CHAPTER IV

LABOR LAW AND SOCIAL LEGISLATION

unions, associations, or societies for purposes not contrary to law shall not be abridged.

3. "Section 10. No law impairing the obligation of contracts shall be passed.

4. "Section 16. All persons shall have the right to a speedy disposition of their cases before all judicial,
quasi- judicial, or administrative bodies.

5. "Section 18.

"XXX XXX

"No involuntary servitude in any form shall exist except as a punishment for a crime whereof the
party shall have been duly convicted." (2nd paragraph)

Article XIlI - Social Justice, 1987 Constitution

1. "Section 2. The promotion of social justice shall include the commitment to create economic
opportunities based on freedom of initiative and self-reliance.

2. "Section 3. The State shall afford full protection to labor, local or overseas, organized and
unorganized and promote full employment and equality of employment opportunities for all.

"It shall guarantee the rights of all workers to self- organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They
shall be entitled to security of tenure, humane conditions of work and a living wage. They shall also
participate in policy and decision-making processes affecting their rights and benefits as may be provided
by law.

"The State shall promote the principle of shared responsibility between workers and employers
and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce
their mutual compliance therewith to foster industrial peace.

"The State shall regulate the relations between workers and employers, recognizing the right of
labor to its just share in the fruits of production and the right of enterprises to reasonable returns on
investments and to expansion and growth.

3. "Section 13. The State shall establish a special agency for disabled person for their rehabilitation, self.
development, and self-reliance, and their integration into the mainstream of society.
4. "Section 14. The State shall protect working women by providing safe and healthful working conditions,
taking into account their maternal functions, and such facilities and opportunities that will enhance their
welfare and enable them to realize their full potential in the service of the nation.

Civil Code of the Philippines provisions on Labor

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.

2. "Article 1701. Neither capital nor labor shall act oppressively against the other, or impair the interest or
convenience of the public.

3. "Article 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of
the safety and decent living for the laborer.

4. "Article 1703. No contract which practically amounts to involuntary servitude, under any guise
whatsoever, shall be valid."

These cited provisions somewhat sum up what Labor Law is all about. Through the intervention of
the State, a balance has to be attained between the interests of capital vis-a-vis the interests lithe laborer
do worker, With such aim in mind, the country saw the promulgation of the Labor Code of the Philippines,
which provided for a two tiered approach to labor - labor standards and labor relations.

Hence, Books 1 to 4 of the Labor Code is mainly concerned with labor standards while the
remaining Books 5 to 6 focuses on labor relations.

Yet it should be borne in mind that there is no real demarcation line between the two (2) since
both complement the other, labor relations cannot stand on its own and the same goes with labor
standards.

Hence, these two (2) general areas of labor law should be studied in tandem.

BALANCE BETWEEN LABOR AND CAPITAL

One essential feature of labor laws is all doubts in the interpretation and implementation of the
provisions of the Labor Code and other labor-related statutes shall be resolved in favor of labor.
 This statutory pronouncement under the Labor Code underlines the state's commitment to the
constitutional mandate of providing full protection to labor since it has affirmed that labor is a primary
social economic force.

This mandate, however, should not be taken to mean that capital will always be at the losing end
of the equation. This has to be reconciled with another constitutional mandate to harmonize and balance
the needs and demands from both labor and capital since capital is recognized as having an indispensable
role in national development.

It has to be understood that labor laws are not meant to place the laborer above the employer, nor
to favor labor over capital.

Both are essential cogs in the wheels of national development, and should be treated equally.

Labor laws are there only to protect the rights of labor against unscrupulous employers as well as
to protect employers from abusive employees.

It should be noted that the protection provided under the Labor Laws goes both ways, i.e., for the
laborer and the employer.

One good example to illustrate this point is in termination of employment. Here a qualified
employee is granted security of tenure and cannot be removed except for authorized and legal causes.
This does not mean that an employer is to be burdened with undesirable employees, the Labor Code
provides for the grounds where an employer can rightfully initiate disciplinary proceedings against an
employee, which necessarily include termination of employment.
EMPLOYER-EMPLOYEE RELATIONSHIP

The existence of an employer-employee relationship can be determined through the existence of four
(4) elements that are determinative of such a relationship as follows:
1. Selection and engagement of the employee;
2. Payment of wages;
3. Power of dismissal; and
4. Power to control employee as to the means and methods the work is to be accomplished.

The fourth, which is commonly referred to as the "Control Test," is deemed the most important
indicator that there exists an employer-employee relationship.

