LABOR STANDARDS ( 2007 EDITION ) 10 Principles in Labor: 1.not all labor for another is compensable 2.

not all compensable labor is demandable 3.labor is a property right (except government employment) 4.prohibition vs involuntary servitude 5.living wage 6.state intervention in labor 7.validity of labor legislation cannot be challenge as unjust legislation or cla ssification 8.waiver of labor rights can be effected by government intervention 9.interpretation of labor contracts in favor of labor (except: union security cl ause and strikes) 10.prohibition vs diminution of benefits.

Policy Declaration Art. 3: The State shall 1.Afford protection to labor 2.Promote full employment 3.Ensure equal work opportunities regardless of sex, race or creed 4.Regulate the relations between workers and ER s. 5.Assure the rights of workers to self-organization, collective bargaining, secu rity of tenure, and just humane conditions of work. 6.Art 12,Sec 1 1987 Constitution states the Equitable distribution of opportunit ies and wealth and increase in amount of goods and services provided by nation f or people s benefit and expanding productivity. 2006 notes: principle of protection extends to EEs who is abused by ER or Union leadership or their respective representatives. 2005 notes:Rule on construction in favor of labor applies only in case there is doubt. 2006 notes: in private entity, labor is a property right; while in government ,l abor is not property right since public office is a public trust, so it must be traceable to a law, if you cannot trace it ,then no employment in government ev en if how long (ex: if you have been mixing coffee in office of mayor for 10 yrs , it will not prescribe)

Law Classification 1. Labor Standards Law That which sets out the minimum terms, conditions and ben efits of employment that ER s must provide or comply with and to which EE s are enti tled as a matter of legal right. Ex. 8-hour labor law 2. Labor Relations Law That which defines * the status, rights and duties * and the institutional mechanisms that govern the individual and collective interaction of ER s and EE s or their repr esentatives. Ex. Book V of Labor Code 3. Welfare Legislation designed to take care of contingencies which may affect w orkers, e.g. where there is loss of income for research beyond the worker s contro l. BENEFITS * Social Security Law.

Basis for Enactment 1. Art. II, Sec.5, Const. : The maintenance of peace and order, the protection of life, liberty, and property, and the promotion of general welfare are essenti al for the enjoyment by all the people of the blessing of democracy. 2. Art. II, Sec. 18, Const. : The State affirms labor as a primary social econo mic force. It shall protect the rights of workers and promote their welfare. 3. Art. XIII, Sec. I, Const. : The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to hu man dignity, reduce social, economic and political inequalities, and remove cult ural inequities by equitably diffusing wealth and political power for the common good. To this end, the State shall regulate the acquisition, ownership, use, and dispo sition of property and its increments.

Labor and social legislation are enacted pursuant to the police power of the Sta te. This is its inherent power to enact wholesome and reasonable laws to promote order, safety, health, morals and general welfare of society. In its exercise t he state may interfere with personal liberty, with property and with business an d occupation. (Calalang vs. Williams). No longer may the due process clause and the freedom of contract be invoked to c hallenge labor and social legislation. This has long been discarded since the 19 37 case of West Coast Hotel vs. Parish (US) and the 1924 case of Pp. vs. Pomar ( RP).

Labor relation laws enable workers to obtain from their employers more than the minimum benefits set by labor standard laws EMPLOYER (ER) and EMPLOYEE(EE) RELATIONSHIP ER includes any person,natural or juridical, acting directly or indirectly in the interest of the ER in relation to an EE and shall include the Government and al l its branches, subdivisions and instrumentalities, all GOCC s and institutions, a s well as non-profit private institutions, or organizations. EE includes any person in the employ of an ER. The term shall not be limited to t he EE s of a particular ER, unless this Code explicitly states. It shall include a ny individual whose work has ceased as a result or in connection with any curren t labor dispute or because of unfair labor practice if he has not obtained any o ther substantially equivalent or regular employment. purchaser of the assets of an ER corporation is not considered a successor ER o f the latter s EE since Labor contracts are not enforceable against a transferee of an enterprise, labor contracts being in personam, thus binding only between p arties. The existence of ER-EE relationship is determined by the following elements name ly: The existence of an ER-EE relationship is a question of law and being such, it cannot be made the subject of an agreement. (Tabas vs. CMC) a. b. c. d. the the the the Selection and engagement of the EE s payment of Wages power of Dismissal; and power to control the EE s conduct

particular form of evidence is required to prove the existence of an ER-EE relat ionship. Any competent and relevant evidence to prove the relationship may be ad mitted (Opulencia vs. NLRC)

CONTROL TEST *** There is an ER-EE relationship where the ER controls or has reserved the rig ht to control the EE not only as the result of the work but also as to the means by which said work is to be accomplished (Paradise vs. Ng). The test merely cal ls for the existence of the right to control the manner of doing the work not th e actual exercise of the right. (Ruga vs. NLRC) The line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually d esired results without dictating the means or methods employed in attaining it, and those that control or fix the methodology and bind or restrict the party hir ed to the use of such means. The first , which aim only to promote the result, c reate no ER-EE relationship unlike the second, which addresses both the result a nd the means to achieve it. (Insular Life vs. NLRC) The control test calls merel y for the existence of the right to control and manner of doing work, not the ac tual exercise of the right. (Dy Keh Beng) ECONOMIC TEST The absence of ER-EE relationship may be determined through economic tests like the inclusion of the EE in the payrolls, having irregular compensation and havin g a personal stake in the business. (Sevilla vs. NLRC)

2006 notes:ER-EE is a question of fact if no question as to indirect ER nor 105, 106 and 107 but it becomes a question of law if there s another party beyond ER-EE or there s indirect ER or 105,106, and 109. Way of answering--- law itself says it Is there an ER-EE relationship on the following? * Workers under a pakiao agreement arranged by G whom PRC considered as an indep endent contractor. ER gives orders to G, on where to store the copra, when to br ing out, how much to load and where, and what class of copra to handle. The equi pment used is owned by PRC. Yes. PRC has direct control over the handling of th e copra. The control test is satisfactorily met. * Piece workers subject to specifications. Yes. The fact that the making of the basket is subject to Dy s specifications indicates the existence of control. (Dy K oh Beng vs. ILMU) * Tailors, pressers, stitchers and similar workers employed by COD on a piece-wo rk basis. The EE s are governed by the company s regulations i.e. 8-hour workday, re cording of attendance etc Furthermore, a master cutter distributes job orders equ ally, supervises the work and sees to it that they were finished as soon as poss ible. Yes. The worker s conduct in the performance of their work was controlled by the company (Rosario vs. Ople) * Cargadores and pahinantes recruited by SMC through a labor contractor who are governed by the regulations of the SMC whose work consisted of loading, unloadin g, pilling or palleting empty bottles and wooden shells from company trucks and warehouses. Yes. The evidence firmly establishes the control exercised by the SM C. (BLUM vs. Zamora) * Shoe shiners who had their own customers but shared proceeds with company. No. The company does not exercise any degree of control or supervision over his wor k. The shoe shiner is a partner in trade. (Besa vs. Trajano)

* Vendees of cigarettes who are governed by the regulations of the vendor compan y i.e. definite sales territory, requirement to submit daily, weekly and monthly reports, etc. Yes. Vendor company had control over the vendee. (SSS vs. CA) 2006 notes: the moment there is a surety bond, ER-EE do not exist. *I. S, a prominent social figure, had an agreement with TWS to act as branch mana ger; The agreement provided that she would be entitled to a part of the commissi on on sale of tickets; and that she would share in the expenses of maintaining t he office. She was also a signatory to a lease agreement covering the branch s pre mises, holding herself solidarily liable for the prompt payment of rentals. No. I. S was not subject to the control by TWS. The services rendered by I.S must ha ve been done by her pursuant to a contract of agency. (Sevilla vs. CA)

* A plant manager hired by a marble company which was about to close in a few mo nth s time due to business losses. The company had no control over the former, eit her as to hours of work or method of accomplishing the work. The former was enti tled to a percentage of the net profits of the company for that period. No. Mana ger was merely a party to a joint venture. (CMC vs. NLRC)

* Fishermen-crew of a trawl fishing vessel subject to control and supervision of the owner of the vessel i.e. conduct of fishing operations; time to report to f ishing port, etc Yes. (Ruga vs. NLRC) * Tailors, seamstresses and other workers of a haberdashery who were paid on a p iece-rate basis. They were directed by the proprietor of the establishment as sp ecified by the customers. They were required to finish jobs orders in one day be fore due date. Yes. They did not exercise independence in their own methods, but on the contrary were subject to the control of the establishment from the begin ning of their task to their completion. They also had to rely on the tools and e quipment supplied by the haberdashery. (Makati Haberdashery vs. NLRC) * The power of control refers merely to the existence of the power and not the a ctual exercise thereof. * Caddles who are not under the control and supervision of the golf club as to w orking hours, manner of carrying out their services, etc. No. The club did not h ave the measure of control over the incidents of the caddy s work and compensation that the ER would possess. (Manila vs. IAC) * College teachers. Yes. The Court takes judicial notice that a university cont rols the work of the members of its faculty; that it prescribes the courses or s ubjects that they teach and the time and place for teaching. (Feati vs. Bautista ) * Jeepney drivers working under the boundary system. Yes. The driver does not ha ve any interest in the business because he did not invest anything in the acquis ition of jeeps and did not participate in the management thereof. (Citizen s Leagu e of Free Workers vs. Abbas)

In Agency, it is civil law, so regular courts has jurisdiction and not the labor arbiter In tenancy: 1.Farmworker(ER-EE): 1 enterprise and that is of the ER ,no right of possession of EE Tenancy: joint production agreement (so it is partnership), tenant has right of possession. 2.T:compensation is conditional(less harvest, no share) F: compensation is unconditional ,meron harvest or wala, may sweldo. 3.T: service is that entire family may help F:only hired EE is obliged to render service 4.T:landowner has little control since it is the tenant that decides how to plan t

2006 notes:Even if there s ER-EE rel, the ff are still immune from suit: embassy,c onsul and int organization.

INDEPENDENT CONTRACTOR AND LABOR CONTRACTOR 2006 notes: in legitimate contracting there exist a trilateral relationship unde r which there is a contract for a specific job between the principal and the con tractor/subcontractor and a contract of employment between contractor/subcontrac tor and its workers. 2006 notes:between principal and the contractor,the major applicable laws regard ing their work relationship are the Civil code and pertinent commercial laws. Be tween contractor and his employees ,the pertinent law is the Labor Code. Between the principal and contractor s ee,no er-ee relationship exist since contractor is a business man, an employer. 2006 notes:er-ee exist between principal and workers where the contracting arran gement is not legitimate ,as where is it a labor only contracting.

1.There is labor-only contracting where: a.the person supplying in workers to an ER does not have > substantial capital > [substantial] investment in the form of tools, equipment, machineries, work pr emises, among others b.and the workers recruited and placed by such persons are performing activities which are directly related to the principal business of such ER. In such cases, the person or intermediary shall be considered merely as an agent of the ER who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him. Labor-only contracting as defined herein is hereby prohibited and the person act ing as contractor shall be considered merely as an agent or intermediary of the ER who shall be responsible to the workers in the same manner and extent as if t he latter were directly employed by him.

2.There is job contracting where: 1. The contractor carries on an independent business and undertakes the contract work a. on his own account

b. under his own responsibility c. according to his own manner and method d. free from the control and direction of his ER or principal in all matters con nected with the performance of the work except as to the results thereof; and 2. The contractor has a. substantial capital or b. [substantial] investment in the form of tools, machineries, work premises, an d other materials which are necessary in the conduct of his business. when a contractor fails to pay the wages of his EE s, the ER who contracted out th e job to the contractor becomes jointly and severally liable with his contractor to the EE s of the latter to the extent of the work performed under the contract as if such ER were the ER of the contractor s EE s. (PBC vs. NLRC) Liability of ER, Independent Contractor and Subcontractor and Labor-Only Contrac ting General Rule : An ER who enters into a contract with a contractor to perform wor k for the ER, does not thereby create an ER-EE relationship between himself and the EE s of the contractor. Thus the EE s of the contractor remain the contractor s EE s and his alone. (PBC vs. NLRC) Nonetheless : When a contractor fails to pay the wages of his EE s in accordance w ith the Labor Code, the ER who contracted out the job to the contractor becomes jointly and severally liable with the contractor to the EE s of the latter to the e xtent of the work performed under the contract as if such ER were the ER of the c ontractor s EE. The law itself, established an ER-EE relationship between the ER and the job con tractor s EE s for a limited purpose i.e. in order to ensure that the latter get pai d for wages due them. 1. Indirect ER : These provisions shall likewise apply to any person, partnershi p , association or corporation which, not being an ER, contracts with an indepen dent contractor for the performance of any work, task, job or project. (Art. 107 ) 2. Labor-Only Contractor : The conclusion is different where there is labor-only c ontracting. The labor-only contractor i.e. person or intermediary, is considered m erely as an agent of the ER. The statute makes the ER directly responsible to the EE s of the labor-only contractor as if such EE s had been directly employed by the E R. The statute establishes an ER-EE relationship between the ER and the EE s of th e labor-only contractor, this time for a comprehensive purpose, to prevent any vio lation of this Code. (Broadway Motors vs. NLRC) > The legitimate job contractor provides services while the labor-only contracto r only provides manpower. > Job contractor undertakes to perform a specific job while labor-only contracto r merely provides personnel to work for the employer. Art. 108 : An ER or urnish a bond equal ond will answer for as the case may be indirect ER may require the contractor or subcontractor to f to the cost of labor under contract, on condition that the b the wages due the EE s should the contractor or subcontractor, fail to pay the same.

If an independent service contractor fails to pay the wages of the janitors its supplies to XYZ, is XYZ liable for the unpaid wages?Yes. According to Art. 106, the ER shall be jointly and severally liable to the EE s of the contractor or subc ontractor to the extent of the work performed under the contract. (Alcantara)

Would your answer change if XYZ already paid the independent contractor the cont ract price? No, XYZ will still be liable for the unpaid wages of the janitor sin ce the obligation is imposed by law. PTS, a government agency, entered into a service agreement with ABC or the suppl y of janitors to PTS. ABS failed to pay the wages of the janitors. PTS refused t o pay on the ground that it is a government agency. Is this claim valid?No. The janitors employed by ABC are considered indirect EE s and not to indirect EE s comin g from the private sector. (Rabago vs. NLRC) Examples of Independent Contractor: * Commission agent : IPC Company entered into agreement with registered represen tatives who worked on a commission basis. While the agents were subject to a set of rules and regulations governing the performance bond; the termination for ce rtain causes, however, the agents were not required to report to work; to devote their time exclusively for the company; to account for their time nor submit a record of their activities; and that they were paid on a commission based on a c ertain percentage of sales. The fact that for a certain specified causes (failur e to meet annual quota) the relationship may be terminated does not mean such co ntrol exists, for the causes of termination have no relation to the means and me thods of work. (IPC vs. SSS) * Dealership : A contract whereby one engages to purchase and sell soft drinks o n trucks supplied by the manufacturer but providing that the other party (peddl er) shall have the right to employ his own workers, shall post a bond to protect the manufacturer against losses shall be responsible for damages caused to thi rd person, shall obtain the necessary licenses and permits and bear the expenses incurred in the sale of the soft drinks. (Mafinco vs. NLRC) Another dealership agreement wherein the dealer: handles the products in accorda nce with existing laws and regulations; sends his orders to the factory plant; i s supplied by the factory with a delivery truck and all expenses for repairs are borne by the factory; receives no commission but given a discount for all sales ; is responsible alone for any violation of the law, sells the product at the pr ice agreed upon between the parties; and posts a surety bond of not less than P1 0,000.00. (La Suerte vs. Director of Labor Relations) * Security Agency : Shipping company entered into an agreement with a security a gency wherein the security agency was responsible for the hiring and assignment of the guards, the guards were not known to the shipping company for it dealt di rectly with the agency, and a payment of a lump sum to the agency who in turn pa id the compensation of the individual watchmen. Under the circumstances, the gua rds cannot be considered EE s of the shipping company. It is the security agency t hat recruits, hires and assigns the work of the watchmen. It is the wages to whi ch the watchman is entitled. The powers to dismiss lies with the agency. Lastly, since the company has to deal with the agency, and not with the individual watc hmen, on matters, pertaining to the contracted task, it stands to reason that th e company does not exercise any power or control over the watchmen s conduct. (APL vs. Clave) * Stevedoring Services : SHIPSIDE entered into a Contract for Services with La Un ion providing among others that the latter would furnish all labor needed for st evedoring work in piers controlled by the former. The net balance of the stevedo ring charges will be divided equally among the parties. The records do not show any participation on the part of SHIPSIDE with respect to the selection and enga gement of the individual stevedores. The terms and conditions of their services are matters determined not by SHIPSIDE but by La Union. It is also sufficiently established that La Union exercised supervision and control over its labor force

. While SHIPSIDE occasionally issued instructions to the stevedores, such instru ctions, in legal contemplation are mere requests since the privity of contract l ies between the workers and La Union. (SHIPSIDE vs. NLRC)

* Collection Agency : Singer entered into a collection agency agreement with colle ctors providing among others that the collector is to be considered at all times to be an independent contactor; he was required to comply with certain rules an d regulations (i.e. use of authorized receipts, monthly collection quota, cash b ond, and submission of report of all collections at least once a week); and his services can be terminated in case of failure to satisfy these regulations. Howe ver, the agent was not required to observe office hours or to report to Singer e xcept for remitting his collections. He did not have to devote his time exclusiv ely for Singer and the manner and method of collection were left solely to the d iscretion of the agent, and he shouldered his transaction services. ( * Messengerial/Janitorial Services : Janitors were hired by CSI and assigned to La Union Carbide. They drew their salaries from CSI. CSI exercised control over them through a SCI EE who gave orders and instructions. Moreover, CSI had the po wer to assign its janitors to various clients and pull them out. CSI was a regis tered service contractor and did business with a number of known companies in th e country. It maintains its own office and had its own office equipment. It furn ishes its janitors the cleaning equipment. (Rhone-Poulene vs. NLRC) BCC, capitalized at P1 million fully subscribed and paid for provided janitorial and other services to various firms. It hired A and B and assigned them to work for FEBTC. The two reported for work wearing the prescribed uniform of the BCC ; their leave of absences were filed directly with BCC; and their salaries drawn only from BCC. FEBTC however issued a job description which detailed the functi ons of two. Applying the control test, BCC is the ER of the two. Furthermore, it had substantial capital. The guidelines in the job description were laid down merely to ensure the desired result was achieved. It did not, however, tell how the work should be performed. (Neri vs. NLRC) * Repair and Maintenance Service : F doing business, was hired by Shell to con duct a hydro-pressure test. He was paid a lump sum for the work he and his men a ccomplished. He utilized his own tools and equipment. He accepted business from other companies. He was not controlled by Shell with regard to the manner in wh ich he conducted the test. (Pilipinas Shell vs. CA)

Examples of Labor-Only Contracting * Agency hiring : PBC and CESI entered into an agreement under which the latter undertook to supply the former with 11 messengers. The agreement provided that t he messengers would remain EE s of CESI; PBC remitted to CESI amount equivalent to the wages of the messengers; CESI in turn paid them and their names are not inc luded in the PBC s payroll; the bank, in cases of dismissal would request CESI, an d CESI would in fact withdraw such messenger, and the messengers performed their functions within the bank s premises. CESI cannot be considered a job contractor because its undertaking is not the performance of a specific job; it merely unde rtook to provide the bank with a certain number of persons able to carry out the work of messengers. (PBC vs. NLRC) Under the Work Contract between A and a motorshop, A undertook to supply labor a nd supervision in the performance of automotive body painting work. A and his me n were paid lump sum, the company supplied the tools, equipment, machineries and materials and moreover, the jobs were done in the premises of the motor shop. A side from the fact that the company exercised control and direction over the wor k done by A and his men, the line of work-automobile painting was directly relat ed to, if not an integral part of the regular business of the motor shop. (Broad way Motors vs. NLRC) LS provided helpers, janitors, mechanics to NP, a corporation engaged in garment manufacturing. The agreement between the two provided that LS shall provide NP with workers, NP shall pay LS a fee based on rates fixed by the agreement, there is no ER-EE relationship between the two and LS shall have exclusive direction in the selection, engagement and discharge of its personnel and the latter shall be within is full control. LS is a labor-only contractor since it is merely an ag ent to procure workers for the real ER. * Security Guard Hiring : Hyatt and VSS entered into a contract of services whe rein VSS agreed to protect the properties and premises of Hyatt by providing sec urity guards. The security guards filled up Hyatt employment application forms a nd submitted the forms to the Security Department of the hotel. Their wages were paid directly by Hyatt and their assignments, promotions, supervisions and dism issal were approved by the Chief Security Officer of Hyatt. (Vallum Security vs. NLRC) 2006 notes: since Hilton is the one doing the training ,assigning and hiring, so Vallum is only a labor only contractor. 2006 notes:liability of indirect ER under labor code cannot apply in causes of a ction arising from quasi-delict (ex: guard playing gun tapos nakabaril, the agen cy is liable but not the hotel)

Rights of Contractual Employees: 1.safe and healthful working conditions 2.labor standards such as service incentive leave, rest days.. 3.social security and welfare benefits 4.self-organization, collective bargaining and peaceful concerted action 5.security of tenure Summary of Prohibited Labor Contracting:

1.Labor Contracting 2.Contracting that terminates the employment of regular employees ,or reduces t heir work hours ,or reduces or splits a bargaining unit, if such contracting out is not done in good faith and not justified by business exigencies. 3.Contracting with a CABO It may also be a ground for cancellation of union registration.

4.Contracting with an in-house agency It is a variety of labor-only contracting disguised by the fiction of separate c orporate entity. 5.Contracting because of a strike or lock out It is prohibited since if allowed it would undermine the nature and purpose of s trike and could amount to a run-away shop. But it should be noted that under Art icle 264, the employer himself may directly hire replacements of strikers even w hile the strike is in progress.

6.Contracting that constitutes ULP

7.Exploits employee in need Taking undue advantage of economic situation or lack of bargaining strength of contractual employee or undermining his security of tenure or basic rights or ci rcumventing the provisions of regular employment.

EMPLOYMENT AGENCIES Worker any member of the labor force, whether employed or unemployed

Private fee-charging employment agency any person or entity engaged in the recruit ment or placement of workers for a fee which is charged directly or indirectly, from the workers or ER s or both. Private recruitment entity any person or association engaged in the recruitment an d placement of workers, locally or overseas, without charging, directly or indir ectly, any fee from the workers or the ER s or both.

