to the grievance committee. (Rule
XIX, D.O. 40-03)
b. VOLUNTARY ARBITRATION
Voluntary Arbitration refers to the mode of
settling labor-management disputes by which
the parties select a competent, trained and
impartial third person who shall decide on the
merits of the case and whose decision is final
AND executory.|||(Section 1d, Rule II, 2004 NCMB
Revised Procedural Guidelines in the Conduct of
Voluntary Arbitration Proceedings)
Where the parties themselves agree to submit
their issue or issues to a third person or board
and accept the arbitration award as final and
binding, the procedure is known as voluntary
arbitration. If it is imposed upon them by the
government, then the technique is known as
compulsory arbitration. The latter is a
government coercive intervention (Labor
Relations and Law on Dismissal with Notes and
Comments, Poquiz, 2018, p. 334)
Types of labor dispute submitted to
voluntary arbitration
The following are the two (2) types of labor
disputes that may be submitted to voluntary
arbitration:
a. Rights disputes contemplated the existence
of a CBA. They include unresolved
grievances arising from the CBA
interpretation or implementation including
violations of the CBA, which are not gross
in character and unresolved grievances
arising from personnel policy enforcement
and interpretation, including disciplinary
cases (Art. 274; No. 44, NCMB Primer on
157
 Grievance Settlement and Voluntary
Arbitration).
b. Interest disputes relate to disputes over the
formation of a CBA or efforts to secure the
same. They cover all other disputes
including unfair labor practices and
bargaining deadlocks (Art. 265; No. 44, ibid.)
Voluntary Arbitrator – refers to any person
who has been accredited by the Board as such,
or any person named or designated in the
collective bargaining agreement by the parties
as their voluntary arbitrator, or one chosen by
the parties with or without the assistance of the
BOARD, pursuant to a selection procedure
agreed upon in the CBA or one appointed by
the board in case either of the parties to the
CBA refuses to submit to Voluntary Arbitration.
(Section 1e, Rule II, 2004 NCMB Revised Procedural
Guidelines in the Conduct of Voluntary Arbitration
Proceedings)
Designation made by parties
Parties to a collective bargaining agreement
shall name and designate in advance, a
voluntary arbitrator or panel of voluntary
arbitrators, or include in the agreement, a
procedure for the selection of such voluntary
arbitrator or panel of voluntary arbitrators duly
accredited by the NCMB. (Labor Relations and Law
on Dismissal with Notes and Comments, Poquiz,
2018, p. 334)
In case the parties fail to select a voluntary
arbitrator or panel of voluntary arbitrators, the
NCMB shall designate the voluntary arbitrator
or panel of voluntary arbitrators, as may be
necessary, pursuant to the selection procedure
agreed upon in the collective bargaining
agreement, which shall act with the same force
and effect as if the voluntary arbitrator or panel
of voluntary arbitrators have been selected by
the parties.
Kinds of Voluntary Arbitrations
1. Permanent Arbitrator – named or
designated person in the CBA by the parties
2. Ad-Hoc Arbitrator – chosen by the
parties in accordance with the established
procedure in the CBA or one appointed by
the NCMB in case there is failure in the
selection or in case either party to the CBA
refuses to submit to voluntary arbitration.
(Section 1e, Rule II, 2004 NCMB Revised
Procedural Guidelines in the Conduct of
Voluntary Arbitration Proceedings)
When the Labor Arbiter renders his decision,
compulsory arbitration is deemed terminated
because by then the hearing and determination
of the controversy has ended. Any appeal
raised by an aggrieved party from the Labor
Arbiter's decision is already beyond the scope
of arbitration since in the appeal stage, the
NLRC en banc merely reviews the Labor
Arbiter's decision for errors of fact or law and
no longer duplicates the proceedings before the
Labor Arbiter. Thus, the clause "pending final
resolution of the case by arbitration/ should be
understood to be limited only to the
proceedings before the Labor Arbiter, such that
when the latter rendered his decision, the case
was finally resolved by arbitration. (Philippine
Airlines, Inc. v. National Labor Relations Commission,
G.R. No. 55159, December 22, 1989)
c. NO STRIKE – NO LOCKOUT CLAUSE
“No Strike, No Lockout” Clause in the Collective
Bargaining Agreement (CBA) is an expression
of the firm commitment of the parties thereto
that, on the part of the union, it will not conduct
a strike during the effectivity of the CBA, and
on the part of the employer, it will not a stage
a lockout during the lifetime thereof. (Chan, Bar
Reviewer on Labor Law, 3rd Revised edition,
ChanRobles Publishing Company, 2017, p.557)
A "no strike, no lock-out" provision in the CBA
"may only be invoked by an employer when the
strike is economic in nature or one which is
conducted to force wage or other agreements
from the employer that are not mandated to be
granted by law. It is not applicable when the
strike is grounded on unfair labor practice.
(Guagua National Colleges v. Guagua National
Colleges Faculty Labor Union, G.R. No. 204693, July
13, 2016)
158
A strike may be held as invalid although the LU
complied with strict requirements as provided
for Art. 263 when the same is contrary to an
existing agreement such as “no strike – no
lockout” clause in CBA. (C. Alcantara & Sons, Inc.
vs. CA, G.R. No. 155109, September 29, 2010)
Effects of Non-Registration of the CBA
A CBA that is not registered as mandated by Art
237 remains valid and binding between the
parties, however, it may not be used to apply
the contract bar rule as provided in Article 238
and prevent any legitimate labor union from
filing a petition for certification election. (Duka,
Labor Laws and Social Legislations, 2016, p. 556)
Disaffiliation Prior to the Freedom Period
A Labor union may disaffiliate from the mother
union to form a local or independent union only
during the sixty (60)-day freedom period
immediately preceding the expiration of the
CBA. (Ibid, p. 570)
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 vs.
Samahan ng mga Manggagawang Nagkakaisa
sa Manila Bay Spinning Mills at J.P. Coats, G.R.
No. 118562, July 05, 1996)
d. LABOR MANAGEMENT COUNCIL
Workers shall have the right, subject to
such rules and regulations as the Secretary
of Labor and Employment may promulgate, 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. For this purpose,
workers and employers may form labor-
management councils. (Article 267, Labor Code)
An LMC, either as council or committee or
cooperation program, can serve as a forum
where management and employees may air
their concerns, short of collective bargaining. It
is largely a communication mechanism for
myriad purposes including prevention or
resolution of disputes. It can even act as a
grievance machinery. (Azucena, Everyone’s Labor
Code, 2021, p.333)
The Department shall promote the formation of
labor-management councils in organized and
unorganized establishments to enable the
workers to participate in policy and decision-
making processes in the establishment, insofar
as said processes will directly affect their rights,
benefits and welfare, except those which are
covered by collective bargaining agreements or
are traditional areas of bargaining. (Sec. 1, Rule
XXI, D.O. No. 40-03 as amended)
The Department shall promote other labor-
management cooperation schemes and, upon
its own initiative or upon the request of both
parties, may assist in the formulation and
development of programs and projects on
productivity, occupational safety and health,
improvement of quality of work life, product
quality improvement, and other similar scheme.
(Ibid.)
Function: A LMC, since it is not a union, is
versatile and can exist where there is no union
or co-exist with a union. But an LMC CANNOT
replace a union. An LMC can represent
employees across the enterprise, present
grievances regardless of the grievant’s rank,
and proffer proposals unhindered by
formalities. It can also handle projects and
programs whoever is the proponent, form
committees for myriad purposes, instill
discipline, and improve productivity. All these
activities the LMC may do without having to
face internecine strifes arising from periodic
inter-union contests for dominance. In short,
the LMC can deal with the employer on matters
affecting the employees’ rights, benefits, and
welfare. (Azucena, Labor Code with Comments and
Cases, Vol. II-A, 2021, p. 387)
159
5. UNFAIR LABOR PRACTICES (ULP)
a) Nature and Aspect
Unfair labor practice refers to acts that
violate the workers' right to organize. To
hold an employer liable for the same, the
alleging party has the burden to prove that the
acts of the former negatively affects in
whatever manner the right of his or her
employees to self-organize. (Ilaw at Buklod ng
Manggagawa sa General Milling Corp. v. General
Milling Corp., G.R. No. 216787 (Notice), February 15,
2022)
The prohibited acts are related to the
workers‘ right to self-organization and to the
observance of a Collective Bargaining
Agreement. Without that element, the acts, no
matter how unfair, are not unfair labor
practices. (Philcom Employees Union vs. Philippine
Global Communications, G.R. No. 144315, July 17,
2006)
Concept of ULP
ULP is an act of an employer or union – or their
agents, which violates the right of workers to
self-organization, which includes the right:
a. To form a union;
b. To take part in its formation;
c. To join or assist a union of their own
choosing for purpose of Collective
bargaining and negotiating; and
d. To engage in concerted activities for mutual
help and protection
Unfair labor practices violate the
constitutional right of workers and
employees to self organization, are inimical
to the legitimate interests of both labor and
management, including their right to bargain
collectively and otherwise deal with each other
in atmosphere of freedom and mutual respect,
disrupt industrial peace and hinder the
promotion of healthy and stable labor-
management relations. (Art. 258, Labor Code)
Not all unfair labor acts constitute ULP
While an act or decision of an employer may be
unfair, certainly not every unfair act or decision
constitute ULP as defined and enumerated
under Labor Code. (Great Pacific Life Employees
Union vs. Great Pacific Life Insurance Corp. G.R
126717, February 11, 1999)
Unfair labor practices are those expressly
enumerated in Arts. 259 and 260 of the Labor
Code. Any act that does not fall in the
enumerations provided is not an unfair labor
practice. As a general rule, an unfair labor
practice can be committed only if there exists
employer-employee relationship. However,
there are instances when it can be committed
against a non-employee such as in yellow-dog
contract. In view of this disqualification of
managerial employees from joining a union, an
unfair labor practice act cannot be committed
by or against them unless they are acting as
agents of the employer in the commission of an
ULP. (Labor Relations and Law on Dismissal with
Notes and Comments, Poquiz, 2018, p. 215)
Elements of ULP:
1. There must be an employer-employee
relationship between the offender and
offended party;
2. The act complained of must be expressly
mentioned and defined in the Labor Code
as ULP;
3. The act complained of as ULP must have a
proximate and casual connection with any
of the following 3 rights:
a. Exercise of the right to self-
organization;
b. Exercise of the right to collective
bargaining; or
c. Compliance with the CBA.
EXCEPTION: The only ULP that may or may
not be related to the exercise of the right to
self-organization and collective bargaining is
the act described under Art. 259 (248(f) i.e. to
dismiss, discharge, or otherwise prejudice or
discriminate against an employee for having
given or being about to give testimony under
the Labor Code.
160
Aspects of ULP
ULP has two (2) aspects:
1. Civil aspect; and
2. Criminal aspect.
The civil aspect of ULP includes claims for
actual, moral and exemplary damages,
attorney‘s fees and other affirmative reliefs (Art.
258, Labor Code)
Generally, these civil claims should be asserted
in the labor case before the Labor Arbiters who
have original and exclusive jurisdiction over ULP
cases. (Art. 224, Labor Code)
The civil aspect can be committed by the
officers and agents of the employers or officers
and agents of the labor organization. This
aspect of ULP is cognizable and falls within the
jurisdiction of the Labor Arbiter. The quantum
of proof required is only substantial evidence
and the prescriptive period is one year from the
accrual of ULP. (Duka, Labor Laws and Social
Legislation, hereinafter Duka, 2019, p. 524)
The criminal aspect, on the other hand, can be
committed by the agents and officers of the
employer who participated, authorized and/or
ratified the act. This ULP falls within the
jurisdiction of the regular trial courts and the
quantum of proof required is beyond
reasonable doubt. The prescriptive period is
within one year from the accrual of the act of
ULP.
The criminal proceeding is suspended once the
civil or administrative aspect is filed. The
criminal proceeding will only continue once the
administrative case has attained finality. The
final judgment in the administrative proceeding
(civil aspect) finding ULP is a prerequisite in the
filing of the criminal case for ULP. However, the
final judgment in the civil case is only a
condition precedent for the filing of the criminal
case and is not binding and cannot be used as
evidence in the criminal case for ULP. (Ibid, pp.
524-525)
Kinds of ULP
1. Acts violative of the right of self-
organization
a. Interference, restraint, and
coercion Non-Union (or Withdrawal
from) Membership as Condition for
Employment
b. Contracting Out to Discourage
Unionism Company Dominated
Union
c. Discriminating to encourage/
discourage unionism
d. Retaliation for testimony against
employer
e. Exaction – Featherbedding
2. Acts violative of the right to collective
bargaining
a. Violation of the duty to bargain
b. Negotiation of Attorney‘s Fees
c. Violation of the CBA
d. Failure to make a timely reply to
the proposals; within ten (10)
calendar days (General Milling Corp.
vs. CA, GR No. 146728, February 11,
2004)
Parties who may be liable for ULP
1. Officers and agents of the company who
have actually participated in, ratified, or
authorized that act of ULP.
2. Union Officers, members of the governing
boards, representatives or agents or
members of labor associations or
organizations who have actually
participated in or authorized or ratified the
ULP.
There must be a final judgment finding that ULP
was committed in the civil or administrative
case before a criminal case can be pursued.
Such decision is not binding in the criminal case
and its findings cannot be considered as
evidence of guilt but merely as proof of
compliance (Art. 258, Labor Code, as amended)
b) By employers
a. Interfere, restrain or coerce employees
in their right to self-organization;
161
 b. Require a person not to join a
union; Discourage Unionism;
c. Contract out services or functions
being performed by union
members;
d. Initiate, dominate, assist or
otherwise interfere with formation
or administration of any union;
e. Discriminate in terms and
conditions of employment to
encourage or discourage
membership in any labor
organization;
f. Dismiss, discharge or discriminate
an employee for having given or
being about to give testimony
under this code;
g. Violate the duty to bargain
collectively;
h. Pay negotiation or attorney‘s fees
to the union or its officers or agents
as part of the settlement of any
issue in collective bargaining or any
other disputes; or
i. Flagrant or gross refusal to comply
with the economic terms of CBA.
j. Interfere, restrain or coerce
employees in their right to self-
organization;
Test of Interference or Coercion
Whether the employer has engaged in conduct
which may reasonably tend to interfere with the
free exercise of employees‘ twin rights to self-
organization and collective bargaining (Insular
Life Employees Association vs. Insular Life, G.R. No.
L-25291, January 30, 1971)
It is the prerogative of the company to
promote, transfer, or even demote its
employees to other positions when the interests
of the company reasonably demand it. Unless
there are circumstances which directly point to
interference by the company with the
employee‘s right to self-organization, the
transfer of an employee should be considered
as within the bounds allowed by law, e.g.
despite transfer to a lower position, his original
rank and salary remained undiminished.
(Rubberworld Phils. vs. NLRC, G.R. No. 75704, July
19, 1989)
Exception to ULP of Interference: Union
Security Agreements
Nothing in the Code or in any other law shall
stop the parties from requiring membership in
a recognized collective bargaining agent as a
condition for employment, except those
employees who are already members of
another union at the time of the signing of the
collective bargaining agreement. (Art. 259, Labor
Code)
It is the policy of the State to promote unionism
to enable the workers to negotiate with
management on the same level and with more
persuasiveness than if they were to individually
and independently bargain for the improvement
of their respective conditions. It is for this
reason that the law has sanctioned stipulations
for the union shop and the closed shop as a
means of encouraging the workers to join and
support the labor union of their own choice as
their representative in the negotiation of their
demands and the protection of their interest
vis-a-vis the employer. (Liberty Flour Mills
Employees vs. Liberty Flour Mills, Inc., G.R. No.
58768-70, December 29, 1980)
The purpose of a union shop or other union
security arrangement is to guarantee the
continued existence of the union through
enforced membership for the benefit of the
workers. (Bank of the Philippine Islands vs. BPI
Employees Union-Davao Chapter-Federation of
Unions in BPI Unibank, G.R. No. 164301, August 10,
2010)
Other examples of acts of interference
a. Outright and unconcealed intimidation;
b. An employer who interfered with the right
to self-organization before a union is
registered can be held guilty of ULP
(Samahan ng mga Manggagawa sa Bandolino-
LMLC vs. NLRC, G.R.No. 125195, July 17, 1997).
c. When the act of a company president in
writing letters to strikers urging them to
return to work is an interference with the
right to collective bargaining; Individual
162
 solicitation is also interference. (The Insular
Life Assurance NATU vs. The Insular Life Co.
Ltd, G.R. No. L‐25291, Jan. 30, 1971)
Totality of Conduct Doctrine
It states that the culpability of an employer's
remarks is to be evaluated not only on the basis
of their implications, but against the
background of and in conjunction with collateral
circumstances.
Under this doctrine, expressions of opinion by
an Employer, though innocent in themselves,
frequently were held to be ULP because of:
1. The circumstances under which they were
uttered;
2. The history of the particular Employer‘s
labor relations or anti-union bias;
3. Their connection with an established
collateral plan of coercion or interference.
Expressions of opinion by an employer which,
though innocent in themselves, frequently were
held to be culpable because of the
circumstances under which they are uttered;
the history of the particular employer‘s relations
or anti-union bias because of their connection
with an established collateral plan of coercion
or interference. An expression which may be
permissibly uttered by one employer, might, in
the mouth of a more hostile employer, be
deemed improper and consequently actionable
as an unfair labor practice. (The Insular Life
Assurance NATU vs. The Insular Life Co. Ltd, G.R.
No. L‐25291, Jan. 30, 1971)
Taken individually, it will not be considered as
ULP, but if taken together and by the totality of
it, the same constitutes as ULP.
In unfair labor practice cases, it is the union
which has the burden of proof to present
substantial evidence to support its allegations
of unfair labor practices committed by the
employer. It is not enough that the union
believed that the employer committed acts of
unfair labor practice when the circumstances
clearly negate prima facie showing to warrant
such belief. (Tiu vs. NLRC, G. R. No. 123276, Aug.
18, 1997)
The judicial dictum is that any act of
interference by the employer in the exercise by
employees of their right to self-organization
constitutes an unfair labor practice. (Chan, Pre-
Week Bar Exam Notes on Labor Law, 2018, p. 96)
Require a person not to join a union;
Discourage Unionism
Yellow Dog Contract
In Article 259(b), ULP is committed when an
employer requires 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. This is known as
a yellow dog contract.
A yellow dog contract is an undertaking by the
employees that as a condition for employment
they will not join, assist, form or even attempt
to foster a union for the duration of their
employment with the employer. This is a void
undertaking. (Duka, Labor Laws and Social
Legislation, 2019, p. 529)
Common stipulations in a Yellow Dog
Contract
A typical yellow dog contract embodies
the following stipulations:
1. A representation by the employee that he
is not a member of a labor organization;
2. A promise by the employee that he will not
join a union; and
3. A promise by the employee that upon
joining a labor organization, he will quit his
employment (Chan, Pre-Week Bar Exam Notes
on Labor Law, 2018, p. 97).
The act of the employer in imposing such a
condition constitutes unfair labor practice under
Article 248(b) of the Labor Code. Such
stipulation in the contract is null and void.
Contract out services or functions being
performed by union members;
Subcontracting is a ULP when the contracting
out of a job, work or service being performed
by union members will interfere with, restrain
or coerce employees in the exercise of their
163
right to self-organization that it shall constitute
an unfair labor practice.
Thus, it is not unfair labor practice to contract
out work for reasons of business decline,
inadequacy of facilities and equipment,
reduction of cost and similar reasonable
grounds. The court usually refuses to substitute
its judgment for that of the business decision of
the employer in ascertaining the validity or
legality of the motivation for the contracting out
of services (Azucena, Labor Code 2, 2016, p. 330).
It is important to note, however, that not all
acts of the employer in contracting out the work
which is otherwise performed by union
members can be classified as ULP. Such
contracting out becomes unfair labor practice if
and when it interferes with, restrains or coerces
the employees in the exercise of their rights to
self-organization. (Duka, Labor Laws and Social
Legislation, 2019, pp. 529-530)
Contracting out of services is not ULP per se. It
is ULP only when the following conditions exist:
the services contracted out are being
performed by union members and such
contracting-out interferes with, restrains, or
coerces employees in the exercise of their right
to self-organization (Duka, Labor Laws and Social
Legislation, 2019, pp. 529-530).
Initiate, dominate, assist or otherwise
interfere with formation or
administration of any union;
It is an unfair labor practice to initiate,
dominate, assist or otherwise interfere with the
formation or administration of any labor
organization, including the giving of financial or
other support to it or its organizers or
supporters. (Duka, Labor Laws and Social
Legislation, 2019, p. 530)
Discriminate in terms and conditions of
employment to encourage or discourage
membership in any labor organization;
Discrimination is not ULP per se, it only
becomes as such when it
encourages/discourages unionism. (Azucena,
Labor Code 2, 2016, p. 337)
Test of discrimination: When the discharge of
an employee was motivated by his involvement
with the union. Such inference must be based
on evidence, direct or circumstantial, not upon
mere suspicion. (Azucena, Labor Code 2, 2016, p.
342-344)
Dismiss, discharge or discriminate an
employee for having given or being about
to give testimony under this code;
Dismissal of employees after they have
organized their union and about to start with
the effort at having it certified as their SEBA.
(Samahan ng Manggagawa sa Binondo-LMLC vs.
NLRC, G.R. No. 126195, July 17, 1997)
Consequently, to dismiss union members in
order to ensure the defeat if the union in the
certification election is ULP. (Samahang
Manggagawa ng Via Mare vs. Noriel, G.R. No. L-
52169, June, 30, 1980)
Dismissal of union officers which threatens the
existence of the union constitutes union-
busting of ULP. (Art. 278 [c], Labor Code)
Violate the duly to bargain collectively;
To be a ULP, violation should be gross in
character.
The crucial question whether or not a party has
met his statutory duty to bargain in good faith
typically depends on the facts in the individual
case. There is no per se test of good faith in
bargaining. Good faith or bad faith is an
interference to be drawn from the facts (HSBC
Employees Union vs. NLRC, G.R. No. 125038,
November 6, 1996)
Runaway Shop - is defined as an industrial
plant moved by its owners from one location to
another to escape union labor regulations or
state laws, but the term is also used to describe
a plant removed to a new location in order to
discriminate against employees at the old plant
164
because of their union activities. It is one
wherein the employer moves its business to
another location or it temporarily closes its
business for anti-union purposes. A "runaway
shop" in this sense, is a relocation motivated by
anti-union animus rather than for business
reasons. (Complex Electronics Employees
Association vs. NLRC, G.R. No. 121315, July 19,
1999)
Blue-Sky Bargaining – is the act of making
exaggerated or unreasonable proposals. (Duka,
Labor Laws and Social Legislation, 2019, p.
533)
Surface Bargaining - is defined as "going
through the motions of negotiating" without
any legal intent to reach an agreement. The
resolution of surface bargaining allegations
never presents an easy issue. The
determination of whether a party has engaged
in unlawful surface bargaining is usually a
difficult one because it involves, at bottom, a
question of the intent of the party in question,
and usually such intent can only be inferred
from the totality of the challenged party’s
conduct both at and away from the bargaining
table. It involves the question of whether an
employer’s conduct demonstrates an
unwillingness to bargain in good faith or is
merely hard bargaining. (Standard Chartered Bank
vs. Confesor, G.R. No. 114974, June 16, 2004)
Pay negotiation or attorney’s fees to the
union or its officers or agents as part of
the settlement of any issue in collective
bargaining or any other disputes; or i.
Flagrant or gross refusal to comply with
the economic terms of CBA.
If an employer interferes in the selection of the
negotiators or coerces the Union to exclude
from its panel of negotiators a representative of
the Union, and if it can be inferred that the
employer adopted the said act to yield adverse
effects on the free exercise to right to self-
organization or on the right to collective
bargaining of the employees. ULP is committed.
(Standard Chartered Bank Employees Union vs.
Confesor, et al., G.R. No.114974, June 16, 2004)
It is not necessary that there be direct
evidence that an employee was in fact
intimidated or coerced by statements of threats
of employer if there is a reasonable inference
that anti-union conduct of the employer has an
adverse effect on self-organization and
collective bargaining. (The Insular Life Assurance
Co., LTD., Employees Association-NATU vs. The
Insular Life Assurance Co., LTD., FGU insurance
Group, G.R. No. L-25291, January 30, 1971, citing
Francisco, Labor Laws 1956, Vol. II, p. 323)
c) By labor organizations
a. Restrain or coerce employees in the
exercise of their right to self-
organization;
b. Cause or attempt to cause an
employer to discriminate an
employee;
c. Violate the duty or refuse to bargain
collectively with the employer;
d. An employer to pay or deliver any
money or other things of valve, in the
nature of an exaction, for services
which are not performed or not to be
performed;
e. Ask for negotiation or attorney‘s fees
from employers as part of the
settlement of any issue in collective
bargaining or any other dispute; or
f. Violation of the CBA
a. Restrain or coerce employees in the
exercise of their right to self-
organization
Labor organization shall have the right to
prescribe its own rules with respect to the
acquisition or retention of membership. The
labor organization, its officers, agents or
representatives are granted license by the
Labor Code to interfere with the exercise by the
employees‘ of their right to self-organization.
Without such, no labor organization can be
formed as the act of recruiting and convincing
the employees is an act of inference. (Chan, Pre-
Week Notes on Labor Law, 2019, p. 63)
165
b. Cause or attempt to cause an
employer to discriminate an employee
Includes discrimination against an employee
with respect to whom membership in such
organization has been denied or to terminate
an employee on any ground other than the
usual terms and conditions of membership or
continuation of membership is made available
to other members.
In determining whether a discharge is
discriminatory, the true reason for the
discharge must be established. While union
activity is no bar to a discharge, the existence
of a lawful cause for discharge is no defense if
the employee was actually discharged for union
activity. (Phil. Metal Foundries vs. CIR, G.R. No.
34948-49 May 15, 1979)
c. Violate the duty or refuse to bargain
collectively with the employer;
Requisites:
1. The union is a duly certified SEBA (Lakas ng
Manggagawang Makabayan vs. Marcelo
Enterprises, GR No. L-38258, November 19,
1982); and
2. It commits any of the following:
a. It violates the duty to bargain
collectively; or
b. It refuses to bargain collectively with
the employer.
Unfair Labor Practice in Collective
Bargaining
a. Bargaining in bad faith - The crucial
question whether or not a party has met his
statutory duty to bargain in good faith
typically depends on the facts in the
individual case. There is no per se test of
good faith in bargaining. Good faith or bad
faith is an interference to be drawn from
the facts. (HSBC Employees Union vs.
NLRC, G.R. No. 125038, November 6,
1996)
b. Refusal to Bargain - An employer is guilty
of ULP in refusing to bargain with the
representative of a majority of his
employees. To bargain in good faith, an
employer must not only meet and confer
with the union which represents his
employees, but also must recognize the
union for the purpose of collective
bargaining. Additionally, he must recognize
the union as the bargaining unit, even if
they are not all members of the union. A
union can also be guilty of ULP for refusing
to bargain collectively. (Azucena, Labor
Code with Comments and Cases, Vol. II-A,
2021, p. 325)
c. Blue Sky Bargaining - unrealistic and
unreasonable demands in negotiations by
either or both labor and management,
where neither concedes anything and
demands the impossible.It actually is not
collective bargaining at all. (Harold S.
Roberts, Roberts Dictionary of Industrial
Relations. (Revised Edition, 1971, p. 51, as
cited in Standard Chartered Bank
Employees Union vs Confesor, GR No.
114974, June 16, 2004)
d. Surface Bargaining - going through the
motions of negotiating without any legal
intent to reach an agreement. It involves
the question of whether or not the
employer’s conduct demonstrates an
unwillingness to bargain in good faith or is
merely hard bargaining (Standard
Chartered Bank Employees Union vs.
Confesor, GR No. 114974, June 16, 2004)
e. An employer to pay or deliver any money
or other things of value, in the nature of an
exaction, for services which are not
performed or not to be performed
This ULP is known as featherbedding. It is in
nature of exaction, for services which are not
performed or not to be performed, as when a
union demands that the employer maintain
personnel in excess of the latter’s requirements.
It is an unfair labor practice of the union
through coercive means for exacting or
attempting to exact the employers for services
not rendered or not intended to be rendered.
166
However, there is no featherbedding if the paid
work is performed no matter how unnecessary
or useless it may be to the employer. (Duka,
Labor Laws and Social Legislation, 2019, p. 535)
The anti-featherbedding provision has been
held not to bar a union from demanding
payment for work for which the employer has
already paid another person. A union is not
guilty of ULP in demanding payment for an
amount equal to the wages paid by the
employer to a non-union employee for work
which the union‘s members were entitled to. If
the work is actually done by employees, there
can be no conflict with the anti-featherbedding
provision, regardless of whether or not the
persons receiving payment are the ones who
performed the work. (Rabouin vs. NLRB [CA2] 195
F2d 906)
Requisites:
1. The labor organization, its officers, agents
or representatives have caused or
attempted to cause an employer either:
2. To pay or agree to pay any money,
including the demand for fee for union
negotiations; or
3. To deliver or agree to deliver any things of
value;
4. Such demand for payment of money or
delivery of things of value is in the nature
of an exaction; and
5. The services contemplated in exchange for
the exaction are not actually performed or
will not be performed. (Chan, Pre-Week Bar
Exam Notes on Labor Law, 2018, p. 99)
f. Ask for negotiation or attorney’s fees from
employers as part of the settlement of any
issue in collective bargaining or any other
dispute;
It is ULP for a labor organization, its officers,
agents or representatives to ask for or accept
negotiation fees or attorney’s fees from
employers as part of the settlement of any issue
in collective bargaining or any other dispute
(Chan, Pre-Week Bar Exam Notes on Labor Law,
2018, p. 100)
Sweetheart Contract - A labor organization
asks for or accepts a negotiation or attorney’s
fees from the employer in settling a bargaining
issue or dispute.
The obligation to pay attorney’s fees belongs to
the union and cannot be shunted to the
individual workers as their direct responsibility.
The law has made clear that any agreement to
the contrary shall be null and void ab initio
(EMCO Plywood Corporation, et al. vs. Abelgas, G.R.
No. 148532, April 14, 2004)
g. Violation of the CBA
It must be noted that under Article 261 of
the Labor Code, violation of the CBA is
generally considered merely a grievable
issue. It becomes unfair labor practice only
if the violation is gross in character which
means that there is flagrant and/or
malicious refusal to comply with the
economic stipulations in the CBA. (Chan,
Pre-Week Bar Exam Notes on Labor Law, 2018,
p. 100)
Featherbedding activities (make work
activities)
It is an unfair labor practice of a union through
coercive practices such as strikes, or extortion
for exacting or attempting to exact from an
employer, compensation for services not
rendered or not intended to be rendered.
Simply this is an extortion of money of other
things of value for services performed or
unperformed by the labor union. There is no
illegal featherbedding, however, where the
union demands payment of damages for breach
of contract, under color of rights. (Labor
Relations and Law on Dismissal with Notes and
Comments, Poquiz, 2018, p. 236)
167
PARTIES LIABLE FOR UNFAIR LABOR Labor Arbiter MTC or RTC as the case
PRACTICE may be, provided that
no criminal prosecution
for ULP may be
CIVIL CASE CRIMINAL CASE
instituted without first
obtaining a final
judgment in the
PARTIES LIABLE
administrative
proceedings before the
Labor Arbiter that ULP
For ULP of Employer For ULP Employer
has been committed.
Officers and agents of Officers and agents of
employer. corporations,
associations, or
partnership who may
have actually
participated the ULP.