It should be noted that control by the employer need not be actually exercised in order to be
determinative of an employer- employee relationship. It is sufficient that such power is reserved to the
employer although the use of the same has never arisen.
CONSTRUCTION IN FAVOR OF LABOR

Article 4 of the Labor Code specifically states that 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.
If there is doubt in the meaning of legal and contractual provisions of a labor contract, said doubt
shall be resolved in favor of the labor sector. Conversely, if the provision is clear and unambiguous, then it
must be applied in accord with the express terms of the contract. (Meralco v. NRC, GR No. 78763, July 12,
1989)

MANAGEMENT RIGHTS

Management, as an incident to the conduct of its business has certain management rights and
prerogatives, and if practiced properly and in good faith, is protected by labor laws. Some of the more
common management prerogatives are as follows:

1. Right to selection of employee;

2. Right to discipline employees;
3. Right to prescribe company rules;
4. Right to transfer or re-assign employees; and
5. Right to determine company policy.
Management prerogative however is subject to limitations provided by the following: (1) law, (2)
contract or collective bargaining agreements, and (3) general principles of fair play and justice. (Mendoza
v. Rural Bank of Lucan, GR No. 155421, July 7, 2004)

KINDS OF EMPLOYMENT
The Labor Code and jurisprudence identified the kinds of employees, as follows:

1. Regular employees – referring to those who have been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer. (Article 295, Labor
Code)

2. Casual employees – referring to those who are not regular, project or seasonal employees. (Article
295, Labor Code)

As a general rule, those performing activities not usually necessary or desirable in the employer's
usual business or trade are casual employees. (GMA Network vs. Pabriga, G.R. No. 176419, November 3.
27, 2013)
3. Probationary employees – those whose employment does not exceed six (6) months from the date
the employee started working unless it is covered by an apprenticeship agreement stipulating a
longer period. (Article 296, Labor Code)
4. Project employees those whose employment have 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. (Gapayao vs. Fulo, G.R. No. 193493, July 13, 2013)

5. Seasonal employees – those who work or perform services which are seasonal in nature and the
employment is for the duration of the season. (Article 295, Labor Code)

6. Fixed-term employees those whose employment contract specifies that the same will last only for
a definite period. (Brent School vs. Zamora, G.R. No. 48494, February 5, 1990)

7. Security guards – referring to any person who offers or renders personal service to watch or secure
a residence, business establishment, building compound, any other area or property; or inspects,
monitors or performs body checks or searches of individuals or baggage and other forms of
security inspection. DO. No. 150-16, Section 2, h)

8. Floating status – means an indefinite period of time when employees do not receive anv salary or
financial benefit provided by law. (Agro Commercial Security Services Agency, Inc. Vs. NLRC, G.R.
Nos. 82823- 24, July 31, 1989)

The law, however, provides that if an employee who has rendered at least one (1) year of service,
whether the same has been continuous or broken, he 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.

Regarding "Overseas Employment," Article 18 of the Labor Code provides that direct hiring of
Filipino workers for overseas employment is not allowed, except:

1. Members of the Diplomatic Corps;

2. International Organizations;
3. Other employers as may be provided by DOLE; and
4. Name hires (individual workers who secure contracts abroad for employment through their
own efforts and representations without assistance from any agency. Their hiring, nonetheless,
shall pass through the POEA for processing purposes). (POEA Rules Governing Overseas
Employment as amended in 2002)

The reasons why contracts of name hires should pass through the POEA are as follows:

1. To provide the best terms and conditions of work for the employee;
2. To provide the foreign employer with qualified Filipino workers as well.
 Article 22, Labor Code provides that all overseas workers are required to remit a portion of their
foreign exchange earnings ranging from 50% to 80% thereof, depending on their kind of jobs. (POEA
Rules)

Exceptions to requirements under Article 22, Labor Code are as follows:

a. If the worker's immediate family members, dependents or beneficiaries are residing with him
abroad;
b. Filipino servicemen working in military installations: and
c. Immigrants and Filipino professionals and employees working with United Nations agencies or
specialized bodies. (Resolution of Inter-Agency Committee for Implementation of Executive Order
No. 857)

RECRUITMENT AND PLACEMENT OF LOCAL AND MIGRANT WORKERS

Article 13(b) of the Labor Code defines that recruitment and placement refer to any act of canvassing,
enlisting, contracting transporting, utilizing, hiring or procuring workers, and includes referrals, contract
services, advertising or promising for employment locally or abroad whether for profit or not, when
undertaken by a non-licensee or non-holder of authority; Provided, That any such non-licensee or non-
holder of authority which in any manner offers or promises for a fee, employment to two or more persons
shall be deemed engaged in recruitment and placement.