Allowed Private Agencies and Entities Sec. 1, Rule III, Book I, IRR s No person or entity shall engage in the recruitmen t and placement of workers either for local or overseas employment except the fo llowing: [allowed agencies] 1. public employment agencies 2. POEA 3. private recruitment entities 4. private employment agencies 5. shipping or manning agents or representatives; and 6. such other persons or entities as may be authorized by the Secretary. *Art. 25 : . . . the private employment sector shall participate in the recruit ment and placement of workers, locally and overseas, under such guidelines, rule s and regulations as may be issued by the Secretary of Labor.

Prohibited Business Agencies and Entities 1. Art. 18 : Ban on Direct Hiring No ER may hire a Filipino worker for overseas employment except through the Boards and entities authorized by the Secretary of Labor. a. Direct hiring by members of the diplomatic corps; b. International organizations and such other ER s as may be; c. allowed by the Secretary of Labor is exempted from this provision. 2. Art. 26 : Travel agencies and sales agencies of airline companies are prohibi ted from engaging in the business of recruitment and placement of workers for ov erseas employment, whether for profit or not. Workers Fees Art. 32 : Any person applying with a private fee-charging employment agency for employment assistance shall not be charged any fee until 1. he has obtained employment through its efforts; or 2. he has actually commenced employment. Such fee shall be always covered with t he appropriate receipt clearly showing the amount paid. The Secretary of Labor s hall promulgate the schedule of allowable fees. Reports Submission

* Art. 33 : Whenever the public interest requires, the Secretary of Labor may di rect all persons or entities within the coverage of this Title to submit a repor t on the status of employment, including job vacancies, details of job requisiti ons, separation from job, wages, other terms and conditions, and other employmen t data. GOVERNMENT TECHNIQUES OF REGULATION PRIVATE RECRUITMENT AND PLACEMENT BUSINESS Licensing, Citizenship, Capitalization, Duration, Transferability and Fees Citizenship Requirement: A.Only Filipino citizens or B.Only corporations, partnerships or entities at least 75% of the authorized and voting capital stock of which is owned and controlled by Filipino citizens shal l be permitted to participate in the recruitment and placement of workers, local ly or overseas. Capitalization Substantial capitalization as determined by the Secretary of Labo r. (P2 M 2006 Revision) Dapat may license and authority from DOLE, if license only but no authority, th en they cannot hire workers for overseas employment. -- authority must be both authority to conduct and authority to operate and not one from the other, dapat both!! Non-transferability of License or Authority No license or authority shall be used directly or indirectly by any other person other than the one in whose favor it was issued; or at any place other than that stated in the license of authority nor such license or authority be transferred, conveyed or assigned to any other person or entity. Any transfer of business address, appointment or designation of any agent or rep resentative including the establishment of additional offices everywhere shall b e subject to the prior approval of the DOLE.

2006 Pointers: Agency may be allowed to conduct provin. Recruitment or job fa irs only upon written authority from POEA. Prior conduct of recruitment, a copy of authority shall be presented to DOLE/Regional Director concerned. Authority means a document issued by the Secretary of Labor and Employment author izing a person or association to engage in recruitment and placement activities as a private recruitment entity; while a license is the document issued to a perso n or entity to operate a private employment agency. A license is valid for a period of 2 years from the date of issuance unless soon er cancelled, revoked or suspended for violation of the Labor Code or its IRR s. Art. 31 : All applicants for license or authority shall post such cash and suret y bonds as determined by the Secretary of Labor to guarantee compliance with pre scribed recruitment procedures, rules and regulations, and terms and conditions of employment as appropriate.The purpose of bonds is to insure that if the right s of these overseas workers are violated by their ER s recourse would still be ava ilable to them against the local companies that recruited them for the foreign p rincipal. (Stronghold vs. CA) Percentage of salary remittance 1. seaman 80%

2. 3. 4. 5. 6.

construction worker 70% professional workers with free board and lodging professional without board and lodging 50% domestic helpers 50% other workers 50%

70%

Prohibited Practices Art. 34 : Prohibited Practices license or holder of authority: It shall be unlawful for any individual, entity

1. To charge or accept; directly or indirectly, any amount greater than that spe cified in the schedule of allowable fees, or make a worker pay any amount greate r than that actually received by him as a loan or advance; 2. To furnish or publish any false notice or information or document in relation to recruitment or employment; [includes the act of furnishing fake employment d ocuments to a worker. (Azucena) 3. To give any false notice, testimony, information or document or commit any Ac t of misrepresentation for the purpose of securing a license of authority under this Code; 4. To induce or attempt to induce a worker already employed to quit his employme nt in order to offer him to another unless the transfer is so designed to libera te the worker from oppressive terms and conditions of employment; 5. To influence or attempt to influence any person or entity not to employ any w orker who has not applied for employment through his agency; 6. To engage in the recruitment or placement of workers in jobs Harmful to publi c health or morality or to the dignity of the Republic of the Philippines; 7. To obstruct or attempt to obstruct inspection by the secretary of Labor or by his duly authorized representatives; 8. To Fail to file reports on the status of employment, placement vacancies, rem ittance of foreign exchange earnings, separation from jobs, departures and such other matters of information as may be required by the Secretary of Labor; 9. To substitute or alter employment contracts approved and verified by the DOLE 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 Secretary of Labor Unless it is to improve the terms and conditions of employment. (Vir-Jen vs. NLR C); 10. To become an officer or member of any corporation engaged in Travel agency o r to be engaged directly or indirectly in the management of a travel agency; 11. To Withhold or deny travel documents from applicant workers before departure for monetary or financial consideration other than those authorized under this Code and its implementing rules and regulations.

(BAR), Filipina, was recruited by a local private employment agency for a tutori ng job abroad. Upon arrival in the place of employment, she was made to work as a housemaid. What advice will you give her? I will advice the Filipina to commen ce a criminal action against the employment agency for violation of Art. 34 of t he Labor Code. She was recruited under false pretense.

PHILIPPINE OVERSEAS EMPLOYMENT AGENCY (POEA): (such is appeallable to the office of the Secretary) 1.cancellation/suspension of license of authority to recruit of Recruitment ag encies (until phase out within 5 yrs) 2.Disciplinary actions towards Overseas Contract workers

2006 notes:Only jurisdiction left to POEA is administrative in character relati ng to licensing/regulating agencies and disciplinary action which are administra tive in character involving employer, principals and partners toward migrant workers. It also has liability under cash and surety bonds and power to refu nd of illegally collected fees. 2006 notes: An agreement that diminishes the employees pay and benefits as con tained in POEA approved contract is void unless such is approved by POEA.( if in crease,it is valid even if no further approval). 2006 notes: POEA has no jurisdiction to hear and decide claim for enforcement of a foreign judgment such, must be brought before regular courts. (POEA is an administrative agency exercising quasi-judicial functions)

RA 8042 (July 15,1995) not only transferred from POEA to the Labor Arbiter (appeallabe to the NLRC) the jurisdiction over money claims, but it also invo lved money claims for overseas deployment (period of deployment and before depa rture for abroad ) unlike in POEA where it covers only workers for overseas em ployment 2006 notes: POEA may hear ,but the decision part lies with the DOLE.

TERMS: Contract Worker - Any person working or who has worked overseas under a valid emp loyment contract. Manning agency Any person or entity recruiting seamen for vessels plying internati onal waters and fore related maritime activities. Name Hire Worker who is able to secure employment overseas on his own without the assistance or participation of an agency. Overseas employment Employment of a worker outside the Philippines, including empl oyment on hoard vessels plying international waters covered by a valid employmen t contract. Placement fee Amount charged by a private employment agency from a worker for its

services in securing employment. Service fee Amount charged by a license from its foreign ER as payment for actual services rendered in relation to the recruitment and employment of workers for s aid principal. SANCTIONS Suspension and/or Cancellation of License or Authority The Secretary of Labor sh all have the power to suspend or cancel any license or authority to recruit EE s f or overseas employment for violations of rules and regulations by the DOLE, the POEA, or for violation of the provisions of this, and other applicable laws . . Penalties Violations of any provisions of this Tile or IRR s by license or holder of authority : a. imprisonment of not less than 2 years nor more than 5 years b. or a fine of not less than P10,000.00 nor more than P50,000.00 c. or both such imprisonment and fine, at the discretion of the court. Violation of any of the provisions thereof or its implementing rules and regulat ions by a non-license or non-holder of authority a.imprisonment of not less than 4 years nor more than 8 years b.or a fine of not less than P20,000.00 nor more than P100,000.00 c.or both such imprisonment and fine, at the discretion of the court. If the offender is a corporation, partnership, association or entity, the penalt y shall be imposed upon the officer or officers of the corporation, partnership, association or entity responsible for violation; and if such officer is an alie n, he shall in addition to the penalties herein prescribed, be deported without further proceedings: Illegal recruitment: a.imprisonment of not less than 6 years and 1 day but not more than 12 years and b.a fine of not less than P200,000.00 nor more than P500,000.00. Illegal recruitment constituting Economic Sabotage: a.life imprisonment; and b.a fine of not less than P500,000.00 nor more than P1,000,000.00. The maximum penalty shall be imposed if: a . the person illegally recruited is less than 18 years of age; or b. committed by a non-license or non-holder of authority. * The Secretary of Labor or his duly authorized representative may order the clo sure of illegal recruitment establishments. Art. 38 (c) of the Labor Code granting the Secretary of Labor the power to issue search or arrest warrants is declared unconstitutional and null and void. (Sala zar vs. Achacoso) --money claims arising from ER-EE relationship prescribes in 3 years --strict rules of evidence are not applicable in claims for compensation and dis ability benefits In case of breach of the employment contract by a foreign-based ER, may the priv ate employment agency or recruitment entity be held liable? What is the nature o f the liability of the recruitment and placement agency and its principal? Yes. The agency or entity undertakes under oath to assume full and complete responsib ility for all claims and liabilities which may arise in connection with the use of the license or authority. The agency is jointly severally liable with the pri ncipal or foreign-based ER for any of the violations of recruitment agreement co

ntract of employment. (Ambraque vs. NLRC; Pp vs. Catan) ILLEGAL RECRUITMENT Recruitment and Placement - Act of a. Canvassing b. Enlisting c. Contracting d. Transporting e. Utilizing f. Hiring or g. Procuring workers and h. Includes referrals, contracts services, promising or advertising for employme nt, locally or abroad, whether for profit or not. Provided That any person or entity which, in any manner, offers or promises for a fee emp loyment to 2 or more persons shall be deemed engaged in recruitment or placement . [The number of persons dealt with is not, an essential ingredient of the act o f recruitment or placement. The provision merely lays down a rule of evidence th at where a fee is collected in consideration of a promise or offer of employment to 2 or more prospective workers, the individual or entity dealing with them sh all be deemed to be engaged in the act of recruitment or placement. (Pp vs. Pani s) 2006 Pointers: -even if a manning agent in Philippines is jointly and severally liable with principal-foreign corporation -A sister of a maltreated DH in Hongkong can file case here in the Philippines in behalf of the latter. -illegal recruitment prescribed in 5 years, but if with eco.sabotage, then 20 y ears -advertising already constitutes as illegal recruitment and falsity of notice is immaterial for prosecution of case Illegal termination w/o just and valid cause (2006 revision) - full reimbursement fees + 12% - salaries for unexpired portion or 3 mos. For every year of unexpired term hever is lower 2006 notes:in OCW, there is no backwages Liability of private employment agency employment contract - joint and solidary with employer - all claims and liabilities that may arise in connection with the implementatio n of the contracts Any recruitment activities, including the prohibited practices, enumerated under Art. 34 of this Code, to be undertaken by non-licensees or non-holders of autho rity shall be deemed illegal and punishable under Art. 39 of this Code. Art. 36 : The Secretary of Labor shall have the power to restrict and regulate t he recruitment and placement activities of all agencies within the coverage of t his Title and is hereby authorized to issue orders and promulgate rules and regu lations to carry out the objectives and implement the provisions of this Title. Sec. 2, Rule VI, Book I, IRR s : Pending investigation of the complaint or report, the Secretary may suspend the license of the private employment agency concerne d. . .

whic

Art. 37 : The Secretary or his duly authorized representatives may, at any time, inspect the premises, books of account and records of any person or entity cove red by this Title, require it to submit records regularly on prescribed forms, a nd act on violations of any provisions of any provisions of this Title. Illegal recruitment when committed by a: 1.Illegal recruitment by a syndicate Carried out by a group of 3 or more persons conspiring and/or confederating with one another in carrying out any unlawful o r illegal transaction, enterprise or scheme defined under the first paragraph he reof. 2.Illegal recruitment in large scale ually or as a group. Committed against 3 or more persons individ

2006 notes: When the Labor Code speaks of illegal recruitment, committed against 3 or more persons , it must be understood as referring to the number of complainan ts therein, otherwise, prosecutions for single crimes of illegal recruitment can be cumulated to make out a case of large scale illegal recruitment. In other wo rds, a conviction for large-scale illegal recruitment must be based on a finding in each case if illegal recruitment of 3 or more persons whether individually o r as a group. (Pp vs. Reyes) 2006 notes:in all instance of illegal recruitment, it shall be considered an off ense involving economic sabotage and shall be penalized which is non-bailable an d life imprisonment

Sec. 8, Migrant Workers Act : A criminal action arising from illegal recruitment as defined herein shall be filed with the RTC of the province or city where the offense was committed or where the offended party actually resides at the time of the commission of the offense: provided, That the court where the criminal ac tion is first filed shall acquire jurisdiction to the exclusion of other courts. The crime of illegal recruitment has 2 elements: i. That the offender is a non-license or non-holder of authority to lawfully eng age in the recruitment and placement of workers; and j. That the offender undertakes any of the recruitment activities defined under Art. 13 (b) of the Labor Code or any of the prohibited practices enumerated unde r Art. 34 of the same Code.

G convinced F and S, that they could be employed for France for a fee. G was als o able to persuade A that he could give A a working visa. Nothing happened to F, S and A. G did not have any license to recruit or authority to recruit? A may b e charged and convicted of a large-scale illegal recruitment since he did not ha ve the license or authority to recruit, and yet recruit at least 3 persons. (Pp vs. Turda) Furthermore, he can also be convicted and charged of estafa since the latter is a malum in se while the former is a malum prohibium NATO, a national union of teachers was able to find jobs abroad for its member b y directly contacting other teachers organizations in foreign countries, without charging additional fees. Is this legal? No. Only persons or entities with appr opriate license or authority can engage in recruitment and placement of workers. Contact services are activities that fall within the scope of recruitment and p lacement of workers. A paper manufacturing company in Cainta would like to know if it needs to obtain

a license authority before it can recruit workers for its plant. No license or authority is necessary. The company is not engaged in the business of recruitmen t and placement of workers, it is not recruiting workers to be employed by other s. It does not represent a principal. It is recruiting its own workers. ALIEN EMPLOYMENT Art. 40 : Employment Permit of Non-resident Aliens Any alien seeking admission t o the Philippines for employment purposes and any domestic or foreign ER who des ires to engage an alien for employment in the Philippines shall obtain an Alien Employment permit from the DOLE . For an enterprise registered in preferred areas of investments, said alien emplo yment permit must be issued upon recommendation of the government agency charged with the supervision of the registered enterprise. Sec. 7, Rule XIV, Book I, IRR s : The Alien Employment permit shall be valid for a minimum period of 1 year. Who are subjected to it: 1.ALL foreign nationals seeking admission to the Philippines for employment 2.Missionaries or religious workers who intend to engage in gainful employment 3.holder of special investors resident visa ,special retirees resident visa, tre aty trades visa or special non-immigrant visa who occupy an executive/technical position in any establishment. 4.agnencies whether public/private who secure service of foreign property to pra ctice their profession in Philippines under reciprocity and other international agreements 5.non-indo Chinese refugees who are asylum seekers and given refugee status by t he UN. 6.resident foreign nationals seeking employment in the Phil. Exempted are: Diplomatic officials, consular officials and national organization . Art. 41 : Prohibition Against Transfer of Employment (a) After the issuance of an employment permit, the alien shall not transfer to another job or change his ER without prior approval of the Secretary of Labor. Art. 288 : Any alien found guilty shall be summarily deported upon completion of service of sentence(other grounds are misrepresentation, failure to renew and p ersons non grata)

May an ER in the Philippines employ a worker who is not a Filipino citizen? Yes, except to nationalized activities such as: a. public utility to develop, exploit and utilize natural resources 60% Filipino ; b. Mass media 100% owned by Filipino citizens c. Advertising 70% Filipino owned d. Retail Business 100% Filipino owned e. Financing business 60% Filipino owned Are there exceptions to the prohibition against employment of aliens in entities engaged in nationalized activities? Yes, when (a) the Secretary of Justice spec ifically authorizes the employment of technical personnel; or (b) where aliens a

re elected members of Board of Directors in proportion to their allowable partic ipation in the capital; or (c) when allowed under certain special laws. 2006 notes: A resident alien need not obtain an employment permit in order to be employed in the Philippines. (Almodiel vs. NLRC) what they are required ,toget her with resident immigrants are Alien Employment registration certificate. Alien Employment Permit Conditions for Grant Art. 40 : The employment permit may be issued to a non-resident alien or to the applicant ER after a determination of -competent -able and -willing at the time of the application to perform the services for which the alien is de sired. [The DOLE is the agency vested with jurisdiction to determine the questio n of availability of the local workers. (General Milling vs. Torres) Sec. 5, Rule XIV, Book I, IRR s : Requirements for Employment Permit Applicants he applicant for an employment permit shall be accompanied by the following: a. Curriculum vitae signed by the applicant indicating the educational backgroun d, his work experience and other data showing that he possesses technical skills in his trade or profession. b. Contract of employment between the ER and the principal, which shall embody t he following, among others: > That the non-resident alien shall comply with all applicable laws and rules an d regulations; > That the non-resident alien worker and ER shall bind themselves to train at le ast 2 Filipino understudies; and > A designation by the ER of at least 2 understudies which must be the most rank ing regular EE s in the section or department for which the expatriates are being hired to ensure actual transfer of technology. ER s right to hire labor is not absolute since the legislature has power to make r egulation subject only to the condition that they pass the reasonableness and pu blic interest test. T

POEA (summary) Appeal to secretary of DOLE within 10 calendar days for cancellation/revocation/ supervision of license or authority Appeal to NLRC within 10 days for violation of overseas employment contracts,or disciplinary cases filed against overseas contract workers Original and exclusive jurisdiction over all claims arising out of an er-ee rela tionship by virtue of any law or contract involving including: -disciplinary cases

-pre-employment cases w/c are administrative in character -violations of conditions for issuance of license or authority to recruit worker s. DEVELOPMENT OF HUMAN RESOURCES Art. 58 : Apprenticeship oretical instruction. Practical training on the job supplemented by related the

Art. 73 : Learners Persons hired as trainees in semi-skilled and other industrial occupations which are non-apprenticeable and which may be learned through practi cal training on the job in a relatively short period of time which shall not exc eed 3 months. Art. 78 : Handicapped workers Those whose earning capacity is impaired by age or p hysical or mental deficiency or injury A. APPRENTICES must be approved by TESDA which is evidence by the apprenticeship agreement. 1. Period of apprenticeship shall not exceed 6 months. 2. Wages shall not start below 75% of the minimum wage.

Art. 60 : Only ER s in highly technical industries and only in apprenticeable occu pations may employ apprentices. Sec. 1, Rule IV, Book II, IRR s : Highly Technical Industries Trade, business, enter prise, industry or other activity which is engaged in the application of advance d technology. Art. 58 : Apprenticeship Occupation Requires more than 3 months of practical train ing supplemented by related theoretical instruction. - 1 month probation - prior approval by TESDA of the proposed apprenticeship program is a condition sine qua non before an apprenticeship can be validly entered into - employer is not obliged to employ the apprentice after the completion of his t raining Art. 70 : Apprenticeship programs shall be primarily voluntary except: a. When national security or particular requirements of economic development so demand, the President may require compulsory training where the shortage of trai ned manpower is deemed critical by the Secretary of Labor. b. Where services of foreign technicians are utilized by private companies in ap prenticeable trades. Qualifications of an Apprentice: A.At least 15 years of age: provided, those below 18 years of age shall not work in hazardous occupations; B.Be physically fit for the occupation. C.Possess vocational aptitude and capacity. D.Possess the ability to comprehend, and follow oral and written instructions. ( Sec. 11, Rule VI, Book III, IRR s) A 5-star hotel would like to have an apprentice program dishwashers? No. This is

not an apprenticeable program occupation because proficiency can be attained wi thin a very short period. Besides, the hotel industry is not highly technical. ( Alcantara) After working for 1 month may an apprentice be dismissed without cause? No. Afte r the probationary period of 1 month, the apprenticeship agreement may be termin ated only for cause. 2006 notes: but if it is less than 1 month, then the ER may terminate the appren tice at will or no cause.

Causes for termination of apprenticeship agreement BY a. b. c. ay d. APPRENTICE Repeated violation by ER of agreement Cruel or inhuman treatment Personal problems which prevents a satisfactory performance (bad health or aw sila ng misis nya) Substandard working conditions

EMPLOYER a. habitual absentism b. willful disobedience e.g. rules c. insubordination lawful order d. poor physical conditions apprentice e. theft or malicious destruction f. poor efficiency of performance g. engaging in violence h. gross misconduct i. bad health or continuing illness. (Sec. 25, Rule VI, Book II, IRR s) * employer must make a commitment to employ the business

B. LEARNERS - Learnership programs must be approved by TESDA * Art. 74 : Learners may be employed when: 1. no experienced worker is available 2. the employment of learners is necessary to prevent curtailment of employment opportunities 3. and the employment does not create unfair competition in terms of labor costs or impair or lower working standards. Art. 75 : 1. Duration of the learnership period shall be 3 months; 2. Wages and salary rates begin at not less than 75% minimum wage; and 3. A commitment to employ learners if they so desire, as regular EE s upon complet ion of the learnership. > All learners who have been allowed or suffered work during the first 2nd month s to be deemed EE s training is terminated by the ER before the end of the stipula ted period though no fault of the learner. Art. 76 : Learners employed in piece or incentive-rate jobs during training shal l be paid in full for the work done. J entered into a learnership agreement with employer A. Before the end of 2 mon ths, A terminated the agreement. When J requested for a chance to let him finish the 3 months period. At the end of 3 months, A refused to hire J. Is the stand of A sustainable? No. A has a commitment under the learnership agreement to empl oy J as a regular worker upon the completion of the learnership.