Quantum of Proof Needed

For ULP Of Labor For ULP of Labor Substantial Evidence Guilt beyond
Organization Officers Organization Officers, reasonable doubt.
and agents of Labor members of governing
Organizations. boards, representatives
or agents, or members
of labor associations
who may have actually 6. PEACEFUL CONCERTED ACTIVITIES
participated,
authorized, or ratified Workers shall have the right to engage in
the ULP.
concerted activities for purposes of collective
bargaining or for their mutual benefit and
protection. The right of legitimate labor
organizations to strike and picket and of
employers to lockout, consistent with the
national interest, shall continue to be
Who has Jurisdiction recognized and respected. However, no labor
union may strike and no employer may declare
a lockout on grounds involving inter-union or
intra-union disputes. (Art. 278(b), Labor Code)

The term ―” concerted activities” is defined as

the activities of two or more employees for the
purpose of securing benefits or changes in
terms and conditions of employment, or for
mutual aid or protection with respect to their
collective interest as employee.

168
Forms of Concerted Activities (Ilagan v. Manila Electric Co., G.R. Nos. 211746 &
1. By Labor Organizations 212077 (Notice), January 22, 2020)
a. Strike
b. Picket Grounds for a Valid Strike
2. By Employers
The Labor Code and the IRR limit the grounds
a. Lockout
for a valid strike to:
1. a bargaining deadlock in the course of
a) Strikes (Valid vs. Illegal)
collective bargaining, or
Any temporary stoppage of work by the
concerted action of the employees as a result 2. the conduct of unfair labor practices by
of an industrial or labor dispute. (Art. 219(o), the employer.
Labor Code)
Only a certified or duly recognized bargaining
representative may declare a strike in case of
A strike is the most powerful weapon of workers
a bargaining deadlock. However, in cases of
in coming to an agreement with management
unfair labor practices, the strike may be
as to the terms and conditions of employment.
declared by any legitimate labor organization.
Premised on the concept of economic war
(Bigg's, Inc. v. Boncacas, G.R. Nos. 200487 &
between labor and management, staging a 200636, March 6, 2019)
strike either gives life to or destroys the labor
union and its members, as well as affect
Mandatory procedural requirements
management and its members. (Ilagan v. Manila
Electric Co., G.R. Nos. 211746 & 212077 (Notice),
January 22, 2020) a. notice of strike be filed with the NCMB 30
days before the intended date thereof, or
Valid Strike vs. Illegal Strike 15 days in case of unfair labor practice;
b. a strike vote be approved by a majority of
the total union membership in the
VALID STRIKE ILLEGAL STRIKE bargaining unit concerned, obtained by
secret ballot in a meeting called for that
purpose; and
It is a strike that is A strike staged for a
c. a notice be given to the NCMB of the results
staged for a valid purpose not recognized
purpose and by law, or, if for a valid of the voting at least seven days before the
conducted through purpose, conducted intended strike. These requirements are
means allowed by law. violative of the law. mandatory, and the union's failure to
comply renders the strike illegal. (Ergonomic
Systems Philippines, Inc. v. Enaje, G.R. No.
195163, December 13, 2017)
Valid Strike
To be legitimate, a strike should not be Bargaining Deadlock vs ULP
antithetical to public welfare, and must Bargaining Unfair Labor
be pursued within legal bounds. Deadlock Practice

The right to strike as a means of attaining social

justice is never meant to oppress or destroy
anyone, least of all, the employer. Since strikes Who may Only a certified duly certified
affect not only the relationship between labor file or duly bargaining
and management, but also the general peace recognized agent or
and progress of the community, the law has bargaining legitimate
representative labor
provided limitations on the right to strike.
organization

169

When at least 30 days at least 15
before the days before
intended date the intended
of the strike date of the
strike
Where regional branch NCMB and
of the NCMB serve a copy
and serve a of the notice
copy of the on the
notice on the employer||
employer||
In both instances, the mandatory procedural
requirements must be complied with.
In a strike due to bargaining deadlocks, the
union must file a notice of strike or lockout
with the regional branch of the NCMB at least
30 days before the intended date of the strike
and serve a copy of the notice on the
employer. This is the so-called "cooling-off
period" when the parties may enter into
compromise agreements to prevent the
strike. In case of unfair labor practice, the
period of notice is shortened to 15 days; in
case of union busting, the "cooling-off period"
does not apply and the union may
immediately conduct the strike after the
strike vote and after submitting the results
thereof to the regional arbitration branch of
the NCMB at least seven days before the
intended strike.
Thus, in a strike grounded on unfair labor
practice, the following are the requirements:
(1) the strike may be declared by the duly
certified bargaining agent or legitimate labor
organization; (2) the conduct of the strike
vote in accordance with the notice and
reportorial requirements to the NCMB and
subject to the seven-day waiting period; (3)
notice of strike filed with the NCMB and copy
furnished to the employer, subject to the 15-
day cooling-off period. In cases of union
busting, the 15-day cooling-off period shall
not apply. (Bigg's, Inc. v. Boncacas, G.R. Nos.
200487 & 200636, March 6, 2019)
Not Valid Grounds for a Strike
a. Violations of CBAs (except those that are
gross in character);
b. Inter-union and internal union disputes
c. Issues brought to voluntary or compulsory
arbitration;
d. Legislated wage orders; and
e. Labor standard cases
Forms and classification of strikes
1. As to nature
a. Legal strike - one that is staged for a
valid purpose and conducted through
means allowed by law. (Duka, Labor
Laws and Social Legislation, 2019, p.649)
b. Illegal strike - one staged for a
purpose not recognized by law or, if
for a valid purpose, it is conducted
through means not sanctioned by
law. (Duka, Labor Laws and Social
Legislation, 2019, p.649)
c. Economic strike - one declared to
demand higher wages, overtime pay,
holiday pay, vacation pay, etc. It is
one which is declared for the purpose
of forcing wage or other concessions
from the employer for which he is not
required by law to grant. (Master Iron
Labor Union vs. NLRC, G.R. No. 92009,
February 17, 1993)
d. Unfair labor practice (ULP) or political
strike - one called to protest against
the employer‘s unfair labor practices
enumerated in Article 248 of the
Labor Code, including gross violation
of the CBA under Article 261 and
union-busting. (Duka, Labor Laws and
Social Legislation, 2019, p.648)
e. Slowdown strike - one staged without
the workers quitting their work but
by merely slackening or reducing
their normal work output. It is also
called “a strike on the installment
plan.” (Poquiz, Labor Relations and Law
on Dismissal with Comments and Notes,
2018, p. 367)
Nothing in the law requires that a slowdown be
carefully planned and that it be participated in
by a large number of workers. The essence of
170
this kind of strike is that the workers do not quit
their work but simply reduce the rate of work in
order to restrict the output or delay the
production of the employer. It has been held
that while a cessation of work by the concerted
action of a large number of employees may
more easily accomplish the object of the work
stoppage than if it is by one person, there is, in
fact no fundamental difference in the principle
involved as far as the number of persons
involved is concerned, and thus, if the act is the
same, and the purpose to be accomplished is
the same, there is a strike, whether one or
more than one have ceased to work. (Ramirez
vs. Polyson Industries, Inc. G.R. No. 207898,
October 19, 2016)
f. Mass leaves - One in which workers
collectively abandon or boycott regular work
causing temporary stoppage of work.
(Solidbank Corp. vs. EU Gamier, G.R. No.
159460-61, November 15, 2010)
g. Wildcat strike - one declared and staged
without the majority approval of the
recognized bargaining agent. (Duka, Labor
Laws and Social Legislation, 2019, p.651)
h. Sit-down strike - one where the workers stop
working but do not leave their place of work.
(Duka, Labor Laws and Social Legislation, 2019,
p.651)
i. Overtime boycott – one involving the act of
the workers in refusing to render overtime
work in violation of the CBA, resorted to as
a means to coerce the employer to yield to
their demands.
j. Boycott of products – one which involves the
concerted refusal to patronize an employer's
goods or services and to persuade others to
a like refusal.
2. As to extent
1. General strike – one which covers and
extends over a whole province or
country.
2. Particular strike – one which covers a
particular enterprise, locality, or
occupation; it usually involves only one
union or only one industry. (Azucena,
Labor Code with Comments and Cases, Vol.
II-A, 2021, p. 490)
3. As to purpose
1. Economic strike – intended to force
wage and other concessions from the
employer; which he is not required by
law to grant; or
2. Unfair labor practice strike – a strike
called against unfair labor practices of
the employer, usually for the purpose
of making him desist from further
committing such practices. (Ibid)
4. As to the nature of the strikers’
action
1. Partial strike – brief and unannounced
temporary work stoppage, including
slowdowns, unauthorized extension of
rest periods, and walkouts for portions
of a shift or for entire shifts;
2. Sit-down strike – a combination of the
strike plus a refusal of the strikers to
leave the plant and machines, and a
refusal to permit the latter to be
operated; and
3. Slowdown strike – It is a willful
reduction in the rate of work by a group
of employees for the purpose of
restricting the output of the employer.
(Azucena, Labor Code 2, 2016, p. 580)
5. As to the extent of the interest of
strikers
1. Primary strike – refers to a strike
conducted by the workers against their
employer, involving a labor dispute
directly affecting them;
2. Secondary strike – refers to a strike
staged by the workers of an employer
involving an issue which does not
directly concern or affect their
relationship but rather, by some
circumstances affecting the workers
such as when the employer persists to
deal with a third person against whom
the workers have an existing grievance.
Workers stage this kind of strike to
secure the economic assistance of their
employer to force the third person to
yield to the union on the issues
involving it and said third person; and
171
 3. Sympathy strike – a kind of strike
staged by the workers of one company
to make common cause with the
strikers of other companies without
demands or grievances of their own
against their employer. This is an illegal
strike because there is no labor dispute
between the workers who are joining
the strikes and the latter’s employer.
(Duka, Labor Laws and Social Legislation,
2019, p.651)
Characteristics of a Strike Activity
a. There must be an established relationship
between the strikers and the person or
persons against the strike is called;
b. The relationship must be one of employer
and employee;
c. The existence of a dispute between the
parties and the utilization by labor of the
weapon of concerted refusal to work as
means of persuading, or coercing
compliance with the working men’s
demands;
d. The contention advanced by the workers
that although work ceases, the
employment relation is deemed to continue
albeit in a state of belligerent suspension;
e. There is stoppage of work, which stoppage
is temporary;
f. The striking group is a legitimate labor
organization, and in case of bargaining
deadlock, is the employees‘ sole bargaining
representative. (Azucena, Jr., The Labor Code
with Comments and Cases, 8th Edition, 2013, p.
552)
Strike Area
The establishment, warehouse, depots, plants
or offices, including the sites or premises
unused as runaway shops of the employer
struck against, as well as the immediate vicinity
actually used by picketing strikers in moving to
and from before all points of entrance to and
exit said establishment (Art. 219(s), Labor Code,
as amended)
Strike-breaker
Any person who obstructs, impedes, or
interferes with by force, violence, coercion,
threats or intimidation any peaceful picketing
affecting wages, hours or conditions work or in
the exercise of the right to self-organization or
collective bargaining, also called a “scab” (Art.
219(r), Labor Code, as amended)
When the respondent offered reinstatement
and attempted to “bribe” the strikers with
“comfortable cots,” “free coffee and occasional
movies,” “overtime” pay for “work performed in
excess of eight hours,” and “arrangements” for
their families, so they would abandon the strike
and return to work, they were guilty of strike-
breaking and/or union-busting and,
consequently, of unfair labor practice. It is
equivalent to an attempt to break a strike for
an employer to offer reinstatement to striking
employees individually, when they are
represented by a union, since the employees
thus offered reinstatement are unable to
determine what the consequences of returning
to work would be. (Insular Life Employees
Association vs. Insular Life, G.R. No. L-25291,
January 30, 1971)
The 7-day waiting period or strike ban is a
distinct and separate requirement from the
cooling-off period. The latter cannot be
substituted for the former and vice-versa. Both
must be complied with separately and distinctly
from each other. In the event the result of the
strike/lockout vote ballot is filed within the
cooling-off period, the 7-day requirement shall
be counted from the day following the
expiration of the cooling-off period (NCMB Primer
on Strike, Picketing and Lockout 2nd Edition,
December 1995)
A legal strike can be changed into an illegal
strike when a ULP occurs. (Consolidated Labor
Assn. of the Phils vs. Marsman, G.R. No. L-17038,
July 31, 1964)
There is non-conversion between strike or
lockout or vice-versa because it is different from
each other. It can however, happen at the same
time. (Rizal Cement vs. CIR, G.R. No. L-18442,
November 30, 1962)
172
Since strikes affect not only the relationship
between labor and management but also the
general peace and progress of the community,
the law has provided limitations on the right to
strike. Procedurally, for a strike to be valid, it
must comply with Article 278 of the Labor Code.
These requirements are mandatory, and the
unions failure to comply renders the strike
illegal. (Piñero vs. NLRC, G.R. No. 149610, August
20, 2004)
Examples of Illegal Strikes
1. Sit-Down Strike – one where the workers
stop working but do not leave their place of
work (Duka, Labor Laws and Social Legislation,
2019, p.651)
2. Wildcat Strike – one declared and staged
without the majority approval of the
recognized bargaining agent (Duka, Labor
Laws and Social Legislation, 2019, p.651)
3. Sympathetic Strike – a kind of strike staged
by the workers of one company to make
common cause with the strikers of other
companies without demands or grievances
of their own against their employer. This is
an illegal strike because there is no labor
dispute between the workers who are
joining the strikes and the latter’s
employer. (Duka, Labor Laws and Social
Legislation, 2019, p.651)
4. Secondary Strikes – occurs when a group
of employees refuse in concert to remain at
work for an employer, not because of any
complaint over their labor standards under
him, but because he persists in dealing with
a third person against whom they have a
grievance (Azucena, Labor Code with
Comments and Cases, Vol. II-A, 2021, p. 491)
5. Welgang Bayan – Work stoppage affecting
numerous (if not all) employers, including a
particular employer who has no dispute
with his employees regarding their terms
and conditions of employment. (Ibid, at p.
494)
6. Slow Down – it is considered to be a strike
on “installment plan.” There is a slowdown
when the workers, without a complete
stoppage of work, retard production or
their performance of duties and functions
to compel management to grant their
demands. (Poquiz, Labor Relations and Law on
Dismissal with Comments and Notes, 2018, p.
367)
A slowdown is inherently illicit and unjustifiable,
because while the employees "continue to work
and remain at their positions and accept the
wages paid to them," they at the same time
select what part of their allotted tasks they care
to perform. In other words, they "work on their
own terms (Ilaw at Buklod ng Manggagawa vs.
NLRC, G.R. No. 125561, June 27, 1998)
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), Labor Code, as amended];
 Blocking the free ingress to/ egress from
work premises for lawful purposes
 Obstruction of public thoroughfares
 Threatening, coercing and intimidating
non-striking employees, officers, suppliers
and customers
● Resistance and defiance of assumption of
jurisdiction by the Labor Secretary or an
injunction
 Acts of violence (Association of Independent
Unions in the Philippines (AIUP), et. al. vs.
NLRC, G.R. No. 120505, March, 25, 1999)
The violence must be pervasive and
widespread, consistently and deliberately
resorted to as a matter of policy (Shell Oil
Workers vs. 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 vs. Ramos, G.R. No. 113907, February
28, 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), Labor Code, as amended)
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,
173
 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), Labor Code, as amended)
Participation in Lawful Strike
Mere participation in a lawful strike is not a
sufficient ground for termination of the services
of a union member. The Labor Code protects
ordinary, rank-and-file union members who
participated in a strike from losing their jobs
provided that they did not commit illegal acts
during the strike. The Labor Code does at the
same time hold accountable union officers who
knowingly participated in an illegal strike.
(Philippine Telegraph and Telephone Corp. v.
National Labor Relations Commission, G.R. No.
109281 (Resolution), December 7, 1995)
An employee who participates in a lawful strike
is not deemed to have abandoned his
employment. Such participation should not
constitute sufficient ground for the termination
of his employment even if a replacement has
already been hired by the employer during such
lawful strike. (Chan, Bar Reviewer on Labor Law,
2019, p. 582)
Liability for Participation in Illegal Strike
In the determination of the consequences of
illegal strikes, the law makes a distinction
between union members and union officers.
The services of an ordinary union member
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. A union officer, on the other
hand, may be dismissed, not only when he
actually commits an illegal act during a strike,
but also if he knowingly participates in an illegal
strike. (Ergonomic Systems Philippines, Inc. v.
Enaje, G.R. No. 195163, December 13, 2017)
a. By union officers
The mere declaration of illegality of the strike
will result in the termination of all union officers
who knowingly participated in the illegal strike.
(Lapanday Workers Union vs. NLRC, G.R. No. 95494-
97, September 07, 1995)
Unlike ordinary members, it is not required, for
purposes of termination, that the officers
should be proven to have committed illegal acts
during the strike in order to be held liable
(Phimco Industries, Inc. vs. Phimco Industries Labor
Association, G. R. No. 178030, August 11, 2010)
b. By ordinary union members
For union members, what is required is that
they knowingly participated in the commission
of illegal acts during the strike for there to be
sufficient ground for termination of
employment. (Bigg's, Inc. v. Boncacas, G.R. Nos.
200487 & 200636, March 6, 2019)
Liability for Commission of Illegal Acts
While the law protects the right of workers to
engage in concerted activities for the purpose
of collective bargaining or to seek redress for
unfair labor practices, this right must be
exercised in accordance with the law. (Bigg's,
Inc. v. Boncacas, G.R. Nos. 200487 & 200636, March
6, 2019)
As far as liability for commission of illegal acts
during the strike is concerned, the issue of
legality or illegality of the strike is irrelevant. As
long as the union officer or member commits
an illegal act in the course of the strike, be it
legal or illegal, his employment can be validly
terminated. (Chan, Bar Reviewer on Labor Law,
2019, p. 585)
Illegal Acts
The term “illegal acts” under Article 264(a) may
encompass a number of acts that violate
existing labor or criminal laws, such as the
following:
1. Violation of Article 264(e) of the Labor Code
which provides that “[n]o person engaged
in picketing shall commit any act of
violence, coercion or intimidation or
obstruct the free ingress to or egress from
the employer’s premises for lawful
purposes, or obstruct public
thoroughfares.”
2. Commission of crimes and other unlawful
acts in carrying out the strike.
174
3. Violation of any order, prohibition, or Focuses on the Focuses on publicizing
injunction issued by the DOLE Secretary or stoppage of work the labor dispute and
NLRC in connection with the assumption of its incidents to inform the
jurisdiction or certification order under public of what is
Article 263(g) of the Labor Code happening in the
company
This enumeration is not exclusive as
jurisprudence abounds where the term “illegal
acts” has been interpreted and construed to
cover other breaches of existing laws. Refers to the actual Simply means marching
stoppage of work to and fro in front of the
b. Picketing employer‘s premises,
A picket simply means to march to and from the usually accompanied by
the display of placards
employer's premises, usually accompanied by
and other signs;
the display of placards and other signs making separate and different
known the facts involved in a labor dispute. from the actual stoppage
(Phimco Industries, Inc. v. Phimco Industries Labor of work
Association, G.R. No. 170830, August 11, 2010)

Requisites for lawful picketing

a. The picket should be peacefully carried out;
b. There should be no act of violence, Guaranteed under the Right to picket
coercion or intimidation attendant thereto; Constitutional guaranteed under the
c. The ingress to or egress from the company provision on the right freedom of speech and
of workers to conduct of expression and to
premises should not be obstructed; and
peaceful concerted peaceably assemble
d. Public thoroughfares should not be activities
impeded.

Elements:
a. There must be a labor issue; What is definitive of whether the action staged
b. It must be a concerted activity of the union; by petitioner is a strike and not merely a picket
and is the totality of the circumstances surrounding
c. Characterized by the peaceful marching to the situation. (Santa Rosa Coca-Cola Plant
and from at the employee’s premises with Employees Union vs. Coca-Cola Bottlers Phils., Inc.,
placards to appraise the employer and the G.R. Nos. 164302-03, January 24, 2007)
public of their demands.
While the right of employees to publicize their
dispute falls within the protection of freedom of
Strike Picketing
expression and the right to peaceably assemble
To withhold or to stop Picketing outside of the to air grievances, these rights are by no means
work by the concerted company compound absolute. Protected picketing does not extend
action of employees usually accompanies to blocking ingress to and egress from the
as a result of an the work stoppage company premises. That the picket was
industrial or labor moving, was peaceful and was not attended by
dispute actual violence may not free it from taints of
illegality if the picket effectively blocked entry
to and exit from the company premises. (Phimco
Industries, Inc. v. Phimco Industries Labor
Association, G.R. No. 170830, August 11, 2010)