Article 38 of the Labor Code specifically defines what activi- ties or acts constitute illegal recruitment
and illegal recruitment by a syndicate or in large scale.

TYPES OF ILLEGAL RECRUITMENT

The following are the types of illegal recruitment:

1. Simple Illegal Recruitment - • committed by or against one (1) or two (2) persons only. Where
illegal recruitment is proved but the elements of "large scale' or 'syndicate' are absent. The
accused can be convicted only of "'simple' illegal recruitment. (People vs. Sagun, G.R. No. 119076,
March 25, 2002)

2. Illegal Recruitment Involving Economic Sabotage

a. Syndicated - Illegal recruitment carried out by a group of any three (3) or more persons conspiring
or confederating with one another; and
b. Large Scale or qualified illegal recruitment committed against three (3) or more persons,
individually or as a group (IRR of RA No. 10022, Section 2, Rule IV)

APPRENTICE AND LEARNERS

 Apprentice is a person undergoing training for an approved apprenticeable occupation during an
established period assured by an apprenticeship agreement. (Section 4, RA No. 7796, "Technical
Education and Skills Development Authority')

Learners are persons hired as trainees in semi-skilled and other industrial occupations which are
non-apprenticeable and which may be learned through practical training on the job in a relatively short
period of time which shall not exceed three (3) months. (Article 73, Labor Code)

LABOR STANDARDS

These are provisions in the Labor Code and in other pertinent laws that provide for the minimum
standards as regard working conditions, hours of work, wages and other similar aspects of employment.
This is a matter of right on the part of the laborer and non- compliance by an employer of said
minimum standards would be met with the punitive force of the law.
Among the terms and conditions of employment that are covered under labor standards are as
follows:
1. Hours of Work;
2. Meal Periods;
3. Minimum Wage;
4. Payment of Wages;
5. Overtime;
6. Night Differential;
7. Weekly Rest Period;
8. Holiday Pay;
9. 13th Month Pay; and
10. Employment of Minors.

Title 1, Book Ill of the Labor Code deals with hours of work, weekly rest periods, holidays, service
incentive leaves and service charges, covers all employees in all establishments, whether for profit or not,
except the following:
1. Government employees;
2. Managerial employees;
3. Field personnel;
4. Members of the family of the employer who are dependent on him for support;
5. Domestic helpers or persons in the personal service of another; and
6. Workers paid by result.

HOURS OF WORK
The Labor Code provides that normal working hours shall not exceed eight (8) hours a day.
Hours worked shall include:
1. All time during which an employee is required to be on duty or to be at a prescribed workplace;
and
2. All time during which an employee is suffered or permitted to work.

Rest periods of short duration during working hours shall be counted as hours worked.

The following are other circumstances relative to normal working hours as provided in the Labor
Code:
1. Compressed Work Week (CWW) is valid, subject to regulations provided by the DOLE;
2. Health personnel in government service are not covered by this provision. Their employment
benefits are governed by Republic Act No. 7305;
3. Waiting time is considered hours worked if it is an integral part of one's work, or one is engaged by
his employer to wait; and
4. It is considered hours worked when an employee is required to remain on call in the employer's
premises or close thereto that he cannot use the time effectively for his own purpose.

MEAL PERIODS
Subject to such regulations as the Secretary of Labor and Employment 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.

Meal period should not be less than sixty (60) minutes. It is not compensable except when laborers
are required to standby for emergency work, or said meal hour is not for complete rest. Such period will
then be considered overtime period. (Pan American World Airways System v. Pan American Employees
Assn., GR No. L-16275, February 24, 1961)

NIGHT SHIFT DIFFERENTIAL

Every employee shall be paid a night shift differential of not less than ten percent (10%) of his
regular wage for each hour of work performed between ten o'clock in the evening and six o'clock in the
morning.
Night shift differential pay is given as an incentive because the employee is rendering work past his
supposed bedtime.

OVERTIME WORK
Work may be performed beyond eight hours a day provided that the employee is paid for the
overtime work, an additional compensation equivalent to his regular wage plus at least twenty- five
percent (25%) thereof.
 Work performed beyond eight hours on a holiday or rest day shall be paid an additional
compensation equivalent to the rate for the first eight hours on a holiday or rest day plus at least thirty
percent (30%) thereof.

It should be borne in mind that under the law, undertime is not allowed to be offset by overtime.
This is because the value paid for overtime work is more than the value paid for undertime work and if the
former is allowed to be offset by the latter, the worker is at a disadvantage.