C. HANDICAPPED WORKERS Art. 79 : Handicapped workers may be employed when their employment 2. is necessary to prevent curtailment of employment opportunities; and 3. when it not create unfair competition in labor costs or lower working standar ds. Conditions of Employment - not exceed 8 hours - allowed overtime Art. 80 : Rates to be paid to handicapped workers shall not be less than 75% of the applicable minimum wage. Employment agreement must state the duration of the employment period and the wo rk to be performed. Art. 81 : Handicapped workers may be hired as apprentices or learners if their h andicap is not such as to effectively impede the performance of job operations i n the particular occupations for which they are hired. Ratio of theoretical vs. on the job training > 100: 2000 - may work overtime duly credited as his training time * Art. 72 : The Secretary of Labor may authorize the: 2. hiring of apprentices without compensation whose training on the job is requi red by the school or training program curriculum as a requisite for graduation o r board examination. There is no ER-EE relationship between students on one hand , and schools, where there is written agreement between them under which the fo rmer agree to work for the latter in exchange for the privilege to study free o f charge. (Sec. 14, Rule X, Book III, IRR s) 3. A clerk in the College of Law of a University worked without pay but was allo wed to take up no more than 3 units per semester free of charge. The clerk resig ned and demanded payment of unpaid wages. Is the clerk entitled to unpaid wages? Yes. Sec. 14, Rule X, Book III, IRR s : only applies in instances where the stude nts are given real opportunity, including such facilities as may be reasonably n ecessary to finish their chosen courses under such arrangement. In this problem, the clerk was not given any real opportunity to finish law as he was allowed to take up no more than 3 units per semester. There is therefore an ER-EE relation ship between the clerk and the university. (Alcantara) Enforcement 1. Art. 66 : Appeal to the Secretary of Labor - The decision of the authorized agency of the DOLE may be appealed to the Secretary of Labor within 5 days from

receipt of the decision. The decision of the Secretary of Labor shall be final a nd executory. 2. Art. 67 : Exhaustion of Administative Remedies No person shall institute any action for the enforcement of any apprenticeship agreement or damages for breach of any such agreement, unless he has exhausted all available administrative rem edies. CONDITIONS OF EMPLOYMENT HOURS OF WORK Normal Hours The 8-hour labor law was designed not only to safeguard the health and welfare o f the laborer but in a way to minimize unemployment by forcing ER s, in cases, whe re more than an 8-hour operations is necessary, to utilize different shifts of l aborers working only for 8 hours each. (Manila Terminal vs. CIR) 2006 notes: if agreed by parties, instead of 8 hrs pwede 7 hours ang duty. Art. 83 : The normal of hours of work of any EE shall not exceed 8 hours a day. Art. 84 : Hours worked shall include: A.all time during which an EE is required -to be on duty -to be at a prescribed workplace and B.all time during which an EE is suffered or permitted to work. Rest periods of short duration during working hours shall be counted as hours wo rked. Principles in Determining Hours Worked(2005 Revision) 1. All hours are hours worked which the EE is required to give to his ER regardl ess of whether or not such hours are spent in productive labor or involve physic al or mental exertion; 2. An EE need not leave the premises of the workplace in order that his rest per iod shall not be counted, it being enough that a. he stops working, b. may rest completely and c. may leave his workplace, to go elsewhere, whether within or outside the prem ises of the workplace; 3. If the work performed was necessary or it benefited the ER or the EE could no t abandon his work at the end of the normal working hours because he had no rep lacement, all the time spent for such work shall be considered as hours worked, if the work was with the knowledge of his ER or immediate supervisor; 4. The time during which an EE is inactive by reasons of interruptions in his wo rk beyond his control shall be considered working time either if the imminence o f the resumption of the work requires the EE s presence at the place of work or if the interval is too brief to be utilized effectively and gainfully in the EE s ow n interest. Jose works as a janitor. He continues sweeping the floors after 5:00 p.m The mana

ger is aware of this, but he does not stop Jose from doing work after 5:00 p.m. Is this hours of work? Yes. Although Jose was not instructed expressly to render work, he was impliedly allowed to do so by failure of the ER to warn him agains t rendering such work. Besides the work rendered by Jose benefited the ER. Waiting Time 1. Sec. 5, Rule I, Book III, IRR s : Waiting time spent by an EE shall be consider ed as working time if waiting is an a. integral part of his work, or b. the EE is required to engage by an ER to wait The controlling factor is whether waiting time spent in idleness is so spent pre dominantly for the ER s benefit or for the EE s. (Azucena) 2. S, a company driver has the following work schedule: 8:30 a.m. - fetches G.M .; 9:00 a.m. 12:00 noon does nothing on call for G.M. at the company premises ; 12 noon 1:00 p.m. lunch; 1:00 p.m. 5:00 p.m. drives the G.M. to conferences; 5:0 0 p.m. goes home. The company refuses to pay him for the 9:00 a.m. to 12:00 noon period. Is this valid? No. S is not free to make use of the period effectively and gainfully for his own purposes. He must remain in the premises as at any tim e he may be called to drive for the G.M. (Alcantara) 3. 30 minutes prior to the start of the scheduled working hours, the workers of an enterprise assembled at a designated area to answer roll call. As their house s are situated right where the farms are located, the workers can go back in the ir houses after roll call to do some chores. Is the assembly time working time? No. The works are not subject to the absolute control of the company during the period. The workers were not deprived of the time to attend to other personal pu rsuits. (Aria vs. NLRC) Idle Time 1. A laborer need not leave the premises of the factory, shop or boat in order t hat his period of rest shall not be counted, it being enough that he cease to wor k , may rest completely and leave or may leave at his will the spot where he actua lly stays while working, or go somewhere else, whether within or without the fac tory, shop or boat. (Luzon Stevedoring vs. Luzon Marine Dept. Union) 2. A, an accountant in the manufacturing firm, has idle time in her work schedul e, waiting for company papers to work on. She dovotes this time working on papers of other firms for which she receives remuneration. Is the firm obligated to pa y her for this time? Yes. Although she is working on the papers of other compani es, she has no absolute control over her time. Her ER may at any time require he r to do some work. She cannot furthermore leave the place of work during her wor k schedule. (Alcantara) 3. T, a machine operator was forced to stop operating his machine for 1 hour dur ing a brownout. Is this working time? Yes. The interruption was not due to the f ault of T. Besides 1 hour is too brief to be utilized effectively and gainfully for his own interest. 2006 notes: if made to work, example 8 am dapat magstart ang duty, pero 7 pa lan g ginapatrabaho na it is compensable. 2006 notes:for non-productive, like taking shower (which is integral to company s SOP) then it is compensable -- also, kahit dismissal na but cement mixer is still grinding cement, alangan n aman iwanan mo yan, so it is still compensable. --but if you are a carpenter and after work you have to baid your tools, it is n ot compensable coz its your own tools.

Meal Time Sec. 7, Rule I, Book III, IRR s : Every ER shall give his EE s not less than 1 hour time-off for regular meals, except in the following cases where a meal period of not less than 20 minutes may be given by the ER provided > Where work is Non-manual in nature or does not involve strenuous physical exer tion; > Where the establishment regularly Operates less than 16 hours a day; > In cases of actual or impending Emergency or there is urgent work to be perfor med on machineries and equipment to avoid serious loss which the ER would otherw ise suffer; and > Where the work is necessary to Prevent serious loss of perishable goods. That such shorter meal period (provided above) is credited as compensable hours worked of the EE But if it is the EE who requested for the shorter meal time, then such shortened meal period is not compensable. Rest periods or coffee breaks running from 5 to 20 minutes shall be considered a s compensable working time. Where during the so-called meal period, the laborers are required to stand by fo r emergency work, or where said meal hour is not one of complete rest, such peri od is considered overtime. (Pan Am vs. Pan Am EE s Association) Working While Sleeping * Sleeping time may be considered working time if it is subject to serious inter ruption or takes place under conditions substantially less desirable than would be likely to exist at the EE home i.e. firemen permitted to sleep a portion of t he time they are so on duty at the fire station.

On Call 1. Sec. 5, Rule I, Book III, IRR s : An EE while he is required in the ER s premises or so close thereto that he cannot use the nd gainfully for his own purpose shall be considered as working all. An EE who is not required to leave word at his own or with s where he may be reached is not working while on call. to remain on call time effectively a hours while on c company official

2. If an EE is kept within reach through a cellular phone. Is it on call? No. (A zucena) 3. GenRule: You are not compensable but the moment you are called then it is com pensable. In PanAM case, SC rules that even while waiting,it is compensable.

Travel Time Principles which determine whether or not time spent in travel is working time:

Travel from Home to Work Normal travel from home to work is no work time but an emergency call outside of regular working hours requiring him to go to his regul ar place of business is working time. Travel that is all in the day s work Time spent by an EE in traveling from one job site to another, during the workday, must be counted as hours worked. Travel away from home Travel away from home is clearly worktime when it cuts acr oss the EE s workday, except during meal period or when EE is permitted to sleep i n adequate facilities furnished by the ER. The time is not only hours worked on regular workdays but also during corresponding working hours on non-working days . Outside of these regular working hours, travel away from home is not considere d working time. (Azucena)

Lectures, Meetings, Training Programs Sec. 6, Rule I, Book III, IRR s : Attendance at lectures, meetings, training progr ams and other similar activities shall not be counted as working time if all of the following conditions are met: 1. Attendance is outside of the ER s regular working hours; 2. Attendance is in fact voluntary; and 3. The EE does not perform any productive work during such attendance. Semestral Break Regular full-time teachers are entitled to salary and COLA during semestral brea k. (U.Pang. Faculty Union vs. U. Pang.)

The following are not entitled to OVERTIME PAY, PREMIUM PAY FOR REST/HOLIDAYS, NIGHT SHIFT DIFFERENTIALS, HOLIDAY PAY,SERVICE INCENTIVE LEAVE, WEEKLY REST PER IODS and SERVICE CHARGE 1.Government EE s whether employed by the National Government or any of its political subdivisions , including those employed in GOCC s with original charters BUT IF GOVT EMPLOYEES A RE UNDER LABOR CODE(NOT UNDER CIVIL SERVICE since no original charter) THEN THEY A RE GOVERNED BY THIS TITLE. 2.Managerial (Power to hire and fire) Employees AND Other officers or members of the managerial staff if they perform the following duties and responsibilities 3.Field personnel Non-agricultural EE s who regularly perform their duties away from the principal place of business or branch office of the ER and whose actual hours of work in the field cannot be determined with reasonable cer tainty. 2006 notes: not field personnel are fishermen and linemen. 2006 notes:field personnel are sales rep and med rep 4.Members of the family of the ER who are dependent on him for support 5.Domestic helpers Minister to a natural family. So if it minister to a bachelor(binata) ,then that is not domestic helper but it is personal service of another like a bodyguard a nd a chauffer. 2006 notes: DH cannot self-organized and they cannot be assigned to commercial o r industrial area, coz if they will be, then it will be converted to industrial/ commercial worker (which includes the family driver)

6.persons in the personal service of another (like guards and private nurses). However, house personnel hired by a ranking company official, but paid for the c ompany itself, to maintain a staff house provided for the official, are not the latter s domestic helpers but regular EE s of the company. (Cadiz vs. Philippine Sin ter)

7.And workers who are paid by results. [Including those who are paid on piece-wo rk, takay , pakiao , or task basis if their output rates are in accordance with the st andards prescribed.] 2006 notes: pc rate workers are entitled to COLA and 13th month pay while task b asis workers are not entitled to COLA and 13th month pay. 1Foremen, inspectors and supervisors given the power to recommend hiring and fir ing of EE s but where ultimate power to hire or fire rested with personnel manager ? No. Where such recommendatory powers are subject to evaluation and review, the same are not effective and not an exercise of independent judgment as required by law. ( Franklin Baker Company vs. Trajano) 2.Cutter in tailoring shop was assigned chore of distributing work to shop s tailo rs when the shop s manager were absent. He saw to it that work conformed with patt ern he had prepared and if not, had them redone, repaired or sewn. No. He did no t participate in policy-making. It is true that in the absence of the manager an d assistant manager, he distributes and assigns work to EE s but such duty though involving discretion is occasional and not regular and customary. (Villuga vs. N LRC) 3.In TIMEX case, there is quota, but quota is purpose of discipline so it is sti ll considered pc rate ,however, if your given time ,then you are not a pc rate w orker.

8.Retail and Service Establishments Pearl(who owns the pearl in the food?) if retail, you buy the entire food then t ake out so you own the pearl, but if service: restaurant owns the inedible part (pearl)

9.Health Personnel Entitled to rest day after 5 working days, if you have him work on 6th day ,you have to pay him a premium. 10.Deep Sea Fishermen

OVERTIME WORK Art. 87 : Overtime Work regular work day plus 25% basic hourly rate (hourly rate= Wage per day/ 8) Special days, holiday or rest day plus 30% of the regular hourly rate on said da ys. Art. 89 : Emergency Overtime Work - Any EE may be required by the ER to perform overtime work in any of the following cases: a.When the country is at war b.When any other national or local emergency has been declared c.When it is necessary to prevent loss of life or property or in case of imminen t danger to the public safety due to an actual or impending emergency in the loc ality caused by serious accidents, fire, flood, typhoon, earthquake, epidemic or other Disaster or calamity. d.When there is Urgent work to be performed on machines and installations in ord er to avoid serious loss or damage to the ER or some other cause of similar natu re. e.When the work is necessary to prevent loss or damage to Perishable goods. f.Where the completion or continuation of the work started before the 8th hour i s necessary to prevent Serious obstruction or prejudice to the business operatio ns of the ER. The EE s refusal to obey the order of the EE constitutes insubordination for which he may be subjected to disciplinary action. (Alcantara) Art. 88 : Undertime work in any particular day shall not be offset by overtime w ork on another day BUT not on someday. ---Permission given to the EE to go on leave on some other day of the week shall not exempt the ER from paying the additional compensation required. Art. 90 : For purposes of computing overtime and other additional remuneration as required by this Chapter the regular wage of an EE shall include the cash wage only, without deduction on account of facilities provided by the ER. (2005 Pointers) Y, corporation, as a company policy, required its EE s to render o nly 6 hours of work daily but pays them the minimum wage corresponding to 8 hour s work. Later, the full 8-hours was required without any increase in wages. Are the EE s entitled to overtime pay? Yes. Though voluntary practice or policy, the c ompany has fixed the normal workday at 6 hours. It now constitute part of the te rms and conditions of employment and cannot be unilaterally withdrawn by the ER. ) Distinguish overtime pay from premium pay Overtime pay is additional compensation for work done beyond the normal work hou rs on ordinary working days. Premium pay is additional compensation for work rendered by the EE on days norma lly he should not be working. But additional compensation for work rendered in e xcess of 8 hours during these days is also considered overtime pay. A was late for work on a particular day. To offset for the time he was late, A w

orked on additional period equivalent to the period he was late for work. The pe riod was offset against A undertime. Is this valid? Yes. The prohibition to offse t overtime against undertime applies to undertime incurred and overtime rendered on different days. -Provisions for overtime covers both profit and non-profit establishment or unde rtaking For purposes of computing overtime EGULAR WAGE includes the cash wage only; without deduction of facilities provide d. Compressed Week voluntary basis

* While as a general rule, the right to overtime pay cannot be waived under exis ting laws, the EE s and ER can agree to a compressed workweek of 5 days of 9 hours each with no payment of overtime if this will redound to the benefit of the wor kers i.e. if the original workweek is reduced from Monday Saturday to Monday Fri day. (Azuzena) Conditions for Compressed Work Week 2. voluntary agreed upon 3. not to exceed 48 hours/ week 4. no diminution on take home pay or fringe benefits 5. waivers must be made 6. all hours exceeding 48 hours/week considered overtime 7. must submit report to DOLE Retail Establishment--sale of goods for personal or household use ex. grocery Service Establishment--sale of services to individuals for their own or househol d use ex. T.V. repair shop

No Formula Basic Contract When the contract of employment requires work for more than 8 hours at specific wages per day, without providing for a fixed hourly rate or that the daily wages include overtime pay, said wages cannot be considered as including overtime com pensation. (Manila Terminal vs. CIR)

Built-In Compensation The employment contract may provide for a built-in overtime pay. Because of this, non-payment of overtime pay by the ER is valid. (Engineering equipment vs. Minis ter of Labor)

2006 notes:if started undertime, kahit lampas na 5:00 if in total is not more th an 8 hrs, not entitled to overtime.

2006 notes: in shifts, the 1st day is included in your overtime since you count 24 hours (Phil based work on a 24 hour basis unlike in US whereby it is based on working hour.) 2006 notes:May the right to overtime pay be waived? As a general rule, the right cannot be waived. (Cruz vs. Yes Sing) However, when the waiver is exchange for certain benefits and privileges, which may be more than what will accrue to them in overtime pay, the waiver may be permitted. (MERALCO Workers Union vs. MERALC O)

WEEKLY REST PERIODS Art. 91 : It shall be for the duty of every ER, whether operating for profit or not, to provide EE a rest period of not less than 24 consecutive hours after eve ry 6 consecutive normal working days. The ER shall determine and schedule the weekly rest day of his EE s.However, the E R shall respect the preference of EE s as to their weekly rest day when such prefe rence is based on religion grounds. Sec. 4, Rule III, Book III, IRR s : Where however the choice of the EE s as to their rest day based on religious grounds will inevitably result in serious prejudi ce or obstruction to the operation of the undertaking, the ER may so schedule th e weekday rest day of their choice at least 2 days in a month. Art. 92 : When ER may require Work on rest day a. In case of actual or impending emergency caused by serious accident, fire, fl ood, typhoon, earthquake, epidemic, or other Disaster or calamity to prevent los s of life, or imminent danger to public safety. b. In case of Urgent work, to avoid serious loss which the ER would otherwise su ffer; c. In the event of Abnormal pressure of work due to special circumstances, where the ER cannot ordinarily be expected to resort to other measures; d. To prevent or damage to Perishable goods; e. Where the Nature of work requires continuous operations and stoppage of the w ork may result in irreparable injury or loss to the ER; and f. Analogous (avail of favorable weather) or similar circumstances

How much is a worker entitled if he works on a rest day Scheduled rest day additional compensation of at least 30% of his regular wage. entitled to additional compens

Scheduled rest day which is a non-working holiday ation of at least 50% of his regular wage.

Scheduled rest day which is a regular holiday entitled to additional compensatio n of at least 30% of his regular holiday rate of 200% based on his regular wage rate. (Sec. 4, Rule III, Book I, IRR s) V works on board the M/V Starfish. Sometimes, the boat remains at sea for 2 week

s, while at other times, especially during bad weather, the vessel returns to po rt only after a few days. While the vessel is in port, V stays home with his fam ily. Can V claim the additional compensation for work on rest day? V s work is suc h that no regular workdays and no rest days can be scheduled. In such cases, the law provides that if he performs work on Sundays and holidays, he shall be paid an additional compensation of at least 30 % of his regular wage. [Art. 39 (b)]

NIGHT WORK Art. 86 : Every EE shall be paid night shift differential of not less than 10% o f his regular wage for each hour of work performed between 10:00 p.m. and 6:00 a .m. This rule shall apply to all EE s except: 1.Those of the government and any of its political subdivisions, including GOCC s. 2.Retail and service establishments regularly employing not more than 5 workers (2005 Pointers:NEWEST ADDITION!!!). 3.Domestic helpers and persons in the personal service of another. 4.Managerial EE s. 5.Field personnel and other EE s whose time and performance is unsupervised by the ER. 6.Includes task and contract basis X works at a gasoline station which has only 5 EE s. Is he entitled to night shift differential? No. He works in a retail establishment employing not more than 5 workers. (2004 Azucena) What if X works at King s Minimarts, a retail store chain with 10 outlets of 2 EE s each outlet. Is he entitled to night shift differential? Yes. The total number o f EE s of the ER exceeds 5. It is at least 20. (Id)

HOLIDAY PAY 2006 notes: dapat present in the immediately preceeding day (before holiday) in order to avail of regular holiday pay. If required to work on regular holidays---regular rate x 2 If not required ,then x 1 Art. 94 : Every worker shall be paid his regular daily wage during holidays, exc ept .in retail and service establishments regularly employing less than 10 workers (2 005 Pointers: ADDITIONAL!!!!)

Regular Holidays (2006 Revision) 1. New Years day 2. Maundy Thursday 3. Good Friday 4. Bataan Day 5. Labor day 6. Independence day 7. National heroes day 8. Bonifacio day 9. X-mas day 10. Rizal day 11. Eudil Fitr/Eudil Adha (RA 9177-Nov.13,2002) 2006 notes: dati it was 11 also ,but the day for election and referenduym was dr opped. 2006 notes:muslims are entitled to Christian holiday pay. Asian Tranmission v CA (March 15,2004) : since workers are entitled to enjoyment of 11 paid regular holidays, the fact that 2 holidays fall on same date should not operate to reduce to 10 the 11 holiday pay benefits a worker is entitled. Wellington v Trajano: if regular holiday is on Sunday, and that Monday is not a regular holiday, so an ee is not entitled to 2 regular holiday pay.

Nationwide Special Holidays(2006 Revision) 1. Nov. 1 2. Dec. 31 3. August 21(Ninoy Aquino day)

2006 notes:an hourly rate employee is not entitled to regular holiday but is ent itled to a special holiday pay.