175
Innocent third-party rule in picketing
An innocent third party shall not be adversely
affected by the picketing. The lawful ingress
and egress of passage of an innocent third
party cannot be blocked.
c. Lockouts
The temporary refusal of an employer to furnish
work as a result of an industrial or labor
dispute. (Art. 219p, Labor Code)
Grounds for lockout
A lockout must be based on any or both of the
following two (2) exclusive grounds:
a. Unfair Labor Practice (political);
b. Collective bargaining deadlock
(economic). (Sec. 5, Rule XXII, D.O. No. 40-
03, as amended by A-I)
Mandatory procedural requirements
If an injunction is subsequently ordered,
lockout must cease.
Effect of illegal lockout
Any worker whose employment has been
terminated as a consequence of an unlawful
lockout shall be entitled to reinstatement with
full back wages. (Art. 279(a), Labor Code)
Both parties in pari delicto
If both parties are in pari delicto, in that the
employer is guilty of illegal lockout and the
union is culpable for illegal strike, 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. (Chan, Bar Reviewer on Labor Law, 2019,
p. 598-599)
d. Assumption of Jurisdiction by the
DOLE Secretary
The Secretary of Labor is empowered to do
either of the following:
a. Assume jurisdiction over the labor dispute
and decide it himself; or
b. Certify the same to the NLRC for
compulsory arbitration, in which case it will
be the NLRC which shall hear and decide it.
(Article 278(g), Labor Code)
Industries Indispensable to National
Interest
The determination of specific industries
indispensable to the national interest is left to
the discretion of the DOLE Secretary.
Under Article 278 (g) of the Labor Code, when
in the opinion of the DOLE Secretary, the labor
dispute causes or will likely cause in a strike or
lockout in an industry indispensable to the
national interest The power of assumption of
jurisdiction or certification by the Secretary of
Labor is in the NATURE OF A POLICE POWER
MEASURE.
The following industries/services are hereby
recognized as deemed indispensable to the
national interest:
a. Hospital Sector;
b. Electric Power Industry;
c. Water Supply Services, to exclude small
water supply services such as Bottling and
Refilling Stations;
d. Air Traffic Control; and
e. Such other industries as maybe
recommended by the National Tripartite
Industrial Peace Council (NTIPC). (Sec. 16,
Rule XXII, D.O. No. 40-03 as amended)
In the instant case, stoppage of work in the firm
will be hurtful not only to both the employer
and the employees, more particularly, it is the
national economy that will suffer because of the
resultant reduction in export earnings and
dollar reserves, not to mention possible
cancellation of the contracts of the company
with foreign importers. It was particularly for
the purpose of avoiding such a development
that the labor dispute was certified to the NLRC,
with the return-to-work order following as a
matter of course under the law. (Asian
Transmission, Corporation vs. NLRC, G.R. No. 75271-
73, GR L-77567, June 27, 1988)
176
Power of the President Over National
Interest Cases
Notwithstanding the power granted to the
DOLE Secretary to assume jurisdiction over
national interest labor disputes or to certify
them to the NLRC for compulsory arbitration,
the President of the Philippines shall not be
precluded from doing any of the following:
a. To determine the industries that, in his
opinion, are indispensable to the national
interest; or
b. To intervene at any time and assume
jurisdiction over any such labor dispute in
order to settle or terminate it. (Article 278
[g], Labor Code)
b. Effects of Assumption of Jurisdiction
1. Automatically enjoins the intended or
impending strike or lockout as specified
in the assumption or certification order;
2. If one has already commenced at the
time of assumption or certification,
automatically prohibits its continuation;
and
3. The mere issuance of an assumption or
certification order automatically carries
with it a return-to-work order which is
compulsory and immediately executor;
4. The employer shall immediately
resume operations and re-admit all
workers under the same terms and
conditions prevailing before the strike
or lockout. (Article 278 [g], Labor Code)
Principles on the Assumption/Certification
Power of the DOLE Secretary:
1. Prior notice and hearing are not required in
the issuance of assumption or certification
order.
2. The DOLE Secretary may seek the
assistance of law enforcement agencies like
the Philippine National Police to ensure
compliance with the provision thereof as
well as with such orders he may issue to
enforce the same (Chan, Pre-Week Bar Exam
Notes on Labor Law, 2018, p. 107)
Return-to-Work Order
Always a part of the Assumption or Certification
Order even if not expressly stated therein. The
return-to-work order is compulsory and
immediately executory (Chan, Pre-Week Bar Exam
Notes on Labor Law, 2018, pp. 107-108).
Assumption of jurisdiction over a labor dispute,
always coexists with an order for workers to
return to work immediately and for employers
to readmit all workers under the same terms
and conditions prevailing before the strike or
lockout (Trans-Asia Shipping Line Inc. – Unlicensed
Crew Employees Union of Appeals, et al., GR No.
145428, July 7, 2004)
The Secretary of Labor may also exercise such
power to assume jurisdiction in labor dispute
adversely affecting the continued operation of
such hospitals, clinics, or medical institutions.
Return-to-work and reinstatement orders are
both immediately executory; however, a
return-to-work order is interlocutory in nature,
and is merely meant to maintain status quo
while the main issue is being threshed out in
the proper forum. In contrast, an order of
reinstatement is a judgment on the merits
handed down by the Labor Arbiter pursuant to
the original and exclusive jurisdiction provided
for under Article 224(a) of the Labor Code
(Manggagawa ng Komunikasyon sa Pilipinas vs.
Philippine Long Distance Telephone Company
incorporated, G.R. No. 190389, April 19, 2017)
Nature of Assumption Order or
Certification Order
The secretary’s assumption and certification
orders being executory in character are to be
strictly complied with by the parties even during
the pendency of any petition questioning their
validity for this extraordinary authority given by
law to the Secretary of Labor is aimed at
arriving at peaceful and speedy solution to
labor dispute, without jeopardizing national
interest. (Philtread tire & Rubber Corp vs. NLRC, GR
No. 102185, February 15, 1993)
Police Power Measure
The power to issue assumption or certification
orders is an extraordinary authority granted to
the President and his alter ego, the DOLE
Secretary, the exercise of which should be
177
strictly limited to national interest cases. This is
done in promotion of the common good
considering that a prolonged strike or lockout
can be inimical to the national economy (Chan,
Pre-Week Bar Exam Notes on Labor Law, 2018, p.
108)
Defiance of assumption or certification
orders shall be considered as an illegal act
Non-compliance with the certification order of
the Secretary of Labor and Employment shall be
considered as an illegal act committed in the
course of the strike or lockout, and shall
authorize the NLRC to enforce the same under
the pain of immediate disciplinary action,
including dismissal or loss of employment
status or payment by the locking-out employer
of backwages, damages and/or other
affirmative relief, even criminal prosecution
against the liable parties (Sec. 4, Rule VIII, 2005
NLRC Revised Rules of Procedure)
Justifications:
1. A strike that is undertaken after the
issuance by the DOLE Secretary of an
assumption or certification order becomes
a prohibited activity and thus illegal. The
defiant striking union officers and
members, as a result, are deemed to have
lost their employment status for having
knowingly participated in an illegal strike.
2. From the moment the worker defies a
return-to-work order, he is deemed to have
abandoned his job.
3. By so defying, the workers have forfeited
their right to be readmitted to work (Chan,
Pre-Week Bar Exam Notes on Labor Law, 2018,
p. 108)
Not a violation of right against
involuntary servitude
So imperative is the order in fact that it is not
even considered violative of the right against
involuntary servitude, as this Court held in
Kaisahan ng Mga Manggagawa sa Kahoy vs.
Gotamco Sawmills. The worker can of course
give up his work, thus severing his ties with the
company, if he does not want to obey the order,
but the order must be obeyed if he wants to
retain his work even if his inclination is to strike
(Asian Transmission Corp. vs. NLRC, G.R. No. 88725,
November 22, 1989)
Employees engaged in Strike are
generally entitled to reinstatement
In Economic Strike
Employees engaged in economic strike are
entitled to reinstatement provided the employer
has not yet hired permanent replacements.
(Consolidated Labor Association vs. Marsman, GR
No. L-17038, July 31, 1964)
In ULP strike
Employees engaged in ULP Strike are entitled
to reinstatement even if the employer may have
already hired replacements. (Cromwell
Employees Union vs. CIR, GR No. L-19778,
September 30, 1964)
Arrest or Detention of Union Members or
Union Organizers for Union Activities
GENERAL RULE: A police officer cannot arrest
or detain a union member for union activities
without previous consultations with the
Secretary of Labor.
EXCEPTION: On the grounds of national
security, public peace, or commission of crime
(Article 281, Labor Code)
General Rule: “No-work no-pay” principle
applied in strike
In an economic strike, the strikers are not
entitled to backwages, since the employer
should get the equivalent day’s work for what
he pays his employees. (Consolidated Labor
Association of the Phils. vs. Marsman and Co. Inc.,
GR No. L-17038, July 31, 1964)
On the other hand, even after the labor tribunal
has made a finding of an unfair labor practice,
it shall have the discretion to determine
whether or not to grant backwages. (Ibid)
The stoppage of their work was not the direct
consequence of the company’s unfair labor
practice. Hence, their economic loss should not
be shifted to the employer. (Cromwell Commercial
178
Employees and Laborers Union vs. CIR, GR No. L-
19778, September 30, 1964).
Injunction in Strikes and Lockouts
GENERAL RULE: Strikes and lockouts that are
validly declared enjoy the protection of the law
and cannot be enjoined unless illegal acts are
committed or threatened to be committed in
the course thereof.
EXCEPTION: Injunction may be issued not
only against the commission of illegal acts but
against the strike itself because the notice of
strike filed by the union has been converted into
a preventive mediation case. Having so been
converted, a strike can no longer be staged
based on said notice. Upon such conversion,
the legal effect is that there is no more notice
of strike to speak of. (San Miguel Corporation vs.
NLRC, G.R. No. 119293, June 10, 2003)
Injunction in Picketing Cases
GENERAL RULE: Injunction cannot be issued
against the conduct of picketing of workers. As
guaranteed by the Constitution, picketing is
considered a part of the Freedom of Speech.
EXCEPTIONS: NLRC may enjoin the picketing
under the following circumstances:
1. Where picketing is carried out through the
use of illegal means;
2. Where picketing involves the use of
violence and other illegal acts;
3. Where picketing affects the rights of third
parties and injunction becomes necessary
to protect such rights. (Chan, Bar Reviewer
on Labor Law, 2019, p. 618-619)
Requisites for labor injunctions
Restraining orders and injunctions are not
issued ex parte but only upon compliance with
the following requisites:
1. Hearing held after due and personal notice
to parties affected;
2. Reception of evidence and the opportunity
of cross examination;
3. Findings of fact by the Commission that:
a. Prohibited or unlawful acts have been
threatened and committed and will be
continued until restrained;
b. Substantial or irreparable injury to
complainant‘s property will follow;
c. That as to each item of relief to be
granted, greater injury will be inflicted
by the denial;
d. Complainant has no other remedy in
law; or Public officials charged with
duty to protect complainant‘s property
are unable or unwilling to furnish
adequate protection. (Sec. 1, Rule X,
2011 NLRC Rules of Procedure as
amended)
Innocent Bystander Rule
Under the “Innocent Bystander Rule,” the third-
party employers or “innocent bystanders” who
have no employer-employee relationship with
the picketing strikers, may apply for injunction
with the regular courts to enjoin the conduct of
the picket. Because of the absence of such
employer-employee relationship, the NLRC
cannot entertain such application for injunction
from innocent bystanders. (Chan, Bar Reviewer
on Labor Law, 2019, p. 619)
The right to picket is not an absolute one. The
right may be regulated at the instance of third
parties or "innocent bystanders" if it appears
that the inevitable result of its exercise is to
create an impression that a labor dispute with
which they have no connection or interest
exists between them and the picketing union or
constitute an invasion of their rights. (MSF Tire
& Rubber, Inc. v. Court of Appeals, G.R. No. 128632,
August 5, 1999)
In one case the Court upheld a trial court's
injunction prohibiting the union from blocking
the entrance to a feed mill located within the
compound of a flour mill with which the union
had a dispute. Although sustained on a different
ground, no connection was found between the
two mills owned by two different corporations
other than their being situated in the same
premises. It is to be noted that in the instances
cited, peaceful picketing has not been totally
banned but merely regulated. (Republic Flour
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Mills Workers Association vs. Reyes, GR No. L-21378,
November 28, 1966).
E. TELECOMMUTING ACT (RA 11165)
1. Definition [Section 3]
Telecommuting refers to a work arrangement
that allows an employee to work from an
alternative workplace, in whole or in part, with
the use of telecommunication and/or computer
technologies. (Section 3, Revised Implementing
Rules and Regulations of RA No. 11165, Otherwise
Known as the "Telecommuting Act", DOLE
Department Order No. 237, s. 2022, September 16,
2022)
2. Telecommuting Program [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. In all cases, 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. (Sec.
4, Ibid.)
3. Fair Treatment [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, and allowing access to company
information. (Sec. 5, Ibid.)
Telecommuting shall apply to employers and
employees in the private sector that implement
a telecommuting program. (Revised
Implementing Rules and Regulations of RA No.
11165, Otherwise Known as the "Telecommuting
Act", DOLE Department Order No. 237, s. 2022,
September 16, 2022)
IV. Post-Employment
A. EMPLOYER-EMPLOYEE RELATIONSHIP
Proof of employment relation is of first
importance, for the reason that the existence of
the employer-employee relationship is the
jurisdictional foundation for a compensation
claim (Asia Steel Corp. v. WCC, L-7636, 27 June
1955).
180
The application of the provisions of the Labor
Code to any situation contemplated therein
requires the existence of employer-employee
relationship. Without this relationship, the
Labor Code does not apply. (Chan, Labor Code of
the Philippines, Vol. 1, 2019, p. 18)
The basic factor underlying the exercise of
rights and the filing of claims for benefits under
the Labor Code and other presidential issuances
or labor legislations is the status and nature of
one’s employment. (Villuga vs. NLRC, GR No.
75038, August 23, 1993)
The existence of employment relationship is
determined by law and not by contract and to
rule otherwise would set a dangerous
precedent, which would in effect permit
employers to evade their responsibilities under
our labor laws through the scheme of having
the employees sign agreements negating the
existence of employer-employee relationship.
(Magtibay v. Airtrac Agricultural Corp., G.R. No.
228212, July 8, 2020)
1. TESTS TO DETERMINE EMPLOYER-
EMPLOYEE RELATIONSHIP
1. Four-Fold Test
The "four-fold test" in determining the
existence of an employer-employee relationship
has the following requisites:
a. the selection and engagement of the
employee;
b. the payment of wages;
c. the power of dismissal; and
d. the power to control the employee's
conduct. (Gerome B. Ginta-Sison vs. J.T.A.
Packaging Corporation, G.R. No. 244206, March
16, 2022, J. Hernando)
The Most Important Test is the Control Test:
Under the "control test," the employer is the
person who has the power to control both the
end achieved by his or her employees, and the
manner and means they use to achieve that
end. (Wyeth Philippines, Inc. v. Estabaya, G.R. Nos.
231082 & 231102 (Notice), October 6, 2021)
Absent the power to control the employee with
respect to the means and methods of
accomplishing his work, there is no employer-
employee relationship between the parties.
(Continental Marble Corp., et.al vs. NLRC, G.R. No.
43825, May 9, 1988)
The power of control refers merely to the
existence of the power and not to the actual
exercise thereof. It is not essential for the
employer to actually supervise the performance
of duties of the employee; it is enough that the
former has a right to wield the power. To
operate against the employer, the power of
control need not have been actually exercised.
Proof of the existence of such power is enough.
(Chan, Bar Reviewer on Labor Law, 2019, p.621-
622)
The control test means that the employer
controls or has reserved the right to control the
employee not only as to the result of the work
to be done but also as to the means and
methods by which the same is to be
accomplished. The three (3) terms: (1) means,
(2) methods and (3) results are the critical
elements of the control test. (Chan, 2019 Pre-
week Notes on Labor Law, p. 76)
Not every form of control establishes ER-EE
relationship. A demarcation line should be
drawn between: (a) rules that merely serve
as guidelines which only promote the result,
and (b) rules that fix the methodology and
bind or restrict the party hired to the use of
such means or methods. Under the first
category, there exists no employer-employee
relationship. In the second category it has the
effect of establishing employer-employee
relationship. (Insular Life Assurance Co., Ltd. U.
NLRC, 179 SCRA 439; Consulta U. C.A., G.R. No.
145413, 18 March 2005)
2. Whole Economic Activity Test
The determination of the relationship between
employer and employee depends upon the
circumstances of the whole economic activity,
such as:
1. the extent to which the services performed
are an integral part of the employer's
business;
181
2. the extent of the worker's investment in
equipment and facilities;
3. the nature and degree of control exercised
by the employer;
4. the worker's opportunity for profit and loss;
5. the amount of initiative, skill, judgment or
foresight required for the success of the
claimed independent enterprise;
6. the permanency and duration of the
relationship between the worker and the
employer; and
7. the degree of dependency of the worker
upon the employer for his continued
employment in that line of business.
The proper standard of economic dependence
is whether the worker is dependent on the
alleged employer for his continued
employment in that line of business. Xxx The
benchmark of economic reality in analyzing
possible employment relationships for
purposes of the Labor Code ought to be the
economic dependence of the worker on his
employer. (Wahing v. Spouses Daguio, G.R. No.
219755, April 18, 2022)
3. Two-Tiered Test
The two-tiered test involves:
1. the putative employer's power to control
the employee with respect to the means
and methods by which the work is to be
accomplished; and
2. the underlying economic realities of the
activity or relationship. (Ibid)
This two-tiered test would provide us with a
framework of analysis, which would take into
consideration the totality of circumstances
surrounding the true nature of the relationship
between the parties. This is especially
appropriate in this case where there is no
written agreement or terms of reference to
base the relationship on and due to the
complexity of the relationship based on the
various positions and responsibilities given to
the worker over the period of the latter’s
employment. (Ibid)
Note: Employment relationship under the
control test is determined by asking whether
“the person for whom the services are
performed reserves the right to control not only
the end to be achieved but also the manner and
means to be used in reaching such end.” The
broader economic reality test calls for the
determination of the nature of the relationship
based on the circumstances of the whole
economic activity. Under this test, the proper
standard of economic dependence is whether
the worker is dependent on the alleged
employer for his continued employment in that
line of business. (Chan, Bar Reviewer on Labor
Law, 2019, p.622-623)
2. KINDS OF EMPLOYMENT
a) Regular
b) Casual
c) Probationary
d) Project
e) Seasonal
f) Fixed-Term
g) Floating Status
a. Regular
Regular Employees
Regular employees refer to those who have
been engaged to perform activities which are
usually necessary or desirable in the usual
business or trade of the employer (Art. 295,
Labor Code, as amended)
Article 295 of the Labor Code "provides for two
(2) types of regular employees, namely:
1. those who are engaged to perform
activities which are usually necessary or
desirable in the usual business or trade of
the employer (first category); and
2. those who have rendered at least one year
of service, whether continuous or broken,
with respect to the activity in which they
are employed (second category).
However, it is to be noted that regular
employment status of a person is defined and
prescribed by law and not by what the parties
say it should be. (Perdito R. Parayday vs. Shogun
Shipping Co., Inc., G.R. No. 204555. July 6, 2020, J.
Hernando)
182
Test of Regularity
1. By nature of work - when the employee
has been engaged to perform activities
which are usually necessary or desirable in
the usual business or trade of the
employer.
2. By years of service - when the employee
is allowed to work beyond the agreed
period of probationary, project, seasonal,
casual, or fixed-term employment,
irrespective of whether it is just one day or
more after the lapse of such period.
(University of Santo Tomas vs. Samahang
Manggagawa ng UST, et al. G.R. No. 184262,
April 24, 2017)
Necessary or Desirable in the Usual
Business or Trade
Workers assigned at the compounding area are
indispensable to the operations of Wyeth
because they ensure the safety of Wyeth's
products by checking the expiration dates and
the condition of the sachets. They were also
responsible for the cartoning of the sachets for
distribution and exportation. Furthermore, the
repeated and continuing need to rehire
complainants is sufficient evidence of the
necessity, if not indispensability, of their work
to the business of manufacturing and
distribution of milk products. (Wyeth Philippines,
Inc. v. Estabaya, G.R. Nos. 231082 & 231102
(Notice), October 6, 2021)
AIMKO's janitorial/sanitation services cannot be
deemed as necessary to Wyeth's business. It is
a fact that all businesses engaged in
manufacturing would require their premises to
be clean as this is only good manufacturing
practice. However, it does not make the
janitorial/sanitation services essential elements
of Wyeth's business, which is developing and
manufacturing of milk products. (Wyeth
Philippines, Inc. v. Estabaya, G.R. Nos. 231082 &
231102 (Notice), October 6, 2021)
Right To Security Of Tenure
The employer may not terminate the services
of a regular employee except for a just cause
or when authorized under the Labor Code (Art.
279, Labor Code, as amended)
b. Casual
Casual Employment
An employment arrangement between an
employer and a casual employee wherein the
latter performs work that is incidental to the
business.
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. (par. 2, Art.
280, Labor Code; (Claret School of Quezon City vs.
Sinday, G.R. No. 226358, October 9, 2019)
The one (1) year period should be reckoned
from the hiring date. (Kimberty-C tark [Phils.], Inc.
v. Secretary of Labor, G .R . No. 156668, Nov.
23,2007.)
No regular appointment papers necessary for a
casual employee to become regular. (Kay
Products, Inc. v. CA, G R N o. 162472, July 28,2005)
c. Probationary
Probationary Employment
Probationary employment exists where the
employee, upon his engagement, is made to
undergo a trial period during which the
employer determines his fitness to qualify for
regular employment based on reasonable
standards made known to him at the time of his
engagement (Labor Code, Art. 296, as amended).
A probationary employee under Article 296 of
the Labor Code is one "who for a given period
of time, is being observed and evaluated to
determine whether or not he is qualified for
permanent employment." (Cambil v. Kabalikat
para sa Maunlad na Buhay, Inc., G.R. No. 245938
(Resolution), April 5, 2022)
Although probationary employees enjoy
security of tenure, they do not enjoy permanent
status and thus may be terminated on two
grounds:
1. just cause; and
183
2. when they fail to qualify as a regular
employee in accordance with reasonable
standards prescribed by the employer.
(Ibid)
Probationary employment must have
been expressly agreed upon. If there is no
such agreement, the employment is considered
regular (Sampaguita Auto Transport Corp. vs. NLRC,
G.R. No. 197384, January 30, 2013)
Ideally, employers should immediately inform
probationary employees of the standards for
their regularization from day one; however,
strict compliance thereof is not required. (Cambil
v. Kabalikat para sa Maunlad na Buhay, Inc., G.R.
No. 245938 (Resolution), April 5, 2022)
An employer who would have substantially
complied with the rule on notification of
standards if it apprises its employee that they
will be subjected to a performance evaluation
on a particular date. At any rate, it is ludicrous
to rule that petitioner was deprived of due
process considering that there is only a three-
day difference between May 30, 2016 and June
2, 2016. (Ibid)
General Rule: Six-month Probationary
Period
Probationary employment shall not exceed 6
months from the date the employee started
working (Art. 296, Labor Code, as amended)
Our computation of the 6-month probationary
period is reckoned from the date of
appointment up to the same calendar date of
the 6th month following. (Jaso v. Metrobank &
Trust Co., G.R. No. 235794, May 12, 2021)
Petitioner was hired on July 16, 2012 for a six-
month probationary contract; thus, her
probation should last until January 16, 2012,
the same calendar date of the 6th month
following July 16, 2012. (Ibid)
Renewal of Contract After the Lapse of
Probationary Period, Employee Becomes
a Regular Employee
When an employer renews a contract of
employment after the lapse of the six-month
probationary period, the employee thereby
becomes a regular employee. No employer is
allowed to determine indefinitely the fitness of
its employees. (Malicdem and Flores vs. Marulas
Industrial Corporation and Mancilla. GR No. 204406,
February 26, 2014)
Note: In the absence of any evaluation or valid
extension, the employee had become a regular
employee (Dusit Hotel Nikko vs. Gatbonton. G.R.
161654, May 5, 2006)
Exceptions to the Six-month
Probationary Period:
1. The employer and the employee mutually
agree on a shorter or longer period
(Mariwasa Manufacturing, Inc. and Dazo vs.
Leogardo, J.R. and Dequila. G.R. No. 74246,
1989);
2. The nature of work requires a longer period
(eg. part-time faculty of educational
institutions);
3. A longer period is required and established
by company policy (Buiser, et al. vs. Leogardo,
J.r., et. al., G.R. No. L63316, July 31, 1984);
4. Covered by an Apprenticeship or
Learnership agreement stipulating a
different period (Art. 296, Labor Code, as
amended);
5. Voluntary agreement of parties;
Note: By voluntarily agreeing to such an
extension, the Employee waived any
benefit attaching to the completion of the
period if he still failed to make the grade
during the period of extension (Mariwasa
Manufacturing, Inc. and Dazo vs. Leogardo, J.R.
and Dequila. G.R. No. 74246, 1989.);
6. The Employer gives the Employee a second
chance to pass the standards set; (Ibid.)
7. When the same is required by the nature of
the work, e.g. the probationary period set
for professors, instructors and teachers is 3
consecutive years of satisfactory service
184
 pursuant to DOLE Manual of Regulations
for Private Schools. (Ibid)
If not one of the exceptional circumstances
above is proven, the employee whose
employment exceeds 6 months is undoubtedly
a regular employee. (San Miguel vs. Del Rosario,
G.R. No. 168194 & 168693, 2005)
Extension Of Probation;
Double/Successive Probation Not
Allowed
The probationary period may be extended but
only when the employee agrees to such
extension. Absent such agreement would make
the extension invalid, hence, the employee
would be considered as having become a
regular employee after the lapse of the original
probationary period. (Dusit Hotel Nikko vs.
Gatbonton. G.R. 161654, May 5, 2006)
The evil sought to be prevented is to discourage
scheming employers from using the system
oWithin the 6-month probationary period,
probationary employees are entitled to security
of tenure notwithstanding their limited tenure
and non-permanent status. During their
probationary employment, they cannot be
dismissed except under any of the following
grounds:
1. For a just or authorized cause as provided
by law or under the employment contract
(Phil Federation of Credit Cooperatives, Inc. and
Jayoma vs. NLRC and Abril. G.R. No. 121071,
December 11, 1998).
2. For 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.
(Robinsons Galleria/Robinsons Supermarket
Corporation vs. Sanchez, G.R. No. 177937,
January 19, 2011)
In the case of No. 1, procedural due process is
required in the termination of probationary
employment.
In the case of No. 2, the following requisites
must be present:
i. The employer must communicate to the
employee that he is being hired on a
probationary basis;
ii. The employer must convey to the
probationary employee the reasonable
standards to qualify for regularization;
iii. The probationary status of the newly-
hired employee must be communicated
to him prior to the commencement of his
employment;
iv. The employer must convey this
reasonable standard at the start of the
probationary employee‘s engagement
and not in the course thereof or towards
its end; otherwise he becomes a regular
employee from day one of his
employment.
v. The employer must evaluate the
performance of the probationary
employee in relation to the duly
communicated reasonable standards;
and
vi. The employee fails to comply with these
reasonable standards before the
completion of the probationary period.
(Tiamson‘s Enterprises, Inc. et al. vs. CA and
Sy, G.R. No. 192881, November 16, 2011)
Termination must be done prior to the lapse of
the probationary period. Termination a few
days after the lapse of probationary period
cannot be done without due process as he has
already become a regular employee by that
time. (Ibid)
Probationary employee may be dismissed
before the end of the probationary period.
Termination, to be valid, must be done before
the lapse of the probationary period. (Pasamba
vs. NLRC, et al. G.R. No. 168421, June 8, 2007;
Meralco vs. NLRC and Meris, G.R. No. 83751,
September 29, 1989)
Once the employer finds the employee
qualified, the employer may extend to him
regular employment even before the end of the
probation. (Canagian Opportunities Unlimited vs.
Dalangin, J.r., G.R. No. 172223, February 6, 2012)
185
Limitations To Termination of Probation
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. The 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 vs.
NLRC and Cruz, G.R. No. 53453, January 22,
1986)
Due Process Prior To Termination
Probationary employees are entitled to
procedural due process prior to dismissal from
service. Due process consists of making the
reasonable standards excepted of the employee
during his probationary period known to him at
the time of his probationary employment.
(Philippine Daily Inquirer, Inc. vs. Magtibay, J.r. and
PDIEU. G.R. No. 164532, July 24, 2007)
Acquisition Of Permanent Employment
For Private School Teachers
The requisites to acquire permanent
employment, or security of tenure, are:
1. the teacher is a full-time teacher;
2. the teacher must have rendered three
consecutive years of service; and
3. such service must have been satisfactory.
(Palgan v. Holy Name University, G.R. No.
219916, February 10, 2021, Per J. Hernando)
A part-time teacher cannot acquire permanent
status. Only when one has served as a full-time
teacher can he acquire permanent or regular
status. The petitioner was a part-time lecturer
before she was appointed as a full-time
instructor on probation. As a part-time lecturer,
her employment as such had ended when her
contract expired. Thus, the three semesters she
served as part-time lecturer could not be
credited to her in computing the number of
years she has served to qualify her for
permanent status. (Ibid)
d. Project
The principal test in determining whether an
employee is a project employee is whether:
1. he/she is assigned to carry out a "specific
project or undertaking,"
2. the duration and scope of which are
specified at the time the employee is
engaged in the project, or
3. where the work or service to be performed
is seasonal in nature and the employment
is for the duration of the season.
A true project employee should be assigned to
a project which begins and ends at determined
or determinable times, and be informed thereof
at the time of hiring. (Eduardo G. Jovero vs.
Rogelio Cerio, GR No. 202466, June 23, 2021, J.
Hernando)
Project Employees Refer To Those Whose
Employment:
a) 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
b) where the work or service to be performed
is seasonal in nature and the employment
is for the duration of the season (Art. 295,
Labor Code, as amended).
Note: Absence of a definite duration of the
project, the employee is deemed to be regular
(Violeta and Baltazar vs. NLRC, G.R. No. 119523,
October 10, 1997)
Litmus Test
The litmus test for determining whether
particular employees are properly characterized
as project employees, as distinguished from
regular employees, is whether or not the
employees were assigned to carry out a specific
project or undertaking, the duration and scope
of which were specified at the time the
employees were engaged for that project.
(Innodata Knowledge Services, Inc. v. Inting, G.R.
No. 211892,[December 6, 2017)
186
Continuous rehiring of the employee a
badge of regular employment
Continuous rehiring of the employee may serve
as a badge of regular employment when the
activities performed by the purported “project”
employee are necessary and indispensable to
the usual business or trade of the employer
(Tomas Lao Construction vs. NLRC, G.R. No. 116781,
September 5, 1997)
Once a project or work-pool employee who has
been (1) continuously, as opposed to
intermittently, re-hired by the same employer
for the same tasks or nature of tasks; and (2)
these tasks are vital, necessary and
indispensable to the usual business or trade of
the employer, then the employee must be
deemed a regular employee. (Maraguinot, J.r.
and Enero vs. NLRC, G.R. 120969, January 22, 1998)
Two (2) Types of Project Activities:
A particular job or undertaking that is
1. within the regular or usual business of the
employer company, but which is distinct
and separate, and identifiable as such,
from the other undertaking of the
company; and
2. 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. (ABS
CBN Broadcasting Corporation vs. Nazareno,
G.R. No. 164156, September 26, 2006)
The services of project employees are
coterminous with the project and may be
terminated upon the end or completion of that
project for which they were hired. (Ibid)
Two (2) Types of Employees In The
Construction Industry
1. Project Employees - those employed in
connection with a particular construction
project;
2. Non-project Employees - those
employed by a construction company
without reference to a particular project.
(Fernandez vs. NLRC and D.M. Consunji, Inc.,
G.R. No. 106090, February 28, 1994)
The length of service or the rehiring of
construction workers on a project-to-project
basis does not confer regular employment
status, since their hiring is only a natural
consequence of the fact that experienced
construction workers are preferred. (Grandspan
Development Corporation vs. Bernardo, G.R. No.
141464, September 21, 2005)
Indicators of Project Employment:
A. The duration of the specific/identified
undertaking for which the worker is
engaged is reasonably determinable;
B. Such duration, as well as the specific
work/service to be performed, is defined in
an employment agreement and is made
clear to the employee at the time of hiring;
C. The work/service performed by the
employee is in connection with the
particular project/undertaking for which he
is engaged;
D. The employee, while not employed and
awaiting engagement, is free to offer his
service to any other employer;
E. The termination of his employment in the
particular project/undertaking is reported
to the DOLE Regional office having
jurisdiction over the workplace within 30
days following the date of his separation
from work, using the prescribed form on
employees’ terminations/ f double or
successive probation to circumvent the
mandate of the law on regularization and
make it easier for them to dismiss their
employees. (Holiday Inn Manila, et al. vs. NLRC
and Honasan. G.R. No. 109114, September 14,
1993)
Right To Security Of Tenure
Project employees are entitled to security of
tenure at least for the duration of the project.
(Ibid)
e. Seasonal
Seasonal Employees
Seasonal employees or those who work or
perform services which are seasonal in nature,
and the employment is for the duration of the
187
season. (Mantalaba, Jr. v. Manila Electric Co., G.R.
No. 238558 (Notice), October 6, 2021)
Regular Seasonal Employment
A seasonal employee may be considered a
regular employee. Regular seasonal employees
are those called to work from time to time. The
nature of their relationship with the employer is
such that during the off season, they are
temporarily laid off; but reemployed during the
summer season or when their services may be
needed. They are in regular employment
because of the nature of their job, and not
because of the length of time they have worked
(Gapayao vs. Fulo, G.R. No. 193493, June 13, 2013)
Note: Regular seasonal employment requires
at least two (2) seasons to make a seasonal
employee into a regular seasonal employee.
(Universal Robina Sugar Milling Corporation and
Cabati vs. Acibo, G.R. No. 186439, January 15, 2014)
Requisites For Regular Seasonal
Employment
1. Seasonal employee should perform work or
services that are seasonal in nature; and
2. They must have also been employed for
more than one (1) season.
Both requisites should concur in order that the
employee may be classified as a regular
seasonal employee. (Hacienda Fatima, vs. National
Federation of Sugarcane Workers-Foods and General
Trade, G.R. No. 149440, January 28, 2003)
The cessation of construction activities at the
end of every project is a foreseeable suspension
of work. Of course, no compensation can be
demanded from the employer because the
stoppage of operations at the end of a project
and before the start of a new one is regular and
expected by both parties to the labor relations.
Similar to the case of regular seasonal
employees, the employment relation is not
severed by merely being suspended. The
employees are, strictly speaking, not separated
from services but merely on leave of absence
without pay until they are reemployed. Thus,
we cannot affirm the argument that non-
payment of salary or non-inclusion in the
payroll and the opportunity to seek other
employment denote project employment. (ABS-
CBN Broadcasting Corp. v. Tajanlangit, G.R. No.
219508, September 14, 2021)
Though project and seasonal employees may
perform functions that are necessary and
desirable to the usual business or trade of the
employer, the law distinguishes them from
regular employees in that, project and seasonal
employees are generally needed and engaged
to perform tasks which only last for a specified
duration. The relevance of this distinction finds
support in how "only employers who constantly
need the specified tasks to be performed can
be justifiably charged to uphold the
constitutionally protected security of tenure of
the corresponding workers." (Paragele v. GMA
Network, Inc., G.R. No. 235315, July 13, 2020)
f. Fixed-Term
Fixed-Term Employment
A type of employment "embodied in a contract
specifying that the services of the employee
shall be engaged only for a definite period, the
termination of which occurs upon the expiration
of said period irrespective of the existence of
just cause and regardless of the activity the
employee is called upon to perform." (Regala vs
Manila Hotel Corporation, G.R. No. 204684, Oct. 5,
2020, J. Hernando)
The fixed-term character of employment
essentially refers to the period agreed upon
between the employer and the employee. (Ibid)
The decisive determinant in term employment
should not be the activities that the employee
is called upon to perform, but the day certain
agreed upon by the parties for the
commencement and termination of their
employment relationship. Specification of the
date of termination is significant because an
employee's employment shall cease upon
termination date without need of notice. (Ibid)
A fixed-term employment is allowable under the
Labor Code only if the term was voluntarily and
knowingly entered into by the parties who must
188
have dealt with each other on equal terms not
one exercising moral dominance over the other.
(Samonte vs. La Salle Greenhills, Inc. and Oca, G.R.
No.199683, February 10, 2016)
Requisites Of A Valid Fixed-Term
Employment:
1. The employee must have willfully and
voluntarily entered into the fixed-term
employment contract without any duress,
force, intimidation, or undue influence from
the employer; and
2. The employer and the employee must have
bargained on equal footing on the terms
and conditions of employment. (Ibid)
g. Floating Status
“Floating status” takes place under any of
the following circumstances:
Temporary "off-detail" or "floating status" is the
period of time when:
1. security guards are in between
assignments or
2. when they are made to wait after being
relieved from a previous post until they are
transferred to a new one.
It takes place when the security agency's clients
decide not to renew their contracts with the
agency, resulting in a situation where the
available posts under its existing contracts are
less than the number of guards in its roster.
It also happens in instances where contracts for
security services stipulate that the client may
request the agency for the replacement of the
guards assigned to it even for want of cause,
such that the replaced security guard may be
placed on temporary "off-detail" if there are no
available posts under the agency's existing
contracts.
During such time, the security guard does not
receive any salary or any financial assistance
provided by law. It does not constitute a
dismissal, as the assignments primarily depend
on the contracts entered into by the security
agencies with third parties, so long as such
status does not continue beyond a reasonable
time. (Samillano v. Valdez Security and Investigation
Agency, Inc., G.R. No. 239396, June 23, 2020)
While the ‘floating status” rule is traditionally
applicable to security guards who are
temporarily sidelined from duty while waiting tc
be transferred or assigned to a new post or
client, Article 301 [286] has been applied as
well to other industries when, as a consequence
of the bona-fide suspension of the operation of
a business or undertaking, an employer is
constrained to put employees on floating
status" for a period not exceeding six (6)
months. (Chan, Bar Reviewer on Labor Law, 2019,
p.655)
A security guard may be placed on "floating
status" or "temporary off-detail" based on a
valid exercise of management prerogative for a
period of no more than six months. When the
floating status lasts for more than six months,
the employee may be considered to have been
constructively dismissed. (Salvador v. Saint
Nicolas Security & Investigation Agency, Inc., G.R.
No. 229384 (Notice), [July 28, 2021)
If the floating status of an employee lasted for
more than six (6) months she is, in effect,
constructively dismissed. (Racho v. Lapuz, G.R.
No. 254682 (Notice), March 24, 2021)
3. Legitimate Sub-Contracting vs.
Labor-Only Contracting
A. Elements; Comparative Chart
Department (DOLE) Order No. 174, Series
of 2017
LEGITIMATE LABOR-ONLY
SUBCONTRACTING CONTRACTING
(JOB
CONTRACTING)
STATUS
Allowed in the Prohibited in the
Philippines Philippines
REASON
It is an attempt to
evade the obligations
of an employer. The
employer is using a
189
 front, a person who method, in which
poses as employer investment in workers are
although he is not. The the form of habitually
scheme evades the tools, employed, or
employer's obligations equipment, 4. Does not
to respect the machinery exercise the
employees' right to and right to
unionize, the right to supervision; control over
employment 3. Is free from the
standards, including the control performance
SSS-EC membership, and/or of the work of
and the right to direction of the contractu
security of tenure. the principal al employee.
DEFINITION in all matters
An arrangement An arrangement where connected
whereby a principal the contractor or with the
agrees to farm out to a subcontractor merely performance
contractor the recruits, supplies or of the work
performance or places workers to except as to
completion of a specific perform a job or work the result;
job or work within a for a principal. 4. The Service
definite or Agreement
predetermined period, ensures
regardless of whether compliance
such job or work is to with all the
be performed or rights and
completed within or benefits fir all
outside the premises of the
the principal. employees of
the contractor
ELEMENTS
or
The contractor or 1. No subcontractor
subcontractor: substantial under the
1. Is engaged in capital, or labor laws;
a distinct and 2. No 5. Is verified by
independent investments and
business and in the form of registered
undertakes to tools, with the
perform the equipment, DOLE.
job or work on machineries,
EMPLOYER-EMPLOYEE RELATIONSHIPS
its own supervision,
responsibility, work Exists between the job Between the workers
according to premises, and contractor and the and the enterprise to
its own 3. The workers people he hires. which they are supplied
manner and recruited and (principal).
method; placed are
2. Has performing Substantial Capital
substantial activities
capital or which are Substantial capital or investment refers to
carry out the directly capital stocks and subscribed capitalization in
job farmed related to the the case of corporation, tools, equipment,
out by the principal
implements, machineries and work premises,
principal on business or
his account, operations of actually and directly used by the contractor or
manner and the employer subcontractor in the performance or completion