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 under the Labor Code.

It is enough that an employee renders work. An express instruction from the employer is not a
requirement. However, on holidays or rest days, said express instruction is a requirement.

Entitlement to overtime pay does not preclude payment of night shift differential pay. (NARIC
Workers Union, GR No. L-12075, May 29, 1959)

EMERGENCY OVERTIME WORK

Any employee may be required by the employer to perform overtime work in any of the following
cases;

1. When the country is at war or when any other national or local emergency has been declared by
Congress or the Chief Executive;
2. When it is necessary to prevent loss of life or property or in case of imminent danger to public
safety due to an actual or impending emergency in the locality caused by serious accidents, fire,
flood, typhoon, earthquake, epidemic or other disaster or calamity;
3. When there is urgent work to be performed on machines, installation or equipment, in order to
avoid serious loss or damage to the employer or some other cause of similar nature;
4. When the work is necessary to prevent loss or damage to perishable goods;
5. Where 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.

Any employee required to render overtime work under the above conditions shall be paid the
additional compensation as provided for by law. An employee cannot as a rule be compelled to render
overtime work for his employer. But this is subject to conditions provided by Article 89 of the Labor Code,
as above- quoted.

WEEKLY REST DAY

 The Labor Code provides that 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 consecutive hours after
every six consecutive normal work days.
Moreover, the employer shall determine and schedule the weekly rest day of his employees,
subject to collective agreement and to such rules and regulations as the Secretary of Labor and
Employment may provide.
However, the employer shall respect the preference of employees as to their weekly rest day when
such preference is based on religious grounds.
All business establishments may operate or open for business on Sundays or holidays, provided
their employees are given their weekly rest days and benefits as provided for by law (Labor Code IRR)

WORK ON A REST DAY

The employer may require his employees to work on any day:

a. In case of actual or impending emergencies caused by serious accidents, 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 case 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 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."

When demanded by employer, and employee still fails to report for work during a rest day, a severe
disciplinary action or outright dismissal is not justifiable. More so when a justifiable ground exists for said
employee. (Romero Garments Manufacturing v. Minister of Labor and Employment, GR No. L-56176-77,
February 27, 1985)

HOLIDAY PAY
 Every worker shall be paid his regular daily wage during regular holidays, except in retail and service
establishment regularly employing less than ten (10) workers.

Moreover, the employer may require an employee to work on any holiday but such employee shall be
paid compensation equivalent to twice his regular rate.

As provided in Article 94 if the Labor Code, regular holidays or nationwide special days as follows:
 New Year's Day
 Mandy Thursday
 Good Friday
 Araw ng Kagitingan in April
 Labor Day (May 1)
 Independence Day (June 12)
 All Saints Day
 National Heroes Day in November
 Christmas Day (December 25)
 Rizal Day (December 30)
 Last day of the Year
 The day designated by law the holding a general elections.

For holiday pay to be compensable, the employee should have reported for work on the day
preceding the holiday. Holiday pay does not apply to employees of retail and service establishments
regularly employing not more than ten (10) workers. (Labor Code Implementing Rules and Regulations)

On July 24, 2007, Congress enacted Republic Act No. 9492, declaring certain days (fixed or flexible)
as special or regular holidays. Likewise, Congress enacted Republic Act No. 9849, providing that Eidul Fitr
shall be celebrated as a National Holiday, Thus, on August 16, 2012, President Benigno S. Aquino Ill issued
Proclamation No. 459, "Declaring the Regular Holidays, Special (Non-Working) Days, and Special Holiday
(For All Schools) for the Year 2013."

On December 28, 2017 RA 10966 was enacted into law declaring December 8, of every year as a
special non-working holiday in the entire country to commemorate the Feast of the Immaculate
Conception of Mary.

On November 15, 2019 President Rodrigo Roa Duterte has issued Proclamation No. 845 titled.
Declaring the Regular Holidays and Special (Non-Working) Days for the Year 2020.

Section 2. Of said Proclamation states that the proclamation declaring national holidays for the
observance of Eidul Fitr and Eidul Adha shall hereafter be issued after the approximate dates of the
Islamic holidays have been determined in accordance with the Islamic calendar (Hijra) or the Lunar
calendar, or upon Islamic astronomical calculations, whichever is possible or convenient. To this end, the
National Commission on Muslim Filipinos (NCMF) shall inform the Office of the President on which day
the holiday shall fall."

SERVICE INCENTIVE LEAVE

Every employee who has rendered at least one (1) year of service shall be entitled to a yearly
service incentive leave of five (5) days with pay.