Art. 94 : The ER may require an EE to work on a holiday but such EE shall be pai d a compensation equivalent to twice his regular rate. To receive holiday pay, the EE should not have been absent without pay on the wo rking day preceding the regular holiday. (Azucena) 1. A legal holiday falling on a Sunday creates no legal obligation for the ER to pay extra to the EE who does not work on that day, aside from the usual holiday pay, to its monthly-paid EE s. (Wellington vs. Trajano) 2. X was told by ER to work during a legal holiday which fell on a Sunday. How m uch is he entitled to? X will get 200% of his daily rate plus premium pay pf 30% of the holiday pay = regular daily rate * 230%. 3. If X works overtime during that day, how much will he earn? Holiday pay rate/ 8 plus overtime pay of 30% of the holiday hourly rate = holiday pay rate/8 * 130 %. 4. R was absent without pay on December 24. Is he entitled to holiday pay for Ch ristmas day? No. An EE may not be paid on holiday pay if he was absent on the da y preceding holiday, or in the case of Maundy Thursday and Good Friday, if he wa s absent on the day preceding the first holiday. It would be different if the da y preceding the legal holiday was the EE s rest day. Then he is entitled to holida y pay. (Alcantara) > On leave with pay 5. Can monthly pay under employment contract already include pay for any unworke d regular holiday within the month? Yes. This is management prerogative provided that the monthly pay comply with the least minimum rates prescribed under minim um wage laws. > What an employer has voluntarily given cannot be unilaterally withdrawn

> If the employees are already paid for all non-working days, the divisor should be 365 and not 251 Monthly paid EE s are not excluded from the benefits of holiday pay. (Mantrade vs. Bacungan) X is a manicurist in the D Style Barbershop which has 20 barbers and manicurists. Is she entitled to holiday pay? Yes. X is an EE who is paid by results ad she wo rks in a service establishment employing more than 10 persons. (Sec. 8, Rule IV, Book III, IRR s) Faculty Private School Regular holidays specified by law are known to both school and faculty members a s no class days . Thus, hourly paid faculty members are not entitled to their pay f or unworked regular holidays. On the other hand, hourly paid faculty members are however entitled to their regular hourly rate on days declared as special holid ays or when classes are called off or shortened since the faculty member, althou gh forced to take a rest, does not earn what he should earn on that day. (JRC vs . NLRC) Divisor as Factor * The daily rate is a constant figure for the purpose of computing overtime and night differential pay and commutation of sick and vacation leave credits, and t his should also be the same basis for computing unpaid holidays. (Union of Filip ro vs. Vivar) THIRTEENTH MONTH PAY basic salary: For purposes of computing the 13th month pay, basic salary -include remuneration or earnings paid by this ER for services rendered -but does not include allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary, such as the cash equivalen t or unused vacation and sick leave credits, overtime, premium, night-differenti al and holiday pay, and cost-of-living allowances. -However, these salary-related benefits should be included as part of the basic salary in the computation of the 13th month pay if the individual or collective agreement, company practice or policy, the same are treated as part of the basic salary of the EE s. The following ER s are still not covered by PD 851: The government and any of its political subdivisions, including GOCC s, except tho se corporations operating essentially as private subsidiaries of the government. ER s already paying their EE s a 13th month pay or more in a calendar year or its eq uivalent at the time of this issuance. [The term its equivalent shall include Christmas bonus, mid-year bonus, cash bonus es and other payments but shall not include cash and stock dividends, cost of li ving allowances and other allowances regularly enjoyed by the EE, as well as non -monetary benefits. Where an ER pays less than required 1/12th of the EE s basic s alary, the ER shall pay the differences.] ER s of household helpers and persons in the personal service of another in relati on to such workers, and ER s of those who are paid on purely commission, boundary, or task basis, and thos

e who are paid a fixed amount for performing specific work, irrespective of the time consumed in the performance thereof, except where the workers are paid on p iece-rate basis in which case the ER shall grant the required 13th month pay to such workers. A distressed ER may qualify for exemption for the 13th month pay if there is pri or authorization from the DOLE. (Dentech vs. NLRC) The CBA provides for the payment of Christmas bonuses to all regular EE s in the b argaining unit with of at least 1 year of continuous service. Is this equivalent to the 13th month pay? No. The Christmas bonuses provided in the CBA accords a reward for loyalty to certain EE s. This is evident from the stipulation granting the bonus in question to workers with at least 1 year of continuous service. The bonus therefore is to be in addition to the legal requirement. (UCP vs. NLRC) Bonus A bonus is an amount is an amount granted and paid to an EE for his industry and loyalty which contributed to the success of the ER s business and made possible t he realization of profits. (Azucena) From the legal point of view, a bonus is not a demandable and enforceable obliga tion. But it is so when it is made part of the wage or salary or compensation. I n such case, the latter would be a fixed amount and the former would be a contin gent one dependent upon the realization of profit. (Azucena) Furthermore, while normally discretionary, the grant if gratuity or bonus by reason of its long and regular concession, may become regarded as part of the regular compensation. (L iberation Steamship vs. CIR) Sec 4 Revised Guidelines on the 13th Month Pay Law: Amount : ½ of the total basic salary earned by an EE within a calendar year. The 13th month pay is to be paid only to rank-and file employees regardless of t he amount of their basic salary. Time of Payment: Not later than December 24. From 1991 to 1997, DFC included in the computation of this 13th month pay, the E E s sick, vacation and maternity leaves, In 1998, the company discontinued the inc lusion of the aforementioned items in the 13th month pay. Is this valid?The cons iderable length of time the questioned items had been included by the company in dicates a unilateral and voluntary action on its part, sufficient in itself to n egate any claim of mistake. A company practice favorable to the EE s had been esta blished, and the payments made pursuant thereto ripened into benefits enjoyed by them. Any benefit and supplement being enjoyed by the EE s cannot be reduced, dim inished, discontinued or eliminated by the ER. (Alcantara) Sec. 7, Revised Guidelines on the 13th Month Pay Law: The mandated 13th month pa y need not be credited as part of the regular wage of EE s for purposes of determi ning overtime and premium pays, fringe benefits as well as contributions to the state insurance fund, Social Security, Medicare and private retirement plans.

Basic Wage Are the sales commission of a salesman paid a guaranteed wage plus commissions i ncluded in the computation of this 13th month pay? It depends on what kind of co mmissions may properly be considered part of the basic salary, they should be in cluded in computing the 13th month pay. If the commission are not an integral pa

rt of the basic salary, then they should be excluded. (2004 Azucena) Sales commi ssions which comprised an automatic increment to the monetary value assigned to each unit of work rendered by the salesman, or that of the wages-or sales-percen tage type should be included in the 13th month pay computation. On the other han d, commission in the form of productivity bonuses which closely resembles profit -sharing payments and have no clear direct or necessary relation to the amount o f work actually done by each individual EE, or the profit-sharing or bonus-type, should be excluded from the computation of the 13th month pay. (Philippine Dupl icators vs. NLRC)

Substitute Payment Benefits in the form of food or free electricity not proper substitute for the 1 3th month pay. (Framanlis vs. Minister of Labor) 14th Month Pay The grant of the 14th month pay is a management prerogative, gratuitous in natur e and therefore it cannot be forced. (Kamaya Hotel vs. NLRC)

SERVICE INCENTIVE LEAVE -granted for those working for 1 year -can be converted to cash NOT APPLICABLE: 1. Those who are already enjoying the benefit. 2. Those enjoying vacation leave with pay of at least 5 days. 3. Those employed in establishments regularly employing less than 10 workers 4. Exempt establishments. Sec. 1, Rule V, Book III, IRR s : 5. Those of the government and any of its political subdivisions including GOCC s. 6. Domestic helpers and persons in the personal services of another. 7. Managerial EE s. 8. Field personnel and other EE s whose performance is unsupervised by the ER incl uding those who are engaged on task or contract basis, purely commission basis, or those who are paid in a fixed amount of performing work irrespective of the t ime consumed in the performance thereof. * Teachers of private schools on contract basis are entitled to service incentiv e leave. (Cebu Institute of Technology vs. Ople) * Art. 95 : 5 days incentive leave with pay for at least 1 year of service. [The term at least 1 year of service shall mean service within 12 months, whether continuous or broken, reckoned from the date the EE started working, including a uthorized absences and paid regular holidays unless the working days in the esta blishment as a matter of practice or policy, or that provided in the employment contract are less than 12 months, in which case said period shall be considered as 1 year. (Sec. 3, Rule V, Book III, IRR s)

15 day vacation and sick leave must be claimed otherwise waived - cannot be converted into cash unless allowed by employer - employer must still bind himself in CBA or grant it unilaterally - not granted by law

SERVICE CHARGES

Section 1, Rule V, Book III, IRR s : This rule shall apply only to establishments collecting service charges such as hotels, restaurants, lodging houses, night cl ubs, cocktail lounge, massage clinics, bars, casinos and gambling houses, and si milar enterprises, including those entities operating primarily as private subsi diaries of the Government. Section 2, Rule VI, Book III This rule shall apply to all EE s of covered ER s except to managerial EE s. Managerial EE a.powers of prerogatives to lay down, and execute management to lay don and exec ute management policies and/or b.hire, transfer, suspend, lay-off, recall, discharge, assign, or discipline EE s or to effectively recommend such managerial actions. > Collection of service charges is a management decision and not a requirement o f law Art. 96 : To be distributed at the rate of 85% for covered EE s [distributed equal ly among them] and 15% for management. X a waiter at DC Diner was receiving a share in the restaurant s service charges. Later, the restaurant discontinued the collection of service charges. The take-h ome pay of X was reduced by the value of the discontinued service charges. May X ask his ER to continue paying the service charges? Yes. In case the service cha rge is abolished, the share or the covered EE s shall be considered integrated in their wages. (Art. 96) The employees share in the service charges is part of th e other benefits to which he is entitled, in addition to full backwages

SUMMARY 1.)Overtime Pay -Regular day 25% per hr -Rest or Holiday 30% per hr 2.)Compensation for work (Premium Pay) on rest day additional 30% to basic wage on special holiday -if falls on working day of EE= 30% on regular wage -if falls on regular day of EE= 50% a. if CBA provides for higher pay--enforceable 3.)Night Shift Differential = 10% for each hr. (so get per hour Daily Wage/ 8) 4.)Health Personnel/6th day= 30% 5.)Holiday Pay if EE not work= 100% if EE work= 200% if EE work overtime on holiday= HOLIDAY WAGE X 130% 8 if work on Holiday w/c is his scheduled rest day= 300 x 130% if EE works OT on holiday w/c is his rest day =holiday pay on rest day/8 x 130% 6.)Service Incentive Leave= 5 days w/ pay provided has rendered at least 1 yr. s ervice 7.)Service Charges 85% to EE, 15% for Mgt. PAYMENT OF WAGES Wages Compensation for manual labor, skilled or unskilled paid at stated times, and measured by the day, week, month, or season. It indicates considerable pay f or a lower and less responsive character of employment. Salary Denotes a higher degree of employment, or a superior grade of services, a nd implies a position of office; by contrast, the term wages , while salary is sugges tive of a larger and more important service. (Gaa vs. CA)

Wage Payment Art. 102 : Forms of Payment : No ER shall pay the wages of an EE by means of pro missory notes, vouchers, coupons, tokens, tickets, chits or any object other tha n legal tender, even when expressly requested by the EE (except FACILITIES). The laborer s wage shall be paid in legal currency. (Art. 1705, NCC)

Payment of wages by check or money order shall be allowed when : a.such manner of payment is customary on the date of the effectivity of this Cod e, or b.is necessary because of special circumstances as specified in appropriate regu lations to be issued by the Secretary of Labor or as stipulated in a CBA.

CONDITIONS a.bank 1 km b.written consent of EE c.ER does not receive any pecuniary benefit d.EE given time to withdraw from the bank considered as compensable his work 2006 notes: aside from time to withdraw from bank considered to be compensable, the employee must be given transportation allowance for his travel going to the bank.

Art. 103 : Time of Payment Generally : Once every two weeks or twice a month at intervals not exceeding 16 days. No ER shall make payment with less frequency th an once a month. -Force Majeure : Immediately after the force majeure or the circumstances have ceased. -Task cannot be completed in 2 weeks in the absence of a CBA or arbitration awar d: a.The payments are made at intervals not exceeding 16 days, in proportion to the amount of work completed; b.That final settlement is made upon completion of work;

CASH WAGE (legal tender) What is basic salary? In its common, generally accepted meaning, it is the rate of pay for a standard work period, exclusive of such additional payment as bonus es and overtime (service incentive ). (Boic-Takeda vs. Dela Serna) Are emergency cost of living allowances considered part of regular wage? Yes. Th is is taken into account in determining overtime and premium pay , premium contr ibutions, social security, maternity pay, etc. (EO 178) If a company cannot pay a living wage, it has no business operating at the expen se of the lives of the workers. (Phil. Apparel vs. NLRC)

Art. 105 : Direct Payment of Wages General Rule : Wages paid directly to workers. Exceptions: 1. Force majeure rendering such payment impossible or under the special circumst ances, in which case the worker may be paid through another person under written authority given by the worker for the purpose. 2. Where the worker has died, in case the ER may pay the wages of the deceased w orker to the heirs of the latter without the necessity of intestate proceedings. Payment of wages to leader of group not violation of direct payment since the co ntract to perform the services was made by the leader of the group, for and in b

ehalf of the latter, not for each and everyone of them individually. (Bermiso vs . Escano)

Art. 104 : Place of Payment : Payment of wages shall be made at or near the plac e of undertaking, except as otherwise provided by such regulations as the Secret ary of Labor may prescribe under conditions to ensure greater protection of wage s. 1.deterioration of peace and order conditions 2.actual or impending emergencies calamity -ER must provide or reimburse transportation back and forth -Time spent collecting wages considered compensable his work

2006 notes:wages shall be paid at interval of 2 weeks not exceeding 16 days 2006 notes:kahit na ATM, ER must still furnish payroll sheet (for 3 yrs) since m oney claim prescribed on that year. But for tax purposes, it is 5 years.

TWO ATTRIBUTES OF WAGES: 1.FACILITIES AND SUPPLEMENTS The law guarantees the laborer a fair and just wage. The minimum wage can by no me ans imply only the actual minimum. Some margin or leeway must be provided, over and above the minimum, to take care of contingencies, such as increase in wants, and to provide means for a desirable improvement in his mode of living. (Atok-B ig Wedge vs. Atok-Big-Wedge Mutual Benefit Association) 2006 notes: wage must be in legal tender ( less 20 centavos are only legal tende r upto P20 only. -- an exception to such rule is FACILITIES (since it forms part of wage if furni shed by ER, it is deductible from EEs wages. Supplements Extra remuneration or special privileges or benefits given to or re ceived by the worker over and above his ordinary earnings or wages.granted for t he convenience of the ER Facilities Items of expense necessary for the laborer s and his family s existence a

nd subsistence. They form part of the wage and when furnished by the ER are dedu ctible therefrom since if they are not furnished, the laborer would spend and pa y for them just the same i.e. meals; housing for dwelling purposes; fuel includi ng electricity, gas, water for the non-commercial personal use of the EE; and ot her articles and services given primarily for the benefit of the worker or his f amily.for the benefit of the worker and his family Facilities are allowed when: 1.customarily furnished (ex- meal of the chef) 2.accepted in writing 3.fair and reasonable value The criterion in determining whether an item is a supplement or facility is its purpose. (State Marine vs. Cebu Seamen s Association) --CMC has 3 buses used to transport its workers, free of charge from Makati to i ts plat in Muntinlupa. The buses became dilapidated and the service was disconti nued by the company. The EE s demanded for their replacement. Decide with reasons. The company may be compelled to continue providing the transportation free of c harge. This is considered a supplement given over and above the ordinary earning s or wages of the workers. Once given, a supplement cannot be eliminated or dimi nished. Test on whether or not items are facilities Are these items automatically furnished by the trade? Did the employee voluntarily accepted the same in writing? Is the value thereof fair and reasonable? If the employer fails to prove this: Then it is a supplement not a facility. Once given, a supplement cannot be eliminated or diminished. Grant of bonus may be unilaterally be reduced by the employer if it depends on p rofits acquired. Because he lived 50 kilometers from its work, X requested his ER if he can slee p in the company premises. The latter agreed with the condition that he will ded uct P5.00 per day as board charges from X. Is the deduction legal? No. Lodging i s not customarily finished by the ER to his EE s. The deduction, furthermore, is n ot with the written consent of X. BENEFITS Art. 100 : Nothing in this Book shall be construed to eliminate or in any way d iminish supplements, or other EE benefits being enjoyed at the time of promulgat ion of this Code. Unless agreed otherwise, statutory benefits are apart from contractual benefits. (Meycauayan College vs. Drilon) Thus, EE s are entitled to the full amounts of bo th a wage increase under a CBA and an increase in living allowances prescribed b y law during the period when both increases are concurrently effective, for want of an agreement between the parties to treat the increase in living allowances as applicable to the wage increases. (Filipinas Golf vs. NLRC) The work of batillos, cargadores of fish catch, were limited to days of arrival of fishing vessels. From 1976 to 1980, operators paid them a fixed monthly emerg ency allowance which included non-working days. Can the operators now discontinu e the practice and pay the batillos only for actual days worked, following the p rinciple of no work, no pay ?No. Benefits voluntarily given cannot be unilaterally withdrawn by the ER. Art. 100 prohibits the elimination or diminution of existi ng benefits.

Workers in a plastic manufacturing company are able to clean and inspect only 25 0 containers of 8 hours despite repeated appeals from management. They were paid a daily rate of P150.00. Through time and motion studies set by the DOLE, the E R was able to ascertain that an ordinary worker can clean and inspect 450 contai ners for 8 hours. The company then changed its mode of payment from time basis t o piecework at P0.40 per container. Is this valid? Yes. The company has the righ t to change the basis of the payment of the wages of the workers. The workers wo uld not suffer since it is within their capability to clean and inspect the numb er of containers to enable them to at least earn the rate they were receiving at the time the change was effected. They cannot however be deprived of benefits t hey were already enjoying at the time of such change. ** While normally discretionary, the grant of a gratuity or bonus, by reason of its long and regular concession, may become part of a regular compensation. * OR employer agreed to give its regularly without any condition imposed for it s payment

GRATUITY and WAGES Gratuity That paid to the beneficiary for past services rendered purely out of t he generosity of the giver or grantor. While it may be enforced once it forms pa rt of a contractual undertaking, the grant of such benefit is not mandatory so a s to be considered a part of labor standard law. (Plastic Town vs. NLRC)

MINIMUM WAGE Art. 99 : The minimum wages for agricultural and non-agricultural EE s and workers in each and every region of the country shall be those prescribed by the Region al Tripartite Wages and Productivity Boards. Explain the rule a fair day s wage for a fair day s labor ? Unless specifically require d by law, contract or established policy, the ER is not bound to pay wages to a worker who has not actually rendered any service. Give 2 aspects of agriculture The primary aspect covers cultivation and tillage of the soil, growing and harve sting of any agricultural and horticultural commodities and raising of livestock and poultry. The secondary aspect covers any practices performed by a farmer on a farm as an incident to or in conjunction with the farming operations.

Farmers employed by B cultivate the soil and plant and harvest tobacco and they also cut big trees grown on the land which they used for fencing and repair of t he owner s house. They claim for minimum wages for non-agricultural workers. Is th e claim valid? No. They are still agricultural workers. They perform activities which fall unde r the primary aspect of agriculture and the cutting of trees to be used for fenc ing is incidental to the farming operations and falls under the secondary aspect of agriculture. Art. 98 : This Title shall not apply > to farm tenancy or leasehold > domestic services and > persons working in their respective homes in needle or in any cottage industry duly registered in accordance with law. 2006 notes: Pc rate cannot be used for minimum wage. 2006 notes:DOLE must conduct a time and motion study to know the acceptability o f minimum, it is not the fastest nor slowest but the average.

Worker Preference-Bankruptcy Art. 110. In the event of bankruptcy or liquidation of an ER s business, his worke rs shall enjoy first preference as regards their wages and other monetary claims , any provisions of law to the contrary notwithstanding. Such unpaid wages and m onetary claims shall be paid in full before claims of the government and other c reditors may be paid. 2006 notes: this article establishes merely a rule of preference and does not cr eate a lien in favor of the workers and workers claim for unpaid wages and other monetary benefits cannot prevail over a mortgages lien The right or preference has to be asserted in distribution proceedings such as i nsolvency where all the creditors convened, their claims ascertained and invento ries and the preferences determined.

A declaration of bankruptcy or a judicial liquidation must be present before the worker s preference may be enforced. The said article cannot be viewed in isolati on; it must always be read in relation to the provisions of the Civil Code conce rning the classification, concurrence and preference of the credits. (DBP vs. Sa ntos) The aforesaid provisions of the Civil Code, including Art. 110 requires ju dicial proceedings in rem in adjudication of creditor s claims against the debtor s assets to become operative. (Alcantara) Atlas Textile mortgaged its assets to DBP. DBP foreclosed the asset. The EE s file d a complaint against Atlas and DBP for the wage differentials. The labor arbite r and the NLRC held that the worker s preference under Art. 110 does not create a lien? No. Art. 110 does not create a lien in favor of the workers. 2006 notes: worker preference cannot be superior to government claims that sprin g from sovereignty (like taxes) 2006 notes:workers preference covers only FREE property, it is not subject to su perior claim like mortgage.

PROHIBITIONS REGARDING WAGES: 1. Prohibition Against Interference in Disposal of Wages No Employer shall limit or otherwise interfere with the freedom of any employee to dispose of his wages. He (ER) shall not in any manner force,compel or oblige his employees to purchase merchandise, commodities or other properties from the employer or from any othe

r person or otherwise make use of any store or service of such employee or any o ther person (art 112). 2006 notes: penalty for violation of art 112 is a fine of not less than P1000 n or more than P10000 or imprisonment for not less than 3 months nor more than 3 y ears or both ,such fine and imprisonment at the discretion of the court.

GARNISHMENT/ATTACHMENT Under Art. 1708 of the NCC, laborers wages shall not be subject to execution or at tachment, except for debts incurred for food, shelter, clothing and medical atte ndance (Pacific Customs vs. Inter-Island Dockmen and Labor Union) Art 1708 which exempts laborers wage from attachment or execution does not apply to a responsibly placed EE, supervisory or managerial EE, but only to the rank-a nd-file. (Gaa vs. CA)

(BAR)A meat processing company gives a 25% discount to EE s for purchase on credit of its product. However, said purchases on credit will be considered payment of his wages. An EE purchases 10 cans of the product but objects to the applicatio n of his purchases as part of his wages. Is the objections valid? Yes. The application of his purchases on credit as part of his wages the product s in lieu of legal tender.