190
of the job, work or service contracted out. (Par.
5, Sec. 5, D.O. No. 18 s. 2002)
It is a paid-up capital stock/shares at least
P5,000,000.00 in the case of corporations,
partnership, and cooperatives; in the case of
single proprietorship, a net worth of at least
P5,000,000.00. The law does not require both
substantial capital and investment in the form
of tools, equipment, machineries, etc. This is
clear from the use of the conjunction "or". Once
substantial capital is established it is no longer
necessary for the contractor to show evidence
that it has investment in the form of tools. (Neri,
et al. vs. NLRC, G.R. Nos. 97008-09, July 23, 1993)
Note: The "Substantial Capital or Investment”
test seeks to address the issue of whether the
contractor has substantial capital or investment
in the form of tools, equipment, machineries,
work premises, and other materials which are
necessary in the conduct of its business. If the
answer is in the afirmative, then this requisite
of legitimate contracting arrangement is fully
complied with. (Chan, Bar Reviewer on Labor Law,
2019, p.665)
Right To Control
The right reserved to the person for whom the
service of the contractual workers are
performed to determine not only the end to be
achieved, but also the manner and means to be
used in reaching that end. (Par. 6, Sec. 5, D.O.
No. 18 s. 2002)
Effects Of Labor-Only Contracting
1. the creation of an employer-employee
relationship between the principal and the
employees of the contractor or sub-
contractor; and
2. the solidary liability of the principal and the
contractor to the employees in the event of
any violation of the Labor Code. (Digital
Telecom vs. Digitel. G.R. Nos. 184903, October
10, 2012)
Where labor-only contracting exists, the Labor
Code itself establishes an employer-employee
relationship between the employer and the
employees of the labor-only contractor. The
statute establishes this relationship for a
comprehensive purpose: to prevent a
circumvention of labor laws. The contractor is
considered merely an agent of the principal
employer and the latter is responsible to the
employees of the labor-only contractor as if
such employees had been directly employed by
the principal employer. (Aliviado, et al vs. Procter
and Gamble Philippines., Inc., G. R. No. 160506,
March 9, 2010)
B. Trilateral Relationship
Trilateral Relationship in Contracting
Arrangements
In legitimate contracting, there exists a
trilateral relationship under which there is a
contract for a specific job, work or service
between the principal and the contractor or
subcontractor, and a contract of employment
between the contractor or subcontractor and its
workers, Hence, there are three parties
involved in these arrangement, the principal
which decides to farm out a job or service to a
contractor or subcontractor, the contractor or
subcontractor which has the capacity to
independently undertake the performance of
the job, work or service, and the contractual
workers engaged by the contractor or
subcontractor to accomplish the job, work or
service (Sec. 3, D.O. No. 18 s. 2002).
Parties Involved
1. Principal who decides to farm out a job,
work or service to a contractor.
2. Contractor who has the capacity to
independently undertake the performance
of the job, work or service.
3. Contractual workers engaged by the
contractor to accomplish the job, work or
service. (Department Circular No. 01 s. 2017)
Relationships That Exist In Legitimate
Contracting Or Subcontracting:
a. An employer-employee relationship
between the contractor and the employees
it engaged to perform the specific job, work
or service being contracted; and
191
b. A contractual relationship between the
principal and the contractor as governed by
the provisions of the Civil Code. (Par. 1, Sec.
5, D.O. No. 18- A s. 2011)
Governing Laws
a. Between the principal and the contractor
the major laws applicable to their work
relationship are the Civil Code and pertinent
commercial laws.
b. Between the contractor and his employees
the major laws applicable to their work
relationship are the Civil Code and special
labor laws.
c. Between the principal and the contractor’s
employees, no employer-employee
relationship exists, because the contractor
himself is the employer. (Azucena, The Labor
Code with Comments and Cases Volume I, 306,
2021)
Rights Of Contractor’s Employees
All contractor’s/subcontractor's employees,
shall be entitled to security of tenure and all the
rights and privileges as provided for in the
Labor Code, as amended, to include the
following:
A. ) Safe and healthful working conditions; b.
Labor standards such as but not limited to
service incentive leave, rest days, overtime
pay, holiday pay, 13th month pay, and
separation pay as may be provided in the
Service Agreement or under the Labor
Code;
B. Retirement benefits under the SSS or
retirement plans of the contractor, if there
is any;
C. Social security and welfare benefits;
D. Self-organization, collective bargaining and
peaceful concerted activities, including the
right to strike. (Sec. 10, D.O. No. 174 s. 2017
C. Solidary Liability
When Employer Shall Be Jointly And
Severally Liable With His Contractor Or
Subcontractor
In the event that the contractor or
subcontractor fails to pay the wages of his
employees in accordance with this Code, the
employer shall be jointly and severally
liable with his contractor or
subcontractor to such employees to the
extent of the work performed under the
contract, in the same manner and extent that
he is liable to employees directly employed by
him. (Art. 106, Labor Code, as amended)
In case of commission of any of the following
acts prohibited under Department Order No.
174'. (a) In case of commission of “ other illicit
forms of employment arrangements” under
Section 6 thereof; (b) In case of violation of the
“rights of contractor's or subcontractor's
employees” under Section 10 thereof; (c) In
case of violation of the “required contracts
under the Rules” mentioned in Section 11
thereof, referring to: [1] Employment Contract
between the contractor and its employee; and
[2] Service Agreement between the principal
and the contractor (Chan, Bar Reviewer on
Labor Law, 2019, p.679)
B. TERMINATION OF EMPLOYMENT BY
EMPLOYER
1. Just Causes
1. Serious Misconduct or Willful
Disobedience (Insubordination)
2. Gross & Habitual Neglect of Duties
3. Fraud/Willful Breach of Trust
4. Commission of A Crime
5. Analogous cases
An employer may terminate an employment for
any of the following causes:
i. Serious misconduct or willful
disobedience by the employee of the
lawful orders of his employer or
representative in connection with his
work;
ii. Gross and habitual neglect by the
employee of his duties;
iii. Fraud or willful breach by the employee
of the trust reposed in him by his
employer or duly authorized
representative;
192
 iv. Commission of a crime or offense by
the employee against the person of his
employer or any immediate member of
his family or his duly authorized
representatives; and
v. Other causes analogous to the
foregoing (Article 297, Labor Code, as
amended).
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. A company has the right to
dismiss its erring employees as a measure of
self-protection against acts inimical to its
interest. (Maula v. Ximex Delivery Express, Inc.,
G.R. No. 207838, January 25, 2017)
i. Serious Misconduct; Elements:
To constitute a valid cause for dismissal under
the Labor Code:
1. The employee's conduct must be serious —
of such grave and aggravated character
and not merely trivial or unimportant.
2. The misconduct must be related to the
performance of the employee's duties
showing him to be unfit to continue
working for the employer.
3. The act or conduct must have been
performed with wrongful intent. (Colegio
San Agustin-Bacolod v. Montaño, G.R. No.
212333, March 28, 2022, Per J. Hernando)
Allowing the ineligible students to march in the
graduation is clearly a conscious and willful
transgression of the university's established
rule regarding graduation rites. (Ibid)
Spur-Of-The-Moment Outburst
The admittedly insulting and unbecoming
language [Siguro na abnormal ang utak mo]
uttered by the employee to the HR Manager on
April 3, 2009 should be viewed with reasonable
leniency in light of the fact that it was
committed under an emotionally charged state.
(Maula vs. Ximex Delivery Express, G.R. No. 207838,
January 25, 2017)
Immoral Conduct
It is the conduct which is so willful, flagrant, or
shameless as to show indifference to the
opinion of good and respectable members of
the community. Furthermore, such conduct
must not only be immoral, but grossly immoral.
It must be so corrupt as to constitute a criminal
act, or so unprincipled as to be reprehensible to
a high degree or committed under such
scandalous or revolting circumstances as to
shock the common sense of decency (Narag vs.
Narag. A.C. No. 3405, June 29, 1998)
Open and Willful Disobedience
For willful disobedience to be a valid cause for
dismissal, these two elements must concur:
1. the employee's assailed conduct must have
been willful or intentional, the willfulness
being characterized by "a wrongful and
perverse attitude"; and
2. the order violated must have been
reasonable, lawful, made known to the
employee, and must pertain to the duties
which he had been engaged to discharge.
(Systems and Plan Integrator and Development
Corp. v. Ballesteros, G.R. No. 217119, April 25,
2022, per J. Hernando)
ii. Habitual Neglect of Duties
The degree of skill, care, diligence and attention
imposed by the implied possession of
competency, knowledge, skillfulness, etc., of
the employee is that of ordinary and reasonable
skill, care and diligence. He cannot be
discharged on the ground of incompetency,
negligence, etc., MERELY BECAUSE he fails
to employ the highest degree of skillfulness and
care known in the trade, UNLESS
● the contract of employment expressly
stipulates for such degree of skill and care;
● the employee represents that he possesses
such. (St. Luke’s Medical Center, Inc. and Kuan
vs. Notario. G.R. No. 152166, October 20, 2010)
The repeated violations for reckless driving of
[De Guzman] is a serious violation especially in
the field of transportation where countless of
lives are at stake on a daily basis. As an
employer, [Genesis Transport] have the
193
prerogative to instill discipline among its drivers Forms of Neglect of Duty:
being in the transport business where the ● Abandonment
safety and lives of its passengers is paramount. ● Tardiness and Absenteeism
We would be sending the wrong signals to the ● Poor Performance (Japos vs. First Agrarian
errant drivers of bus companies who have been Reform Multi-Purpose Cooperative and/or
found to be driving recklessly in our highways Bagares. G.R. No. 208000, July 26, 2017)
if we would sustain the assailed decision. [De
Guzman]'s reckless driving has been proved by Abandonment of employment is "the deliberate
competent evidence. (Genesis Transport Service, and unjustified refusal of an employee to
Inc. v. De Guzman, G.R. No. 229741, February 23, resume his employment." This requires:
2022) 1. the employee's failure to report for work or
absence without valid or justifiable reason,
Gross Negligence and
Gross negligence has been defined as the want 2. a clear intention to sever the employer-
or absence of even slight care or diligence as to employee relationship. It is recognized that
amount to a reckless disregard of the safety of abandonment is incompatible with the filing
the person or property. It evinces a thoughtless of a case for constructive dismissal. (ABS-
disregard of consequences without exerting any CBN Corp. v. Magno, G.R. No. 203876, March
effort to avoid them. Put differently, gross 29, 2022)
negligence is characterized by want of even
slight care, acting or omitting to act in a “Attitude Problem” Is A Just Cause
situation where there is a duty to act, not An employee who cannot get along with his co-
inadvertently, but willfully and intentionally with employees is detrimental to the company for he
a conscious indifference to consequences can upset and strain the working environment.
insofar as other persons may be affected. Without the necessary teamwork and synergy,
(Systems and Plan Integrator and Development the organization cannot function well. Thus,
Corp. v. Ballesteros, G.R. No. 217119, April 25, 2022, management has the prerogative to take the
J. Hernando) necessary action to correct the situation and
protect its organization. When personal
GROSS HABITUAL FRAUD differences between employees and
NEGLIGENCE NEGLECT AND management affect the work environment, the
WILLFUL peace of the company is affected. (Heavylift
NEGLECT Manila vs. CA, G.R. No. 154410, October 20, 2005)
Gross Habitual Fraud and
negligence neglect implies willful neglect Habitual tardiness alone is a just cause for
connotes want repeated of duties
termination. Punctuality is a reasonable
of care in the failure to imply bad
performance perform one's faith on the
standard imposed on every employee, whether
of one's duties. duties for a part of the in government or private sector, whereas
It evinces a period of time, employee in habitual tardiness is a serious offense that may
thoughtless depending failing to very well constitute gross or habitual neglect of
disregard of upon the perform his duty, a just cause to dismiss a regular
consequences circumstances. job to the employee. Habitual tardiness manifests lack of
without (Ibid) detriment of initiative, diligence and discipline that are
exerting any the employer inimical to the employer's general productivity
effort to avoid and the
and business interest. (Systems and Plan
them. (Matis v. latter's
Integrator and Development Corp. v. Ballesteros,
Manila Electric business.
G.R. No. 217119, April 25, 2022, J. Hernando)
Co., G.R. No. (Ibid)
206629,
September 14,
2016)

194
iii. Dishonesty and Loss of Confidence Loss of Confidence with respect to Rank-
The fraud must be committed against the and-File Personnel and Managerial
employer or representative in connection with Employee:
the employee’s work. Thus, the fraud RANK-AND-FILE MANAGERIAL
committed against third persons not in PERSONNEL EMPLOYEE
connection with his work, and which does not As ground for valid Proof of beyond
in any way involve his employer, is not a ground dismissal, requires proof reasonable doubt is
for dismissal. of involvement in the NOT required, it being
alleged events in sufficient that there is
question. some basis for such
Furthermore, since fraud implies willfulness or
loss of confidence,
wrongful act intent, the innocent nondisclosure Mere uncorroborated such as when the
of facts by the employee to the employer will assertion and employer has
not constitute a just cause for the dismissal. accusations by the reasonable ground to
(Bookmedia Press, Inc. and Brizuela vs. Sinajon and employer will not be believe that the
Abenir, G.R. No. 213009, July 17, 2019) sufficient. (Bravo vs. employee concerned
Urios College, G.R. is responsible for the
Dishonesty No.198066, June 7, purported
The disposition to lie, cheat, deceive or 2017) misconduct, and the
defraud; unworthiness; lack of integrity; lack of nature of his
honesty, probity, or integrity in principle; lack participation therein
renders him unworthy
of fairness and straightforwardness; disposition
of the trust and
to defraud, deceive or betray. (Philippine confidence demanded
Amusement and Gaming Corp. vs. Rilloraza, G.R. No. by his position. (Ibid)
141141, June 25, 2001)
Loss of confidence applies to: (1) employees
Loss Of Trust and Confidence
occupying positions of trust and confidence, the
Loss of trust and confidence may be a just case
managerial employees; and (2) employees who
for termination of employment only upon proof
are routinely charged with the care and custody
that:
of the employer's money or property which may
1. the dismissed employee occupied a position
include rank-and-file employees, e.g., cashiers,
of trust and confidence; and
auditors, property custodians, or those who, in
2. the dismissed employee committed "an act
the normal routine exercise of their functions,
justifying the loss of trust and confidence”.
(Systems and Plan Integrator and Development regularly handle significant amounts of money
Corp. v. Ballesteros, G.R. No. 217119, April 25, or property. (Matis v. Manila Electric Co., G.R. No.
2022, Per J. Hernando) 206629, September 14, 2016)

Loss of trust and confidence, be it a principal or “Pecuniary Gain” Not A Necessary

an analogous ground for dismissal, is not
justified if it exists in vacuum. As a just cause,
it requires an underlying act, deed or conduct
from which a reasonable belief of
untrustworthiness might be inferred. (PNOC
Development and Management Corp vs. Gomez,
G.R. Nos. 220526-27, July 29, 2019)
Element Of Termination On Account Of
Loss Of Trust
Misappropriation of company funds, although
the shortages had been fully restituted, is a
valid ground to terminate the services of an
employee of the company for loss of trust and
confidence. (Santos v. San Miguel Corp., G.R. No.
149416, March 14, 2003)

Guidelines for Applying the Doctrine of

Loss Of Confidence
1. Loss of confidence should not be simulated.

195
2. Should not be used as a subterfuge for
causes which are improper, illegal or
unjustified.
3. It may not be arbitrarily asserted in the face
of overwhelming evidence to the contrary.
4. It must be genuine, not a mere
afterthought to justify earlier action taken
in bad faith.
5. The employee involved holds a position of
trust and confidence. (Casco vs. NLRC, G.R.
No. 200571, February 19, 2018; San Miguel
Corporation vs. Gomez, G.R. No. 200815, 24
August 2020)
iv. Commission of a Crime or Offense
Elements:
1. There must be an act or omission
punishable/prohibited by law;
2. The act or omission was committed by the
employee against the person of his
employer, against any immediate member
of the employer’s family, against the
employer's duly authorized representative.
(DOLE No. 147 s. 2015)
Immediate Family Members
The immediate members of the family referred
to are limited to spouse, ascendants,
descendants, or legitimate, natural, or adopted
brothers or sisters of the employer or of his
relative by affinity in the same degrees, and
those by consanguinity within the fourth civil
degree. (Subsection 2, Art. 11, RPC)
The commission of the crime of homicide was
outside the perimeter of the IRRI complex,
having been committed in a restaurant after
office hours and against a non-IRRI employee.
Thus, the conviction of Micosa for homicide was
not work-related, his misdeed having no
relation to his position as laborer and was not
directed or committed against IRRI or its
authorized agent. (International Rice Research
Institute v. National Labor Relations Commission,
G.R. No. 97239, May 12, 1993)
v. Analogous Causes
The determination of whether the cause for
terminating employment’s analogous to any of
those enumerated in Art. 296 of the Labor Code
will depend on the circumstances of each case.
To be considered analogous to the just causes
enumerated, however, a cause must be due to
the voluntary and/or willful act or omission of
the employee. (Nadura vs. Benguet Consolidated,
Inc., G.R. No. L-17780, August 24, 1962)
Must the Analogous Causes be
anticipated in company regulations?
No act or omission shall be considered as
analogous cause unless expressly specified in
the company rules and regulations or policies.
(DOLE Order No. 147-15)
Principle of Totality of Infractions
The Principle of Totality of Infractions cannot
be used against the employee because his
transgression for wearing an improper uniform
was not related to his latest infractions of
insubordination and purported poor
performance evaluation. "Previous offenses
may be used as valid justification for dismissal
only if they are related to the subsequent
offense upon which the basis of termination is
decreed, or if they have a bearing on the
proximate offense warranting dismissal." (Celis
v. Bank of Makati (A Savings Bank), Inc., G.R. No.
250776, June 15, 2022)
2. AUTHORIZED CAUSES
The Employer May Terminate the
Employment Of Any Employee Due To:
i. Installation of Labor-Saving Devices
ii. Redundancy
iii. Retrenchment or Downsizing to prevent
losses or the closing or cessation of
operation of the establishment
iv. Closures or Cessation of Operations of
establishment or undertaking not due to
serious business losses or financial reverses
(Art. 298, Labor Code, as amended)
v. Disease and whose continued employment
is prohibited by law or is prejudicial to his
health as well as to the health of his co-
employee (Art. 299, Labor Code, as amended)
196
i. Installation of Labor-Saving Devices
Elements:
1. There must be introduction of machinery,
equipment or other devices;
2. Such introduction must be done in good
faith;
3. The purpose for such introduction must be
valid (e.g., to save on cost; enhance
efficiency; other justifiable economic
reasons;
4. There is no other option available to the
employer than the introduction of
machinery, equipment or device and the
consequent termination of employment of
those affected thereby;
5. There must be fair and reasonable criteria
in selecting employees to be terminated.
(DOLE Order No. 147-15)
The right to reduce personnel should, of course,
not be abused. It should not be made a pretext
for easing out laborers on account of their union
activities. But neither should it be denied when
it is shows that they are not discharging their
duties in a manner consistent with good
discipline and the efficient operation of an
industrial enterprise. (Philippine Sheet Metal
Workers’ Union vs. CIR, G.R. No. L-2028, April 28,
1949)
ii. Redundancy
Elements:
1. There must be superfluous positions or
services of employees;
2. The positions or services are in excess of
what is reasonably demanded by the actual
requirements of the enterprise to operate
in an economical and efficient manner;
3. There must be good faith in abolishing
redundant positions;
4. There must be fair and reasonable criteria
in selecting the employees to be
terminated;
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 the
newly created positions, job description
and the approval by the management of
the restructuring. (DOLE Order No. 147-15)
Redundancy exists when the service of an
employee is in excess of what is reasonably
demanded by the actual requirements of the
business. (Ilaw at Buklod ng Manggagawa sa
General Milling Corp. v. General Milling Corp., G.R.
No. 216787 , February 15, 2022)
Redundancy means an excess position. It is not
the way to remove an unwanted occupant. If
the functions of the position are still needed but
the position-holder needs to be removed, the
cause of the removal should be valid and the
proper procedure should be observed.
(Manggawa ng Komunikasyon sa Pilipinas vs. PLDT,
Inc., G.R. No. 190389, April 19, 2017)
The determination of the continuing necessity
of a particular officer or position in a business
corporation is a management prerogative, and
the courts will not interfere unless arbitrary or
malicious action on the part of management is
shown. It is also within the exclusive
prerogative of management to determine the
qualification and fitness of an employee for
hiring and firing, promotion or reassignment.
Indeed, an employer has no legal obligation to
keep more employees than are necessary for
the operation of its business (Lowe, Inc. vs. IAC
and Mutuc. G.R. Nos. 164813 and 174590, August
14, 2009)
Valid Redundancy Program Requisites
1. written notice served on both the
employees and the DOLE at least one
month prior to the intended date of
retrenchment;
2. payment of separation pay equivalent to at
least one month pay or at least one month
pay for every year of service, whichever is
higher;
3. good faith in abolishing the redundant
positions; and
4. fair and reasonable criteria in ascertaining
what positions are to be declared
redundant and accordingly abolished,
taking into consideration such factors as
a. preferred status;
197
 b. efficiency; and
c. seniority, among others. (Vibal Co. v.
Morquin, G.R. No. 247879 , April 19, 2022)
Contracting out of services is a valid exercise of
business judgment or management
prerogative. (Ilaw at Buklod ng Manggagawa sa
General Milling Corp. v. General Milling Corp., G.R.
No. 216787, February 15, 2022)
Garden Leave
The practice of the employer directing an
employee not to attend work during the period
of notice of resignation or termination of the
employment. During the period of garden
leave, employees continue to be paid their
salary and any other contractual benefits as if
they were rendering their services to the
employer. (Mejila vs. Wrigley Philippines, Inc., G.R.
No. 199469, September 11, 2019)
In the Philippines, garden leave has been
more commonly used in relation to the 30-
day notice period for authorized causes of
termination. There is no prohibition under our
labor laws against a garden leave clause in an
employment contract. (Ibid)
Evidence Of Good Faith To Arrest Losses
Before Terminating The Employees:
1. Engaging an independent consulting firm to
conduct manpower audit and OD
(organization development)
2. Instituting of cost-saving programs
3. Termination of probationary employees
4. Retrenchment of some managers
5. Efforts to find jobs in other firms where
employees to be retrenched may be
employed. (Manila Polo Club Employees Union
vs. Manila Polo Club, Inc., G.R. No. 172846, July
24, 2013)
iii. Retrenchment or Downsizing
Elements:
1. The retrenchment must be reasonably
necessary and likely to prevent business
losses;
2. The losses, if already incurred, are not
merely de minimis, but substantial, serious,
actual and real, or if only expected, are
reasonably imminent;
3. The expected of 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;
5. There must be fair and reasonable criteria
in ascertaining who would be dismissed and
who would be retained among the
employees, such as status, efficiency,
seniority, physical fitness, age and financial
hardship for certain workers. (DOLE Order
No. 147-15)
The idea of rightsizing is to reduce the number
of workers and related functions and trim
clown, streamline, or simplify the structure of
the organization to the level of utmost
efficiency and productivity in order to realize
profit and survive. (Cabaobas, et al. vs. Pepsi-Cola
Products Phil., Inc., G.R. No. 176908, March 25,
2015)
Retrenchment or downsizing is a mode of
terminating employment initiated by the
employer through no fault of the employee and
without prejudice to the latter, resorted to by
management during periods of business
recession, industrial depression or seasonal
fluctuations or during lulls over shortage of
materials. It is a reduction in manpower, a
measure utilized by an employer to minimize
business losses incurred in the operation of its
business. (Flight Attendants and Stewards
Association of the Philippines v. Philippine Airlines,
Inc., G.R. Nos. 178083 & A.M. No. 11-10-1-SC,
March 13, 2018)
Requisites of a Valid Retrenchment
1. The retrenchment must be reasonably
necessary and likely to prevent losses and
such losses are proven;
2. Losses, if already incurred, are not merely
de minimis but substantial, serious, actual
198
 and real; or if only expected, are Workers Union vs. Mac Adams, etc., G.R. No.
reasonably imminent; 141615, October 24, 2003)
3. Expected or actual losses must be proved Closure of Business vs. Retrenchment
by sufficient and convincing evidence;
4. Retrenchment must be in good faith for the CLOSURE OF RETRENCHMENT
advancement of its interest and not to BUSINESS
defeat or circumvent the employees' right complete cessation of Reduction of
to security of tenure; and business operations personnel usually due
and/or an actual to financial returns so
5. Fair and reasonable criteria who would be
locking-up of the doors as to cut down on
retained and who would be dismissed and of establishment, costs of operations in
who would be retained among the usually due to financial terms of salaries and
employees such as status, efficiency, losses. Closure of wages to prevent
seniority, physical fitness, age, and business as an bankruptcy of the
financial hardship for certain workers) authorized cause for company. (Ibid.)
(Ibid) termination of
employment aims to
Last-In, First-Out (LIFO) Policy prevent further financial
drain (JAT General
“Last One Hired is the First One Fired"
Services vs. NLRC, G.R.
No. 148340, January
This rule applies only to cases of labor-saving 26, 2004).
devices, redundancy and retrenchment.