Such grant shall not apply to those who are already enjoying the benefit herein provided, those
enjoying vacation leave with pay at least five (5) days and those employed in establishments regularly
employing less than ten (10) employees or in establishments exempted from granting this benefit by the
Secretary of Labor after considering the viability or financial condition of such establishment.

The grant of benefit in excess of that provided by law shall not be made a subject of arbitration or
any court or administrative action.

Service Incentive Leave can be converted to cash if not availed at the end of the year. This is to
encourage continuous work of the employees.

Vacation and Sick Leaves are not required by law. It is a management prerogative.

In addition to Maternity Leave, previously provided in RA 1161 as amended by RA 7322, Solo

Parent Leave under RA 8972 of the Solo Parents' Welfare Act of not more than seven (7) working days is
granted to any solo parent employee who has rendered service of at least one (1) year. Solo parent leave
is not convertible to cash in case it is not used. It must be pointed out that solo parent leave maybe
availed by any solo parent or individual who is left alone with the responsibility of parenthood based on
circumstances provided in the law.

Under RA 7322, a covered female employee shall be paid a daily maternity benefit equivalent to
100% of her present basic salary, allowances and other benefits of the cash equivalent of such benefit for
sixty (60) days.

Paternity Leave is granted to a married male employee allowing him seven (7) days leave on the
condition that his spouse has delivered a child or suffered a miscarriage. The purpose is for lending
support to the wife during the period of recovery and/ or in nursing of the newly born child. (Section 3, RA
No. 8187 "Paternity Leave Act of 1996”)

The Paternity Leave Benefit is not convertible into cash in of RA 8187) case it is not availed of;
neither it is cumulative. (Section 7, IRR of RA 8187)
 Special Leave Benefit (SLB) for women applies to a female employee's entitlement to two (2)
months leave with full pay from her employer based on her gross monthly compensation following
surgery caused by gynecological disorders. Provided, that she has had rendered continuous aggregate
employment service of at least six (6) months for the last twelve (12) months. (D.O. No. 112-A, Section 1,
Series of 2012)

Leave for Victims of Violence Against Women and Their Children is based on RA No. 9262, "Anti-
Violence Against Women and Their Children Act of 2004" (VAWC), referring to any act or a series of acts
committed by any person against a woman who is his wife, former wife, or against a woman with whom
the person has or had a sexual or dating relationship, or with whom he has a common child, or against her
child whether legitimate or illegitimate, within or without the family abode, which 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. (page 34, 2018 Handbook
on Workers' Statutory Monetary Benefits)

THE 105 DAY EXPANDED MATERNITY LEAVE LAW

On February 20, 2019, RA 11210, otherwise known as the "105-Day Expanded Maternity Leave
Law" was approved by President Rodrigo Roa Duterte.
The expanded maternity benefits under the new law are as follows:

a) 105 days maternity leave with full pay to all covered female workers in government and the
private sector, including those in the informal sector;
b) an option to extend for an additional thirty (30) days without pay;

c) additional fifteen (15) days maternity leave with full pay in case the worker qualities as a solo
parent under the Solo Parents' Welfare Act:

d) enjoyment of maternity leave cannot be deferred but should be availed of either before or
after the actual period of delivery in a continuous and uninterrupted manner, not exceeding
105 days;

e) granted to female workers in every instance Of pregnancy, miscarriage or emergency

termination of pregnancy; and

f) In case of miscarriage or emergency termination of pregnancy sixty (60) days maternity leave
with full pay shall be granted.

MINIMUM WAGE
 Wage refers to the remuneration or earnings, however designated, capable of being expressed in
terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other
method of calculating the same, which is payable by an employer to an employee under a written or
unwritten contract of employment for work done or to be done or for services rendered or to be rendered
and includes the fair and reasonable value, as determined by the Secretary of Labor and Employment of
board, lodging or other facilities customarily furnished by the employer to the employee. "Fair and
reasonable value" shall not include any profit to the employer, or to any person affiliated with the
employer."

Moreover, the minimum wage is the rate prescribed by the Regional Tripartite Wages and
Productivity Board (RTWPB).

Wage is compensation for skilled or unskilled work, while salary connotes compensation to a
higher class of work.

PAYMENT OF WAGES
The Labor Code prohibits the payment of wages by means of promissory notes, vouchers, coupons,
tokens, tickets, chits or any object other than legal tender, even when expressly requested by the
employee.