2.Prohibition Against Withholding of Wages and Kickbacks Art. 116 : Withholding of Wages and kickbacks prohibited r any person, directly or indirectly: > To withhold any amount from the wages of a worker or > Induce him to give up any part of his wages by force, stealth, intimidation, t hreat or by any other means whatsoever without the workers consent. It shall be unlawful fo

3.Prohibition against wage deductions May an ER make any deductions from the wages of EE s: General Rule : No. His own behalf or in behalf of any person. Exceptions: [Allowable Deductions]

1. Deductions of SSS, Medicare and Pag-ibig Premiums 2. Withholding tax (NLRC) 3. Deductions for reimbursement of insurance premium advanced by the ER where th e worker is insured with his consent by the former. (Art. 113) 4. Deductions for unions dues where the right to check-off has been recognized b y the ER or individual EE himself. (Art.113) 5. Deductions made with the written authorization of the EE for payment to a 3rd person and the ER agrees to do so, provided that the latter does not receive an y pecuniary benefit, directly or indirectly, from the transaction. 6. Deductions for reimbursement of loss or damage to tools, materials or equipme nt supplied by the ER to the EE, in trades, occupations or business where the pr actice of making such deductions is recognized. (Art. 114) 7. Deductions as a disciplinary measure for habitual tardiness 8. Agency fees under Art. 248 (e) of the Code. 9. Deductions for debts due the ER from the EE, when such debts become due and d emandable. (Art. 1706, NCC) 10. In court awards, wages may be the subject of execution or attachment, but on ly for debts incurred for food, shelter, clothing and medical attendance. (Art. 1708) 11. Deductions for value of meals and others. An obligation arising from non-payment of stock subscriptions to a corporation c annot be offset against a money claim of an EE against an ER. (Apodaca vs. NLRC) The wife of an EE tells the manager that her husband has not been giving her sup port. Taking pity, the manager instructs the cashier to deduct 1/3 of the EE s pay and give the same to the wife. Is this valid? No. The EE concerned did not give his written authorization for the deduction. (Alcantara) Z borrowed P500.00 from his ER. When the loan became due and demandable, Z did n ot pay his ER. May the ER, without the written authorization of Z, deduct the lo an from the latter s wages?Yes. Compensation can take place under Art. 1706 of the NCC: withholding of wages except for a debt due shall not be made by the emplo yer.

CHECK-OFF * An ER may be compelled to check-off union dues from the wages of his EE when the ER has been authorized to do so by the EE. This is upon the theory that it is n ecessary to promote the welfare and integrity of the union to which he belongs. (Manila Trading vs. Manila Trading Labor Association) 4.Prohibition against Deposits for Loss or Damage (this is part of the allowable deductions of the previous page)

Art. 114 : Deposits for Loss or Damage : No ER shall require his worker to make deposits from which deductions shall be made for the reimbursement for loss or d

amage to tools, materials or equipment supplied by the ER except: a. When the ER is engaged in such trades, occupations or business where the prac tice of making deductions or requiring deposits is a recognized one, or b. is necessary or desirable as determined by the Secretary of Labor in appropri ate rules and regulations. 2006 notes: this is required in industry/works like the banktellers, cashier and delivery boy/conductor where they deposit a bond. 2006 notes:the basis is not the asset value but the value less depreciation(ex:d elivery boy nanakaw ang motor,based it on the book value of the motor)

(BAR)J works as a dishwasher in a big restaurant. At the time of his employment, he was told that it was an industry practice that the value of plates broken by him while in the performance of his work will be deducted from his wages. May m anagement deduct the said value from J s wages? Yes, provided the following condit ions are met: The practice of making deductions is a recognized one or is necess ary and desirable in the business of the ER. 1. J is clearly shown to be responsible 2. He is given reasonable opportunity to show cause why the deduction should not be made. 3. The amount of deductions is fair and reasonable and does not exceed the actua l loss or damage. 4. The deduction does not exceed 20% of J s wages in a week. (Sec. 14, Rule VIII, Book III, IRR s)

(BAR)A marketing firm retains 5% of the weekly salary of its collectors as a dep osit to answer for any shortage in their collections. These are refunded at the end of the month, if no shortages are incurred. Is the practice legal? It depend s. If it is a recognized practice of ER s to require such deposits, then such is l egal, since the sum retained is not excessive and is kept by the ER only for a r easonable period. (BAR)A taxicab company requires its drivers to make deposits to defray boundarie s and to cover car wash payments. Is this legal? Art. 114 does not permit deposi ts for deficiency in the remittances of drivers boundary but the requirement for d eposit for car wash payments is lawful since car washing after a tour of duty is a practice in the taxi industry and in fact dictated by fair play, if drivers w ant to save their P20 deposit for car wash, there is nothing to prevent them fro m cleaning the taxi themselves. (5-J Taxi vs. NLRC)

5.Prohibition Against Deductions to Ensure Employment Art. 117 : Deduction to ensure employment - It shall be unlawful to make any de duction from wages of any EE for the benefit of the ER or his life representativ e or intermediary as consideration of a promise of employment or retention in em ployment.

Art. 222 - No attorneys fees, negotiation fees or similar charges of any kind ar ising from any collective bargaining negotiations or conclusions of the CBA shal l be imposed on any individual member of the contracting union: Provided, howeve r that attorneys fees may be charged against union funds in an amount agreed upo n by the parties. Any contract, agreement or arrangement of any sort to the cont rary shall be null and void. In cases of unlawful withholding of wages the culpable party may be assessed att orney s fees equivalent to 10% of the amount of wages recovered. It shall be unlawful for any person to demand or accept, in any judicial or admi nistrative proceedings for the recovery of the wages, attorney s fees, which excee d 10% of the amount of wage recovered

6.Prohibition Against Retaliatory Measures and False Reporting Art. 118 : It shall be unlawful for an ER to reuse to pay or reduce the wages an d benefits, discharge or in any manner discriminate against any EE who has filed any complaint or instituted any proceedings under this Title or has testified o r is about to testify in such proceedings. 2006 notes: Both articles 118 and 248(F) prohibit retaliation or reprisal agains t such employee. The difference is that under 118 the subject of testimony is wa ges ,thereby ,making the ER s act unlawful but not constituting a ULP while under 248 (f) it is ULP. Therefore, 118 is not strikeable.

Art. 119 : It shall be unlawful for any person to make any material false statem ent, report or record filed or kept pursuant to the provisions of this Code. RECORD KEEPING The records shall be kept and maintained in or about the premises of workplace o r in the branch where the EE is regularly assigned, the keeping of the records i n any other place is prohibited. (South Motorists vs. Tosoc) WAGE RATIONALIZATION (RA 6727) It is hereby declared the policy of the State to rationalize the fixing of mini mum wages and to promote productivity-improvement and gain-sharing measures: 1. To ensure Decent standard of living for the workers and their families;

2. To guarantee the rights to its Just share in the fruits of production; 3. To enhance Employment generation in the countryside through industry dispersa l; and 4. To Allow business and industry reasonable returns on investment, expansion an d growth. Agencies for Wage Fixing Machinery 1.Advisory agency National Wages and Productivity Commission attached to the DOLE the policy and program coordination. Give at least 5 major powers and functions of the National Wages and Productivit y Commission : a. To act as the national consultative and advisory body to the President and Co ngress on matters relating to wages, incomes and productivity. b. To formulate policies and guidelines on wages, incomes and productivity impro vement at the enterprise, industry and national levels. c. To prescribe rules and guidelines for the determination of appropriate minimu m wage and productivity measures at the regional, provincial or industry levels. d. To review regional wage levels set by the Regional Tripartite Wages and Produ ctivity Boards . Art. 126 : No preliminary or permanent injunction or temporary restraining order may be issued by any court, tribunal or any entity against any proceedings befo re the Commission or the regional Boards.

2.Wage Fixing Agency Regional Tripartite Wages and Productivity Boards nomous regions In all regions, including auto

2006 notes: when the RTWPB of Region X approved the applications for exemption o f 2 companies ,which approval was based on Guidelines 3 passed by said board, bu

t it was shown that the guidelines had not been approved by the NWPC, the Suprem e Court rules that the NWPC was correct and the regional board was wrong. 2006 notes:it is the NWPC not RTWPB which has the power to prescribe the rules a nd guidelines for the determination of minimum wage and productivity measures. W hile the RTWPB has the power to issue wage orders and such orders are subject to the guidelines prescribed by NWPC. 2006 notes: NWPC authorized the RTWPB to issue exemption from wage orders but su bject to its review and approval. 1. Give at least 3 major powers and functions of the Regional Tripartite and Pro ductivity Boards within their territorial jurisdiction: a.To develop plans, programs and projects relative to wages, incomes and product ivity improvement for their respective regions. b.To determine and fix minimum wage rates applicable in their region, provinces or industries therein and to issue the corresponding wage orders, subject to gui delines by the Commission. c.To receive, process and act on applications for exemption from prescribed wage rates as may be provided by law or any Wage Order. [Implementation of the plans shall be through the respective offices of the DOLE but the Regional Boards sha ll have technical supervision over the said DOLE offices.] 2. Art. 126 : No preliminary or permanent injunction or temporary restraining or der may be issued by any court, tribunal or other entity against any proceedings before the Commission or the regional Boards. > The ECOLA now forms part regular wage > Employees paid by results should receive not less than the applicable wage rat es provided for 8 hours workday

Area Minimum Wages and Criteria Art. 124 : Standards/Criteria for Minimum Wage Fixing Regional minimum wages shall be nearly as adequate as is economically feasible t o maintain the minimum standards of living necessary for the health, efficiency and general well-being of the EE s within the framework of the national economic a nd social development program. In the determination of such regional minimum wag

es, the Regional Board shall, among other relevant factors, consider the followi ng: 1. The demand of living wages; 2. Wage adjustment vis-à-vis the consumer price index; 3. The cost of living and changes and their families; 4. The need to induce industries to invest in the countryside; 5. Improvements in the standard of living 6. The prevailing wage levels 7. Fair return of the capital invested and capacity to pay of ER s 8. Effects on employment generation and family income; and 9. The equitable distribution of income and wealth along the imperatives of econ omic and social development. These wages shall include wages varying within industries, provinces or loc alities if in the judgment of the Regional Board conditions make such local diff erentiation proper and necessary to effectuate the purpose of this Title. Wage Order Art. 123 : Whenever conditions in the region so warrant, the Regional Board shal l investigate and study pertinent facts and, based on the standards and criteria herein prescribed, shall proceed to determine whether a Wage Order should be is sued. In the performance of its wage-determining functions, the Regional Board shall c onduct public hearings, consultations, giving notices to EE s and ER s groups, provi ncial, city and municipal officials and other interested parties. Any party aggrieved by the Wage Order issued by the Regional Board may appeal su ch order to the Commission within 10 calendar days from the publication of such order. It shall be mandatory for the Commission to decide such appeal within 60 calendar days from the filing thereof.

Methods of Fixing The determination of wages has generally involved two methods, the floor-wage meth od and the salary-ceiling method. The 1st method involves the fixing of determinate amount that would be added to the prevailing statutory minimum wage. In the 2nd method, the wage adjustment is applied to EE s receiving a certain deno minated salary ceiling. (ECOP vs. NWPC) 2006 notes: the shift from the first method to the second method was brought abo ut by labor disputes arising from wage distortions, a consequence of the impleme ntation of the said wage orders. With the establishment of the second method as a practice in minimum wage fixing ,wage distortion were minimized. A severe contraction of the wage or salary differences is enough Wage Distortion Distortion where an increase in the prescribed wage rates results in the elimina tion or severe contraction of intentional quantitative differences in wage salar y rates between and among EE groups in an establishment as to effectively oblite rate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation.

How is a wage distortion corrected? Any dispute arising from wage distortions s hall be resolved through the grievance procedures under their CBA, and if it rem ains unresolved, through arbitrary arbitration. If there is no recognized labor union or there are no collective bargaining agre ements, the dispute shall be settled through the National Conciliation and Media tion Board, or if unresolved after 10 days of conciliation, through the NLRC whi ch shall decide the dispute within 20 calendar days. (Art. 24) The law recognize s the validity of negotiated wage increases to correct wage distortions. The leg islative intent is to encourage the parties to seek solution to the problems of wage distortions through voluntary negotiation or arbitration, rather than strik es, lockouts, or other concerted activities of the EE s or management. (ALU-TUCP v s. NLRC) In a case where a union went on strike over a salary distortion dispute , the Court held the strike illegal. (Ilaw at Buklod ng Manggagawa vs. NLRC)

Wage Recovery Art. 129 : Recovery of wages, simple money claims and other benefits The Regional Director of the DOLE or any of the duly authorized hearing officers of the Department is empowered, through summary proceedings and after due notic e, to hear and decide any monetary claims and benefits, including legal interest to a person employed in domestic or household service; Provided a. Such complaint does not include claim for reinstatement b. Aggregate money claims of each househelper does not exceed P5,000 > The complaint shall be resolved within 30 days from the date of filing of the same.

VISITORIAL AND ENFORCEMENT POWER Power exercised by the Secretary of Labor or his duly authorized representative 1.access to employer s records and premises 2.right to copy records

3.right to question any employee 4.investigate any fact, condition or matter which may be necessary to determine violations ,or which may be necessary to aid enforcement of this code or any la bor law or order 5.order and administer after due notice and hearing, compliance with the labor s tandards provisions 6.issue writs of execution to the appropriate authority for enforcement of their orders 7.order stoppage of work or suspension of operations when non-compliance with la w and implementing regulations poses grave and imminent danger to the health and safety of workers in the workplace (only the Secretary has this power) Hearing within 24 hours Employer liable for salaries during suspension of operations if found to have ca used the violation No TRO or Temporary/Permanent injunction may be issued by an inferior court over any case involving the enforcement orders issued.

Difference between 128 and 129: Article 128 1.offshoot inspection 2.labor legislation in general 3.inspection of establishments and the issuance of order to compel compliance wi th labor standards ,wage orders and other labor law regulations

Article 129(recovery of wages) 1.initiated by sworn complaint 2.limits proceedings to monetary claims which therefore involve any labor 3.adjudicaiton through summary proceedings after notice and hearing of employer s claims for wages and benefits. Recovery of Wages ,Simple Money and other Benefits:

Jurisdiction: DOLE Regional Director(summary proceeding) Claimant: Employee or person in domestic or household service provided: 1.no claim for reinstatement 2.aggregate claim of each does not exceed P5,000 (2006 notes: if claim exceeds ,regional director still retains jurisdiction base d on inspection s findings in the nature of enforcement action.) 3.Claims arise from er-ee relationship

Notice and Hearing: Resolution of complaint within 30 days from filing (appeal within 5 days to NLRC ) NLRC resolved appeal within 10 days from submission of last pleading Not included are: Claims for ee s compensation Claims for sss, medicare, maternity benefits

2006 notes: regional director cannot enforce results of visitorial power when Er contest the findings Issues raised requires examination of evidentiary matters such matters not verifiable in the normal course of inspection. SPECIAL GROUP OF WORKERS WOMEN This rule shall apply to all ER s except to(a)government and GOCC s and (b) to ER s of household helpers and persons in their personal service insofar as such workers are concerned PROHIBITED ACTS NIGHT WORK Art. 130 : No woman shall be employed or permitted or suffered to work, with or without compensation: a.Industrial undertaking : Between 10:00 pm and 6:00 am b.Commercial undertaking : Between midnight and 6:00 am c.Agricultural undertaking : Nighttime unless she is given a period of rest of n ot less than 9 consecutive hours. Art. 131 : Exceptions to Nightwork prohibition a.In cases of actual or impending emergencies caused by a serious accident, fire

, flood, earthquake, epidemic or other Disasters or calamity, to prevent loss of life or property. b.Cases of force majeure or imminent danger to public safety. c.Cases of urgent work to be performed on machineries, equipment or installation , to avoid serious loss which the ER would otherwise suffer. d.Work is necessary to prevent serious loss of perishable goods e.Woman EE holds a responsible position of managerial or technical in nature. f.Woman EE has been engaged to provide health and welfare service. g.Where the nature of the work requires the manual skill and dexterity of women workers; h.Where the women EE s are immediate members of the family operating the establish ment or undertaking; and i.Analogous cases. BAR:LG, a manufacturer and exporter of jeans, has a 3-shift work schedule but ma intains a policy of not assigning women in the 3rd shift from 10:00 pm to 6:00 a m. Is this policy discriminatory to women? Yes. The women sewers, by reason of t heir sex, are denied the opportunity to earn additional pay. The nature of the w ork requires the manual skill and dexterity of women workers and cannot be perfo rmed with equal efficiency to male workers. This is one of the exceptions to the night work prohibition. DISCRIMINATION Art. 135: It shall be unlawful for any ER to discriminate against woman EE with respect to terms and conditions of employment solely on account of her sex. The following are acts of discrimination a.Payment of lesser compensation, as against a male EE, for work of equal value. b.Favoring a male EE over a female EE with respect to the promotion, training op portunities, study and scholarship grants solely on account of their sexes. Criminal liability for violations shall be penalized as provided in Art. 288 and 289 of this Code. The institution of any criminal action under this provision s hall not bar the aggrieved EE from filing an entirely separate and distinct acti on for money claims, which may include claims for damages and other affirmative reliefs. The actions hereby authorized shall proceed independently of each other . BAR: C, a 45-year old teacher was dismissed by the school after she got married to Q, her 18-year old 4th year high school student. Is the dismissal lawful? No, in the absence of substantial evidence to show that C took advantage of her pos ition to court her student. There is nothing wrong if the two fell in love despi te the disparity in their ages. (Chua-Qua vs. Clave) ANTI-SEXUAL HARASSMENT LAW (RA 7877) -victim is either male or female -committed by a person who has authority ,influence or moral ascendance over vic tim -that person demands, request or otherwise requires sexual favor from the victim -prescription of action is 3 years.

Committed when: In work/employment environment: 1.sexual favor is made as a condition in hiring or in the employment,re-employme nt or continued employment or in granting favorable compensation,promotions or p rivilege 2.Or the grant of sexual favor results in limiting,segregating the ee w/c in any

way would discriminate, deprive or diminish employment opportunities or otherwi se adversely affect the ee. 3.above act results in an intimidating,hostile ,or offensive environment for the employee 2006 notes: HOSTILE ,INTIMIDATING ENVIRONMENT ex: short skirt, or that table of bos s filled with filthy pictures. 4.and such would impair employee s rights or privileges under existing labor laws.

In education or training environment: 1.when sexual favor is made a condition to the giving of a passing grade or gran ting of honors and scholarships or payment of an allowance or other benefits and privileges. 2.when sexual advances result in an intimidating,hostile or offensive environmen t for the student, trainee or apprentice. 3.committed against one whose education is under the care,custody or superviso n of the offender 4.or whose education ,training is entrusted to offender

4blue 95:it shall be the duty of employer or head to deter the acts of sexual ha rassment and to provide procedures for the settlement and prosecution of acts of sexual harassment. Employer shall: a.promulgate rules in consultation w/ and jointly approved by ee or students thr ough their representative prescribing the procedure for investigation of sexual harassment cases and adm sanctions. b.create a committee on decorum and investigation of cases on sexual harassment (w/c shall be composed of atleast 1 rep each from mgt,union, ee or students)

4blue 95:the employer or head shall be solidarily liable for damages arising fro m acts of sexual harassment committed in the employment,education or training en vironment if the er or head is informed of such acts by offended party and no im mediate action is taken thereon. 2006 notes:the offended party may institute a separate and independent action fo r damages and other affirmative relief MARRIAGE Art. 136 : Stipulation against marriage It shall be unlawful for an ER to :

a.Require as a condition of employment or continuation of employment that a woma n EE shall not get married; b.Stipulate expressly or tacitly that upon getting married a woman shall be deem ed resigned or separated; c.Actually dismiss, discharge, discriminate or otherwise prejudice a woman EE me rely by reason of her marriage.

Duncan v Glaxxo Wellcome( Sept 2004) Company may stipulate that ee s could not marry an ee of the competitor company si nce there might exist a conflict of interest between company and the employee. Such constitutes proper exercise of management prerogative since company has a r ight to protect its trade secrets and EE cannot contend that is a violation of t heir equal protection since such right can only be invoke against the State. StarPaper case (April 12,2006 ---BAGO!!!) Company policy states that if you married with a co-employee, then you must resi gn. The SC ruled that this is an invalid rule since there exist no reasonablenes s to uphold the necessity of such policy for there must be a bonafide business qualification. 2006 notes: but if your working in a SWAT team, and your wife is in the SWAT tea m too, your wife must quit coz there exist a strain in occupation or authority.

2006 notes: company may also stipulate in their policy that after ee resign, baw al mag-apply sa competitor for 2 years (non competition clause) company policy may also dictate that in case employee not follow contract, emplo yee will pay (damage clause). -- however, if no corporate secret is being protected, the above two clauses is not necessary then if such clauses exist ,such would constitute involuntary ser vitude.

MATERNITY It is not obligation of ER to grant maternity benefits but employer has obligat ion to enroll employee to SSS.

GRULE: Employee is granted 60 calendar days for maternity Except(more than 60): 1.Ceasarean Delivery 78 calendar days 2.extension requested by EE with pay but shall be deducted from her unused vacat ion and sick leave 3.in absence of such leave or no leave credits is available since ee exhausted i t already, she may extend her leave whenever: -extended leave is due to illness -medically certified -illness arises out of pregnancy, miscarriage,abortion 2006 notes:unwed mothers may also apply for SSS.

100% of daily average credit for 60 days (or 78 days) with ff conditions: 1.contribution for 3 months preceding 2.EE notify ER of pregnancy of probable delivery 3.full payment shall be advanced by ER within 30 days 4.during time collecting maternity, cannot collect sick benefits --however, if still sick beyond 60 days, EE can now ask for sick leave benefit --if you exhausted sick leave, go to SSS and ask for sick benefit.

2006 notes: Paternity leave(RA 8187) leave of 7 days with full pay to all married male employees which is valid for 4 deliveries of legitimate spouse with whom he is cohabiting.

GENERAL Art. 137 : It shall be unlawful for any ER to a.Deny any woman EE the benefits provided for in this Chapter or to discharge an y woman employed by him for the purpose of preventing her from enjoying any of t he benefits provided under this Code; b.Discharge such woman on account of her pregnancy, or while on leave or in conf inement due to her pregnancy; c.Discharge or refuse the admission of such woman upon returning to her work for fear that she may again be pregnant. In L s contract of employment with Club E, it was stipulated that her employment a s a dancer would cease once she gets pregnant. When L got pregnant, L was no lon ger allowed to dance and since there were no other work available for which her talents were suitable, her employment was terminated. Is the action legal? Yes. It is both awkward and dangerous for her to dance during her pregnancy. Of cours e the ER has the obligation to give her another job, but as stated in the proble m there is no other work for which her talents are suited. It is not fair to req uire the ER to continue employing her. (Alcantara) A pharmaceutical company rejected the applications of 5 pregnant women as sales representatives for contraceptive pills and family planning devices. Is this val id?Yes. The company has the prerogative to select its EE s. What is unlawful is fo r the ER to discriminate against or dismiss a woman by reason of their pregnancy . (Alcantara)

Facilities Art. 132 : The Secretary of Labor shall establish standards that will ensure the safety and health of women EE s. In appropriate cases, he shall, by regulations, require ER to: a.Provide seats proper for women and permit them to use seats when they are free from work and during working hours, provided they can perform their duties in t he position without detriment to efficiency. b.To establish a nursery in a workplace. c.To determine appropriate minimum age and other standards for retirement or ter mination in special occupations such as those of flight attendants and the like. Art. 134 : (a) Establishments which are required by law to maintain clinic or in firmary shall provide free family planning services to their EE s. Is the ER required by law to give maternity benefits to its female workers? No. Maternity benefits are to be paid in appropriate instances by the SSS. The only obligation of the ER is to advance the benefit subject to reimbursement by the S SS. (Alcantara)

Special classification Special Women Workers X works as a hostess in a nightclub, she is paid a percentage of the lady s drink ordered by customers. There are nights when she does not earn anything because t here are no customers. Is X an EE of the nightclub? Yes. Any woman who is permit ted or suffered to work, with or without compensation, in any nightclub, cocktai l lounge, massage clinic, bar, or similar establishment, under the effective con trol or supervision of the ER for a substantial period of time as determined by the Secretary of Labor shall be considered an EE of such establishment for purpo ses of labor and social legislation. (Art. 138) Hospitality girls may ask for SSS from their employers.