Exceptions: Partial Closure

1. When an employee volunteers to be The Court had occasion to reiterate
separated from employment (Maya Farms management’s prerogative to close or abolish a
Employees Organization vs. NLRC, G.R. No. department or section of the employer’s
106256, December 28, 1994)
establishment for economic reasons. The Court
2. Determination of the Employees to be
reasoned out that since the greater right to
Retrenched Is in Accord with the CBA.
close the entire establishment and cease
(Mendros, Jr. v. Mitsubishi Motors Phils. Corp.,
G.R. No. 169780, February 16, 2009) operations due to adverse economic conditions
iv. Closure or Cessation of Operation is granted an employer, the closure of a part
thereof to minimize expenses and reduce
Elements: capitalization should also be recognized (Dangan
vs. NLRC, G.R. No. 63127-28, February 20, 1984)
1. There must be a decision to close or cease
operation of the enterprise by the
No Separation Pay in Case of Closure
management;
Because of Serious Business Losses
2. The decision was made in good faith;
Article 298 of the Labor Code considers closure
3. There is no other option available to the
of business as an authorized cause for the
employer except to close or cease
dismissal of employees, whether or not the
operations. (D.O. No. 147-15)
closure is due to serious business losses.
However, if the closure is not due to serious
Right to Close Whether Losing or Not
business losses, the employer is required to pay
If the business is not losing but its owner, for
its employees separation pay equivalent to one
reasons of his own, wants to get out of the
(1) month pay or at least one-half (1/2) month
business, he in good faith can lawfully do so
pay for every year of service, whichever is
anytime. Just as no law forces anyone to go into
higher. (Dusol v. Lazo, G.R. No. 200555, January
business, no law compels anybody to stay in
20, 2021)
business. But the employees should be paid the
severance pay (Mac Adams Metal Engineering

199
Summary Of Rules on Closure
1. Closure or cessation operations of
establishment or undertaking may either be
partial or total.
2. Closure or cessation operations of
establishment or undertaking may or may
not be due to serious business losses or
financial reverses. However, in both
instances, proof must be shown that:
● It was done in good faith to advance
the employer’s interest and not for the
purpose of defeating or circumventing
the rights if employees under the law
or a valid agreement;
● A written notice on the affected
employees and the DOLE is served at
least one month before the intended
date of termination of employment.
3. The employer can lawfully close shop even
if not due to serious business losses or
financial reverses but separation pay, which
is equivalent to at least one month pay as
provided for by Art 298 of the Labor Code,
as amended, must be given to all the
affected employees.
4. If the closure or cessation is due to serious
business losses or financial reverses, the
employer must prove such allegations in
order to avoid the payment of separation
pay. Otherwise, the affected employees are
entitled to separation pay.
5. The burden of proving compliance with all
the above-stated falls upon the employer
(Art. 283, Labor Code, as amended; Manila Polo
Club Employees’ Union vs. Manila Polo Club, Inc.
G.R. No. 172846, July 24, 2013)
Sale Of Business In Good Faith
No law prohibits bona fide sale of a going
enterprise. When that happens, the purchaser,
unless he agrees to do so, has no legal
obligation to continue employing the employees
of the seller. The seller, as employer, is obliged
to pay his employees separation pay and other
benefits founded on law, policy, or contract.
The transferee may, but is not obliged to, give
employment preference to the former
employees; if hired, they may be required to
pass probation (SME Bank, Inc. vs. De Guzman,
G.R. No. 184517, October 8, 2013)
Successor-Employer Doctrine
The Court has upheld the transfer/absorption of
employees from one company to another, as
successor employer, as long as the transferor
was not in bad faith and the employees
absorbed by a successor-employer enjoy the
continuity of their employment status and their
rights and privileges with their former
employer. (Marsman & Co., Inc. v. Sta. Rita, G.R.
No. 194765, April 23, 2018)
Change of Name
Change of Corporate name is not an authorized
cause of employment termination. Under the
Corporate Code, amendment of the articles of
incorporation is not one of the modes of
dissolving a corporation. The change of name
was not a change of the corporate being. Since
the change does not create a new corporation,
the renamed corporation remains liable for
illegal dismissal committed under the old name
(Zuellig Freight Cargo vs. NLRC, G.R. No. 157900,
July 22, 2013)
Merger
The merger of a corporation with another does
not operate to dismiss the employees of the
corporation absorbed by the surviving
corporation. This is in keeping with the nature
and effects of a merger as provided under law
and the constitutional policy protecting the
rights of labor. The employment of the
absorbed employees subsists. Necessarily,
these absorbed employees are not entitled to
separation pay on account of such merger in
the absence of any other ground for its award.
(Philippine Geothermal, Inc. Employees Union v.
Unocal Philippines, Inc., G.R. No. 190187,
September 28, 2016)
Succession of employment rights and
obligations occurs between the absorbing
corporation and the employees of the absorbed
corporation. Not only must the absorbing
corporation retain the employees; it should
likewise recognize the length of service in the
previous employer (BPI vs. BPI Employees Union-
Davao Chapter, G.R. No. 164301, August 10, 2010)
200
I. Disease the decision to dismiss the employee’s
Under Art. 299 of the Labor Code, an employer employment and separation.
may terminate the services of an employee: findings)
1. who has been found to be suffering from Effectivity Date
any disease and whose continued Determined by the At least 30 days after
employment is prohibited by law or is employer after the employee AND
prejudicial to his health as well as to the compliance with due DOLE is notified.
health of his co-employees. process
2. To be a valid ground for termination, there
must be a certification by a competent 3. DUE PROCESS
public authority that the disease is of such
nature or at such stage that it cannot be Philippine law conceives "due process" in two
cured within a period of six (6) months senses:
even with proper medical treatment. (Jerzon 1. Substantive due process which means
Manpower and Trading, Inc. v. Nato, G.R. No. the employee's dismissal is justified by a
230211, October 6, 2021) lawful and valid reason, and
2. Procedural due process which requires
Medical Certificate ample opportunity for the worker to explain
A medical certificate issued by the company’s his side before he is dismissed.
own physician is not a certificate by “competent
public health authority.” (Cebu Royal Plant [San By present jurisprudence, absence of
Miguel Corporation] vs. Deputy Minister of Labor, substantive due process makes the dismissal
G.R. No. 58639, August 12, 1987) illegal, while absence of procedural due
process, although similarly illegal, does not
Just Causes vs. Authorized Causes invalidate the dismissal but makes the employer
JUST CAUSES AUTHORIZED liable for monetary penalty. (Azucena, Everyone’s
CAUSES Labor Code, 2021, p405)
Provisions under the Labor Code
Article 297 Article 298 and 299 a) Twin-Notice Requirement
Removal of the Employee is Called
Dismissal or Separation Due process has been described as a "malleable
discharge concept anchored on fairness and equity."
Refer to Indeed, at its core is simply the reasonable
Faults and misdeed Business or economic opportunity for every party to be heard. (Reyes
of the employee reasons v. Rural Bank of San Rafael (Bulacan), Inc., G.R. No.
Employer’s Liability 230597, March 23, 2022, Per J. Hernando)
Not liable for Required by law to
employee’s separation provide separation pay For Termination of Employment Based On
pay. to the employee. Just Causes As Defined In Article 282 Of
The Labor Code:
XPN: closure or 1. A written notice served on the employee
XPN: based on cessation of operation specifying the: (a) ground/s for
compassion financial due to serious termination, and (b) giving to said
assistance may be business losses duly employee reasonable opportunity within
given to a deserving proved.
which to explain his side.
dismissed employee.
2. hearing or conference during which the
Procedural Due Process
employee concerned, with the assistance of
Twin-Notice Rule (First Written notice to DOLE counsel if the employee so desires, is given
notice, informing and the employee at
an opportunity to respond to the charge,
alleged acts/omissions; least 30 days before
Second notice, stating

201
 present his evidence or rebut the evidence
presented against him.
3. A written notice of termination served on
the employee indicating that upon due
consideration of all the circumstances,
grounds have been established to justify his
termination.
The heart of procedural due process is the need
for notice and an opportunity to be heard.
Moreover, what is required is not actual hearing
but a real opportunity to be heard. Thus, one
who refuses to appear at a hearing is not
thereby denied due process if a decision is
reached without waiting for him. Likewise, the
requirement of due process can be satisfied by
subsequent due hearing. (Reyes v. Rural Bank of
San Rafael (Bulacan), Inc., G.R. No. 230597, March
23, 2022, J. Hernando)
The twin requirements of notice AND hearing
constitute essential elements of due
process in cases of employee dismissal:
the requirement of notice is intended to inform
the employee concerned of the employer's
intent to dismiss and the reason for the
proposed dismissal; upon the other hand, the
requirement of hearing affords the employee
an opportunity to answer his employer's
charges against him accordingly to defend
himself therefrom before dismissal is
effected (Kwikway Engineering Works vs. NLRC,
G.R. No. 85014, March 22, 1991)
b) Hearing
GUIDING PRINCIPLES in connection with
the hearing requirement in dismissal cases:
● "ample opportunity to be heard" means any
meaningful opportunity (verbal or written)
given to the employee to answer the
charges against him and submit evidence in
support of his defense, whether in a
hearing, conference or some other fair, just
and reasonable way.
● a formal hearing or conference becomes
mandatory only when requested by the
employee in writing or substantial
evidentiary disputes exist or a company
rule or practice requires it, or when similar
circumstances justify it.
● the "ample opportunity to be heard"
standard in the Labor Code prevails over
the "hearing or conference" requirement in
the implementing rules and regulations
(Perez vs. Philippine Telegraph and Telephone,
Co., G.R. No. 152048, April 7, 2009).
Right To Counsel
The right to counsel and the assistance of one
in investigations involving termination cases is
neither indispensable nor mandatory, except
when the employee himself requests for one or
that he manifests that he wants a formal
hearing on the charges against him. (Lopez vs.
Alturas Group. G.R. No. 191008, April 11, 2008)
The right to counsel under Section 12 (1) of
Article III of the Constitution applies in criminal
proceedings, but not in administrative
proceedings. It is a right given to persons
accused of an offense during criminal
investigation. Any proceeding conducted by an
administrative body is not part of the criminal
investigation or prosecution. (Gutierrez v.
Commission on Audit, G.R. No. 200628, January 13,
2015)
When Hearing Not Required
● If the employee has admitted his guilt.
● Termination which is justified by any of the
authorized causes under Art. 298.
● Termination initiated by the employee (Art.
300, Labor Code, as amended).
● Termination of the probationary period of
employment. (Art. 281, Labor Code as
amended).
● Suspension of employment relationship
resulting from bona fide suspension of
operation (Art. 301, Labor Code as amended).
● In case of project employment, termination
upon completion of the project or phase
thereof for which the employee is hired.
(Dizon vs. NLRC, G.R. No. 79554, December 14,
1989)
202
4. TERMINATION OF CONTRACT OF
MIGRANT WORKERS UNDER RA 8042
AS AMENDED BY RA 10022
The fact that respondent was a migrant worker
in Taiwan does not remove him from the
protective mantle of the Labor Code of the
Philippines when applicable. This
pronouncement is in keeping with the basic
public policy of the State to afford protection to
labor; promote full employment; ensure equal
work opportunities regardless of sex, race or
creed; and regulate the relations between
workers and employers. (Jerzon Manpower and
Trading, Inc. v. Nato, G.R. No. 230211, October 6,
2021)
The worker shall be entitled to full
reimbursement:
1. In case of termination of overseas
employment without just, valid or
authorized cause as defined by law or
contract, or
2. In case of any unauthorized deductions
from the migrant worker's salary. (Sec. 10,
R.A. No, 8042, as amended by Sec. 7, R.A. No.
10022)
The worker shall be entitled to full
reimbursement of:
1. His placement fee and the deductions made
with interest at twelve percent (12%) per
annum; and
2. His salaries for the unexpired portion of his
employment contract.
Exemplary, Moral and other forms of damages
may be awarded if the acts or omissions of the
employer is tainted with bad faith, malice, or
fraud. (R.A. No. 8042 as amended, Sec. 10)
In computing the award due to an illegally
dismissed employee, salary includes all other
benefits guaranteed in the employment
contract which were not made contingent upon
the performance of any task or the fulfilment of
any condition. The Court included in the
computation of salary the amount of seafarer's
vacation leave pay and tonnage bonus as the
same were guaranteed and fixed benefits as
provided in the contract. Hence, the total
compensation salary of Montealto, inclusive of
guaranteed benefits should be included in the
computation of his award. (International Skill
Development, Inc. v. Montealto, Jr., G.R. No. 237455
(Notice), October 7, 2020)
Allowing "foreign employers to determine for
and by themselves whether an overseas
contract worker may be dismissed on the
ground of illness would encourage illegal or
arbitrary pre-termination of [the] employment
contract." (Jerzon Manpower and Trading, Inc. v.
Nato, G.R. No. 230211, October 6, 2021)
The three-month salary rule
Rule before Serrano (1995-2009)
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 vs. Almanzor, G.R. No. 177948,
March 14, 2008)
Rule after Serrano (2009-present)
Invalidated the 3-month salary cap clause.
Sec. 10 of 8042, which limited the separation
pay to three months, was unconstitutional for
violating the equal protection clause. (Serrano
vs. Gallant, G.R. No. 167614, March 24, 2009)
The phrase “or for three (3) months for every
year of the unexpired term, whichever is less”
has been declared as unconstitutional.
Despite the fact that the clause “or for three (3)
months for every year of the unexpired term,
whichever is less” was reinstated in R.A 8042
upon promulgation of R.A. 10022 in 2010, the
Supreme Court reiterated its finding in Serrano
vs. Gallant Maritime that limiting wages that
could be recovered by an illegally dismissed
overseas worker to three months is both a
violation of due process and the equal
protection clauses of the Constitution. (Sameer
Overseas Placement Agency vs. Cabiles, G.R.
170139, August 5, 2014)
Sameer stresses that "when a law or a
provision of law is null because it is
inconsistent with the Constitution, the nullity
203
cannot be cured by reincorporation or served may hold the employee liable for
reenactment of the same or a similar law or damages.
provision. A law or provision of law that was b. An employee may put an end to the
already declared unconstitutional remains as relationship without serving any notice on
such unless circumstances have so changed the employer for any of the following just
as to warrant a reverse conclusion." causes:
However, there are no noted relevant i. Serious insult by the employer or his
changes in the surrounding circumstances, as representative on the honor and
RA 10022 merely reinstated the provision person of the employee;
after the Court already declared it ii. Inhuman and unbearable treatment
unconstitutional in Serrano. accorded the employee by the
employer or his representative;
Additionally, the Court declared that an
iii. Commission of a crime or offense by
unconstitutional clause in the law, being
the employer or his representative
inoperative at the outset, confers no rights,
against the person of the employee
imposes no duties and affords no protection.
or any of the immediate members of
Withal, even if Yarza's dismissal became
his family; and
effective on May 22, 2011, or when RA 10022
iv. Other causes analogous to any of the
was already in force, "the declaration of
foregoing. (Article 300 of the Labor
unconstitutionality found in the Serrano case
Code)
promulgated in March 2009 [and ||
subsequently the Sameer case promulgated The Labor Code recognizes termination by the
on August 5, 2014] shall retroactively apply." employee of the employment contract by
(SRL International Manpower Agency v. Yarza, Jr.,
"serving written notice on the employer at least
G.R. No. 207828, [February 14, 2022, Per J.
Hernando) one (1) month in advance." Given that
provision, the law contemplates the
requirement of a written notice of resignation.
Gabriel's unjustified refusal to sign the In the absence of a written resignation, it is safe
Romanian Labor Contract on the belief that it to presume that the employer terminated the
was a falsified contract was the cause of the seafarers. (Skippers United Pacific, Inc. v. Doza,
pre-termination of his overseas employment G.R. No. 175558, February 8, 2012)
contract, as his stay in Romania became illegal.
Thus, Gabriel is not entitled to his salaries for 1. Resignation vs. Constructive Dismissal
the unexpired portion of overseas employment
contract. In the same vein, that he is not
Resignation Constructive
entitled to moral and exemplary damages, as
Dismissal
he failed to prove bad faith on the part of
Quintinians. (Gabriel v. Quintinians Placement Resignation is the Constructive dismissal
Agency, Inc., G.R. No. 238101 (Notice), September voluntary act of an is defined as quitting or
30, 2020) employee who is in a cessation of work
situation where one because continued
C. TERMINATION OF EMPLOYMENT BY believes that personal employment is
EMPLOYEE reasons cannot be rendered impossible,
sacrificed in favor of the unreasonable or
An employee may terminate without just cause exigency of the service, unlikely; when there is
the ER-EE relationship: and one has no other a demotion in rank or a
choice but to dissociate diminution of pay and
a. by serving a written notice on the employer
oneself from other benefits. (Ibid)
at least one (1) month in advance. The employment.
employer upon whom no such notice was
It is a formal

204
 would be no other choice but to resign. An
pronouncement or
relinquishment of an unconditional and categorical letter of
office, with the resignation cannot be considered indicative of
intention of constructive dismissal if it is submitted by an
relinquishing the office employee fully aware of its effects and
accompanied by the act implications. (Pascua v. Bank Wise, Inc., G.R. Nos.
of relinquishment. 191460 & 191464, January 31, 2018)
(Alenaje v. C.F. Sharp
Crew Management, Constructive dismissal is an involuntary
Inc., G.R. No. 249195,
resignation by the employee due to the harsh,
February 14, 2022)
hostile, and unfavorable conditions set by the
employer and which arises when a clear
Intent to Relinquish discrimination, insensibility, or disdain by an
The intent to relinquish must concur with the employer exists and has become unbearable to
overt act of relinquishment. The acts of the the employee. (SME Bank, Inc. v. De Guzman, G.R.
employee before and after the alleged Nos. 184517 & 186641, October 8, 2013)
resignation must be considered in determining
whether the employee concerned, in fact, D. PREVENTIVE SUSPENSION
intended to terminate his employment.”
(University of the Cordilleras v. Lacanaria, G.R. No. Preventive suspension is a disciplinary measure
223665, September 27, 2021, Per J. Hernando) for the protection of the company's property
pending investigation of any alleged
Petitioners' voluntary resignation coupled by malfeasance or misfeasance committed by the
their execution of quitclaims and the processing employee. The employer may place the worker
of the documents required from resigning concerned under preventive suspension if his
employees such as the exit interview, company continued employment poses a serious and
clearance and information sheets indubitably imminent threat to the life or property of the
show their intent to relinquish voluntarily their employer or of his co-workers. (Gatbonton v.
employment with the Company. (Tacis v. Shields National Labor Relations Commission, G.R. No.
Security Services, Inc., G.R. No. 234575, July 7, 146779, January 23, 2006)
2021, Per J. Hernando)
Preventive Suspension Not a Penalty
Resignation must be voluntary. In illegal While preventive suspension is not a penalty
dismissal cases, the employer, if defense of but a measure to protect the life or property of
resignation is presented, must show that the the employer or the co-workers pending
employee indeed voluntarily resigned. (Bance v. investigation of any alleged infraction
University of St. Anthony, G.R. No. 202724, February committed by the employee,it should be
3, 2021, Per J. Hernando) imposed with caution as employees are
deprived of their salaries and benefits during
Constructive dismissal the period of the suspension. As such, it should
Constructive dismissal exists where there is only be meted out when the employee's
cessation of work, because "continued continued employment poses a serious and
employment is rendered impossible, imminent threat to the life or property of the
unreasonable or unlikely, as an offer involving employer or of his co-workers. (Celis v. Bank of
a demotion in rank or a diminution in pay" and Makati (A Savings Bank), Inc., G.R. No. 250776, June
other benefits. (Ibid) 15, 2022)

There is constructive dismissal when an Period of Suspension

employee is compelled by the employer to No preventive suspension shall last longer than
resign or is placed in a situation where there thirty (30) days.