Payment of wages by check or money order, however, is allowed provided it is customary or is

necessary because of special circumstances as specified in appropriate regulations to be issued by the
Secretary of Labor or is stipulated in a collective bargaining agreement.

As to the frequency or time of payment, the law provides that wages shall be paid at least once
every two weeks or twice a month at intervals not exceeding sixteen (16) days.

If on account of force majeure or circumstances beyond the employer's control, payment of wages
on or within the time herein provided cannot be made, the employer shall pay the wages immediately
after such force majeure or circumstances have ceased.

No employer shall make payment with less frequency than once a month.

Finally, payment of wages shall be made at or near the place of undertaking, except as otherwise
provided by such regulations as the Secretary of Labor may prescribe under conditions to ensure greater
protection of wages.

An employer cannot exempt himself from liability to pay minimum wages because of poor financial
condition of the company. The payment of minimum wages is not dependent on the employer's capacity
to pay. (De Racho v. Municipality of Iligan, GR No. L-23542, January 2, 1968)
 13TH MONTH PAY
Thirteenth-month pay refers to one twelfth (1/12) of the basic salary of an employee within a
calendar year. Granted under Presidential Decree No. 851 on 16 December 1975, this benefit was granted
in order to protect the level of real wages from the ravage of worldwide inflation.
As such, all employers are hereby required to pay all their employees regardless of the nature of
their employment, a 13th- month pay not later than December 24 of every year.

It is worth noting that one special feature of this law is that the benefits granted shall not be
credited as part of the regular wage of the employees for purposes of determining overtime and premium
pay, fringe benefits, as well as premium contributions to the State Insurance Fund, social security,
Medicare and private welfare and retirement plans.

An employee who resigned or was terminated from work at any time before payment of the 13th
month pay, is still entitled to said pay in proportion to the time he worked during the year.
All rank-and-file employees in the private sector and government service who have worked for at
least one (1) month during the calendar year are entitled to receive 13th month pay regardless of their
position, designation or employment status.

In principle, 13th month pay is generally exempt from taxation. However, under the law (RA
10963), Section 32(B)(7) (e) of the NIRC, as amended prescribed limit to this exemption. The new
provisions stipulate that the 13th month pay and other equivalent benefits shall not be subject to tax for
maximum of P90,000.

DISCRIMINATION AGAINST WOMEN

It shall be unlawful for any employer to discriminate against any woman employee with respect to
terms and conditions of employment solely on account of her sex. The basis of the afore- quoted Article
133 (Labor Code) is Article Ill, Section 1 of the Constitution which mandates equal protection of the laws.
Article XIl1, Section 3 of the Constitution also assures Filipino workers of equal work opportunity.

On August 14, 2009, Congress enacted Republic Act No. 9710, "An Act Providing for the Magna
Carta of Women," which essentially reaffirms the role of women in nation building and ensures the
substantive equality of women and men. Said law shall promote empowerment of women and pursue
opportunities for women and men, ensure equal access to resources and to development results and
outcome.

The enactment of said law was preceded by the Philippine government's pledge of commitment to
the Convention on the Elimination of All Forms of Discrimination against Women's (CEDAW) Committee in
its 36th Session in 2006 and to the UN Human Rights Council on its first Universal Periodic Review in 2009

EXCEPTION TO THE RULE ON DISCRIMINATION AGAINST WOMEN

 Where the job itself necessarily requires a particular qualification, then the job applicant or worker
who does not possess it may be disqualified on that basis. Such will not be unlawful discrimination. This is
known as bona fide occupational qualification or BFOQ. (Star Paper Corporation vs. Simbol, G.R. No.
164774, April 12, 2006)

SEXUAL HARASSMENT
The acts penalized as sexual harassment are demanding, requesting or otherwise requiring any
sexual favor from the other, regardless of whether the demand, request or requirement for submission is
accepted by the object of the act. (Section 3 of RA No. 7877, "Anti-Sexual Harassment Act")

SAFE SPACES ACT

On April 17, 2019, RA No. 11313, otherwise known as "The Safe Spaces Act" was enacted into law.
The law laid down measures to prevent gender based sexual harassment in streets, public spaces, online,
workplaces, and educational and training institution. The new law also strengthens the administrative
mechanism against sexual harassment in workplaces and in educational and training institutions. Likewise,
the law punishes misogynistic acts, sexist slurs, wolf-whistling, cat calling, intrusive gazing, cursing, and
persistent telling of sexual jokes in public or online.

EMPLOYMENT OF MINORS
In the 12th Congress enacted curative legislation aimed at strengthening Republic Act No. 7610,
otherwise known as the "Special Profection of Children Against Child Abuse, Exploitation and
Discrimination Act." The amendatory law is RA 9231, enacted on December 19, 2003.