MINORS Art. II, Sec. 13, Const. : The State recognized the role of the youth in nationbuilding and shall promote and protect their physical, moral spiritual, intellec tual, and social well-being. It shall inculcate in the youth patriotism and nati onalism, and encourage their involvement in public and civic affairs. Section 1, Rule XII, Book III, IRR s : This Rule shall apply to all ER s except 1.to the Government and GOCC s and 2.to ER s of household helpers and persons in their personal service insofar as su ch workers are concerned. Discrimination Art. 140 : Prohibition against child discrimination No ER shall discriminate aga inst any person in respect to terms and conditions of employment on account of h is age. Would a company rule providing for lower wages for workers below 18 years who ar e inexperienced violate the prohibition? No. The payment of lower wages is by re ason of the worker s inexperience, not his age. There is no discrimination on acco unt of the worker s minority. (Alcantara)

Employable Age Section 12, RA 7610 as amended by RA 7658 :General rule: Children below 15 years of age shall not be employed. Exceptions: 1. Child works directly under the sole responsibility of his parents or legal gu ardian and where only members of the ER family are employed, provided: a. his employment neither endangers his life, safety, health and morals, nor imp airs his normal development: b. the parent or legal guardian shall provide the said minor child with the pres cribed primary and/or secondary education. 2. Child is employed in entertainment or information through cinema, theater, radio or television, provided: c. Employment contract is concluded by the child s parents or legal guardian, with the expressed agreement of the child concerned, if possible, and the approval o f the DOLE. d. The ER shall ensure the protection, health, safety and morals of the child; e. The ER shall institute measures to prevent the child s exploitation or discrimi

nation. f. The ER shall formulate and implement, subject to the approval and supervision of competent authorities, a continuing program for training and skills acquisit ion of the child. g. The ER shall first secure, a work permit from the DOLE which shall ensure obs ervance of the above requirements. 2006 notes: No child below 15 shall be employed except when he works directly un der the sole responsibility of his parents/guardian and his employment does not in any way interfere w/ his schooling. Art. 139 : Any person, between 15 and 18 may be employed in any non-hazardous w ork. In any hazardous work, the employable age is 18 and up. Hazardous work places -Where the nature of work exposes the worker to Dangerous environmental elements , contaminations or work conditions. -Stevedoring, construction work, logging, firefighting, mechanized farming and s imilar work. -Manufacture or handling of Explosives and other pyrotechnic products. -Where the workers are exposed to heavy or power-driven machinery or equipment o r tools. L, 10 years old, was hired as a singer in a carnival which stages shows wherever there is a town fiesta. She is paid P5,000.00 a month. L is therefore always on the road, traveling to different parts of the country. Is her employment lawful ?No. Such employment will endanger her health and impair her normal development. She is also deprived of the opportunity to get primary education as she is alwa ys traveling to different parts of the country. (Alcantara)

HOUSEHELPERS Art. 141 : This chapter shall apply to all persons rendering services in househo lds for compensation Domestic or household service : Service in the ER s home which is usually necessar y or desirable for the maintenance and enjoyment thereof and includes ministerin g to the personal comfort and convenience of the member s of the ER s household, inc luding services of family drivers. (Art. 141) C was employed by A company to work as a maid in the cottages of its Baguio min ing site to attend to the needs of its executives or guests who now and then vis it the site. Is S a househelper or domestic servant? No. The services of a house helper is rendered exclusively for the personal comfort and enjoyment of the fam ily of the ER and are performed in the latter s home. Services rendered in an exec utive cottage cannot be considered domestic. S must be considered a regular EE o f the mining company. (Apex Mining vs. NLRC) Non-Household Work Assignment T lives in a compound where he operates a modest candy business. Sometimes, when there is no work in his house, his maids help in the packing of the candies and his family driver delivers the candies to the outlets. How should the work rend ered in connection with the candy business be compensated? For work rendered by the maids and the family driver, they should be paid at the rate prescribed by l aw for non-agricultural workers. (Alcantara) No household helper shall be assign ed to work in a commercial industrial or agricultural enterprise at a wage or sa lary rates lower than that provided for agricultural or non-agricultural workers as prescribed therein. (Art. 145) Conditions for Employment M, 15 years old, worked as a maid in the house of L. She was paid in advance for 3 years and she agreed that she will work for L for the said period. Is there a ny legal infirmity in the said agreement? Yes. The period contract exceeds the m aximum set by the law. Art. 142 provides that the original contract of domestic service shall not last for more than 2 years, although it may be renewed for suc h periods as may be agreed upon by the parties. M s contract will therefore be goo d for only 2 years. (Alcantara)

What are the minimum wages for househelpers? Metro Manila and highly urbanized cities : P800.00 Chartered cities and 1st class municipalities : P650.00 Other municipalities : P550 Househelpers receiving P1,000.00 shall be covered by the SSS.

Aside from the rights to minimum wage, what other rights are enjoyed by a househ elper a. Opportunity for elementary education if a househelper is less than 18 years o ld (Art. 146) b. Just and human treatment (Art. 147) c. Board, lodging and medical attendance (Art. 148) d. Indemnity for unjust termination of services of 15 days plus the compensation already earned. e. Funeral benefits if the househelper has no relatives with sufficient means in the place where the head of the family lives. (Art. 1696, NCC) [F I B E J] f. If househelper is unjustly dismissed, > pay wages already earned + 15 days wages (Indemnity) g. If househelper leaves without justifiable cause, > forfeits any unpaid salary not exceeding 15 days M works as a live-in labandera in the house of T somewhere in Quezon City. She w orks for 11 hours a day. Based on their contract, she is paid P800.00. Is she en titled to additional compensation? Yes. Although she is merely a househelper, sh e should not be allowed to work more than 10 hours a day. (Art. 1695, NCC) Since she worked for 11 hours daily, she should be paid an additional compensation be yond the minimum wage of P800.00 set by the law. Art. 150 : If the duration of the household service is not determined either in the stipulation or by the nature of the service, the ER or the househelper may g ive notice to put an end to the relationship of the service.

BAR: The weekly work schedule of a driver is as follows: Monday, Wednesday ,Fri day is to drive car to bring and fetch the children to and from school. Tuesday, Thursday and Saturday is to drive the family van to fetch merchandise f

rom suppliers and deliver the same to a boutique in a mall owned by the family. Is the driver a househelper? Held: NO, the driver is not a househelper since the driver renders driving servi ces connected with the business of his employer, he is not to be considered as a househelper and should be paid minimum daily wage for Tuesday, Thursday and Sat urday of a driver of a commercial establishment.

HOMEWORKERS Art. 155 : ER of homeworkers includes any person, natural or artificial, who for h is account or benefit, or on behalf of any person residing outside the country, directly or indirectly or though any EE, agent, contractor, sub-contractor or an y other person: a. Delivers or causes to be delivered, any goods, fabricated in or about a home and thereafter to be returned or to be disposed of or distributed in accordance with his directions; or b. Sells any goods, articles or materials to be processed or fabricated in or ab out a home then rebuys them after such processing or fabrication, either himself or through some other person. 2006 notes: if mali and paggawa ,ER may ask for such worker to redo it without c harge. 2006 notes:example of homeworkers are handicraft workers ER Liability Section 8, Rule XIV, Book III, IRR s : The ER shall be jointly and severally liabl e to the EE s or homeworkers of the contractor or sub-contractor, in the same mann er as if the EE s or homeworkers were directly engaged by the ER. S represents in the Philippines the Sears chain of department stores in the US. She sells wood and leather to housewives who makes these into wooden clogs accor ding to the patterns and specifications of S. Is there an ER-EE relationship bet ween S and the housewives? Yes. The housewives are considered homeweorkers and S is their ER. (Alcantara)What is the liability of Sears? Sears is jointly and se verally liable if S is not able to pay the wages of the homeworkers. (Sec. 8, R ule XIV, Book III, IRR s) Terms and conditions of employment involving money claims of homeworker shall be heard by the Regional Director of the DOLE. Beyond that, the case falls under t he jurisdiction of the Labor Arbiter.

Difference between Homeworker and Domestic Worker

HW: work in his own home DW:work in home of ER HW:commercial/industrial DW:domestic chores HW:entrusted w/ raw materials DW:not entrusted w/ raw materials EMPLOYEE CLASSIFICATION Section 1, Rule I, Book VI, IRR s : This Rule shall apply to all establishments an d undertakings, whether operated for profit or not, including educational, medic al, charitable and religious institutions and organizations, in cases of regular employment with the exception of the Government and its political subdivisions including GOCC s. EE Classification 1. Art. 280 a. Regular EE s b. Project EE s c. Casual EE s d. Seasonal EE s 2. Art. 281 > Probationary EE 3. Others > Contract-fixed period

ER Determination What determines whether a certain employment is regular or casual is not the wil l and words of the ER, much less the procedure of hiring the EE or the manner of paying his salary. It is the nature of the activities performed in relation to the particular business or trade considering all circumstances, and in some case s the length of time of its performance and its continued existence. (De Leon vs . NLRC) Tucor Industries, a company engaged in moving and storage of foods hired packers and drivers pursuant to employment contracts which provided that the workers we re employed on as-needed basis and considered daily-hired . Are they considered regul ar EE s? Yes. Packing and driving activities are usually necessary and desirable i n Tucor s usual business. They are entitled to security of tenure, the provisions of the written agreement to the contrary notwithstanding. (Tucor vs. NLRC)

1.REGULAR EE S 1.Those who have been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the ER, their employment not bein g fixed for a specific project or undertaking the completion or termination of w hich has been determined at the time of the engagement, or seasonal nature and t he employment is for the duration of the season. (Art. 280) 2.Casual EE s who have rendered at least 1 year of service is continuous or broken ; they are considered regular EE s with respect to the activities in which they ar e employed; their employment shall continue while such activity exists. (Id.) 3.A probationary EE who is allowed to work after the probationary period. (Art. 281) 4.Learners who have been allowed or suffered work during the first 2 months if t raining is terminated by the ER before the end of the stipulated period through no fault of the learner. (Art. 75) H applied for employment with Holiday Inn and was accepted for On-the-job trainin g as telephone operator for 3 weeks. After the completion of the training she was employed on a probationary basis for 6 months. Four days before the said period, she was dismissed by the hotel on the ground that she failed to meet the standar ds of the hotel. Is the dismissal valid?No. At the time of her dismissal, she wa s already a regular EE since the on-the-job training was already her probationary p eriod. She was not dropped after that period. Even granting that the probation di d not end with the training, there is no reason why that period should not be in cluded in the stipulated 6-month period probation. (Holiday Inn vs. NLRC) L was hired as a component mechanic by a manufacturing firm for a probationary p eriod for 6 months. Management decided not to hire her after the probationary pe riod. After a month, the company again hired L for another 6-month probationary period. After the 2nd 6-month probationary period, she was dismissed. Is L a reg ular EE? Yes. The nature of her job required her to perform activities which are necessary and desirable in the usual business of her ER. She was also rehired a fter the probationary employment extended to her. This fact of rehiring negates any claim that she failed to qualify as a regular EE. Successive hirings and fir ings cannot be resorted to by the ER to avoid obligations imposed by law for the protection and benefit of probationary EE s. (Octaviano vs. NLRC) J is employed on a probationary period for isfied with his performance, he is allowed period. Has J become a regular EE? Yes. An onary period shall be considered a regular 3 months. Although the ER was not sat to work after the end of the 3-month EE is allowed to work after a probati EE. (Alcantara)

Nature of Work The primary standard to determine a regular employment is the reasonable connect ion between the particular activity performed by the EE in relation to the usual business or trade of the ER. (De Leon vs. NLRC) The connection can be determine d by considering the nature of the work performed and its relation to the scheme of a particular business or trade in its entirety. Also, if the EE has been per forming the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of t hat activity to the business. Hence, the employment is also considered regular, but only with respect to such activity and while such activity exists. (Id.) 2005 notes:GRule is that, if lampas 1 year, then EE is deemed regular except if project EE (or private school teacher see illustration on page 4) an exception to exception is that whenever such project EE is constantly rehired, then ,he will be a regular EE. 1.B, was hired by a Buddhist Temple as secretary and interpreter. She also atten ded personally to some needs of the Head Monk. Is B a regular EE or a domestic h elper? B is a regular EE. Her functions were essential and important to the oper ation and religious function of the temple; they could not be categorized as mer e domestic work. 2.Stevedores were employed by corporation engaged in deep-sea fishing to unload the tuna fish catch from latter s vessels into refrigerated vans. Their work was i ntermittent depending on the arrival of fishing vessels. There were also times w hen the stevedores worked on vessels belonging to other companies. Are the steve dores regular EE s? Yes. They were engaged to perform activities usually necessary or desirable in the usual business or trade of their ER s. The activity of catchi ng fish is a continuous process; it cannot be considered as a specific project o r a seasonal activity. Their working on other vessels does not militate against the existence of the ER-EE relationship since it is but natural for the worker t o seek other employment during the periods of temporary la-off. (RJL Martinez vs . NLRC) 3.An electric cooperative only extended permanent appointments to linemen, secre taries, clerks and electricians after 6 months from the date of their hiring. Ma y the ER treat these workers as regular EE s only from the date they were extended permanent appointments? No. Their services are usually necessary or desirable i n the usual trade or business of the cooperative. (Central Negros Electric vs. N LRC)

Hiring Extended Period 1.A company engaged in construction hired carpenters and issued them some notice s of employment that they were hired for specific projects and their employment shall be deemed automatically terminated at the completion of the project. Howev er, when the project to which they were assigned were completed, they would be i mmediately assigned to the next project. Considering that they have been working for a number of years, are they regular EE s? Yes. They perform activities usuall y necessary or desirable in the usual business of the company. They are consider ed non-project EE s of the construction company. (Fegurin vs. NLRC) 2.F, a skilled welder was hired by DM Consunji for several projects wherein he w

as assigned. There was also evidence that the worker was under obligations to be always available on call by the company and that he could not offer his service s to other ER s. Is he a regular EE? No. F is a project EE. (Fernandez vs. NLRC)

Contract to Contract 1.P was hired by a textile firm as a machine operator. P s employment contract sti pulates that the company shall make an annual assessment of his performance and his continued employment shall depend on said evaluation. Is the stipulation val id?No. It determines the security of tenure enjoyed by P who is a regular EE. Hi s continued employment is made to depend upon the whims of the ER. (Alcantara) 2.M Co., is engaged in the manufacture of furniture for export. It has regular c ustomers but also receives special orders. It hires temporary workers for special orders. These are made to sign temporary contracts. Are these workers considered regular workers? Yes. They are engaged in activities which are usually necessar y of desirable in the usual business or trade of the ER. Significantly, the spec ial orders are not seasonal but more or less regular, requiring the continuous s ervices of the temporary workers. The temporary employment contracts have little probative value. (Mehitabel Furniture vs. NLRC) 3..M was employed as a carpenter by a company engaged in the concrete structural business. His work involved the making of moulds for bridges. He was never assi gned to work outside the plant of the ER. Every 3 months, he was made to fill up and sign an employment contract relating to a particular phase of a work in a s pecific project. Is M a regular EE?Yes. He was assigned to perform tasks which a re usually necessary or desirable in the usual trade or business of the ER. Desp ite the signing of employment contracts, the work did not end on a project to pr oject basis. He continued to perform the same kind of work throughout his period of employment. (Magante vs. NLRC)

2.SEASONAL EE S 2005 notes: employment depends on season, usually occurring in agricultural area . Agricultural workers were hired by the owners of a rice and sugar land to perfor m particular phases of agricultural work necessary in rice production, after whi ch they were free to render services. Considering that they rendered services fo r many years, in their employment, though seasonal, deemed regular? No. They are considered project or seasonal EE s .their employment legally ends upon the compl etion of the project or the season. (Mercado vs. NLRC) 3.CASUAL EE S An employment is casual when the EE is engaged to perform tasks or activities wh ich are not usually necessary or desirable in the usual business or trade of the ER. (Art. 280) Jai Alai Manila hired a mason and plumber to do renovation work on its building. The work lasted for 11 months. Are the mason and plumbers regular EE s? No. They were engaged for a specific project or undertaking. They are casual EE s and as su ch do not enjoy the security of tenure since they work for only 11 months. (Phil ippine Jai Alai vs. Clave) 4.CONTRACT-FIXED PERIOD A was engaged as athletic director by Brent School for a fixed term of 5 years. She was not rehired after that term. Is she a regular EE? No. A s employment was f or a fixed period, her employment ended. It does not necessarily follow that whe re the duties of the EE s entail activities which are usually necessary or desirab le in the usual trade or business of the ER, the parties should not be forbidden to stipulate any period of time for these activities. There is nothing essentia lly contradictory between a definite period of employment and the nature of the EE s duties. (Brent vs. Zamora) Give the criteria under the fixed period contracts of employment cannot be said to be in circumvention of the worker s security of tenure. 1.The fixed period of employment was knowingly and voluntarily agreed upon by t he parties, without any force, duress or improper pressure being brought to bear

upon the EE and absent any other circumstances vitiating his consent; or 2.It satisfactorily appears that the ER and EE dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former on the latter. (Pantranco vs. NLRC) 3.When such stipulations were not designed to circumvent the laws on security of tenure. (Brent vs. Zamora) C was engaged by a trucking company to work as a truck driver for a period of si x months. It appears that all drivers of the company were hired on fixed contrac t basis. The company merely filled in the blanks in a mimeographed form with the corresponding driver s data. After the 6-month period, C s services were terminated . Was this a valid termination? No. The contract for a fixed period was a clever scheme to prevent its EE s from becoming regular EE s. he should be considered a re gular EE. (Cielo vs. NLRC) 15 years after his dismissal for cause. A was re-hired as a driver for 1 month. Did such re-hiring result in his reacquisition of his former regular status?No. The contract specifically provided for a fixed term. (Pantranco vs. NLRC) 5.PROJECT EE S 2005 notes: It is coterminous with a project, that s why their employment is fixed for a specific project. A project EE is one whose employment has been fixed for a specific project or un dertaking, the completion or termination of which has been determined at the tim e of the engagement of the EE or where the work or service to be performed is se asonal in nature and the employment is for the duration of the season. (Art. 280 )

Test of Project EE s The test is whether or not the project EE s are assigned to carry out a specific p roject or undertaking the duration and scope of which are specified at the time the EE s are engaged for that project. (ALU-TUCP vs. NLRC) PPI, a company providing construction supervision of the Manila Expressway hired R for a term of 24 months. After the expiration of the period, he was hired for another term of 10 months, and then for 19 months. All these were entered durin g various stages prior to the completion of the construction project. Was R a re gular EE of PPI? No. He was hired in a specific project or undertaking as a driv er. He was a project EE whose employment terminated upon the expiration of his e mployment contract or upon the completion of the project. (Rada vs. NLRC) A company engaged in the building and repair of vessels hired welders to work in the repair of a specified vessel. Is the employment of the workers considered r egular?No. They are project EE s whose work is co-terminus with the project for wh ich they are hired. (Sandoval Shipyards vs. Leogardo) Consumer Pulse hired field interviewers on specified project basis for a definit e period of time. Many of the interviewers worked for several projects. Generall y, the contractual employment is not continuous but intermittent, sporadic with long intervals of idle periods in between projects due to lack of work or job co ntracts. Are the filed interviewers considered regular EE s? No. The interviewers were hired for specific projects the completion or termination of which are dete rmined at the start of their employment. (Manansag vs. NLRC)

A construction firm hired as project EE s several workers. Instead of being assign ed solely to the job sites, they were also made to work as inventory clerk or wa rehouseman in the company s central shop. Are they project EE s? No. Their work did not end upon the completion of a project. They perform their jobs even after a j ob had been finished. Since they performed tasks vital and indispensable to the efficient administration and completion of the company s various projects, they ar e considered regular EE s. (Capitol Industrial vs. NLRC)Project EE s are not entitle d to separation pay as their work was coterminous with the completion of the pro ject. (Sandoval Shipyards vs. Leogardo)

6.PROBATIONARY EE S What is a probationary employment? It is employment for a specified period gene rally no exceeding 6 months for the purpose of determining whether the EE can qu alify for regular employment in accordance with reasonable standards prescribed by the ER. Purpose Justify the rights of the ER to fix a probationary period of employment? The ER has the right to select his EE s that the ER may set or fix a probationary period within which the latter may test and observe the conduct of the former before hi ring him permanently. (Grand Motors vs. Minister of Labor) A probationary appoin tment is made to afford the ER the opportunity to observe the fitness of a proba tioner while at work, and to ascertain whether he will become a proper and effic ient EE. (International Catholic Migration Commission vs. NLRC) It is necessary for the probationary EE to undergo a period of probation to test his qualificati ons, skills and experience. (Grand Motors) Duration/Exception May a company impose a longer probationary period than 6 months? Yes. Generally, the probationary period of employment is limited to 6 months. The exception to this general rule is when the parties to an employment contract may agree otherw ise, such as when the same is established by company policy or when the same is required by the nature of the work to be performed by the EE i.e. where a probat ionary period was set for 18 months, especially where the EE must learn a partic ular kind of work such as selling or when the job requires certain qualification s, skills, experience or training. (Buiser or Leogardo)

Extension Contract Effect EE s D was hired on probation by Mariwasa. Upon expiration of the probationary period , he was informed by the ER that his work proved unsatisfactory. To give him a c hance to improve his performance and to qualify for her regular employment, Mari wasa extended, with his written conformity, his probationary period for another

3 months. His performance did not improve, and his services was terminated. Did he become a regular EE? NO. By voluntary agreeing to the extension of the origin al probationary period, D, in effect, waived any benefit attaching to the compl etion of the said period. (Mariwasa vs. Leogardo)

Absorbed EE s Private respondents could not be considered probationary EE s because they were al ready well-trained in their respective positions. (Cebu Stevedoring vs. Regional Director) Termination and Salary Award to the private respondent of the salary for the unexpired 3-month portion of her 6-month probationary employment who was validly terminated during her pro bationary employment is unjust and oppressive to the ER. (International Catholic Immigration Commission vs. NLRC)

Private School Teacher Give the legal requisites for a private school teacher to acquire permanent empl oyment and security of tenure? These requisites are: a. The teacher is a full time teacher. b. The teacher must have rendered 3 consecutive years of service. c. Such service must have been satisfactory. (Cagayan Capitol College vs. NLRC) At the time of her retirement, A has been employed as school teacher for 22 year s. After 3 years from her retirement, she was rehired by the school teacher unde r contract which was renewable yearly. After 2 years of continuous satisfactory performance, her contract was not renewed. Was the non-renewal violative of her security of tenure?Yes. When she was rehired, she did not have to undergo a prob ationary employment as her teaching competence had already been tried and tested during her 22 years of service. she could not be discharged solely on account o f the expiration of her 2nd annual contract. She could not only be dismissed for cause and with due process. (St. Theresita s Academy vs. NLRC) A teacher was hired by a private school on a yearly basis. Before the expiration of the 2nd yearly contract, the school refused to renew her contract on the gro und that her teaching performance was not satisfactory. Is the refusal justified ?Yes. The positions were temporary in nature and her employment was for a defini te period. Even assuming that she was on probationary employment, the probationa ry period for teachers is 3 years. (Biboso vs. Victoria Milling) 2006 notes: school could not terminate part time teachers between term or semest er, but after such term or semester, school has no obligation to hire them again . 2006 notes: with regard insurance broker who could not pass exam even though out standing in his sales, he cannot insist on continuing work that he is not offici ally qualified (he could not invoke that probationary ee who work beyond the per iod would be considered as regular) 2006 notes: after period of probationary work, it turned out that ee has a tb, a

nd he is terminated SC ruled that disease is not considered as a just cause for te rmination, unless there is a finding of public health that it cannot be cured an d it is there for 6 months ,so such ee would then be terminated with pay for 1 m onth. -- except, if you are made to work beyond the probationary period, then if you h ave illness and if you can show an approval from public health officer that you are cured, then you are deemed regular. 2006 notes: in pirating of an ee no need to undergo probationary period. 2006 notes: in apprentice you undergo apprenticeship , then you cannot undergo pro bationary period if it is just the same ER.