205
The imposition of this disciplinary measure falls
within the ambit of the employer's exercise of
its management prerogative. For it has been
recognized that employers have the right to
protect itself, its assets and operations or its
other employees from further harm or losses
that the erring employee might cause during
the pendency of the investigation of any alleged
infraction. (Lao v. Filinvest Land, Inc., G.R. No.
248768 , November 11, 2021)
The imposition of preventive suspension must
be done reasonably, in good faith, and in a
manner not otherwise intended to defeat or
circumvent the rights of the employee under
special laws and valid agreements.| (Ibid)
E. RELIEFS FROM ILLEGAL DISMISSAL
An illegally dismissed employee is entitled to
the following reliefs:
a. Reinstatement
1. Pending appeal
2. Separation pay in lieu of reinstatement
b. Backwages
c. Damages, Interest and Attorney’s Fees
a. Reinstatement
Reinstatement is a restoration to a state from
which one has been removed or separated. The
person reinstated assumes the position he had
occupied prior to his dismissal. Reinstatement
presupposes that the previous position from
which one had been removed still exists, or that
there is an unfilled position which is
substantially equivalent or of similar nature as
the one previously occupied by the employee.
(Traveloka Philippines, Inc. v. Ceballos, Jr., G.R. No.
254697 , February 14, 2022)
Reinstatement restores the employee who was
unjustly dismissed to the position from which
he was removed, that is, to his status quo ante
dismissal (Civil Service Commission vs. Moralde,
G.R. No. 211077, August 15, 2018)
Respondent company has already hired a
replacement for the petitioner. It would not be
justified for the respondent company to
terminate the services of the person who was
hired to replace the petitioner just so the latter
could assume his former position. Thus, the
remedy left for the petitioner is reinstatement
to a substantially equivalent position. (Magtoto
vs. NLRC, G.R. No. 63370, November 18, 1985).
An employee who is unjustly dismissed from
work shall be entitled to reinstatement without
loss of seniority and other privileges. (Art. 294
Labor Code, as amended).
i. Reinstatement pending appeal
Employer has 2 options involving
reinstatement:
a. Actual reinstatement; or
b. Payroll reinstatement.
Under Article 223 of the Labor Code, "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 admitted
back to work under the same terms and
conditions prevailing prior to his dismissal or
separation, or at the option of the employer,
merely reinstated in the payroll. The posting of
a bond by the employer shall not stay the
execution for reinstatement." (Wenphil
Corporation vs. Tuazon, G.R. No. 207983, April 7,
2014)
The right to reinstatement pending appeal is a
statutory embodiment of social justice
principles; a reflection of a compassionate
policy of the law which "vivifies and enhances
the provisions of the 1987 Constitution on labor
and the working man." It is "designed to stop x
x x a continuing threat or danger to the survival
or even the life of the dismissed or separated
employee and his family." (Dumaog v. Coca-Cola
Bottlers Phils., Inc., G.R. No. 226828 , November 11,
2021)
The employer is obliged to pay the dismissed
employee’s salary if he refuses to reinstate until
actual reinstatement or reversal by a higher
tribunal. (Bergonion vs. South East Asian Airlines,
G.R. No. 195227, April 21, 2014)
206
It is settled that even if the order of
reinstatement of the labor arbiter is reversed on
appeal, it is obligatory on the part of the
employer to reinstate and pay the wages of the
dismissed employee during the period of appeal
until reversal by a higher court. (Dumaog v. Coca-
Cola Bottlers Phils., Inc., G.R. No. 226828, November
11, 2021)
The principle of reinstatement pending appeal
applies only in case there is a finding of illegality
of dismissal by the Labor Arbiter. If the
dismissal is not illegal as in fact it was declared
valid and legal by the Labor Arbiter, neither can
the employer be held liable for payment of any
reinstatement wages. (Lansangan vs. Amkor
Technology Philippines, G.R. No. 177026, January
30, 2009)
ii. Separation pay in lieu of reinstatement
Separation pay may be awarded in lieu of
reinstatement if reinstatement is no longer
practical or will no longer serve the best interest
of the parties. Separation pay in lieu of
reinstatement may likewise be awarded if the
employee decides not to be reinstated
anymore. (Anting v. LT Steel Center, Inc., G.R. No.
256655, December 7, 2021)
Separation Pay as An Alternative Relief In
Lieu of Reinstatement
Under the law and prevailing jurisprudence, an
illegally dismissed employee is entitled to
reinstatement as a matter of right. The
award of separation pay is a mere exception
to the rule. It is made an alternative relief in
lieu of reinstatement in certain circumstances,
like:
1. when reinstatement can no longer be
effected in view of the passage of a long
period of time or because of the realities of
the situation;
2. reinstatement is inimical to the employer's
interest;
3. reinstatement is no longer feasible;
4. reinstatement does not serve the best
interests of the parties involved;
5. the employer is prejudiced by the workers'
continued employment;
6. facts that make execution unjust or
inequitable have supervened; or
a. strained relations between the
employer and employee. (Fernandez Jr.
vs. MERALCO, G.R. No. 226002, June 25,
2018)
7. for the best interest of the parties to prevent
exacerbation of tension or compromised
efficiency.
8. when the employee is well over the
statutory compulsory retirement age of 65.
(Simon v. Results Companies, G.R. Nos.
249351-52, March 29, 2022)
9. when the respondent's position as country
manager was already filled up. (Traveloka
Philippines, Inc. v. Ceballos, Jr., G.R. No.
254697, February 14, 2022)
Computation of separation pay in lieu of
reinstatement
Separation pay equivalent to one (1) month pay
for every year of service, with a fraction of at
least six (6) months considered as one (1)
whole year. (Inter-Asia Development Bank v.
Pereña, G.R. No. 213627, April 5, 2022)
When separation pay in lieu of reinstatement is
decreed, the finality of the ruling that decreed
the illegal dismissal becomes the reckoning
point, for in allowing separation pay, the final
decision effectively declares that the
employment relationship is ended so that
separation pay and backwages are to be
computed up to that point. (Broadcom Asia, Inc.
v. Cosare, G.R. No. 228079, February 15, 2022)
In other words, the finality of the decision cuts-
off the employment relationship and represents
the final settlement of the rights and obligations
of the parties against each other. (Broadcom
Asia, Inc. v. Cosare, G.R. No. 228079, February 15,
2022)
It must be emphasized that this payment of
separation pay is in addition to payment of back
wages.
The amount given to the employee depends on
the specific authorized cause for their
termination, which could be any of the
following:
207
A. Installation of labor-saving devices or
redundancy- equivalent of at least one (1)
month pay or one (1) month for every year
of service, whichever is higher
B. Retrenchment, closure or cessation of
business- equivalent of at least one (1)
month pay or one-half (1/2) month pay for
every year of service, whichever is higher
C. Incurable disease- equivalent to at least
one (1) month pay or one-half (1/2) month
pay for every year of service, whichever is
greater. (Art. 283, Labor Code)
b. Backwages
An employee who is unjustly dismissed from
work shall be entitled to his full backwages,
inclusive of allowances, and to his other
benefits or their monetary equivalent computed
from the time his compensation was withheld
from him up to the time of his actual
reinstatement. (Art. 294 Labor Code)
The payment of backwages is a form of relief
that restores the income that was lost by
reason of the unlawful dismissal. (Advan Motor,
Inc. vs. Veneracion, G.R. No. 190944, December 13,
2017)
The payment of full backwages can only be
granted to an unjustly dismissed employee,
allowing him/her to recover from the employer
what he/she had lost by way of wages as a
result of his/her dismissal. (De Leon v. Good Year
Steel Pipe Corp., G.R. No. 225311, November 29,
2021)
The payment of backwages is generally granted
on the ground of equity. It is a form of relief
that restores the income that was lost by
reason of the unlawful dismissal; the grant
thereof is intended to restore the earnings that
would have accrued to the dismissed employee
during the period of dismissal until it is
determined that the termination of employment
is for a just cause. It is not private
compensation or damages but is awarded in
furtherance and effectuation of the public
objective of the Labor Code. Nor is it a redress
of a private right but rather in the nature of a
command to the employer to make public
reparation for dismissing an employee either
due to the former’s unlawful act or bad faith.
The award of backwages is not conditioned on
the employee's ability or inability to, in the
interim, earn any income. (Advan Motor Inc., vs.
Veneracion, G.R. No. 190944, December 13, 2017)
Employees who are illegally dismissed are
entitled to full backwages, inclusive of
allowances and other benefits or their monetary
equivalent, computed from the time their actual
compensation was withheld from them up to
the time of their actual reinstatement.
(Philippine Journalists Inc., vs. Morqueda, G.R. No.
141430, May 7, 2004).
If reinstatement is no longer possible, the back
wages shall be computed from the time of their
illegal termination up to the finality of the
decision. (Buenviaje et al. vs. CA, G.R. No. 147806,
November 12, 2002).
A closer adherence to the legislative policy
behind Rep. Act No. 6715 points to "full
backwages" as meaning exactly that, i.e.,
without deducting from backwages the
earnings derived elsewhere by the concerned
employee during the period of his illegal
dismissal. In other words, the provision calling
for "full backwages" to illegally dismissed
employees is clear, plain and free from
ambiguity and, therefore, must be applied
without attempted or strained interpretation.
Index animi sermo est. (Equitable Banking
Corporation vs. Sadac, G.R. No. 164772, June 8,
2006)
Backwages and Reinstatement are
Separate and Distinct Reliefs
Backwages and reinstatement are separate and
distinct reliefs given to an illegally dismissed
employee in order to alleviate the economic
damage brought about by the employee's
dismissal. "Reinstatement is a restoration to a
state from which one has been removed or
separated" while "the payment of backwages is
a form of relief that restores the income that
was lost by reason of the unlawful dismissal."
Therefore, the award of one does not bar the
208
other. (Reyes vs. RP Guardians Security Agency,
Inc., G.R. No. 193756, April 10, 2013)
The two forms of relief are distinct and
separate, one from the other. Though the grant
of reinstatement commonly carries with it an
award of backwages, the inappropriateness or
non-availability of one does not carry with it the
inappropriateness or non-availability of the
other. (Tomas Claudio Memorial College, Inc. vs.
CA, supra.)
c. Separation Pay, Doctrine of Strained
Relations
Separation Pay
Separation pay is the amount given to an
employee who has been terminated from
service for authorized causes, which could be
either of the two: business closure (Art. 283,
Labor Code, as amended) or disease contracted
by the employee that could be prejudicial to
their health as well as the health of their co-
workers (Art. 284, Labor Code, as amended).
Doctrine of Strained Relations
Under the doctrine of strained relations, such
payment of separation pay is considered an
acceptable alternative to reinstatement when
the latter option is no longer desirable or viable.
On the one hand, it liberates the employee from
what could be a highly oppressive work
environment. On the other hand, it releases the
employer from the grossly unpalatable
obligation of maintaining in its employ a worker
it could no longer trust. (Guinto v. Sto. Niño Long-
Zeny Consignee, G.R. No. 250987, March 29, 2022)
Strained relationship may be invoked only
against employees whose positions demand
trust and confidence, or whose differences with
their employer are of such nature or degree as
to preclude reinstatement. (Advan Motor, Inc. v.
Veneracion, G.R. No. 190944, December 13, 2017)
Strained Relations Must Be Demonstrated
As A Fact
The implementation of the doctrine of strained
relationship must be supplemented by the rule
that the existence of a strained relationship is
for the employer to clearly establish and prove
in the manner it is called upon to prove the
existence of a just cause; the degree of hostility
attendant to a litigation is not, by itself,
sufficient proof of the existence of strained
relations that would rule out the possibility of
reinstatement. (Advan Motor, Inc. vs. Veneracion,
G.R. No. 190944, December 13, 2017)
The doctrine of strained relations cannot be
applied indiscriminately since every labor
dispute almost invariably results in "strained
relations"; otherwise, reinstatement can never
be possible simply because some hostility is
engendered between the parties as a result of
their disagreement. That is human nature.
Strained relations must be demonstrated
as a fact. The doctrine should not be used
recklessly or loosely applied, nor be based on
impression alone. (Guinto v. Sto. Niño Long-Zeny
Consignee, G.R. No. 250987, March 29, 2022)
The doctrine of strained relations should not be
used recklessly or applied loosely nor be based
on impression alone" so as to deprive an
illegally dismissed employee of his means of
livelihood and deny him reinstatement. Since
the application of this doctrine will result in the
deprivation of employment despite the absence
of just cause. (Advan Motor, Inc. vs. Veneracion,
supra)
d. Damages
Damages refers to the sum of money which the
law awards or imposes as a pecuniary
compensation, a recompense, or satisfaction
for an injury done or a wrong sustained as a
consequence either of a breach of a contractual
obligation or a tortious act. (MEA Builders, Inc. vs.
CA, G.R. No. 121484, January 31, 2005)
Damages Which May Be Awarded In
Relation With Illegal Dismissal
209
1. Moral Damages
Moral damages may be awarded when the
employer acted (a) in bad faith or fraud; (b) in
a manner oppressive to labor; or (c) in a
manner contrary to morals, good customs, or
public policy. Finally, the Court may impose
exemplary damages by way of example or
correction for the public good. (Aguilera v. Coca-
Cola FEMSA Philippines, Inc., G.R. No. 238941,
September 29, 2021)
2. Exemplary Damages
Exemplary damages may be awarded if the
dismissal was effected:
a. in a wanton, oppressive or malevolent
manner;
b. If moral damages was awarded, exemplary
damages may be awarded as well
(Ganancial vs. Cubagao, G.R. No. 203348, July
06, 2020).
3. Nominal Damages
In labor cases, nominal damages are awarded
when an employer removes an employee for a
just or authorized cause but without complying
with the requirements of due process. (LBP
Service Corp. v. Tuppil, G.R. No. 249747, March 15,
2022)
Failure to observe or to prove compliance of the
two-notice rule would still make the dismissal
valid, as long as a just or authorized cause for
dismissal exists, with the employer, however,
being held liable for nominal damages. (Systems
and Plan Integrator and Development Corp. v.
Ballesteros, G.R. No. 217119, April 25, 2022, Per J.
Hernando)
e. Attorneys’ Fees
In labor cases, attorneys’ fees partake of the
nature of an extraordinary award granted to the
victorious party as an indemnity for damages.
As a general rule, it is payable to the client, not
his counsel, unless the former agreed to give
the amount to the latter as an addition or part
of the counsel’s compensation. (Alva vs. High
Capacity Security Force Inc. G.R. No.203328
November 8, 2017)
Article 111 of the Labor Code, sanctions the
award of attorney's foes in cases of the
unlawful withholding of wages, wherein the
culpable party may be assessed attorney's fees
equivalent to ten percent (10%) of the amount
of wages recovered. The amount of attorney's
fees shall not exceed ten percent (10%) of the
total monetary award, and the fees may be
deducted from the amount due the winning
party. (Ibid)
To recapitulate, both the Labor Code and
the Civil Code provide that attorney's fees
may be recovered in the following instances,
namely:
1) in cases when the employee's wages have
been unlawfully withheld or there is a
showing that lawful wages were not paid
accordingly. (Salvador v. Saint Nicolas Security
& Investigation Agency, Inc., G.R. No. 229384 ,
July 28, 2021)
2) where the defendant's act or omission has
compelled the plaintiff to litigate with third
persons or the plaintiff incurred expenses
to protect his interest;
3) in actions for the recovery of wages of
household helpers, laborers and skilled
workers;
4) in actions for indemnity under
workmen's compensation and
employer's liability laws; and
5) in cases where the court deems it just
and equitable that attorney's fees and
expenses of litigation should be
recovered. (Ibid)
f. Interest
All monetary awards shall earn interest at the
rate of six percent (6%) per annum computed
from the finality of the Court’s resolution until
fully paid. (Salvador v. Saint Nicolas Security &
Investigation Agency, Inc., G.R. No. 229384 , July
28, 2021)
Exception to the Declared Policy of Strict
Construction in the Award of Attorney’s
Fees
Article III is an exception to the declared policy
of strict construction in the award of attorney's
210
fees." In fact, the general rule that attorney's
fees may only be awarded upon proof of bad
faith takes a different turn when it comes to
labor cases. The established rule in labor law is
that the withholding of wages need not be
coupled with malice or bad faith to warrant the
grant of attorney's fees under Article III of the
Labor Code. All that is required is that the lawful
wages were not paid without justification,
thereby compelling the employee to litigate.
(Alva vs. High Capacity Security Force Inc. G.R.
No.203328 November 8, 2017)
Availment of Free Legal Services Does Not
Foreclose an Award of Attorney's Fees
The laborer's availment of the free legal
services offered by the Public Attorney's Office
(PAO) does not prevent the award of attorney's
fees upon the successful conclusion of the
litigation. (Ibid)
g. Liabilities of Corporate Officers
Corporate Officers Generally Not Liable
for Illegal Dismissal
As a general rule, only the employer-
corporation, partnership or association or any
other entity, and not its officers, which may be
held liable for illegal dismissal of employees or
for other wrongful acts. This is as it should be
because a corporation is a juridical entity with
legal personality separate and distinct from
those acting for and in its behalf and, in
general, from the people comprising it. A
corporation, as a juridical entity, may act only
through its directors, officers and employees.
Obligations incurred as a result of the directors'
and officers' acts as corporate agents, are not
their personal liability but the direct
responsibility of the corporation they represent.
It is settled that in the absence of malice and
bad faith, a stockholder or an officer of a
corporation cannot be made personally liable
for corporate liabilities. (Echo 2000 Commercial
Corp. v. Obrero Filipino-Echo 2000 Chapter-CLO,
G.R. No. 214092, January 11, 2016)
The personal liability of corporate officers
validly attaches only when:
a. they assent to a patently unlawful act of the
corporation; or
b. they are guilty of bad faith or gross
negligence in directing its affairs; or (c)
they incur conflict of interest, resulting in
damages to the corporation, its
stockholders or other persons. (Zaragoza v.
Tan, G.R. No. 225544, December 4, 2017)
Obligations incurred by corporate officers,
acting as such corporate agents, are not theirs
but the direct accountabilities of the corporation
they represent.” As such, they should not be
generally held jointly and solidarily liable with
the corporation (Harpoon Marine Services, Inc. vs.
Francisco, G.R. No. 167751, March 2, 2011).
To hold a director or officer personally liable for
corporate obligations, two requisites must
concur, to wit:
(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. (Lozada vs.
Mendoza, G.R. No. 196134, October 12, 2016).
The sole proprietor is personally liable for all the
debts and obligations of the business. (Quiñones
y Conde v. Ortofon Telecom, G.R. No. 225675, June
23, 2021)
Piercing the Corporate Veil
A corporation is invested by law with a
personality separate and distinct from those of
the persons composing it as well as from that
of any other legal entity to which it may be
related. However, in certain cases, the
corporation's mask may be removed or its veil
pierced when it serves as an alter ego of
another entity and becomes a shield for fraud,
illegality or inequity committed against third
persons. (De Leon v. Good Year Steel Pipe Corp.,
G.R. No. 225311, November 29, 2021)
Particularly, the doctrine of piercing the
corporate veil applies in the following instances:
211
a. defeat of public convenience as when the
corporate fiction is used as a vehicle for
the evasion of an existing obligation;
b. fraud cases or when the corporate entity
is used to justify a wrong, protect fraud,
or defend a crime; or
c. alter ego cases, where a corporation is
merely a farce since 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
corporations.
Piercing the veil of corporate fiction is
frowned upon and must be done with
caution. The corporation's wrongdoing must
be proven clearly and convincingly.
The fact that both companies share the same
address, have the same stockholders, and
that he shuttled back and forth from one
company to another does not justify that both
corporations are alter egos of each other.
To pierce the corporate veil based on the alter
ego theory requires the concurrence of three
elements, namely:
(i) control of the corporation by the
stockholder or parent corporation;
(ii) fraud or fundamental unfairness
imposed on the plaintiff; and
(iii) harm or damage caused to the plaintiff
by the fraudulent or unfair act of the
corporation. The absence of any of
these elements prevents piercing the
corporate veil. (De Leon v. Good Year
Steel Pipe Corp., G.R. No. 225311,
November 29, 2021)
Mere ownership by another corporation of all or
nearly all of the capital stock of a corporation is
not of itself sufficient ground for disregarding
separate corporate personality. The element of
control requires that the subsidiary be
completely under the control and domination of
the parent. It examines the parent
corporation's relationship with the subsidiary.
(Dumaog v. Coca-Cola Bottlers Phils., Inc., G.R. No.
226828, November 11, 2021)
The veil of corporate fiction can be
pierced, and responsible corporate
directors and officers or even a separate
but related corporation, may be
impleaded and held answerable solidarily
in a labor case, even after final judgment
and on execution, so long as it is
established that such persons have
deliberately used the corporate vehicle to
unjustly evade the judgment obligation,
or have resorted to fraud, bad faith or
malice in doing so. When the shield of a
separate corporate identity is used to commit
wrongdoing and opprobriously elude
responsibility, the courts and the legal
authorities in a labor case have not hesitated to
step in and shatter the said shield and deny the
usual protections to the offending party, even
after final judgment. The key element is the
presence of fraud, malice or bad faith. Bad
faith, in this instance, does not connote bad
judgment or negligence but imports a dishonest
purpose or some oral obliquity and conscious
doing of wrong; it means a breach of a known
duty through some motive or interest or ill will;
it partakes of the nature of fraud. (Dinoyo v.
Undaloc Construction Company, Inc., G.R. No.
249638, June 23, 2021)
F. RETIREMENT
Retirement 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
their employment with the former.” (Youngbros
Parts Centre, Inc. v. Taduran, G.R. No. 232527, July
7, 2021)
Article 287. Retirement. — Any employee may
be retired upon reaching the retirement age
established in the collective bargaining
agreement or other applicable employment
contract.
In the absence of a retirement plan or
agreement providing for retirement benefits of
employees in the establishment, an employee
212
upon reaching the age of sixty (60) years or
more, but not beyond sixty-five (65) years
which is hereby declared the compulsory
retirement age, who has served at least five (5)
years in the said establishment, may retire and
shall be entitled to retirement pay [equivalent
to at least one-half (1/2) month salary for every
year of service, a fraction of at least six (6)
months being considered as one whole year].
The article provides for two types of retirement,
namely: (a) compulsory and (b) optional. The
first takes place when the employee reaches
the age of 65, while the second is primarily
determined by the collective bargaining
agreement or other employment contract or
employers' retirement plan. In the absence of
any provision on optional retirement in a
collective bargaining agreement, other
employment contract, or employer's retirement
plan, an employee may optionally retire upon
reaching the age of 60 years or more, but not
beyond 65 years, provided they have served at
least five years in the establishment concerned.
That prerogative is exclusively lodged in the
employee. (Youngbros Parts Centre, Inc. v.
Taduran, G.R. No. 232527, July 7, 2021)
Employees Eligible for Retirement
1. All employees in the private sector,
regardless of their position, designation or
status and irrespective of the method by
which their wages are paid;
2. Part-time employees;
3. Employees of service and other job
contractors;
4. Domestic workers/kasambahays or persons
in the personal service of another;
5. Underground mine workers;
6. Employees of government-owned and/or
controlled corporations organized under
the Corporation Code (without original
charters). (Article 302, Labor Code)
Exclusions
The following employees are not covered under
Article 302 [287], Labor Code:
1. Employees of the national government and
its political subdivisions, including
government-owned and/or controlled
corporations, if they are covered by the
Civil Service Law and its regulations;
2. Employees of retail, service and agricultural
establishments or operations regularly
employing not more than ten (10)
employees.
a. “Retail establishment” is one
principally engaged in the sale of
goods to end-users for personal or
household use. It shall lose its retail
character qualified for exemption if it
is engaged in both retail and
wholesale of goods.
b. “Service establishment” is one
principally engaged in the sale of
service to individuals for their own or
household use and is generally
recognized as such.
c. “Agricultural establishment/operation”
refers to an employer which is
engaged in agriculture. However, it
does not include the manufacture
and/or processing of sugar, coconut,
abaca, tobacco, pineapple, aquatic or
other farm products. (Section 2, Rule II,
Implementing Rules and Regulations of
R.A. 7641)
Kinds of Retirement Schemes
1. Compulsory and contributory in nature;
This is embodied in R.A. No. 8282 (private
sector) and R.A. No. 8291 (government).
These laws require a mandatory
contribution from the employer as well as
the employee, which shall become a
pension fund for the employee upon
retirement. (United Doctors Medical Center vs.
Bernadas, G.R. No. 209468, December 13,
2017)
2. One set up by the agreement of the
employer and employee in the CBA or other
agreement between them;
3. One that is voluntarily given by the
employer. (Gerlach vs. Reuters Ltd. PHL., G.R.
No. 148542, January 17, 2005)
213
Age of Retirement
In the absence of a retirement plan or
agreement, the age of retirement shall be fixed
by law, that is, in accordance with Article 302
[287] of the Labor Code.
1. Optional Retirement — an employee may
retire upon reaching the age of 60 or more
if he has served for at least 5 years in said
establishment.
2. Compulsory Retirement — an employee
shall be retired at the age of 65 years. (Sec.
4, IRR, R.A. 7641)
An employer is free to impose a retirement age
less than 65 for as long as it has the employees’
consent. (Jaculbe vs. Siliman University, G.R. No.
156934, March 16, 2007)
The employer who retires the employee
prematurely is guilty of illegal dismissal, and is
liable to pay his backwages and to reinstate him
without loss of seniority and other benefits,
unless the employee has meanwhile reached
the mandatory retirement age under the Labor
Code, in which case he is entitled to separation
pay pursuant to the terms of the plan, with legal
interest on the backwages and separation pay
reckoned from the finality of the decision. (Laya
vs. Philippine Veterans Bank, G.R. No. 205813,
January 10, 2018)
For underground mine workers:
1. Optional Retirement — an employee may
retire upon reaching the age of 50 years or
more.
2. Compulsory Retirement — an employee
shall be retired at the age of 60 years.
(Article 302 [287], Labor Code as amended by
R.A. 10757)
R.A. No. 10789 reduced the compulsory
retirement age of racehorse jockeys to 55
years.
Importance of 5 years
Five (5) years is the minimum years of service
that must be rendered by the employee before
he can avail of the retirement benefits upon
reaching optional or compulsory retirement age
under Article 287.
But this period holds true only “in the absence
of a retirement plan or agreement providing for
retirement benefits of employees in the
establishment. ” Hence, the employer and the
employee are free to stipulate a different period
in the retirement plan, employment contract or
CBA.
Amount of Retirement Pay
A retiring employee shall be entitled to
retirement pay equivalent to at least one-half
(1/2) month salary for every year of service, a
fraction of at least six (6) months being
considered as one (1) whole year. (Article 302
[287], Labor Code)
In determining the minimum retirement pay
due, the term “one-month salary” includes:
1. Fifteen (15) days salary of the employee on
his latest salary date;
2. Cash equivalent of not more than five (5)
days of service incentive leave;
3. One-twelfth (1/12) of 13th month pay due
the employee or two and a half (2.5) days;
and
4. All other benefits that the employer and
employee may agree upon that should be
included in the computation of the
employee’s retirement pay. (Sec. 5.2, Rule II,
Implementing Rules and Regulations of R.A.
7641)
The meaning of “one-half (1/2) month salary”
under Article 302 [287] of the Labor Code
means a total of 22.5 days. (Capitol Wireless, Inc.
vs. Confesor, G.R. No. 117174, November 13, 1996)
Article 302 [287] of the Labor Code ONLY
applies in a situation where:
1. There is no CBA or other applicable
employment contracts providing for the
benefits for employees; or
2. There is a CBA or other applicable
employment contracts providing for the
retirement benefits for employees, but such
benefits are below the requirements set by
214
 law. (Elegir vs. Philippine Airlines, G.R. No.
To help the employee It is designed as a
181995, July 16, 2012)
enjoy the remaining wherewithal during the
years of his life thereby period that an
Retirement of Workers Paid by Results lessening the burden of employee is looking for
The basis for the determination of the salary for worrying for his another employment
fifteen (15) days shall be their average daily financial support; also a after his termination
salary (ADS). The ADS is the average salary for form of reward for the
the last twelve (12) months reckoned from the employee’s loyalty and
date of their retirement, divided by the number service to the employer
of actual working days in that particular period. (Aquino vs. NLRC, G.R. No. 87653, February 11,
(Sec. 5.3, Rule II, Implementing Rules and 1992)
Regulations of R.A. 7641)
Rules on Double Recovery
Retirement of Part-Time Workers 1. If CBA/Retirement Plan prohibits double
Part-time workers are entitled to retirement pay recovery of separation pay and retirement
of “one-half month salary” for every year of benefit – then grant only one benefit,
service under R.A. 7641 after satisfying the whichever is greater. (Article 283, Labor
following conditions precedent for optional Code)
retirement: 2. If CBA/Retirement Plan contains no
1. There is no retirement plan between the prohibition, grant both. (Aquino vs. NLRC,
employer and employee; and G.R. No. 87653, February 11, 1992)
2. The employee should have reached the age 3. Same is true with retirement plans vis-a-vis
of 60 years, and should have rendered at CBA. (Ibid)
least 5 years of service with the employer. 4. If CBA does not require payment of
retirement pay “in addition” to
The components of retirement benefits of part- retrenchment pay, then no double
time workers may be computed at least in recovery. (Ibid)
proportion to the salary and related benefits
due them. (DOLE Handbook on Workers’ Statutory V. Jurisdiction and Remedies
Monetary Benefits, 2022 ed.)
A. LABOR ARBITER
Retirement Benefits vs Separation Pay
Original and Exclusive Jurisdiction of
Retirement Benefits Separation Pay Labor Arbiter involving all workers, whether
agricultural/non-agricultural:
Cause 1. Under Article 224 of the Labor Code:
a. Unfair labor practice (ULP) cases;
b. Termination disputes (illegal dismissal
Paid by reason of Required in cases
retirement enumerated in Articles
cases);
298 [283] and 299 c. If accompanied with a claim for
[284] of the Labor Code reinstatement, those cases that
and as substitute workers may file involving wages, rates
remedy in cases where of pay, hours of work and other terms
reinstatement is no and conditions of employment;
longer feasible nor d. Claims for actual, moral, exemplary
possible and other forms of damages arising
from the ER-EE relationship;
Purpose
e. Cases arising from any violation of
Article 264 of the Labor Code, including

215
 questions involving the legality of
strikes and lockouts;
f. Except claims for Employees
Compensation, Social Security,
Medicare and Maternity Benefits, all
other money claims exceeding P5,000
arising from ER-EE relationship,
including those of persons in domestic
service, regardless if accompanied with
a claim for reinstatement.
2. Disputes involving legislated wage
increases and wage distortion in
unorganized establishments not voluntarily
settled by the parties (Art. 124, Labor Code,
as amended by Republic Act No. 6727)
3. Contested cases under the exception clause
in Article 128(b) of the Labor Code.
4. Enforcement of compromise agreements
when there is non-compliance by any of the
parties thereto (Art. 233, Labor Code as
amended)
5. Issuance of writ of execution to enforce
decision of voluntary arbitrators or panel of
voluntary arbitrators in case of their
absence or incapacity for any reason.
6. Money claims of OFWs arising out of ER-EE
relationship or by virtue of any law or
contract, including death and disability
benefits and for actual, moral, exemplary
and other forms of damages (Sec. 7, RA
10022, Migrant Workers and Overseas
Filipino Act)
7. Other cases may be provided by law.
Exceptions to the Original and Exclusive
Jurisdiction of Labor Arbiters.
Labor Arbiters do not have jurisdiction over the
following cases:
1. When the DOLE Secretary or the President
exercises his power to assume jurisdiction
over national interest cases and decide
them himself. (Art. 278[g], Labor Code, as
amended)
2. When the NLRC exercises its power of
compulsory arbitration over similar
national interest cases that are certified to
it by the DOLE Secretary pursuant to the
exercise by the latter of his certification
power. (Art. 278[g], Labor Code, as
amended)
3. Cases arising from the interpretation or
implementation of CBA and from the
interpretation and enforcement of company
personnel policies which shall be disposed
of by the Labor Arbitrator by referring the
same to the grievance machinery or
voluntary arbitration, as may be provided in
said agreements. (Art. 224(c), Sec. 1, Rule V,
2011 NLRC Rules of Procedure)
4. Cases Submitted for Voluntary Arbitration.
Jurisdiction over ULPs
1. Labor Arbiter has jurisdiction over all ULPs
whether committed by the employers or
the labor organizations;
2. The law gives utmost priority to the
resolution of ULP cases;
3. The Labor Arbiter has jurisdiction only
over the civil aspect of the ULP.
Jurisdiction over Termination Cases
1. The Labor Arbiter has jurisdiction whether
the dismissal is for just cause or
authorized cause;
2. In case of conflict of jurisdiction between
Labor Arbiter and the Voluntary Arbitrator,
the Labor Arbiter’s jurisdiction shall
prevail.
Jurisdiction over Money Claims
I. Classification of Money Claims
1. Any money claim, regardless of
amount, if accompanied with a claim
for reinstatement;
2. Any money claim exceeding the
amount of P5,000 per claimant
regardless if accompanied with a claim
for reinstatement.
a. If the amount does not exceed
P5,000, the Regional Director of
the DOLE or his duly authorized
hearing officers have jurisdiction.
216
1. Jurisdiction of Labor Arbiter vs.
Arbitrator
Jurisdiction of Regional Director
on MONEY Limited only to Arising from the
Labor Arbiter Regional CLAIMS those arising interpretation
Director from statutes or or
contracts other implementation
As to (Art 224, Labor (Art. 129, Labor than a CBA. of the CBA and
Jurisdictio Code, as Code) those arising
n on amended) from the
MONEY interpretation
CLAIMS 1. Aggre 1. Aggre or enforcement
gate gate of company
money money personnel
claim claim policies.
EXCEE of
DS each
Jurisdiction over Claims for Damages
P5,000 emplo
; yee
DOES The grant of jurisdiction to the Labor Arbiter by
NOT the Labor Code is sufficiently comprehensive to
excee include claims for moral and exemplary
d damages sought to be recovered from an
P5,000 employer by an employee upon the theory of
; his illegal dismissal. (Primero vs IAC, G.R. No.
72644, December 14, 1987)
2. Arising 2. Arising
out of out of
Labor Arbiters shall have original and exclusive
ER-EE ER-EE
jurisdiction over claims of OFWs arising out of
relatio relatio
nship; nship; ER-EE relationship or by virtue of any law or
3. WHET 3. DOES contract, including death and disability benefits
HER NOT and for actual, moral, exemplary and other
OR seek forms of damages. (Sec. 7, RA 10022, Migrant
NOT reinsta Workers and Overseas Filipino Act)
seeks temen
reinsta t. 2. Requisites to Perfect an Appeal With
temen the National Labor Relations
t.
Commission
As to Decides a case Initiated by
Handling within 30 sworn 1. Observance of the Reglementary
of Cases calendar days statements filed Period. (Art. 229, Labor Code, as
after by any amended)
submission of interested
the case by the party. Decisions, awards, or Orders of the
parties for Labor Arbiter shall be final and
decision. executory unless appealed to the NLRC
by any or both parties, within 10
Appeals Appealable to the NLRC calendar days from receipt.

Labor Arbiter vs. Voluntary Arbitrators 2. Filing of a Memorandum of Appeal. (Art.

229, Labor Code, as amended)
Labor Arbiter Voluntary

217
 Appellant shall furnish a copy of the
Memorandum of Appeal to the other
party, who shall file an answer not later
than 10 calendar days from receipt
thereof.
3. Posting of: Cash Deposit, Property or
Surety Bond, in case of monetary
awards. (Art. 229, Labor Code, as
amended)
Only monetary awards (such as unpaid
wages, backwages, separation pay,
13th month pay, etc.) are required to
be covered by the bond.
Moral and exemplary damages and
attorney’s fees are excluded.
4. Appeals must be verified and certified
against forum shopping by the parties
themselves. (Antonio B. Salenga, et al. vs.
CA, G.R. No. 174941, February 1, 2012)
5. Grounds: (Art. 229, Labor Code, as
amended)
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;
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
3. Reinstatement and/or Execution
Pending Appeal
A. Order of Reinstatement Pending
Appeal of the Labor Arbiter
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. (Art. 229, Labor Code, as amended)
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 admitted back to work under the same terms
and conditions prevailing prior to his dismissal
or separation or, at the option of the employer,
merely reinstated in the payroll. The posting of
a bond by the employer shall not stay the
execution for reinstatement provided herein.
(Pioneer Texturizing Corp. vs. NLRC, G.R. No. 18651,
October 16, 1997)
This interpretation is more in consonance with
the constitutional protection to labor (Section 3,
Art. XIII, 1987 Constitution). The right of a
person to his labor is deemed to be property
within the meaning of the constitutional
guaranty that no one shall be deprived of life,
liberty, and property without due process of
law. Therefore, he should be protected against
any arbitrary and unjust deprivation of his job.
Options of the Employer: (Art. 229, Labor
Code, as amended)
1. Actual Reinstatement – reinstated to his
position which he occupies prior to his
illegal dismissal under the same terms and
conditions prevailing prior to his dismissal
or separation or, if no longer available, to a
substantially-equivalent position; or
2. Payroll Reinstatement – reinstated in
the payroll of the company without
requiring him to report back to his work.
If the reinstatement order is issued by the NLRC
on appeal, or by CA or SC, there is a need to
secure a writ of execution from LA of origin to
enforce the reinstatement of the employee
whose dismissal is declared illegal. (Retrieved
February 02, 2023, from
https://nlrc.dole.gov.ph/FAQS)
Unless there is a restraining order, it is
ministerial upon the LA to implement the Order
218
of Reinstatement, and mandatory on the part
of the employer to comply therewith. (Garcia vs.
PAL, G.R. No. 164856, January 20, 2009)
B. Effect of NLRC Reversal of Labor
Arbiter’s Order of Reinstatement
The reversal by a higher tribunal of the LA’s
finding (of illegal dismissal), notwithstanding,
an employer, who, despite the LA’s order of
reinstatement, did not reinstate the employee
during the pendency of the appeal up to the
reversal by a higher tribunal may still be held
liable for the accrued wages of the employee.
(Bergonio, Jr. v. South East Asian Airlines, April 21,
2014)
Reckoning Period by Accrued
Reinstatement Wages
Settled is the rule that an employee who was
illegally dismissed from work is entitled to
reinstatement without loss of seniority rights,
and other privileges, as well as to full
backwages, inclusive of allowances, and to
other benefits or their monetary equivalent
computed from the time his compensation
was withheld from him up to the time of
his actual reinstatement. Since
reinstatement is no longer feasible as Lopez'
former position no longer exists, his backwages
shall be computed from the time of illegal
dismissal up to the finality of the decision.
Backwages include the whole amount of
salaries plus all other benefits and bonuses and
general increases to which he would have been
normally entitled had he not been illegally
dismissed, such as the legally mandated
Emergency Cost of Living Allowance (ECOLA)
and thirteenth (13th) month pay, and the meal
and transportation allowances prayed for.
(Dumapis vs. Lepanto Consolidated Mining
Company, G.R. No. 204060, September 15,
2022)Employees ordered reinstated by the
Labor Arbiter are entitled to accrued
reinstatement wages only:
From: the time when the employer received a
copy of the LA’s decision declaring the
employees’ termination illegal and the order of
reinstatement.
Until: the time when the higher tribunal
reversed such LA’s decision.
The employee, in turn, is not required to return
the wages that he had received prior to the
reversal of the LA’s decision. (Bergonio, Jr. v.
South East Asian Airlines, April 21, 2014)
Garcia Doctrine: The test to determine the
liability of the ER (who did not reinstate the EE
pending appeal) to pay the wages of the
dismissed EE covering the period from the time
he was ordered reinstated by the LA to the
reversal of the LA‘s decision is two-fold:
1. There must be actual delay or the fact that
the order of reinstatement pending appeal
was not executed prior to its reversal;
2. Delay must not be due to the EE‘s
unjustified act or omission (Garcia vs. PAL,
G.R. No. 164856, January 20, 2009)
If a complaint is brought before the DOLE to
give effect to the labor standards provisions of
the Labor Code or other labor legislation, and
there is a finding by the DOLE that there is an
existing ER-EE relationship, the DOLE exercises
jurisdiction to the exclusion of the NLRC. If the
DOLE finds that there is no ER-EE relationship,
the jurisdiction is properly with the NLRC. If a
complaint is filed with the DOLE, and it is
accompanied by a claim for reinstatement, the
jurisdiction is properly with the Labor Arbiter,
under Art. 217 (3) of the Labor Code, which
provides that the Labor Arbiter has original and
exclusive jurisdiction over those cases involving
wages, rates of pay, hours of work, and other
terms and conditions of employment, if
accompanied by a claim for reinstatement. If a
complaint is filed with the NLRC, and there is
still an existing ER-EE relationship, the
jurisdiction is properly with the DOLE. The
findings of the DOLE, however, may still be
questioned through a petition for certiorari
under Rule 65 of the Rules of Court. (Del Monte
Land Transport Bus, Co. v. Armenta, G.R. No.
240144, February 3, 2021)
219
B. NATIONAL LABOR RELATIONS
COMMISSION
National Labor Relations Commission is an
administrative body with quasi-judicial
functions, and is the principal government
agency that hears and decides labor-
management disputes. It is attached to the
DOLE solely for program and policy
coordination. (Art. 220, Labor Code, as amended)
Composition of the NLRC
1. One (1) Chairman
2. 23 Members, called “Commissioners”
a. Eight (8) Members each of whom shall
be chosen only from among the
nominees of the workers and
Employer’s organization.
b. The Chairman and the seven (7)
remaining members shall come from
the public sector, with the latter to be
chosen preferably from among the
incumbent labor arbiters.
c. Upon assumption into office, the
members nominated by the workers
and Employers organization shall divest
themselves of any affiliation with or
interest in the federation or association
to which they belong. (Art. 220, Labor
Code, as amended)
There is no need for the Commission on
Appointments to confirm the positions in the
NLRC. Such a requirement has no constitutional
basis. (Calderon vs. Carale, G.R. No. 91636, April
23, 1992)
Powers and Functions
1. En Banc
The chairman and the 23 members may sit in
en banc and have the following powers and
functions;
a. Promulgate rules and regulations, and
govern the hearings and disposition of
cases;
b. Formulate policies affecting its
administration and operations;
c. En banc may on temporary or emergency
basis, allow cases within the jurisdiction of
any division to be heard and decided by
any other division, whose docket allows
the additional workload and such transfer
will not expose litigants to unnecessary
additional expense.
d. Recommend the appointment of labor
arbiters (Art. 222, Labor Code, as amended)
e. Recommend the extension of the services
of the Commissioner and Labor arbiters
(Ibid.)
The Commission shall exercise its adjudicatory
and all other powers, functions, and duties
through its divisions. (Art. 220, Labor Code, as
amended)
2. Division (8 Divisions with 3 members)
The Commission shall be composed of eight (8)
divisions each composed of three (3) members.
Each division shall have one (1) representative
from the Employer’s sector, Employee’s sector,
and public sector. Each division shall have the
following powers and functions:
a. The representative from the public sector
will act as the Presiding Commissioner.
b. Adjudicatory powers
c. All other powers, functions, and duties
d. Have exclusive appellate jurisdiction over
cases within their respective territorial
jurisdiction (Ibid.)
Individual Commissioner does not have
Adjudicatory Powers
Qualifications of the Chairman and the
Commissioners
1. Member of the Philippine Bar;
2. Engaged in the practice of law in the
Philippines for at least 15 years;
3. At least 5 years of experience or exposure
in handling labor management relations;
4. Preferably a resident of the region where
he is to hold office. (Art. 222, Labor Code, as
amended)
Qualifications of a Labor Arbiter (LA)
1. Member of the Philippine Bar;
2. Engaged in the practice of law in the
Philippines for at least 10 years;
220
 3. At least 5 years of experience or exposure Cases decided by the Regional Offices of the
in handling labor management relations. DOLE, in the exercise of its adjudicatory
(Ibid) function over monetary claims of workers,
amounting to not more than P5,000 and not
Terms of Office of the Chairman, accompanied by a claim for reinstatement;
Commissioners, and Labor Arbiters
They shall hold office during good behavior until Contempt cases decided by the LA.
they reach the age of sixty-five (65), unless 2. No Appellate Jurisdiction over
removed for causes as provided by law or Decisions rendered by:
become incapacitated to discharge the function a. Voluntary Arbitrator;
of his office. (Ibid.) b. Secretary of DOLE;
Provided however, that the President of the c. BLR Director, on cases appealed from
Philippines may extend the services of the the DOLE Regional Offices
Commissioners and LAs up to a maximum age
of 70 years upon the recommendation of the Jurisdiction of Labor Arbiter vs. NLRC
Commission En Banc. (Ibid.) Basis Labor Arbiter NLRC
Jurisdiction of NLRC:
1. Exclusive Original Jurisdiction over:
a. Certified labor disputes causing or likely Jurisdiction Can hear and NLRC
to cause a strike or lockout in an resolve cases reviews the
industry indispensable to national under Art. 224 of decisions
interest, certified by the Secretary of the Labor Code, rendered by
DOLE or the President of the money claims the LA;
under Sec. 7 of decisions or
Philippines for compulsory arbitration;
RA 10022; and orders
(Art. 278(g), Labor Code, as amended)
referred wage rendered by
b. Injunction in ordinary labor disputes to distortion the Regional
enjoin or restrain any actual or disputes in Directors
threatened commission of any or all unorganized under Art.
prohibited or unlawful acts, or to establishments, 129 of the
require performance of a particular act as well as the Labor Code;
in any labor dispute which, if not enforcement of and
restrained or performed therewith, compromise conducts
may cause grave or irreparable agreements compulsory
pursuant to the arbitration in
damage to any party; (Art. 225(e), Labor
2011 NLRC Rules certified
Code, as amended)
of Procedure, as cases
c. Injunction in strikes or lockouts under amended
Art. 279 of the Labor Code;
d. Petition for extraordinary remedies from
orders or resolutions of Labor Arbiters
(including those issued during
execution proceedings). (Rule XII, Sec.
1, 2011 NLRC Rules of Procedure, as
amended by En Banc Resolution No. 07-14, Issuance of Cannot issue an Can issue an
Series of 2014; En Banc Resolution No. 01- Labor injunctive Writ injunctive
17, Series of 2017) Injunction Writ
2. Exclusive Appellate Jurisdiction over:
a. All cases decided by the LA under
Art. 224 of the Labor Code, as
amended and Sec. 10 of R.A. No.
8042 (Migrant Worker’s Act);