The law maintained that it has always been the policy of the State to provide special protection to
children from all forms of abuse, neglect, cruelty, exploitation and discrimination, and other conditions
prejudicial to their development including child labor and its worst forms.

As such, the law provides that children below fifteen (15) years of age shall not be employed
except in the following circumstances:

1. When the child works directly under the sole responsibility of his/her parents or legal guardian
and where only members of his/her family are employed: Provided, however, That his/her employment
neither endangers his/her life, safety, health, and morals nor impairs his/her normal development:
Provided, further, That the parent or legal guardian shall provide the said child with the prescribed
primary and/or secondary education; or

2. "Where a child's employment or participation in public entertainment or information through

cinema, theater, radio, television or other forms of media is essential: Provided, That the employment
contract is concluded by the child's parents or legal guardian, with the express agreement of the child
concerned, if possible, and the approval of the Department of Labor and Employment: instances are
complied with: Provided, further, That the following requirements in all
a) "The employer shall ensure the protection, health, child; safety, morals and normal
development of the child;

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service, involving an amount exceeding five thousand pesos (P5,000.00), whether or not
accompanied with a claim for reinstatement;
7. Monetary claims of overseas contract workers arising from Employer-Employee relations under
Migrant Workers Act of 1995; (Article 217, Labor Code)
8. Wage distortion disputes in unorganized establishments not voluntarily settled by the parties
pursuant to Republic Act No. 6727 (Rationalizing Wage Policy Determination);
9. Enforcement of compromise agreements when there is non-compliance by any of the parties
pursuant to Article 227 of the Labor Code, as amended; and
10. Other cases as may be provided by law.

Except as otherwise provided under the Labor Code, the Labor Arbiters shall have original and
exclusive jurisdiction to hear and decide, WITHIN 30 CALENDAR DAYS, after submission of the case by the
parties for decision without extension, even in the absence of stenographic notes.

Cases arising from the interpretation or implementation of collective bargaining agreements and
those arising from the interpretation or enforcement of company personnel policies shall be disposed of
by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may
be provided in said agreements.

Although the provision speaks of exclusive and original jurisdiction of Labor Arbiters, the parties, in
the cases afore- quoted, are not precluded from submitting their case to a voluntary arbitrator instead.

TERMINATION OF EMPLOYMENT

Termination of employment refers to the cessation of the services of the employee by

management either through authorized or just causes.

The Supreme Court ruled that the Constitutional right more commonly known as Security of
Tenure, granted to an employee, wherein the employer cannot terminate his services without just or
authorized cause, applies even to regular or non-regular employees. (Kiamco v. NLRC, GR No. 129449,
June 29, 1999)

AUTHORIZED CAUSES

An employer is authorized under the Labor Code, particularly Articles 283 and 284 to terminate the
employment of an employee on grounds extraneous to the employee's conduct or performance.

The pertinent provisions are reproduced below:

"Art. 283. Closure of establishment and reduction of personnel. The employer may also terminate
the employment of any employee due to the installation of Labor-Saving Devices, Redundancy,
Retrenchment to prevent losses or the closing or Cessation Of Operation of the establishment or
undertaking unless the closing is for the purpose of circumventing the provisions of this title, by serving a
written notice on the workers and the Department of Labor and Employment at least one (1) month
before the intended date thereof.

"In case of termination due to the installation of labor-saving devices or redundancy, the worker
affected thereby shall be entitled to a separation pay equivalent to at least one (1) month pay or to at
least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent
losses and in cases of closures or cessation of operations of establishment or undertaking not due to
serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay
or at least one-half (1/2) month pay for every year of service, whichever is higher.

"A fraction of at least six (6) months shall be considered one (1) whole year.

"Art. 284. Disease as ground for termination. An employer may terminate the services of an
employee who has been found to be suffering from any disease and whose continued employment is
prohibited by law or is prejudicial to his health as well as the health of his co-employees: Provided, That
he is paid separation pay equivalent to at least one (1) month salary or to one-half (1/2) month salary for
every year of service, whichever is greater, a fraction of atleast six (6) months being considered as one (1)
whole year."

Installation of labor-saving devices is also known as

‘Automation/Robotics." In the case of Cajucom VIl v. TPI Philippines Cement Corporation, et al., GR No.
149090, February 11, 2005, the Supreme Court ruled that the phrase "to prevent losses" means that
retrenchment or termination from the service of some employees is authorized to be undertaken by the
employer even before the losses anticipated are actually sustained.