SUMMARY

GRULE: Regular Employee- engage to perform activities usual and necessary to tra de of ER Exceptions( at the start of employment, ee is told by the er about his status):

1.Project Worker employment has been fixed for a specific project which has been determined at th e time of engagement of the ee as such, the period is not the determining factor so that even if the period is more than 1 yr, ee does not become regular (like the carpenter since only for a particular duration or project). 2006 notes:becomes regular if job is usually necessary or desirable in the usual business or trade and repeated rehiring (for similar tasks w/c is vital and ind ispensable to the business) Non-Project: engage in a non-project endevour and enjoys fullness of security of tenure.

2.Probationary conditional employment (if you re not told about your status, then you are regular ) Not exceed 6 months

2006 notes:if allowed to work after the period, he shall be considered as regula r ee. Except: a.covered by apprenticeship agreement stipulating a longer period (if your appre ntice and you were hired by same ER ,you don t have to undergo probation) b.voluntary agreement of parties (especially when nature of work requires longer period) c.employer gives the ee a second chance to pass the standards set may be terminated by: a:just/authorized causes b.when he fails to qualify as a regular employee in accordance with reasonable s tandards made known by ER to EE at time of engagement (like in insurance agent)

3.Seasonal Work to be performed is seasonal and employment is for the duration of the seaso n. He may be industrial if it is with retail (like in Xmas where more workers are h ired, they are doing usual and necessary work for er but not regular since they are informed) and natural (agriculture). 4.Casual Activity performed is not usually necessary/desirable in the usual business of e r, not project and not seasonal. Except: rendered at least 1 yr of service whether such service is continous or broken, h e is considered REGULAR ee with respect to the activity in which he is employed and his employment shall continue while such activity exist. Retired EE who was ask to return, cannot be deemed as regular since he did retir e, but casual.

5.Managerial Worker Moment you don t meet sales target, you can be terminated since your part of a man agerial team(however ,SC is lenient with regard rank and file)

6.Fixed Term Worker (board director or chairman) Period is agreed upon knowingly and voluntarily by the parties without force, du ress or improper pressure exerted on the employee. And such term is not resorted to defeat the rights of the workers. After a term you can be dismissed, so long as term not used to circumvent labor laws, such term shall be upheld. TERMINATION OF EMPLOYMENT Art. 278 : The provisions of this Title shall apply to all establishments or und ertakings, whether for profit or not. Confidential and managerial are also entitled to security of tenure, fair standa rds of employment and the protection of labor laws. (Inter-Orient Maritime vs. N LRC) Probationary and contractual EE s enjoy security of tenure but only to a limi ted extent. That is, they remained secure in their employment during the period of time their respective contracts remained in effect. (Labajo vs. Alejandro) Pakiao workers who by the nature of their work are considered regular workers en joy security of tenure. (Dy Keh Beng vs. ILMU) However, if the circumstances ind icate that they are in reality independent contractors, then they do not enjoy s ecurity of tenure. (Alcantara)

Security of Tenure right against unjust and arbitrary dismissal. He cannot be deprived of his work, which is property in the constitutional sense, without a just cause and without the benefit of hearing. (Alcantara) Is there an express constitutional guarantee of the security of tenure of an EE? Yes. Art. XIII, Sec. 3, Const. (Rance vs. NLRC)

Nature of Rights Termination of employment is not anymore a mere cessation or severance of contra ctual relationship but an economic phenomenon affecting members of the family. T his explains why under the board principles of social justice the dismissal of E E s is adequately protected by the laws of the state. (Alhambra vs. NLRC) However, the worker s right to security of tenure is not an absolute right for the law pro vides that he may be dismissed for cause. The law in protecting the rights of th e laborers, authorizes neither oppression nor self-destruction of the ER. (MERAL CO vs. NLRC)

Rationale Regulation The right of ER to freely select or discharge his EE s is regulated by the State, because the preservation of the lives of citizens is a basic duty of the State, more vital than the preservation of the corporate profit. (Llosa-Tan vs. Silahi

s)

MANAGEMENT RIGHTS 1. Right to manage people in general : Except as limited by special laws, an ER is free to regulate, according to his own discretion and judgment, all aspects o f employment. (San Miguel vs. Ople) 2. Right to just share in the fruits of production : Every business enterprise e ndeavors to increase its profits. In the process it may adopt or devise means d esigned toward the goal. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied. (Id.) 3. Right to discipline : The ER has the prerogative to instill discipline in his EE s and to impose reasonable penalties, including dismissal, on erring EE s pursua nt to company rules and regulations. (San Miguel vs. NLRC) 4. Right to transfer EE s : It is management prerogative to transfer an EE from on e office to another within the business establishment, provided there is no demo tion in rank or diminution of his salary, benefits and other privileges. (Yuco C hemical vs. Minisrty of Labor) An EE s right to security of tenure does not give h im such a vested right in his position as would deprive the company of its prero gative to change his assignment or transfer him where he will be most useful. (P TTC vs. NLRC) The managerial prerogative, however, to transfer personnel, must b e exercised without grave abuse of discretion and putting to mind the basic elem ents of justice and fair play. It cannot be used as a subterfuge by the ER to ri d himself of an undesirable worker. Nor where the real reason is to penalize an EE for his union activities and thereby defeat his right to self-organization. ( Id.) 5. The right to demote : It is management prerogative to tranfer, demote, discip line and even dismiss an EE to protect its business, provided it is not tainted with unfair labor practice (Petrophil vs. NLRC) 6. Right to dismiss : The right of the company to dismiss its EE s is a measure of self-protection. (Reyes vs. Minister of Labor) An ER cannot legally be compelle d to continue with the employment of a person who admittedly was guilty of malfe asance towards his ER, and whose continuance in the service of the latter is pat ently inimical to his interests. (Manila Trading vs. Zulueta) May an ER dismiss an EE who enjoys security of tenure? Yes. Security of tenure d oes not guarantee perpetual employment. If there is a just or authorized cause t he ER may terminate the services of an EE; the former cannot be legally compelle d to have in its employ s person whose continued employment is patently inimical to its interest.

I. JUST CAUSES OF TERMINATION Art. 282 : An ER may terminate an employment for any of the following just cause s(substantive due process): 1.Serious misconduct or willful disobedience by the ER of the lawful orders of h is ER or representative in connection with his work; 2.Gross and habitual Neglect by the EE of his duties; 3.Fraud or willful breach by the EE of the Trust reposed in him by his ER or dul y authorized representative; 4.Commission of a crime or offense by the EE against a.the person of his ER or b.any immediate member of his family or c.his duly authorized representative and 5.Analogous cases.

A. JUST CAUSE : SERIOUS MISCONDUCT Misconduct is improper or wrong conduct/ it is the transgression of some establi shed and definitive rule of action, a forbidden act, a dereliction of duty, will ful in character, and implies wrongful intent and not mere error in judgment. Th e misconduct to be serious must be of such a grave and aggravated character and not merely trivial or unimportant. Such misconduct, however serious, must, never theless, be in connection with the EE s work to constitute just cause for its sepa ration. Examples of serious misconduct : a. EE utters obscene, insulting or offensive words against a superior (Asian Des ign vs. Deputy Minister of Labor) or challenging a superior officer to a fistfig ht. (Luzon Stevedoring vs. CIR) However, 2 other later cases ruled that the pena lty of termination is extreme and excessive and is not commensurate with the act s committed. (Maranao Hotel vs. CA and Mary Johnston Hospital vs. NLRC) The cont rolling factor is the circumstances surrounding the willful misconduct. (Alcanta ra) b. Serious breach of company rules by allowing 2 security guards to come inside the Security Office, drinking and having sex with one of the guards, although bo th of them are married. (Stanford vs. NLRC) c. As a general rule, immorality does not justify a discharge. But when the EE h olds a responsible position and has under him a good number of men, the EE must set a good example for his men to follow. Thus, when he got a young concubine an d drove away the members of his family from the conjugal home, such dismissal is justified. (Sanchez vs. Ang Tibay)

d. Sleeping in post, gross insubordination, dereliction of duty and challenging superior officers to a fight committed by a security guard. (Luzon Stevedoring v s. CIR) e. Seaman s assault with a knife of a member of the ship s crew. (Haverton vs. NLRC) f. Intoxication is such a misconduct as will justify separation from employment, where such intoxication interferes with the employment. (Azucena) g. Sexual harassment by a managerial EE of one of his subordinates. (Villarama v s. NLRC) h. Authorship of a manifesto which ridiculed the officers of a school and demand ed their removal, and which disrupted the good order and decorum in the school, when such charges in the manifesto are found to be not true. (St. Mary s College v s. NLRC) i. Cheating a customer. (PLDT vs. NLRC) 2006 notes: there is no obligation for NLRC to award financial assistance for se rious misconduct, but for other causes, you can have financial assistance. What are examples of misconduct which does not warrant dismissal? a. Fistcuffs between two EE s as a result of mere private matter between them. (Ar is vs. NLRC) b. Vending, soliciting, and engaging in usurious activities. (Pacific Products) c. Borrowing money from a patient which the EE later paid back. (Makati Medical Center vs. NLRC) However, when there is use for a trust relationship as leverage for borrowing money, the act becomes serious misconduct. (Pearl S. Buck Foundat ion vs. NLRC) d. Teacher falling in love with student provided the teacher did not take advant age of her position to court her student--- not serious misconduct. (Chua-Qua vs . Clave)

2006 notes:in just causes, usually court penalize offender ee with only a mere 3 0-day suspension rather than termination since there must be a reasonable propor tionality between the offense and the penalty imposed therefor so if di naman masy ado mabigat ang ginawa niya, masyado namang disproportionately heavy ang termina tion eh suspension na lang.

B. JUST CAUSE : WILLFUL DISOBEDIENCE What are the requisites in order that willful disobedience may constitute a just cause for terminating employment? The orders, regulations, instructions of the ER or his representative must be: a.Reasonable and lawful has reference not only to the kind and character of dire ctions, but also the manner in which they are made. b.Sufficiently known to the EE. c.In connection with the duties which the EE has been engaged to discharge. The ER s conduct must have been willful or intentional, willfulness being characte rized by a wrongful and perverse mental attitude rendering the EE s act inconsiste nt with proper subordination. 1. Not every case of insubordination or willful disobedience by an EE of a lawfu l work-connected order of the ER or its representatives is reasonably penalized with dismissal. There must be a reasonable proportionality between the offense a nd the penalty imposed therefor. (Gold City vs. NLRC) Past infractions, to which the EE was already meted out disciplinary measures cannot be used as a justific ation for EE s dismissal from service of the current infraction does not suffice a s a ground for just termination. (Filipino vs. Ople) 2. M, an EE of Tritran was told by the personnel manager to see right away the p resident to apologize for his past misdeeds. He was dismissed because he failed to see the company president. Is the dismissal justified?No. The directive to se e the company president was neither reasonable nor one connected with his duties . (Mancho vs. NLRC)

(BAR)D, an EE of Northwest Airlines refused a promotion. Does such refusal const itute insubordination warranting dismissal? No. There is no law which compels an EE to accept a promotion. He was exercising a right and he cannot be punished for it as quijure suo utitor neminem laedit. He who uses his own legal right injures no one. (Dosch vs. NLRC) (BAR)G, a press-helper of a printing company drank beer outside company premises after his tour of duty. He later went to the company s canteen to eat lunch. He w as dismissed based on the company policy prohibiting drinking in the company prem ises or coming to work under the influence of alcohol. Is the dismissal justified ? No. He did not drink beer in the company premises; neither did he report for wor k under the influence of liquor because it was not their tour of duty then. (Cat alan vs. Genilo)

Examples of willful disobedience :

> Violation of a rule which prohibits EE s from using company vehicles for private purposes without authority from management and stubborn refusal to attend a gri evance conference to discuss the violation. (Soco vs. Mercantile Corp.) > Willful violation of rules and regulations designed for the safety of laborers i. e. smoking by a painter in the painting booth. (Northern Motors vs. NLU) > Allowing a customer to pass thru the exit gate without paying for the work don e on his car, despite clear instructions to the contrary, (Manila Trading vs. Zu lueta) > Act of gambling if it is penalized under company rules with dismissal. (Dimala nta vs. Secretary of Labor) > Failure to comply with reportorial requirements in the sales policies. (GTE vs . Sanchez) > N, driver refused to drive EE s to Makati head office to collect their profit s hares despite repeated orders made by the vehicle supervisor and the officer-incharge. (Nuez vs. NLRC) In this case, even if he was employed for 19 years, and this was his 1st offense, no separation pay, on the basis of compassion was give n to the EE. > B was employed as Chief Dietician of a hospital. She refused to follow the ins tructions of the Board of Trustees of the hospital to buy from a food supplier w ho was willing to give a discount on food purchases. Because of this, B was dism issed. Is the dismissal justified? Yes. Her acts constitute serious defiance of the lawful orders of her superiors with respect to matters involving her duties. They are also sufficient basis for her superiors to lose their trust and confid ence in her. (St. Luke s vs. Minister of Labor)

C. JUST CAUSE : NEGLECT OF DUTIES In order to constitute a just cause for EE s dismissal, the neglect of duties must not only be gross but also habitual . Gross neglect means an absence of that d iligence that an ordinarily prudent man would use in his own affairs, unless the contract of employment requires a higher degree of care. It is sufficient that the gross and habitual neglect by the EE tends to prejudice the ER s interest sinc e it would be unreasonable to require the ER to wait until he is materially inju red before removing the cause of the impending evil. (DOLE Manual)

Examples of gross negligence : a.Failure to properly estimate the fair market value of a property to be used fo r a loan by an appraiser. (Associated Bank vs. NLRC) b.Abandonment. To constitute abandonment, two elements must concur: b1.The failure to report for work or absence without valid or justifiable reason , and b2.A clear intention to sever the ER-EE relationship, with the second element as the more determinative factor and being manifested by overt acts. (Labor vs. NL RC) > Habitual tardiness and absenteeism (Sajonas vs. NLRC) > Numerous unauthorized absences. (Cando vs. NLRC) 1. S, working as a lobby boy of a movie theater, was pursuant to standard manage ment practice transferred from the day shift where he had been for quite some ti me to the night shift. He asked that the change be recalled but his request was denied. As he disliked the new assignment, he did not report for work. The compa ny dismissed him due to abandonment. Is the dismissal jusitified? Yes. There was nothing unusual or discriminatory in his change of assignment because the rotat ion was standard company practice. (Castillo vs. CIR) 2. Due to unauthorized absences, M, employed with the company for 18 years, was transferred from the Fire Tender Section to the Pan Grinding Section. He however did not report to his new section, on the ground that the transfer was unreason able and amounted to demotion. The company contends that his failure to work des pite repeated notices constitutes abandonment and a ground for his dismissal. Is this valid? The penalty of dismissal is out of proportion to the offense commit ted considering the number of years of M s employment. A 1 year suspension would b e sufficient. (Meracap vs. International Ceramics) 3. A, met a work-connected accident. When he was completely recovered, he failed to report to work despite the certification of 5 doctors that he could resume h is normal work. He was dismissed pursuant to company [policy that an EE who incu rs without valid reason 6 or more absences is subject to dismissal. Is the dismi ssal valid? Yes. He was guilty of serious neglect of his duties. (Phil. Geotherm al vs. NLRC)

D. JUST CAUSE : COMMISSION OF A CRIME OR OFFENSE Another just cause of terminating an employment is the EE s commission of a crime or offense against the person of his ER or against any immediate member of the E R s family. The immediate members of the family referred to are limited to the spo use, ascendants, descendants, or legitimate, natural, or adopted brothers or sis ters of the ER or of his relative by infinity in the same degrees, and those by consanguinity within the 4th degree. (Azucena) Conviction or prosecution is not required, to warrant his dismissal by his ER an d the fact that a criminal complaint against the EE has been dropped by the city fiscal as not binding and conclusive upon the tribunal. (Starlite vs. NLRC)

E. ANALOGOUS CASES To be considered analogous to the just cases enumerated, the cause must be due t o the voluntary and/or willful act or omission of the EE. (Nedura vs. Benguet Co nsolidated) Examples of Analogous Cases :Unreasonable behavior and unpleasant deportment in dealing with the people she closely works with in the course of her employment, is analogous to the other just causes enumerated under the Labor Code. (Cathedral School vs. NLRC)

F. OTHERS 1. Other examples of just termination: > Courtesy resignation (Batongbacal vs. Associated Bank) > Faculty members of a school whose appointments as department heads are termina ted. (La Sallette vs. NLRC)

2006 notes:with regard abandonement, if ee does not respond(go AWOL), that do no t constitute abandonement, ER must communicate 3 times to be qualified , however ,1 communication is possible only when there is proof that he has gone to anoth er place. 2 elements must concur: 1)failure to report for work or absence w/o valid or jus tifiable reason and 2)clear intention to sever the er-ee relationship with the 2 nd element as the more determinative factor.

G. JUST CAUSE : DISHONESTY, LOSS OF CONFIDENCE 2006 notes: EE must hold position of trust (managerial/confidential), as such, since if position is of trust, then strain relationship is a ground for separati on pay since reinstatement is not anymore feasible (ex: cook). 2006 notes:if not in position of trust, then ,no separation pay. As such, the cl oser ee is to er, the more strained relationship it creates.

Fraud has been defined as any act, omission, or concealment which involves a bre ach of a legal duty, trust or confidence justly reposed and is injurious to anot her. To constitute a just cause for terminating the EE s services, the fraud must

be committed against the ER, or representative and in connection with the EE s wor k. Thus, fraud committed by an EE against 3rd persons not in connection with his work and which does not in any way involve his ER not a ground for the dismissa l of the EE. (DOLE, Manual) 1. Example of Dishonesty > Falsification of time cards. (SMC vs. NLRC) > Theft of company property. (Firestone vs. Lariosa) However, the penalty must b e proportional to the offense committed i.e. EE should not be dismissed for thef t of used motor oil of minimal quantity if the EE has no previous record. (Gelma rt vs. NLRC); EE should not be dismissed for theft of lead pipe to be used for p ersonal use if the EE has no previous record. (PAL vs. PALEA); president of unio n should not be dismissed for leading an unexpected strike which lasted for 2 days and which resulted in a loss to the company of only P3,000.00 (Sampang vs. Inci ong); counter clerk of PLDT should not be dismissed for tampering with a phone b ill where the worth of the tampering only amounted to P30.00 and it was the firs t offense in 7 years (PTTC vs. NLRC). Note that the length of time the EE is emp loyed and the fact that it was the EE s 1st offense is an important factor in many of these cases wherein the penalty of dismissal was deemed to harsh. Where a pe nalty less punitive would suffice, whatever missteps may be committed by the wor ker should not be visited with the supreme penalty of dismissal. (Almira vs. BF Goodrich) > Circulating fake tickets. (Ibarrientos vs. NLRC)

2. Explain loss of confidence as a ground for just termination : The basic premi se for dismissal on the ground of loss of confidence is that the EE concerned h olds a position of trust and confidence. (Quezon Electric vs. NLRC) Mere existen ce of basis for believing that the EE has breached the trust of ER is sufficient and does not require proof beyond reasonable doubt. (Kwikway vs. NLRC) However, to constitute as valid ground, it must be substantial and not arbitrary, and mu st be founded on clearly established facts sufficient to warrant the EE s separati on from work. (Labor vs. NLRC) 3. Examples of loss of confidence as ground for just termination : > GM of hotel found to have anti-Filipino tendencies, who did not perform his f unctions properly and who requisitioned wines for personal use. (Riker vs. Ople) > Director who represented to the company that machinery brought were brand-new when in fact they were second-hand. (Pepsico vs. NLRC) > Bank teller s act allowing encashment of checks over the counter without verific ation of drawer s signature. (Allied Bank vs. Castro) > Violation of the company sales policy of distributing its goods to as many cus tomers as possible by a salesman who made it appear that they were sold to many customers. (Filipro vs. NLRC) > Engaging in business other than that of ER, if the activities tend to injure o r endanger the business of the ER or the EE is unable to give time and attention to the discharge of his duties. (Azucena) > Competing with ER s business. (Azucena) > Repeated shortages incurred by a bill collector, although resulting in no mate rial damage as the amounts were returned. (Piedad vs. Lanao del Norte Electric C ooperative)

5 EE s of an electric cooperative were dismissed for loss of confidence when they were caught pilfering electric current through tampered meters in their houses. Considering that the EE s held no position involving trust and confidence, is loss of confidence a ground to dismiss them? No. The offense they committed is not w ork-related. The pilferage could have been effected even if they were not EE s of the cooperative. (Quezon Electric Cooperative vs. NLRC) Compare this with the ca se of Flores vs. NLRC, where the same act constituted a ground of serious miscon duct and breach of trust.