221
Adjudication of cases by the NLRC
1. The NLRC adjudicates cases by division,
where a concurrence of 2 votes is needed
for a valid judgment. (Art. 220, Labor Code,
as amended).
Whenever the required membership in a
division is not complete and the
concurrence of the Commissioners to arrive
at a judgment or resolution cannot be
obtained, the Chairman shall designate
such number of additional Commissioners
from the other divisions as may be
necessary.
2. It shall be mandatory for the division to
meet for purposes of consultation
The conclusion of a division on any case
submitted to it for decision should be
reached in consultation before the case is
assigned to a member for the writing of the
opinion.
3. A certification that a consultation has been
conducted, signed by the presiding
commissioner of the division, shall be
issued (copy attached to the record of the
case and served upon the parties) (Art.
220, Labor Code, as amended)
Powers of the NLRC
1. Rule-Making Power Promulgation of rules
and regulations:
a. Governing disposition of cases befor any
of its division/regional offices;
b. Pertaining to its internal functions;
c. As may be necessary to carry out the
purposes of the Labor Code
2. Power to issue compulsory processes
(administer oaths, summon parties, issue
subpoenas)
3. Power to investigate matters and hear
disputes within its jurisdiction
(adjudication power – original and
appellate jurisdiction over cases)
4. Contempt power
5. Ocular inspection
6. Power to issue injunctions and
restraining orders (Art. 225, Labor Code,
as amended)
Effect of NLRC reversal on Labor Arbiter’s
Order of Reinstatement
1. If the employee was actually
reinstated
After reversal of the Labor Arbiter‘s decision,
the employer‘s duty to reinstate the dismissed
employee in the actual service or in the payroll
is effectively terminated. The employee, in turn,
is not required to return the wages that he had
received prior to the reversal of the LA‘s
decision. (Bergonio, Jr. vs. South East Asian
Airlines, G.R. No. 195227, April 21, 2014)
2. If employee was neither reinstated to
his former position nor in the payroll
When an employee is ordered reinstated by the
LA and the employer fails or refuses to obey the
reinstatement order but initiates an appeal, the
employer‘s success in having the decision of the
LA reversed on appeal will not exculpate him
from the liability to pay the reinstatement
wages of the employee from the time he was
reinstated until the date of reversal on appeal
(Roquero vs. PAL, G.R. No. 152329, April 22 2003)
The test to determine the liability of the ER
(who did not reinstate the EE pending appeal)
to pay the wages of the dismissed EE covering
the period from the time he was ordered
reinstated by the LA to the reversal of the LA‘s
decision is two-fold:
1. There must be actual delay or the fact that
the order of reinstatement pending appeal
was not executed prior to its reversal;
2. Delay must not be due to the EE‘s
unjustified act or omission (Garcia vs. PAL,
G.R. No. 164856, January 20, 2009)
Roquero Doctrine was reaffirmed but with the
modification that ― after the LA‘s decision is
reversed by a higher tribunal, the employee
may be barred from collecting the accrued
222
wages, if it is shown that the delay in enforcing
the reinstatement pending appeal was without
fault on the part of the employer (Roquero vs.
PAL, G.R. No. 152329, April 22, 2003)
Reckoning Period for Computation of the
Amount of accrued Reinstatement Wages
From the time the ER received a copy of the
decision of the Labor Arbiter declaring the EE‘s
termination illegal and ordering their
reinstatement up to the date of the NLRC
resolution overturning that of the Labor Arbiter.
(ISLRIZ Trading/Victor Hugo Lu vs. Efren Capada, et.
al, G.R. No. 168501, January 31, 2011)
Remedies
1. Appeal
Decisions of the NLRC are not appealable.
However, judicial review of the NLRC’s decision
is available through Petition for Certiorari under
Rule 65, a special civil action. The special civil
action should initially be filed with the CA in
strict observance of the Doctrine of Hierarchy
of Courts as the appropriate forum for the relief
desired (St. Martin Funeral Home vs. NLRC, G.R. No.
130866, Sep. 16, 1998)
2. Requisites for Perfection of Appeal to
the CA (Rule VI, 2011 NLRC Rules of
Procedure)
a. Appeal shall be:
i. Filed within the reglementary
period;
ii. Verified by the appellant himself
in accordance with Sec. 4, Rule 7
of the Rules of Court;
iii. 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;
iv. In three (3) legibly typewritten or
printed copies; and
v. Accompanied by:
1. Proof of payment of the required appeal
fee;
2. Posting of a cash or surety bond as
provided in Sec. 6 of the NLRC Rules;
3. Proof of service upon the other parties
b. A mere Notice of Appeal, without
complying with the other
requisites aforestated shall not
stop the running of the period
for perfecting an appeal
c. 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
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.
a. 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 Remedies
Extraordinary remedies are found under Rule
XII of the 2011 NLRC Rules of Procedure.
It is not equivalent to nor a substitute for
appeal. It is directed against “orders” or
“resolutions” issued by the Labor Arbiter in the
course of the proceedings before him where the
remedy of appeal is not available.
Grounds for the exercise of Extraordinary
Remedies
1. There is prima facie evidence of abuse of
discretion on the part of the LA;
2. Serious errors in the findings of fact are
raised which, if not corrected, would cause
grave or irreparable damage or injury to the
petitioner;
3. A party has been prevented from taking an
appeal due to fraud, accident, mistake, or
excusable negligence (FAME)
4. Made purely on questions of law; and
223
5. Order or resolution will cause injustice if not
rectified. (Rule XII, Sec. 2, 2011 NLRC Rules of
Procedure, as amended by En Banc Resolution
No. 05-14, Series of 2014).
Verified Petition
1. 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
2. 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 (Sec. 1, Rule XII, 2011 NLRC
Rules of Procedure, as amended by En Banc
Resolution No. 07-14)
Certified Cases
1. Certified labor disputes are national interest
cases certified by the DOLE Secretary to the
Commission (NLRC) for compulsory
arbitration under Art. 278(g) of the Labor
Code (Sec. 2, The 2011 NLRC Rules and
Procedures)
2. Certified labor disputes causing or likely to
cause a strike or lockout in an industry
indispensable to the national interest
certified to the NLRC by the SOLE for
compulsory arbitration
Power of the Secretary of Labor to Certify
Cases
1. 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:
a. Assume jurisdiction over the dispute;
and
b. 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. 278g,
Labor Code, as amended)
Effects of Certification
1. The intended or impending Strike or
Lockout is automatically enjoined. (Azucena,
Labor Code 2, 2016, p. 637)
2. 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. (Rule VIII, Sec.
3, 2011 NLRC Rules of Procedure)
3. All cases between the parties shall be
considered subsumed or absorbed by the
certified case and shall be decided by the
appropriate Division of the Commission.
(Ibid)
4. Parties of cases, relative or incident to the
certified case, pending before the Regional
Arbitrational branches and Voluntary
Arbitrators shall inform the Division thereof.
(Ibid)
The division having territorial jurisdiction over
the principal office of the company shall acquire
jurisdiction over the certified case whenever a
certified labor dispute 1. involves a business
entity with several workplaces. (Ibid)
Note: These effects are also applicable when
the Secretary of DOLE directly assumes
jurisdiction and decides over a labor dispute
affecting industries imbued with national
interest.
Effects of Defiance
Non-compliance with the Certification order of
the Secretary of DOLE shall:
a. Be considered as an illegal act committed
in the course of the strike or lockout; and
b. Authorize the Commission to enforce the
same under pain of immediate disciplinary
action, including:
i. Dismissal or loss of employment
status; or
ii. Payment by the locking-out employer
of backwages, damages; and/or
224
 iii. Other affirmative relief, even criminal
prosecution against the liable parties
(Sec. 4, Rule VIII, NLRC 2011 Rules)
c. The Commission may also seek the
assistance of law enforcement agencies to
ensure compliance and enforcement of its
orders and resolutions (Ibid)
Procedure in Certified Cases
1. When there is no need to conduct a
clarificatory hearing, the Commission shall
resolve all certified cases within 30 calendar
days from receipt by the assigned
Commissioner of the complete records,
which shall include the position papers of
the parties and the order of the SOLE
denying the motion for reconsideration of
the certification order, if any (Sec. 5, Rule
VIII, 2011 NLRC Rules and Procedures)
2. Where a clarificatory hearing is needed, the
Commission shall, within 5 calendar days
from receipt of the records, issue a notice
to be served on the parties through the
fastest means available, requiring them to
appear and submit additional evidence, if
any. All certified cases shall be resolved by
the Commission within 60 calendar days
from receipt of the complete records by the
assigned Commissioner. (Ibid)
No Motion for Extension or Postponement shall
be entertained (Sec. 5, Rule VIII, 2011 NLRC Rules
and Procedures)
Execution of 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. 5, Rule
VIII, 2011 NLRC Rules and Procedures)
C. COURT OF APPEALS
A Judicial Review of NLRC’s decisions is
available through a Petition for Certiorari under
Rule 65, which should initially be filed with the
CA, in strict observance of the doctrine of
Hierarchy of Courts, as the appropriate forum
for the relief desired. The CA is procedurally
equipped to resolve unclear or ambiguous
factual findings, aside from the increased
number of its component divisions. (St. Martin
Funeral Home vs. NLRC, G.R. No. 130866, Sep. 16,
1998)
The judicial review of NLRC’s decision is to
determine whether the latter committed grave
abuse of discretion. However, where the LAs
and NLRCs make contradictory factual findings,
it becomes incumbent upon the Court of
Appeals to re-examine these findings in order
to resolve the issue of whether the NLRC did or
did not commit grave abuse of discretion.
(Hubilla vs. HSY Marketing Ltd., Co., G.R. No.
207354, January 10, 2018)
Under Rule 65
1. General Rule: Decisions of the DOLE
Secretary, NLRC and BLR, in its appellate
jurisdiction are NOT APPEALABLE to the
CA; however, their decisions may be
elevated to the CA via a Petition for
Certiorari under Rule 65
A petition for certiorari does not normally
include an inquiry into the correctness of its
evaluation of the evidence. Errors of judgment,
as distinguished from errors of jurisdiction, are
not within the province of a special civil action
for certiorari, which is merely confined to issues
of jurisdiction or grave abuse of discretion. It is,
thus, incumbent upon petitioners to
satisfactorily establish that the NLRC acted
capriciously and whimsically in order that the
extraordinary writ of certiorari will lie. By grave
abuse of discretion is meant such capricious
and whimsical exercise of judgment as is
equivalent to lack of jurisdiction, and it must be
shown that the discretion was exercised
arbitrarily or despotically. (Philippine National
Bank v. Gregorio, G.R. No. 194944, September 18,
2017)
2. Exception: Rule 43 of the Rules of Court
a. Orders or Awards of the Voluntary
Arbitrator (VA) may be appealed to the
CA via a Petition for Review under Rule
43
225
The judicial review of NLRC’s decision is to
determine whether the latter committed grave
abuse of discretion. However, where the LAs
and NLRCs make contradictory factual findings,
it becomes incumbent upon the Court of
Appeals to re-examine these findings in order
to resolve the issue of whether the NLRC did or
did not commit grave abuse of discretion.
D. SUPREME COURT
Supreme Court (SC)
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
henceforth be initially filed in the Court of
Appeals, in strict observance of the doctrine on
the hierarchy of courts, as the appropriate
forum for the relief desired (St. Martin Funeral
Home vs. NLRC, G.R. No. 130866, September 16,
1998)
Such appeal from a final disposition of the Court
of Appeals is a petition for review on certiorari
UNDER Rule 45, and not a special civil action of
certiorari under Rule 65 of the Rules of Court.
Rule 45 is clear that the decisions, final orders
or resolutions of the Court of Appeals in any
case, i.e., regardless of the nature of the action
or proceeding involved, may be appealed to the
Supreme Court by filing a petition for review,
which would be but a continuation of the
appellate process over the original case. Under
Rule 45, the reglementary period to appeal is
15 days from notice of judgment or denial of
the motion for reconsideration. (Asian
Transmission Corp. v. CA, G.R. No. 144664, March
15, 2004)
A petition for certiorari under Rule 65 cannot be
a substitute for lost appeal under Rule 45 in
case the aggrieved party fails to file an appeal
within the reglementary period. (Malayang
Manggagawa ng Staylast PHL. Inc. v. NLRC, G.R. No.
155306, August 28, 2013).
Under Rule 45
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, Rule
45, Revised Rules of Court)
The petition shall be filed within 15 days from
Notice of the Judgment, Final Order, or
Resolution appealed from, or of the denial of
the petition for new trial or reconsideration filed
in due time.
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;
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 vs. Phil EDS Techno-Service Inc.,
G.R. No. 169712, January 20, 2009)
Review of Decisions
Review of decisions of the NLRC shall be done
through (in order):
a. Motion for Reconsideration
b. Rule 65 to the CA
c. Rule 45 to the SC
Supreme Court policy as to Appeals in
Labor Cases
The Supreme Court is very strict regarding
appeals filed outside the reglementary period
for filing the same. To extend the period of the
appeal is to delay the case, a circumstance
which could give the employer the chance to
wear out the efforts and meager resources of
the worker that the latter is constrained to give
up for less than what is due him. (Firestone Tire
and Rubber Co. of the Philippines vs. Firestone Tire
226
and Rubber Co. Employees Union, G.R. No. 75363,
August 4, 1992)
Fresh Period Rule
To standardize the appeal periods provided in
the Rules and to afford litigants fair opportunity
to appeal their cases, the Court deems it
practical to allow a fresh period of 15 days
within which to file the notice of appeal in the
Regional Trial Court, counted from receipt of
the order dismissing a motion for a new trial or
motion for reconsideration.
The Neypes Doctrine “fresh period rule” shall
also apply to Rule 40 governing appeals from
the Municipal Trial courts to the Regional Trial
Courts; Rule 43 on petitions for review from the
Regional Trial courts to the Court of Appeals;
Rule 43 on appeals from quasi-judicial agencies
to the Court of Appeals and Rule 45 governing
appeals by certiorari to the Supreme Court. The
new rule aims to regiment or make the appeal
period uniform, to be counted from receipt of
the order denying the motion for new trial,
motion for reconsideration (whether full or
partial) or any final order or resolution. (Gagui
vs. Dejero, G.R. No. 196036, October 23, 2013)
E. BUREAU OF LABOR RELATIONS
Serves as the planning, policy making,
consultative and advisory body in the
promotion and maintenance of industrial peace.
It has the mandate to:
1. act as national registry of unions and CBAs;
2. formulate regulatory and developmental
policies, standards, guidelines and
programs promoting the right to organize,
including collective bargaining and
improvement of the income of workers and
their organizations;
3. act as lead agency in workers and
employers education;
4. adjudicate inter- and intra-union disputes;
5. promote bipartism and tripartism; and
6. formulate and implement programs that
strengthen trade unionism to achieve
industrial peace.
EXCLUSIVE ORIGINAL JURISDICTION
1. All inter-union and intra-union conflicts,
and
2. All disputes, grievances or problems arising
from or affecting labor-management
relations in all workplaces, whether
agricultural or nonagricultural, except those
arising from implementation or
interpretation of collective bargaining
agreements which shall be the subject of
grievance procedure and/or voluntary
arbitration. (Article 232, Labor Code, as
amended)
BLR has the original and exclusive jurisdiction
on all inter-union and intra-union conflicts. An
intra-union conflict would refer to a conflict
within or inside a labor union, and an inter-
union controversy or dispute, one occurring or
carried on between or among unions. (Bautista
v. Court of Appeals, G.R. No. 123375, February 28,
2005)
Inter-union disputes include:
a. Validity/invalidity of SEBA, certification
election, consent election, run-off election
or re-run election; b
b. Such other disputes or conflicts involving
the rights to self-organization, union
membership and collective bargaining
between and among legitimate labor
organizations (D.O 40-03 series 2003; D.O 40-
1- 15, series of 2015)
Intra-union disputes include:
a. Conduct or nullification of election of
officers of union and workers’ associate;
b. Audit or accounts examination of union or
workers’ association funds;
c. Deregistration of collective bargaining
agreements;
d. validity /invalidity of union affiliation or
disaffiliation;
e. Validity/invalidity of
acceptance/nonacceptance for union
membership;
f. Opposition to application for union or CBA
registration;
227
g. Violations of or disagreements over any 3. Intra-union disputes involving said labor
provision in the constitution and by-laws of organizations;
a union or workers’ association; 4. Registration of multi-employer CBAs or
h. Disagreements over chartering or petitions for deregistration; and
registration of labor organizations and 5. Contempt cases BLR Director has
collective bargaining agreements;
i. Violations of the rights and conditions of Exclusive Appellate Jurisdiction over:
membership in a union or workers’ 1. All decisions of the Med-Arbiter in:
association; a. Intra union disputes, and
j. Violations of the rights of legitimate labor b. other related labor relation disputes
organizations, except interpretation of (Sec. 1[1], Rule III, NCMB Manual of
CBAs; Procedures for Conciliation and Preventive
k. Validity/invalidity of Mediation Cases)
impeachment/expulsion/suspension or any 2. Decisions by the DOLE Regional Directors
disciplinary action noted against any officer in the following cases relevant and related
and member, including those arising from to labor relations:
non-compliance with reportorial a. Visitorial cases under Art. 289 [274],
requirement; and involving examination of books of
l. Such other disputes or conflicts involving accounts of independent unions, local
the rights to self-organization, union chapters/chartered local and workers’
membership and collective bargaining associations (Rule II, Rules of Procedure
between and among legitimate labor on Mediation-Arbitration)
organizations. (Ibid) b. Union registration-related cases such
as denial of application under Art. 243
Other related labor relations disputes [236] (Labor Code), and revocation or
cancellation (Art. 245 [238], Labor Code) of
Related Labor Relations Dispute pertains to any
conflict between a labor union and the registration of said unions
c. Notice of merger, consolidation,
employer or any individual, entity or group that
is not a labor union or workers’ association. It affiliation, and change of name of said
covers the following: unions and or petition for denial thereof
(Sec. 5, Rule IV, Book V, Rules to
a. any conflict between a labor union and the
Implement the labor Code, as amended)
employer or any individual, entity or group
that is not a labor organization or worker’s Rule on Appeal on Unorganized
association; Establishments
b. cancellation of registration of unions and Appeal may only be made to the DOLE
workers associations; and Secretary in case of denial of the petition within
c. a petition for interpleader (Sec. 2, Rule XI,
10 days from the receipt of the decision of
D.O. No. 40-03)
denial (D.O. 40-F-03, Series of 2008)
BLR’s Director has Original and Exclusive
Rule on Appeal
Jurisdiction over:
1. Complaints and petitions involving the On denial of On revocation or
registration of cancellation of registration of application for cancellation of
federations, national unions, industry union registration union registration
unions, trade union centers and their local
Denial is made by the Decision of the RD in
chapters, affiliates and members of
Regional office in cases the cases which he has
organization; involving application for original jurisdiction —
2. Request for examinations of books of registration of appealable to the BLR
accounts of said labor organizations under independent unions, Director by any of the
Art 250 of the Labor Code;

228

local chapters and parties within 10 days
workers’ associations — from receipt thereof
appealable to the BLR
Director
Denial is made by the Decision of the BLR
BLR Director in case Director in the exercise
involving federations, of his original
national unions, jurisdiction — Copra Export Corporation, G.R. No. 183335,
industry unions and appealable to the DOLE
trade union centers — Secretary by any party
appealable to the DOLE within the period of 10
Secretary days
NCMB is not a quasi-judicial agency exercising
quasi-judicial functions but merely a
conciliatory body for the purpose of facilitating
settlement of disputes between parties. Its
decisions or that of its authorized officer cannot
be appealed either through a petition for review
under Rule 43 or under Rule 65 of the Revised
Rules of Court. (Tabigue et. al. vs. International
December 23, 2009)
Jurisdiction

The NCMB has the following jurisdiction:

Rules on appeal on CBA registration 1. Collective Bargaining Disputes;
2. Notice of Strike or Lockout; and
3. Preventive Mediation.
Single-enterprise CBAs Multi-employer CBAs —
— denial by the denial of the BLR Conciliator-Mediator
Regional Director may Director may be An official of the NCMB whose principal function
be appealed to the BLR appealed to the DOLE
is to settle and dispose of potential and actual
Director within 10 days Secretary within 10
from receipt of the days from receipt of
labor disputes through preventive mediation
notice of denial notice of denial and conciliation including the promotion of
voluntary approaches to labor disputes
prevention and settlement. (Rule III(5), 2017
Appeal to the BLR Revised National Conciliation and Mediation Board
1. The decision of the Med-Arbiter and Manual of Procedures for Conciliation and Preventive
Regional Director may be appealed to the Mediation Cases)
BLR by any of the parties within 10 days
from receipt thereof. (Sec. 16, Rule XI, Book Conciliation-mediation is a mode of dispute
V, D.O. 40-F-03, Series of 2003) settlement that brings together two disputing
2. The decision of the Bureau Director in the parties to negotiate and settle their differences.
exercise of his original jurisdiction may be It is a process of rational and orderly discussion
appealed to the office of the DOLE of differences between the parties to a dispute
Secretary by any party within the same under the guidance of a Conciliator-Mediator.
period (Ibid.)
1. Conciliation vs. Mediation
F. NATIONAL CONCILIATION AND
Conciliation Mediation
MEDIATION BOARD

The National Conciliation and Mediation Nature

Board (NCMB) refers to the agency attached
to DOLE principally in-charge of the settlement
of labor disputes through conciliation, Both are mild forms of intervention by a neutral
mediation, and promotion of voluntary third party
approaches to labor dispute prevention and
settlement. (Rule III(23), 2017 Revised National Role of Conciliator-Mediator “Con-Med”
Conciliation and Mediation Board Manual of
Procedures for Conciliation and Preventive Mediation
Cases)

229
 The Con-Med, takes an The Con-Med advises Notice or Request for Preventive
active role in assisting the parties or offers Mediation cannot be filed by the
parties by: solutions or alternatives Federation
● trying to keep to the problems with The Notice or Request for Preventive Mediation
disputants the end in view of cannot be filed by the Federation on behalf of
talking, assisting them towards its local chapter; a local union does not owe its
● facilitating other voluntarily reaching existence to the federation with which it is
procedural their own mutually affiliated.
niceties, acceptable settlement
● carrying of the dispute.
messages back Mere affiliation does not divest the local union
and forth of its own personality, neither does it give the
between the mother federation the license to act
parties, and independently of the union. (Insular Hotel
● keeping things Employees Union-NFL vs. Waterfront Insular Hotel
calm and Davao, G.R. Nos. 174040-41, September 22, 2010)
forward-looking
in a tense Notice of Lockout
situation. Refers to the notification filed by an employer
(Rule III (4 and 22), 2017 Revised National with the appropriate Regional Branch informing
Conciliation and Mediation Board Manual of the latter of its intention to temporarily cease
Procedures for Conciliation and Preventive Mediation its operation due to alleged commission by a
Cases) registered labor union of unfair labor practice
act/s or a deadlock in collective bargaining
Conciliation-Mediation Case — refers to a negotiations. (Rule III (25), The Revised National
request for preventive mediation, notice of Conciliation and Mediation Board Manual of
strike or lockout and actual strike or lockout. Procedures for Conciliation and Preventive Mediation
(Rule III (5), The Revised National Conciliation and Cases, 2017 Ed)
Mediation Board Manual of Procedures for
Conciliation and Preventive Mediation Cases, 2017 Notice of Strike
Ed). Refers to the notification filed by a registered
labor union with the appropriate Regional
Preventive Mediation Branch informing the latter of its intention to go
Refers to the potential labor dispute subject for on strike due to alleged commission by the
conciliation and mediation assistance sought by employer of unfair labor practice act/s or a
either or both parties or upon the initiative of deadlock in collective bargaining negotiations.
the NCMB to avoid the occurrence of actual (Rule III (26), 2017 Revised National Conciliation
labor dispute. (Rule III (28), The Revised National and Mediation Board Manual of Procedures for
Conciliation and Mediation Board Manual of Conciliation and Preventive Mediation Cases)
Procedures for Conciliation and Preventive Mediation
Cases, 2017 Ed) Who may file a request for Preventive
Mediation, Notice of Strike or Lockout
How Initiated
By Filing a Notice or Request of Preventive The following may file a request for preventive
Mediation, as distinguished from a Notice of mediation, notice of strike or lockout:
Strike/Lockout; or a. The president or any authorized
representative of a certified or duly
By Conversion of the Notice of Strike or Lockout recognized bargaining representative in
into a Preventive Mediation case. (Chan, Bar cases of bargaining deadlocks and unfair
Reviewer on Labor Law, 4th Revised Edition, 2019,
labor practices.
p939)

230
b. In the absence of a certified or duly
recognized bargaining representative, the
president or any authorized representative
of a legitimate labor organization in the
establishment on grounds of unfair labor
practice.
c. The employer or any authorized
representative in cases of bargaining
deadlocks and unfair labor practices.
(Section 3, Rule IV, 2017 Revised National
Conciliation and Mediation Board Manual of
Procedures for Conciliation and Preventive
Mediation Cases)
Where to file a Request for Conciliation
and Mediation
A request for preventive mediation, notice of
strike or lockout shall be filed through personal
service or by registered mail/private couriers
with the Regional Branch having jurisdiction
over the workplace of the union members.
(Section 4, Rule IV, 2017 Revised National
Conciliation and Mediation Board Manual of
Procedures for Conciliation and Preventive Mediation
Cases)
Service of Notice
The party filing the notice shall serve the other
party/ies with a copy/ies of the notice either
through personal service or by registered
mail/private couriers.
Any notice which does not conform with the
procedural requirements of this and the
foregoing sections shall be deemed as not
having been filed and the party concerned shall
be so informed by the Regional Branch of the
Board. (Section 5, Rule IV, 2017 Revised National
Conciliation and Mediation Board Manual of
Procedures for Conciliation and Preventive Mediation
Cases)
Parties are bound by the Agreement
entered into
Parties are bound to honor any agreement
entered into by them, as it is the result of the
painstaking efforts made by the union,
management, and the Conciliator-Mediator.
(Conciliation-mediation. National Conciliation and
Mediation Board. (n.d.). Retrieved February 10,
2023, from
https://ncmb.gov.ph/services/conciliation-
mediation/)
Cases when the NCMB has the authority
to convert a Notice of Strike/Lockout into
a Preventive Mediation case
● Issues raised in the Notice of
Strike/Lockout are not strikable;
● The party which filed the Notice voluntarily
asks for the conversion
● Both parties to a labor dispute mutually
agree to have it subjected to Preventive
Mediation (Chan, Bar Reviewer on Labor Law,
4th Revised Edition, 2019, p.940)
Any strike/lockout subsequently staged after
the said conversion is deemed illegal, since it
does not comply with the requirements of a
valid strike/lockout. (Philippine Airlines Inc. vs.
Secretary of Labor, G.R. No. 88210, January 23,
1991)
Action on Notices Involving Issue/s
Cognizable by Grievance Machinery,
Voluntary Arbitration or the National
Labor Relations Commission
When it appears that the issues raised in the
notice of strike or lockout are proper subjects
of the grievance machinery, the conciliator-
mediator shall exert effort to convince the filer
to withdraw the case and take them up instead
in the grievance machinery/voluntary
arbitration or compulsory arbitration. (Section 6,
Rule V, The Revised National Conciliation and
Mediation Board Manual of Procedures for
Conciliation and Preventive Mediation Cases, 2017
Ed)
G. DOLE REGIONAL DIRECTORS
Regional Directors - They are duly
authorized representatives of the DOLE
Secretary in the DOLE regional offices. They are
in charge of the administration and
enforcement of labor standards within their
respective territorial jurisdictions.
231
Original and Exclusive Jurisdiction over exclusive original jurisdiction over all claims
the following cases: arising from ER-EE relations, other than
1. Small money claims cases arising from claims for employee's compensation, social
labor standards violations in an amount not security, medicare and maternity benefits.
exceeding P 5,000.00 and not accompanied (Brokenshire Memorial Hospital, Inc., vs.
with a claim for reinstatement under Article Minister of Labor and Employment, et. al., G.R.
129; No. 74621, February 7, 1990)
2. Labor standards enforcement cases under
Article 128; Jurisdiction of DOLE Regional Director
3. Occupational safety and health violations; if the employer contests the order
4. Registration of unions and cancellation
thereof, cases filed against unions and The adjudicatory power provided by Article
other labor relations related cases; 129 to the DOLE Regional Director may not
5. Complaints against private recruitment and be exercised by him where the employer
placement agencies (PRPAs) for local contests the labor regulation officers'
employment; and findings and raises issues which cannot be
6. Cases submitted to them for voluntary resolved without considering evidentiary
arbitration in their capacity as ExOfficio matters not verifiable in the normal course
Voluntary Arbitrators (EVAs) under of inspection.
Department Order No. 83-07, Series of
2007. In such an event, the case will have to be
referred to the corresponding Labor Arbiter
1. Small money claim cases arising from for adjudication, since it falls within the
labor standards violations in an amount not latter's exclusive original jurisdiction.
exceeding P5,000.00 and not accompanied (Brokenshire Memorial Hospital, Inc., vs.
Minister of Labor and Employment, et. al., G.R.
with a claim for reinstatement. (Art. 129,
No. 74621, February 7, 1990)
Labor Code, as amended)
2. Visitorial Power
Jurisdiction of the DOLE Regional
The DOLE Regional Directors shall have:
Director under Art. 129
a. access to employer’s records and
premises at any time of the day or
Under Article 129, the Regional Director or
night, whenever work is being
any of the duly authorized hearing officers
undertaken therein; and
of DOLE has jurisdiction over claims for
b. the right:
recovery of wages, simple money claims
i. to copy from said records;
and other benefits, provided that the claim
ii. to question any employee and
is filed by an employee or person employed
investigate any fact, condition or
in domestic or household service or house
matter which may be necessary to
helper and the following must concur:
determine violations or which may
1. The claim must arise from ER-EE
aid in the enforcement of the Labor
relationship;
Code and of any labor law, wage
2. The claimant is no longer employed
order, or rules and regulations
and does not seek reinstatement;
issued pursuant thereto.
3. The aggregate money claim of each
employee or domestic worker or
The DOLE Regional Director, in cases where the
kasambahay does not exceed
employer-employee relationship still exists,
P5,000.00.
shall have the power:
a. to issue compliance orders to give effect to
In the absence of any of the three (3)
the labor standards provisions of the Labor
requisites, the Labor Arbiters have