Other authorized causes are the following:

1. Disability of employee (permanent)

2. Valid union security clause application
3. Term expiration in contract of employment
4. In cases of project employment, completion of said project
5. Failure to meet standards of probation
 6. Relocation of business
7. Failure to follow "return-to-work order"
8. Perpetrating illegal acts during a strike
9. Retirement

JUST CAUSES

Under Article 282 of the Labor Code, the employer may terminate the services of the employee under
the following just causes:

1. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his work;
2. Gross and habitual neglect by the employee of his duties;
3. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative;
4. Commission of a crime or offense by the employee against the person of his employer or any
immediate member of his family or his duly authorized representative; and
5. Other causes analogous to the foregoing.

When an employee has done something that is contrary or incompatible with the faithful performance
of his duties, the employer has a just cause for terminating his employment. (Manila Chauffeurs League V.
Bachrach Motor Co., No. L-47138, June 17, 1940)

DUE PROCESS IN LABOR LAW

Due process is the legal requirement which mandates respect for all of the legal rights that are
owed to a person. Due process balances the power of the law and protects individuals from it. An
employer cannot harm or inflict damage to a worker Without following the exact course prescribed by the
law, for this constitutes a due process violation.

The Twin-Notice Rule is the standard of due process that must be substantially observed for
termination of employment based on just causes in Labor Code. This means that the employer should give
a written notice on the employee at least one (1) month in advance the notice of termination. For better
understanding, see Article 285 of the Labor Code.

DISTINCTION BETWEEN SUBSTANTIVE AND PROCEDURAL DUE PROCESS

Substantive due process mandates that an employee can only be dismissed based on just or
authorized causes. On the other hand, procedural due process requires further that he can only be
dismissed after he has given an opportunity to be heard. The import of due process necessitates the
compliance with the two (2) aspects. (Maneja vs. NLRC, G.R. No. 124013, June 5, 1998)

SOCIAL LEGISLATION

The nature of social legislation is best illustrated in the Supreme Court decision in Calalang v. Williams,2
promulgated on 2 December 1940 as follows:
 "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.

"Social justice, therefore, must be founded on the recognition of the necessity of interdependence
among divers and diverse units of a society and of the that should be equally and evenly extended to all
groups as a combined force in our social and economic life, consistent with the fundamental and
paramount objective of the state of promoting the health, comfort, and quiet of all persons, and of
bringing about the greatest good to the greatest numbe.”

Examples of Social Legislations:

1. Republic Act 8282, "The Social Security System Lay

2. Republic Act 8291, "Government Service Insurance System Law".
3. RA 7875 National Health Income Act 1995;
4. RA 9257 Expanded Senior Citizens Act 2003; and
5. RA 7727 Magna Carta for Disabled Person

SOCIAL LEGISLATION MEASURES

Pursuant to the policy of the State to protect the citizenry, several legislative measures were put
into effect with the end in view of providing for welfare benefits such as salary loans, death assistance
benefits, housing loans, emergency loans, medical assistance and insurance coverage and the like.

Employees from the private sector are covered under the Social Security System (SSS) while public
servants are covered under the Government Service Insurance System (GSIS).

Aside from the administration of welfare funds, the government has also put into place certain
statutory mechanisms that regulate office practice such as the Anti-Sexual Harassment Act, the law on the
employment of minors, as well as laws affecting certain groups of workers like the Migrant Overseas
Workers Act.

To carry out the thrust of the government on social legislation, Congress has enacted, among
others, law that deal with the myriad concerns of laborers and workers such as social security, minimum
wage for house helpers, protection of children from abuse and exploitation, grant of benefits, overseas
employment, illegal recruitment, and the like.

Examples of social legislation are as follows:

1. Republic Act No. 8187 (Paternity Act);

2. Republic Act No. 7610 (Special Protection of Children);
3. Republic Act No. 7877 (Anti-Sexual Harassment Act);
4. Republic Act No. 7655 (Minimum Wage for House helpers);
5. Republic Act No. 8042 (Migrant Workers Act);
6. Republic Act No. 8282 (Social Security System Law of 1997)
7. Republic Act No. 8291 (Government Service Insurance System Act of 1997); and
8. Republic Act No. 7875 (PhilHealth Act).
9. Republic Act No. 7641 (Retirement Pay Law) (Amending Art. 287 of the L.C. now "Art. 285 of L.C.")
10. Republic Act No. 9231 (Act Against Child Labor)
11. Presidential Decree No. 851 (13th Month Pay Law)