232
 Code and other labor legislations based on
the findings of labor employment and
enforcement officers or industrial safety
engineers made in the course of inspection.
b. to issue writs of execution to the
appropriate authority for the enforcement
of their orders, except in cases where the
employer contests the findings of the labor
employment and enforcement officer and
raises issues supported by documentary
proofs which were not considered in the
course of inspection, in which case, the
contested case shall fall under the
jurisdiction of the Labor Arbiter to whom it
should be endorsed by the Regional
Director.
c. to order stoppage of work or suspension of
operations of any unit or department of an
establishment when non-compliance with
the law or implementing rules and
regulations poses grave and imminent
danger to the health and safety of workers
in the workplace. Within 24 hours, a
hearing shall be conducted to determine
whether an order for the stoppage of work
or suspension of operations shall be lifted
or not. In case the violation is attributable
to the fault of the employer, he shall pay
the employees concerned their salaries or
wages during the period of such stoppage
of work or suspension of operation.
d. to require employers, by appropriate
regulations, to keep and maintain such
employment records as may be necessary
in aid of his visitorial and enforcement
powers under the Labor Code.
For the valid exercise of the visitorial and
enforcement powers provided under Article
128, the following three (3) requisites should
concur:
1. The employer-employee relationship still
exists at the time of the initiation of the
action;
2. The findings in question were made in the
course of inspection, regardless of whether
it was initiated by complaint or routine
inspection ; and
3. The employees have not yet initiated any
claim or complaint with the DOLE Regional
Director under Article 129 (Small money
claims not exceeding P 5,000.00) , or the
Labor Arbiter, under Article 217 (Money
claims exceeding P 5,000.00)
3. Occupational Safety and Health
Violations
The DOLE Regional Director has original
jurisdiction to issue
1. order of stoppage of work or
2. suspension of operation of any unit or
department or the establishment if
there exists in the workplace a
condition that poses grave and
imminent danger to the health and
safety of the workers which cannot be
voluntarily corrected by the employer
within a reasonable period.
4. Union registration-related cases:
a. Applications for union registration of
independent unions, local chapters and
workers’ associations (Section 3, Rule III
of the Mediation-Arbitration Rules)
b. Petition for denial of application for
registration for said unions (Art. 243
[238], Labor Code, as amended)
c. Petitions for revocation or cancellation
of registration of said unions (Art. 245
[236], Labor Code, as amended)
5. Complaints against PRPAs for Local
Employment
The DOLE Regional Directors have original
jurisdiction over complaints against a
licensee and/or its authorized
representative/s which are filed in writing
and under oath with the
Regional/District/Provincial Office having
jurisdiction over the place:
1. where the Private Recruitment and
Placement Agencies (PRPAs) /Branch
Office is located, or
2. where the prohibited act was
committed, or
3. at complainant’s place of residence, at
the option of the complainant;
provided, that the Regional Office
233
 which first acquires jurisdiction over Intervention for Dispute Avoidance (AIDA)
the case shall do so to the exclusion of initiative; and
the others. 4. Upon agreement of the parties, any other
labor dispute may be submitted to the EVAs
6. Denial of registration of single-enterprise for voluntary arbitration.) (D.O. 83-17, Series
CBAs or petitions for deregistration thereof of 2007).
(Sec. 5, Rule XVII DO No. 40-03 as amended)
Article 128 vs Article 129
7. Request for SEBA certification when made Article 128 Article 129
in an unorganized establishment with only
1 legitimate union (Sec. 4, Rule VII, DO No. visitorial and adjudication power of
40-03 as amended) enforcement powers of the Regional Directors
the DOLE Secretary or or any duly authorized
8. Operational safety and health conditions DOLE Regional hearing officers of
(can order stoppage or suspension of Directors DOLE
operations) (Art. 128; Book. IV, Rule II, Sec.
8) ER-EE relationship is a ER-EE relationship is
required severed
9. Cases related to private recruitment
● inspection of ● power to hear
and placement agencies (PRPAs) for
establishments and decide
local employment, such as: and any claim for
a. Applications for license or denial; (Sec. ● the issuance of recovery of
8, DO 141-14, Series of 2014) orders to compel wages, simple
b. Complaints for suspension or compliance with (small) money
cancellation of license by reason of ○ labor standards, claims, and
administrative offenses; (Sec. 54, in ○ wage orders and other benefits
relation to Sec. 51, DO 141-14, Series of ○ other labor laws
2014) and regulations
c. Complaints for illegal recruitment;
(Sec.45, DO 141-14, Series of 2014) and
Appeal from the orders of DOLE Regional
d. Petition for closure of agency (Sec. 47,
Director
DO 141-14, Series of 2014)
If the decision of the DOLE Regional Director is
issued pursuant to Article 128 which basically
10. Cases submitted for voluntary
involves an inspection case, the appeal should
arbitration in their capacity as Ex-
be made to the DOLE Secretary. But if the
Officio Voluntary Arbitrators (EVAs)
decision of the DOLE Regional Director is made
in accordance with Article 129 which does not
Jurisdiction of Regional Directors and
involve an inspection case, the appeal should
Assistant Regional Directors for
be made to the NLRC.
Voluntary Arbitration in their capacity as
Ex-Officio Voluntary Arbitrators:
H. DOLE SECRETARY
1. All grievances arising from the
interpretation or implementation of the CBA
1. Jurisdiction
2. All grievances arising from the
interpretation or enforcement of company
Original Jurisdiction of DOLE Secretary
personnel policies which remain unresolved
1. Petition to assume jurisdiction over labor
after exhaustion of the grievance
disputes affecting industries indispensable
procedure;
to the national interest.
3. Cases referred to them by the DOLE
Secretary under the DOLE’s Administrative

234
2. Petition to certify national interest cases to
the NLRC for compulsory arbitration.(Art.
278(g), Labor Code)
3. Petition to suspend effects of termination
(Art 292(g), Labor Code, as amended)
4. Administrative Intervention for Dispute
Avoidance (AIDA) cases (DOLE Circular No
1, Series of 2006)
- This is a new form of dispute
settlement introduced by the DOLE
Secretary under DOLE Circular No. 1,
Series of 2006, issued on August 11,
2006 by former DOLE Secretary Arturo
D. Brion, later a distinguished member
of the Highest Court.
- This was issued in line with the
objectives of R.A. No. 9285, otherwise
known as the “Alternative Dispute
Resolution Act of 2004” [approved on
April 2, 2004], Executive Order No. 523
dated April 07, 2006 and the mandate
of the DOLE to promote industrial
peace.
5. Voluntary arbitration cases (DOLE Circular No
1, Series of 2006)
6. Contempt cases (Art 231 [255])
- Art 231 [255]. Contempt powers of the
Secretary of Labor. In the exercise of
his powers under this Code, the
secretary of Labor may hold any person
in direct or indirect contempt and
impose the appropriate penalties
therefor.
Appellate Jurisdiction of DOLE Secretary
1. Offices from which appeals may originate
a. DOLE Regional Directors
b. Med-Arbiters
c. Director of the Bureau of Labor
Relations (BLR)
d. Philippine Overseas Employment
Administration (POEA)
Cases Not Appealable to the DOLE
Secretary
a. Those rendered by Labor Arbiters that are
appealable to the Commission (NLRC)
which has exclusive appellate jurisdiction
thereover;
b. Those rendered by the Commission (NLRC)
since they can be elevated directly to the
CA by way of a Rule 65 certiorari petition;
c. Those rendered by the BLR Director in the
exercise of his appellate jurisdiction since
they can be brought directly to the CA
under Rule 65 certiorari petition;
d. Those rendered by DOLE Regional
Directors under Article 129 of the Labor
Code since they are appealable to the
NLRC;
e. Those issued by DOLE Regional Directors in
their capacity as Ex-Officio Voluntary
Arbitrators (EVAs) since they can be
brought directly to the CA under Rule 43 of
the Rules of Court; and
f. Those rendered by Voluntary Arbitrators
which are appealable directly to the CA
under Rule 43 of the Rules of Court.
2. Visitorial and Enforcement Powers
1. Visitorial Power
a. Access to employer‘s records and
premises at any time of the day or
night, whenever work is being
undertaken;
b. To copy from said records
c. Question any employee and investigate
any fact, condition, or matter which
may be necessary to determine
violations or which may aid in the
enforcement of the Labor Code and of
any wage order, rules, and regulations
issued pursuant thereto.
2. Enforcement Power
a. Issue compliance orders
b. Issue writs of execution for the
enforcement of their orders, except in
cases where the Employer contests the
findings of the labor officer and raise
issues supported by documentary proof
which were not considered in the
course of inspection
c. Order stoppage of work or suspension
of operation when non-compliance with
the law or implementing rules and
regulations poses grave and imminent
danger to health and safety of workers
in the workplace.
235
 d. Require Employers to keep and
maintain such employment records as
may be necessary in aid to the visitorial
and enforcement powers.
e. Conduct hearings within 24 hours to
determine whether:
i. An order for stoppage of work or
suspension of operations shall be
lifter or not; and
ii. Employer shall pay the concerned
Employees their salaries in case
the violation is attributable to his
fault (As amended by RA 7730);
(Guico vs. Secretary, G.R. No.
131750, November 16, 1998).
3. Power to Suspend Effects of
Termination
1. Grounds - The DOLE Sec may suspend
the effects of termination pending
resolution of the dispute in the event of
a prima facie finding by the appropriate
official of the DOLE before whom the
dispute is pending that:
a. The termination may cause a
serious labor dispute; and/or
b. The termination is in
implementation of a mass lay-off.
2. Rationale
- To bring parties to the status quo ante
litem (state of relationship before
termination)
- workers will be litigating the issue of the
validity or legality of their termination on
more or less equal footing with the
employer since they will be immediately
reinstated and accordingly not be
deprived of their wages while the
litigation is on-going;
3. Suspension of the effects of termination will
necessarily result in the immediate
reinstatement of the terminated
employees. An order of reinstatement
pending resolution of the case may thus be
issued by the DOLE Secretary pursuant to
this power;
4. Power of the DOLE Secretary granted under
Article 277(b) distinguished from his power
to assume or certify labor disputes
involving industries indispensable to the
national interest under Article 263(g)
a. First, the exercise of the power to
suspend the effects of termination
involves only the issue of termination
of employment which may cause a
serious labor dispute or is in
implementation of a mass lay-off; while
the power to assume or certify labor
disputes is applicable to all labor
disputes, irrespective of the grounds
therefor, provided such labor disputes
will cause or likely to cause strikes or
lockouts in industries indispensable to
the national interest.
b. Second, the former requires the
conduct of preliminary determination of
the existence of prima facie evidence
that the termination may cause a
serious labor dispute or is in
implementation of a mass lay-off to be
conducted by the appropriate official of
the DOLE before whom the termination
dispute is pending; while the latter
does not require such preliminary
prima facie determination. In fact, prior
notice and hearing are not required
before the DOLE Secretary may issue
an assumption or certification order.
c. Third, the “serious labor dispute”
contemplated under the former may or
may not involve a strike or lockout;
while the labor dispute referred to in
the latter will cause or likely to cause a
strike or lockout.
d. Fourth, the former may be exercised
in cases of termination of employment
for as long as any of the two (2)
grounds mentioned in Article 277(b)
exists, irrespective of the nature of the
business of the employer; while the
latter may only be exercised in
industries indispensable to the national
interest.
e. Fifth, the remedy under the former is
immediate reinstatement pending
resolution of the termination case;
while in the latter, the remedy is the
automatic return to work of the strikers
or locked-out employees, if the strike
236
 or lock-out is on-going at the time of
the issuance of the
assumption/certification order or the
enjoining of the strike or lockout, if one
has not taken place, pending the
resolution of the issues raised in the
notice of strike or lockout.
4. Remedies
The aggrieved party from a decision of the
SOLE may file one motion for
reconsideration within ten (10) days from
receipt thereof. (PIDLTRANCO Service
Enterprises Inc v. PWU – AGLO, G.R. No.
180962 (2014)
If the motion for reconsideration is denied, the
party may appeal via Rule 65 to the CA 60 days
from receipt of the denial. Upon denial, the
party may proceed via Rule 45 to the SC. (Rule
65, ROC; St. Martin Funeral Home v. NLRC, G.R. No.
130866 (1998)
Clearly, before a petition for certiorari under
Rule 65 of the Rules of Court may be availed of,
the filing of a motion for reconsideration is a
condition sine qua non to afford an opportunity
for the correction of the error or mistake
complained of. So also, considering that a
decision of the Secretary of Labor is subject to
judicial review only through a special civil action
of certiorari and, as a rule, cannot be resorted
to without the aggrieved party having
exhausted administrative remedies through a
motion for reconsideration, the aggrieved
party, must be allowed to move for a
reconsideration of the same so that he can
bring a special civil action for certiorari before
the Supreme Court. (PIDLTRANCO Service
Enterprises Inc, supra.)
I. VOLUNTARY ARBITRATOR
Voluntary Arbitration
A mode of settling labor-management disputes
in which the parties select a competent, trained
and impartial third person who is tasked to
decide on the merits of the case and whose
decision is final and executory. (Grievance
Machinery and Voluntary Arbitration - DOLE)
Who is a Voluntary Arbitrator
1. Any person who has been accredited by the
National Conciliation and Mediation Board
(“NCMB” or “Board”) as such or;
2. Any person named or designated in the
CBA by the parties as their Voluntary
Arbitrator; or
3. A person chosen by the parties with or
without the assistance of the NCMB,
pursuant to a voluntary arbitration
4. One appointed by the NCMB in case either
of the parties to the CBA refuses to submit
to voluntary arbitration.
Generally, the arbitrator is expected to decide
only those questions expressly delineated by
the submission agreement. Nevertheless, the
arbitrator can assume that he has the
necessary power to make a final settlement
since arbitration is the final resort for the
adjudication of the disputes. (Ludo and Luym
Corp. vs. Saornido, G.R.No. 140960, January 20,
2003)
Voluntary Arbitrator v. Mediator
A mediator is a disinterested third party who
helps settle disputes involving terms and
conditions of a CBA. He/she is assigned and
paid by the State and is not selected by the
parties. He/she renders no final and binding
decision, but merely suggests solutions.
Voluntary arbitrators have no tenure of office
and are not politically appointed or elected.
Their primary function is to provide for a
process for the orderly labor-management
relations. (CHAN, Reviewer, supra, at 780)
Minimum Requirements to be accredited
as a Voluntary Arbitrator (I.B.1. NCMB
Revised Guidelines in the Accreditation
and Delisting of Voluntary Arbitrators)
1. Filipino citizen residing in the PH;
2. Bachelor‘s degree holder;
3. At least 5 years of experience in the field of
Industrial Relations;
4. NO pending criminal case involving moral
turpitude;
5. Completion of training on voluntary
arbitration by the NCMB.
237
Powers of Voluntary Arbitrators
1. Adjudicatory power - power to hold
hearings, receive evidence and take
whatever action is necessary to resolve the
issues subject of the dispute (No. 64, NCMB
Primer on Grievance on Settlement and
Voluntary Arbitration);
2. Compulsory Power - power to compel the
attendance of witnesses in a hearing called
for the purpose. They can issue subpoena
ad testificandum or duces tecum (No. 80,
ibid);
3. Power to conciliate and mediate - the
Voluntary Arbitrator should exert his best
efforts to conciliate or mediate in order to
aid the parties in reaching a voluntary
settlement of the dispute (No. 65, ibid);
4. Power to encourage the parties to enter
into a stipulation of facts (Sec. 2, Rule V,
NCMB Revised Procedural Guidelines in the
Conduct of Voluntary Arbitration Proceedings)
Voluntary Arbitrator in Quasi-judicial
Capacity
A voluntary arbitrator by the nature of her
functions acts in a quasi-judicial capacity.
(Guagua National Colleges v. Court of Appeals, G.R.
No. 188492, August 28, 2018)
Although not a part of a government unit or
personnel of the Department of Labor and
Employment, a Voluntary Arbitrator, by the
nature of his functions, acts in a quasi-judicial
capacity. He is a means by which the
government acts, or by which a certain
government act or function is performed. He
performs a state function pursuant to a
governmental power delegated to him under
the Labor Code. (Luzon Development Bank vs.
Association of Luzon Development Bank Employees,
G.R. No. 120319, October 6, 1995)
Jurisdiction
1. Original and Exclusive Jurisdiction
a. Unresolved grievances arising from the
interpretation or implementation of the
CBA.
b. Unresolved grievances arising from the
interpretation or enforcement of
company personnel policies.
c. Violations of the CBA which are not
gross in character.
d. Other labor disputes, including unfair
labor practices and bargaining
deadlocks, upon agreement of the
parties.
e. National interest cases.
f. Wage distortion issues arising from the
application of any wage orders in
organized establishments.
g. Unresolved grievances arising from the
interpretation and implementation of
the Productivity Incentive Programs
under R.A. No. 6971.
● Rights Disputes
Unresolved grievances arising from the
interpretation or implementation of the
CBA, unresolved grievances arising from
interpretation or enforcement of company
personnel policies, as well Violations of the
CBA which are not gross in character are
called ―” rights disputes”
These disputes contemplate the existence of a
CBA already concluded or a situation in which
no effort is made to bring about a formal
change in its terms or to create a new one.
The dispute relates either to the meaning or
proper application of a particular provision
therein with reference to a specific situation or
to an omitted case.
● Interest Disputes
Bargaining deadlocks are often called
interest disputes.
Disputes over the formation of collective
agreements or efforts to secure them.
They arise where there is no such
agreement or where it is sought to change
the terms of one and therefore the issue is
not whether an existing agreement controls
the controversy
2. Jurisdiction over other Labor Disputes
The Voluntary Arbitrator panel of Voluntary
Arbitrators may also hear and decide all
other labor disputes, including unfair labor
238
 practices, and bargaining deadlocks. (Art.
275, Labor Code)
That is why before or at any stage of the
compulsory arbitration process, parties to a
labor dispute may agree to submit their
case to voluntary arbitration.
3. Jurisdiction over National Interest
Cases
SOLE‘s power of assumption of jurisdiction
or certification to the NLRC of labor
disputes affecting industries indispensable
to the national interest provides that before
or at any stage of the compulsory
arbitration process, the parties may opt to
submit their dispute to voluntary
arbitration. (Art. 278, Labor Code)
This means that even if the case has
already been assumed by the DOLE
Secretary or certified to the NLRC for
compulsory arbitration, or even during its
pendency therewith, the parties thereto
may still withdraw the case from the SOLE
or NLRC, as the case may be, and submit it
to a Voluntary Arbitrator for voluntary
arbitration purposes.
4. Jurisdiction over Wage Distortion
Cases
In organized establishments, the
employer and the union are required to
negotiate to correct the wage distortion.
Any dispute arising from such wage
distortion should be resolved through the
grievance procedure under the CBA and if
it remains unresolved, through voluntary
arbitration (Art 124, Labor Code, as
amended)
In unorganized establishments, where
there are no CBAs or recognized or certified
collective bargaining unions, the jurisdiction is
with the Labor Arbiter. (Art 124, Labor Code)
Some Principles
Cases cognizable by Voluntary Arbitrators in
their original jurisdiction but ERRONEOUSLY
filed with Labor Arbiters, DOLE Regional Offices
or NCMB should be disposed of by referring
them to the Voluntary Arbitrators or panel of
Voluntary Arbitrators mutually chosen by the
parties.
Cases cognizable by Voluntary Arbitrators but
filed with regular courts should be dismissed.
The well-entrenched rule is that when a case
does not involve the parties to a CBA (referring
to the employer and the bargaining union), it is
not subject to voluntary arbitration. While
individual or group of employees, without the
participation of the union, are granted the right
to bring grievances directly to the employer,
they cannot submit the same grievance, if
unresolved by the employer, for voluntary
arbitration without the union’s approval and
participation. It is the union which is the party
to the CBA, and not the individual or group of
employees. (Tabigue vs. International Copra Export
Corporation, G.R. No. 183335, December 23, 2009)
Pursuant to Article 260 of the Labor Code, the
parties to a CBA shall name or designate their
respective representatives to the grievance
machinery and if the grievance is unsettled in
that level, it shall automatically be referred to
the voluntary arbitrators designated in advance
by parties to a CBA. Consequently, only
disputes involving the union and the
company shall be referred to the
grievance machinery or voluntary
arbitrators.”
Generally, the arbitrator is expected to decide
only those questions expressly delineated by
the submission agreement. Nevertheless, the
arbitrator can assume that he has the
necessary power to make a final settlement
since arbitration is the final resort for the
adjudication of disputes. A voluntary arbitrator
is not part of the governmental unit or labor
department's personnel, said arbitrator renders
arbitration services provided for under labor
laws. (Ludo & Luym Corp. u. Saornido, G.R. No.
140960, January, 20, 2003)
239
Decision of Voluntary Arbitrator is J. PRESCRIPTION OF ACTIONS
Appealable
Cause of Prescriptive Where to
The decisions and awards of Voluntary Action Period initiate
Arbitrators, albeit immediately final and
executory, remained subject to judicial review Money claims 3 years from Labor
in appropriate cases through petitions for arising from ER- accrual of Arbiter
certiorari. (Guagua National Colleges v. Court of EE relationship cause of
Appeals, G.R. No. 188492, August 28, 2018) action

The mode of appeal from the Voluntary Illegal Dismissal/ 4 years from Labor
Arbitrator to the Court of Appeals is governed Illegal accrual of Arbiter
Termination cause of
by Rule 43 of the Rules of Court. (Samahan ng
action Regional
Manggagawa sa Hyatt vs. Buenaventura, G.R. No.
Director of
164939, June 6, 2011)
DOLE
(<P 5,000)

Unfair Labor 1 year from Labor

Practice the time the Arbiter
acts
complained of RTC
were (criminal)
committed

Other Offenses in 3 years from Labor

the Labor Code the time of Arbiter
commission

Simple Illegal 5 years RTC

Recruitment

Illegal 20 years
Recruitment
involving
economic
sabotage

The 10-day period stated in Article 276 should SSS SSS

be understood as the period within which the
1. Disability 10 years
party adversely affected by the ruling of the benefit claim
Voluntary Arbitrators or Panel of Arbitrators
may file a motion for reconsideration. Only after 2. Refusal or 20 years
the resolution of the motion for reconsideration neglect by the
may the aggrieved party appeal to the CA by employer in the
filing the petition for review under Rule 43 of remittance of
the Rules of Court within 15 days from notice contributions to
pursuant to Section 4 of Rule 43. (Guagua the SSS
National Colleges v. Court of Appeals, G.R. No.
188492, August 28, 2018)
GSIS GSIS

240

1. Claims for life Imprescriptibl
and retirement e 
benefits
2. Other claims
for benefits 4 years
Employee’s 3 years ECC
Compensation
The three-year prescriptive period for service
incentive leave commences, not at the end of
the year when the employee becomes entitled
to the commutation of his service incentive
leave, but from the time when the employer
refuses to pay its monetary equivalent after
demand of commutation or upon termination of
the employee's services, as the case may be.
(Santos v. Bicol Apparel Corp., G.R. No. 226259,
October 19, 2022)
General Rule: Criminal offenses penalized
under the Labor Code and its implementing
rules and regulations prescribes in three (3)
years from the date of commission of the
violation or from discovery thereof. It may be
reckoned from the institution of judicial
investigation and punishment. (People vs Duque,
GR No. 100285, August 13, 1992)
Exception: ULP prescribes in one (1) year
form the date of commission; otherwise, they
shall be forever barred. However, the running
of the one-year period is interrupted during the
pendency of the labor case (Art. 305, Labor
Code).
1. MONEY CLAIMS
Money claims under Art. 306 of the Labor Code,
as amended, include those arising from:
- Laws
- Incremental proceeds from tuition
increases
- Overseas employment of OFWS.
Article 306 of the Labor Code covers claims for:
 overtime pay,
 holiday pay,
 service incentive leave pay,
 bonuses,
salary differentials,
 and illegal deductions by an employer.
It does not cover amounts which were merely
retained by the employer from the employees'
wages as security deposits to answer for future
obligations such as deficiencies in boundary
payments, because these amounts remained to
be the employees' money, unless utilized for its
purpose in accordance with the law. (Hyatt Taxi
Services, Inc. v. Rull, Jr., G.R. No. 246256, June 16,
2021)
Exception
The prescriptive period would be counted from
the date of last promise to pay under the
Doctrine of Promissory Estoppel.
Promissory Estoppel which may arise from the
making of a promise even though without
consideration, if it was intended that the
promise should be relied upon. If in fact it was
relied on, a refusal to enforce it would virtually
sanction the perpetration of fraud or would
result in other injustice. It presupposes the
existence of a promise on the part of one
against whom estoppel is claimed. The promise
must be plain and unambiguous and sufficiently
specific so that the court can understand the
obligation assumed and enforce the promise
according to its terms. (Accessories Specialist, Inc.
vs. Alabanza, G.R. No. 168985, July 23, 2008)
In order to make out a claim of promissory
estoppel, a party bears the burden of
establishing the following elements: (1) a
promise was reasonably expected to induce
action or forbearance; (2) such promise did, in
fact, induce such action or forbearance; and (3)
the party suffered detriment as a result. (Ibid)
2. ILLEGAL DISMISSAL
- The prescriptive period of illegal
dismissal is four (4) years. The legal
basis is not Art. 306 of the Labor Code,
as amended, but Art. 114 of the Civil
Code. (Callanta vs. Carnation Philippines,
G.R. No. 70615, February 29, 1986)
241
3. UNFAIR LABOR PRACTICES PD No. 851, as amended, provides that it shall
- The prescriptive period of illegal be paid not later than December 24 of every
dismissal is four (4) years. The legal year.
basis is not Art. 306 of the Labor Code,
On Other Claims
as amended, but Art. 114 of the Civil
Code. (Callanta vs. Carnation Philippines, If the employees failed to allege that they had
G.R. No. 70615, February 29, 1986) made previous demands to their employers for
payment of their claims. The commencement
4. OFFENSES UNDER THE LABOR CODE of the prescription period shall be reckoned
from the time the employer-employee
Offenses penalized under the Labor Code relationship is severed. (Santos v. Bicol Apparel
and the rules and regulations issued Corp., G.R. No. 226259, October 19, 2022)
pursuant thereto shall prescribe in three (3)
Subject to Interruption
years. (Article 305, Labor Code)
The three-year period may be interrupted when
5. ILLEGAL RECRUITMENT (1) a complaint is filed, (2) a written
extrajudicial demand is made, or (3) the
Illegal recruitment prescribes in five (5) employer makes a written acknowledgment of
years, except in illegal recruitment its debt. (Santos v. Bicol Apparel Corp., G.R. No.
constituting economic sabotage such as 226259, October 19, 2022)
syndicated or large-scale which prescribes
in twenty (20) years. (Section 7, R.A. 10022) For ULP cases, the running of the one (1) year
General Law on Prescription prescriptive period is interrupted during the
pendency of the labor proceeding.
The general law on prescription under Article
1150 of the Civil Code applies:
Article 1150. The time for prescription for all
kinds of actions, when there is no special
provision which ordains otherwise, shall be
counted from the day they may be
brought.
Commencement of Prescriptive Period
On Monetary Claims
The three-year prescriptive period to file the
complaint for money claims arising from an
employer-employee relationship shall
commence from the time that the claim
becomes a legal possibility, or when the
claim was unlawfully withheld by the
employer.
For the unpaid wage differentials, overtime
pay, and holiday pay, petitioners' cause of
action accrued the day after they received their
respective wages, since that is when the claim
had ripened into a legal possibility. As for the
13th month pay, the cause of action for
payment ripens every 25th of December, since

242