J, a checker, was dismissed by San Miguel for breach of trust due to possible in volvement in a burglary incident. The dismissal was effected despite J s acquittal in a criminal case for the said offense. Is the dismissal lawful?No. The termin ation of rank and file EE s due to breach of trust requires proof of actual involv ement in the acts constituting the offense. (SMC vs. NLRC)

II. AUTHORIZED CAUSES OF TERMINATION

Art. 283 : The ER may also terminate the employment of the EE due to: 1. 2. 3. 4. 5. the Installation of labor saving device(automation). redundancy retrenchment to prevent losses. closing or cessation of operation of the establishment or undertaking. ailment

Art. 284: EE who has been found to be suffering from and Disease and whose conti nued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-EE s.

Separation Pay In case of termination due to installation of labor saving devices or redundancy : the worker affected shall be entitled to separation pay equivalent to at least o ne month pay or to at least one month pay for every year of service whichever is higher.

In case of Retrenchment to prevent losses and in Case of closure of operations n ot due to serious business losses or financial reverses: Separation pay shall be equivalent to one month pay or at least one-half month p ay for every year of service. 2006 notes:as such if it is closure due to serious losses, the employee is not entitled to a separation pay.

INTRODUCTION OF LABOR SAVING DEVICE Reduction of number of workers in a company made necessary by the introduction o f machinery in the manufacture of its products, in order to use labor saving dev ices with a view to effecting more economy and efficiency in its method.

REDUNDANCY Redundancy exists where the services of an EE are in excess of what is reasonabl y demanded by the actual requirements of the enterprise; a position is redundant when it is superfluous, and superfluity of a position or positions may be the o utcome of a number of factors such as: 1. the overthrowing of workers 2. decreased volume of business or 3. the dropping of a particular product line or 4. service activity previously manufactured or undertaken by the enterprise. Redundancy is an ER s personnel force, however does not necessarily or even ordina rily refer to duplication of work. That no other person was holding the same pos ition which the dismissed EE held prior to the termination of his services does not show that his position had not become redundant. (Escareal vs. NLRC) 2005 notes:employer must comply with the procedural requirements of a written no tice to the Sec of Labor(and the employee concerned) at least 1 month prior to d ismissal.

CLOSURE OF BUSINESS

The burden of proving that the termination was for a valid or authorized cause s hall rest on the ER by showing its audited financial statement. (Indino vs. NLRC ) Is the ER required to pay separation pay for closure of business due to the seri ous business losses?No. The cases of State Investment House vs. CA, Mendoza vs. NLRC, and the Mindanao Terminal vs. Minister of Labor provide that the rule in A rticle 283 with respect to separation pay applies only to closure not due to bus iness reverses. Due to loss or closure which is voluntary on part of ER > Service of a written notice to the EE s and to the DOLE at least 1 month before the intended date thereof. > Cessation or withdrawal from business operations must be bona fide in characte r.

2006 notes: if closure is not voluntary on part of ER , like when a law is impos ed so as for the employer to close, then no separation pay to ee is needed. 2006 notes: if an employee is dismissed for just cause, he is not entitled to te rmination pay, however, in case of closure of establishment, the ee is always gi ven termination pay. 2006 notes:separation pay need not be paid to employees if the business has clos ed or ceased operations due to serious losses or financial reverses duly proven. 2006 notes: if closure is involuntary on part of ER, then no benefits is paid to workers.

RETRENCHMENT What are the general standards to determine whether the retrenchment is valid? 1. The losses expected should be substantial and not merely de minimis in extent . 2. The substantial loss apprehended must be reasonably imminent, as such imminen ce can be perceived objectively and in good faith by the ER. 3. It must be reasonably necessary and likely to prevent the expected losses. 4. The ER should have taken other measures prior or parallel to the retrenchment to forestall losses. I. e. ; cut other costs other than labor costs. 5. Alleged losses if already realized, and the expected minimum losses sought to be forestalled, must be proved by sufficient and convincing evidence. (evidence is using comparative figure not audited financial statement) Distinguish redundancy from retrenchment? Redundancy means that the position of the EE has become superfluous, an excess over what is actually needed, even if t he business reduction or reverses. 2006 notes:moment it is serious loss like bankruptcy no need to pay ee anymore

2006 notes:fire burned down ee cannot ask for separation, kasi 6 months cessation of operation do not constitute closure.

3 basic Requisites of Valid Retrenchment: 1.necessary to prevent losses and such losses are proven 2.written notice to the employees and to the Dept of Labor at least one month pr ior to the intended date of retrenchment (mandatory) 3.payment of separation pay

AILMENT OR DISEASE If the EE suffers from a disease and his continued employment is prohibited by l aw or prejudicial to his health or to the health of his co-EE s, the ER shall not terminate his employment unless there is a certification by a competent public h ealth authority that the disease is of such nature or at such a stage that it ca nnot be cured within a period of 6 months even with proper medical treatment. (S ec. 8, Rule 1, Book VI, IRR s) A medical certificate issued by the company s own physician, is not a competent pub lic health authority. 2006 notes:even if there is no illegal dismissal, there may be an award for sepa ration pay provided that he is paid separation pay equivalent to at least one mo nth salary or to one-half month salary for every year of service whichever is gr eater, a fraction of atleast 6 months being considered as one whole year. 2006 notes: even voluntary resignation due to ill health may be paid termination pay for reasons analogous to those contemplated. Other Causes for termination: 1.disease, 2.retirement, 3.filing of certificate of candidacy, 4.conflict of interest, 5.permanent disability, 6.continuation of employment is prohibited, 7.conviction of a crime, 8.CARL if closure is involuntary on part of ER since imposed by law (CARL), so no benefits for ee.

PROCEDURE TO TERMINATE EMPLOYMENT TWO FACETS OF VALID TERMINATION 1. THE LEGALITY OF THE ACT OF DISMISSAL WHICH CONSTITUTES DISCHARGE WITH JUST(AU THORIZED) CAUSE (SUBSTANTIVE DUE PROCESS); 2006 notes: investigation is a must however it can be do away if EE admits his fault or if there s an investigation handled by the piscal so it eliminates purpos e of trial, but if it is the wife of the accused ee who nag makaawa, still there is a need for investigation.

2. THE LEGALITY IN THE MANNER OF DISMISSAL WITH DUE PROCESS( PROCEDURAL DUE PROC ESS) 2006 notes: substantive due process mandates that an employee can only be dismis sed based on just or authorized causes. Procedural due process requires that the ee can only be dismissed after he has b een given an opportunity to be heard. 2006 notes:the import of due process necessitates the compliance of these two fa cets.

1.For termination of employment based on just causes: -2 notice rule -opportunity to be heard 2.for termination based on authorized cause Requirements of due process shall be deemed complied with upon service of a writ ten notice to the employee and the appropriate regional office of the department atleast 30 days before the effectivity of the termination specifying the ground s for termination (2006 notes) 3.if termination is brought about by the completion of the contract or phase the reof, no prior notice is required. If termination is brought about by the failure of an employee to meet the standa rds of the employer in case of probationary employment, it shall be sufficient t hat a written notice is served the employee within a reasonable time from the ef fective date of termination

Burden of Proof Art. 277 : The burden of proving that the termination was for a valid or authori zed cause shall rest on the ER. Degree of Proof In administrative or quasi-judicial proceedings, proof beyond reasonable doubt i s not required as basis for a judgment of the legality of an ER s dismissal of an EE, nor even preponderance of evidenced, substantial evidence being sufficient. (MERALCO vs. NLRC) Condonation Having condoned the misconduct of the EE and pardoned the latter, he is deemed t o have lost or waived his right to insist on the ER s acts as a ground for dismiss al. (2004 Azucena) PROCEDURAL DUE PROCESS 1.) 2 Notice Rule

The law requires that the ER must furnish the worker sought to be dismissed with two written notices before termination of employment can be legally effected: 1. Notice which apprises the EE of the particular acts or omissions for which hi

s dismissal is sought; and 2. Subsequent notice which informs the EE of the ER s decision to dismiss him. Fai lure to comply with the requirements taints the dismissal with illegality. (Peps i-Cola vs. NLRC) 2.) Opportunity to be Heard

1. An EE must be given ample opportunity prior to his dismissal to adequately pr epare for his defense. By ample opportunity is meant every kind of assistance that management must be accord to the EE to enable him to prepare adequately for his defense. Under the rules, indeed workers may be provided with a representative . (Ruffy vs. NLRC) The requirement of hearing affords the EE the opportunity to answer his ER s charges against him and accordingly to defend himself therefrom be fore dismissal is effected. (Salaw vs. NLRC) 2. No hearing is required if the grounds for dismissal or termination of service are based on authorized causes.. (Witshire vs. NLRC) . 3. W was called to the Office of the General Manager and was told that she was b eing charged with discourtesy and insubordination. During that time, she was als o called to explain her side. As she could not give an explanation, she was dism issed. Is the dismissal valid? No. She was denied procedural due process. She wa s not given ample opportunity to be heard and to defend herself. 4. 36 conductors of a bus were dismissed after investigations conducted by the J ago and the fiscal found out that they defrauded the company. Is the dismissal v iolative of due process? No. For the company to conduct its own investigation is a duplication of the JAGO and the city fiscal s investigation. (BLTB vs. NLRC) 5. D was dismissed by his ER based on the preliminary investigation of the city fiscal which relied on an affidavit of an accused-turned state witness. Is this violative of due process?Yes. As compared to the BLTB case, the findings of the city fiscal were based solely on the affidavit of the accused-turned state witne ss. The substantial evidence requirement is not present. (China City Restaurant vs. NLRC) 6. S was dismissed by his ER due to his well documented involvement in pilferage . Prior to dismissal, he was called to a meeting of all delivery personnel to di scuss pilferage incidents. He denied involvement therein. Later he was dismissed . Is the dismissal violative of due process? Yes. The meeting called by the ER d oes not qualify as the hearing required by law. (Segismundo vs. Montalvo)

DISMISSAL FOR CAUSE BUT WITHOUT DUE PROCESS 1)Wenphil vs. NLRC A sanction, in the form of damages, must be imposed upon the ER for failure to g ive a formal notice and conduct an investigation as required by law before dismi ssing the EE from employment. 2006 notes:WenPhil Doctrine:The Supreme Court uphold that the dismissal of emplo yee must follow the 2 facets of valid termination, however, if employer committe d an infraction of the 2nd requirement, a sanction must be imposed on the employ er.

2)Serrano (GR 117040, January 27,2000) repeal WenPhil Termination due to authorized cause without giving the notice required under th e Labor Code is not a violation of due process. It is valid although declared ir regular/ineffectual. He shall however be entitled to SEPARATION PAY AND BACKWAGES subject to the foll owing: 1.when dismissal is for a cause, the employee, whether dismissed for just/author ized cause but w/o prior notice is entitled to full backwages from the time he w as terminated until the decision finding cause becomes final. 2.when the dismissal is w/o just/authorized cause, backwages shall be computed f rom the time of his dismissal until his actual reinstatement. 4BLUE 95 notes: Serrano case, although a case of termination for authorized caus e also covers termination due to just cause, if termination is due to just cause s ,no separation pay is due.

3)Agabon v NLRC (November 17,2004)

modifies Serrano and WenPhil

Dismissal for just/authorized w/o procedural due process is not an illegal dismi ssal which warrants backwages entitled only to nominal damages. Court decided to follow WenPhil that where dismissal is for a just cause, the la ck of statutory due process should not nullify the dismissal or render it illega l. However, the employer should indemnify the employee for the violation of his rig hts. The indemnity should be stiffer than that provided in WenPhil to discourage the abhorrent practice of dismiss now,pay later . Indemnity should be in the form of nominal damages which is adjudicated in order that a right of plaintiff which has been violated by the defendant may be vindi cated. May 16,2006 updates: =if termination is with just cause but no due process penalty is P20,000. =If termination is due to authorized cause but no due process P50,000 (Jaca Case M arch 28,2005). =And if it is a temporary lay-off, then it is P30000 (PT&T case, April 15,2005) Rules(2006 notes): 1.Valid Termination if it is with just/authorized cause and with due process. 2.It is illegal dismissal if -w/o just/authorized cause even if with due process -w/o just/authorized cause and no due process 3.There is sanction to ER if termination is with just/authorized cause but no du e process (but not considered as illegal dismissal Agabon Doctrine).

Rules

Managerial EE s and Rank and File EE s

As a general rule, ER s are allowed a wider latitude of discretion in terminating the employment of managerial personnel or those who, while not of similar rank, perform functions which by their nature require the ER s full trust and confidence . This must be distinguished from the case of ordinary rank-and-file EE s whose te rmination on the basis of these same grounds require a higher proof of involveme nt in the events in question; mere uncorroborated assertions and accusations by the ER will not suffice. (Coca-Cola vs. NLRC) Offer to Reinstate The fact that his ER latter made an offer to re-employ him did not cure the vice of his earlier arbitrary dismissal. (Ranara vs. NLRC) Prescription A complaint founded on illegal dismissal is not an ordinary money claim but for reinstatement. The action may be brought within 4 years from dismissal pursuant to Art. 1146 of the NCC. (New Imus Lumber vs. NLRC) Right to Counsel The right to counsel is a basic requirement of substantive due process. The righ t to counsel cannot be waived except in writing and in the presence of counsel. (Salaw vs. NLRC)

CONSEQUENCES OF TERMINATION 4 REMEDIES OF AN EMPLOYEE: 1. reinstatement 2. separation pay 3. full backwages

4. damages REINSTATEMENT Reinstatement is a restoration to a state which one has been removed or separate d. It is the turn to the position from which he was removed and assuming again t he functions of the office already held. Reinstatement presupposes that the prev ious position from which one had been removed still exists, or that there is an unfilled position more or less of a similar nature as the one previously occupie d by EE (NATU vs. Secretary of Labor) The decision of the labor arbiter reinstating a dismissed EE is immediately exec utory even while the case is brought up on appeal. (Art. 223) In authorizing this, the law itself has laid down a compassionate policy which o nce more vivifies and enhances the provisions of the Constitution. (Aria vs. NLR C)

An ER has 2 options in order for him to comply with an order of reinstatement, w hich is immediately executory, even pending appeal, firstly, he can admit the dismissed EE back worth under the same terms and condi tions prevailing prior to his dismissal or separation or to a substantially equi valent position if the former position is already filled up(ACTUAL REINSTATEMENT ). Secondly, he can reinstate the EE merely in the payroll (PAYROLL REINSTATEMENT). (Medina vs. CBS)

2006 notes: Reinstatement is not self-executing. Payroll reinstatement or actual reinstatement needs the issuance of a writ of execution. (Maranao Hotel vs. NLR C) BAR:What if reinstatement is not prayed for in the case before the labor arbiter . Is the labor arbiter allowed to grant reinstatement? No. The EE will not be re instated if he did not pray for reinstatement. (Labor vs. NLRC) But an earlier c ase, (General Baptist Colloge vs. NLRC) says that EE is entitled to reinstatemen t although he failed to specifically pray for the same. The Labor case is a late r case. After a finding that the dismissal of G, the manager of Dunkin Donuts violated procedural due process. G asked that he be reinstated. The company refused on th e ground of loss of confidence of G. Is the refusal valid? Yes. G held a sensiti ve position. The case left both parties with less than full trust and faith in e ach other. He should be paid severance compensation in lieu of reinstatement. (G olden Donuts vs. NLRC) 2006 notes: it cannot be executed if : 1.ee reached retirement age pending decision 2.er close down 3.position abolished 4.hostility and antagonism between er and ee SEPARATION PAY

General Rule If there is valid cause to terminate an employment, no separation pay need be pa id. (Sec. 7, Rule I, Book VI, IRR s) 2006 notes: separation pay is possible if reinstatement is no longer feasible(du e to strained relationship which is applicable only to confidential EE) Exceptions 1. Art. 283 : > Installation of labor saving devices and redundancy : 1 month or 1 month pay f or every year of service, whichever is higher. > Retrenchment to prevent losses and closure or cessation of operation or establ ishment or undertaking not due to serious business losses or financial reverses : 1 month pay or ½ month pay for every year of service, which ever is higher. 2. Art. 284 : > Disease : 1 month salary or ½ month salary for every year of service, whichever is higher. 3. Even if an EE resigns, he shall be given a separation pay if there is a compa ny policy to that effect. (Philoil vs. Ministry of Labor) 4. Discerning compassion Doctrine: Separation pay shall be allowed as a measure of social justice for instances where the EE is validly dismissed for causes oth er than serious misconduct or those reflecting on his moral character i.e. A was found to have demanded and received money in consideration for promise to facil itate approval of telephone line application. (Nasipit Lumber vs. NLRC) 5. Antipathy and Antagonism Reinstatement is no Longer Possible : Strained relat ions in order that it may justify award of separation pay in lieu of reinstateme nt with backwages, should be such, that they are so compelling and so serious in character, that the continued employment has become inconsistent with peace and tranquility which is an ideal atmosphere in every workplace. (Sibal vs. Notre D ame) This is particularly true when the position the EE is occupying is a positi on involving trust and confidence. (Alcantara)

COMPUTATION of SEPARATION PAY Includes not just the basic salary but also the regular allowances the EE has be en receiving. (Planters Products vs. NLRC) However, commissions are not included in such base figure. (Soriano vs. NLRC) EFFECT- RECEIPT EE s who received their separation pay are not barred from contesting the legality of their dismissal. The acceptance of those would not amount to estoppel. (San Miguel vs. Javate) BACKWAGES Backwages in general are granted on grounds of equity which a worker has lost du e to his illegal dismissal. (Torillo vs. Leogrardo) As a general rule, an EE is entitled to backwages only where his dismissal is due to the unlawful act of the ER or to the latter s bad faith. (Reyes vs. Minister of Labor) While generally an order of reinstatement carries with it an award of backwages, the court may not

only mitigate, but also absolve the ER from liability fro backwages where good faith is evident. (Durabilt vs. NLRC) Separation pay is the amount that an EE receives at the time of his severance fr om the service and is designed to provide the EE with the wherewithal during the period that he is looking for another employment. (Torillo vs. Leogardo) Backwag es represent compensation that should be earned but not controlled because of th e unjust dismissal. (Lim vs. NLRC) The basis of computing the two are different, the 1st being usually the length of the EE s service and the 2nd the actual perio d when he was lawfully prevented from working. (Id.)

COMPUTATION OF BACKWAGES Art. 279 : An EE who is unjustly dismissed from work shall be entitled to full b ackwages, inclusive of allowances, and to his other benefits or their monetary e quivalents computed from the time his compensation was withheld from him up to t he time of his actual reinstatement. 2005 notes: However, in the case of Retuya v NLRC, reinstatement is no longer fe asible since Insular Builders has ceased operations. Absent any showing that its business was deliberately stop to avoid reinstatement, the EEs amount of backw ages shall be computed from time of illegal termination(even if work in the sist er company) upto time of cessation of business operation. (aside from that, he is also entitled to separation pay) 2005 notes:An illegally dismissed employee is also entitled to reinstatement wit hout lose of seniority right and payment of full backwages without any deduction corresponding to the period of the employee s illegal dismissal upto actual reins tatement.

4BLUE 95 lecture:As provided under the labor code, an illegally dismissed emplo yee is entitled to the twin reliefs of: a.reinstatement or separation pay(if reinstatement no longer feasible) b.backwages relief a and b are distinct and separate reliefs given to alleviate the economic setback brought by the EEs dismissal, therefore AWARD OF ONE DOES NOT BAR THE O THER. Backwages may be awarded without reinstatement and reinstatement may be aw arded without backwages.

2006 notes: The effects of extraordinary inflation are not to be applied withou t an agreement between the parties and without an official declaration thereof b y competent authorities. (Lantion vs. GAUF) 2006 notes: OFW: there is no such thing as full backwages since they are entitle d to 3 months for every yr of service or entire unexpired portion of contract w/ c ever is lesser + placement fee + 12% interest from time it was paid. Backwages as a general rule is upto the time of actual reinstatement. Exceptions(2006 revision): 1.if reinstatement is not feasible, backwages must be computed upto FINALITY of Court s decision.

2.if ceased operation of business, its upto CESSATION of business. 3.if EE died, its upto EE s DEATH 4.if retired, upto RETIREMENT Date

2005 notes: upon reinstatement, backwages must be without deduction (Bustamante Ruling) 2005 notes:gasoline, car and allowance are benefits of EE which must be included in backwages computation.

2005 notes:Hobson Choice Doctrine: if respondent is given the option to retire , retrench or dismissed, and they were made to understand that they had no choic e but to leave the company, they were forced to swallow the bitter pill of dismi ssal but afforded a chance to sweeten their separation from employment. 2005 notes:Law of the Case: term applied to established the rule that when an ap pellate court passes on a question and remands the case at a lower court for fur ther proceedings, the question that was settled on such lower court becomes the law of the case upon subsequent appeal.

DAMAGES Any award of damages by the Labor Arbiter obviously cannot be based on the Labo r code but would be grounded on the Civil Code. Such an award is premised that ER fired EE w/o just cause or due process. Moral damages Employer is liable for moral damages for breaches of contract where the employer acted fraudulently or in bad faith. The sum of P5000 each in favor of the termi nated workers in the concept of moral damages may be given. Moral damages is recoverable only where the dismissal or suspension was attended by bad faith (conscious or intended design) or fraud or constituted an act oppr essive to labor or was done in a manner contrary to morals ,good customs or publ ic policy. Exemplary damages Award of moral and exemplary damages in favor of the employee who was illegally dismissed shall be upheld where the employee had been harassed by the employer. Where employee s dismissal was effected without procedural fairness ,an award of exemplary damages in her favor can only be justified if her dismissal was effect ed in a wanton, oppressive or malevolent manner. II. TERMINATION BY EE AND SUSPENSION OF OPERATION Termination by EE Just Causes Art. 285 : An EE may put an end to the relationship without serving any notice o n the ER for any of the following just causes:

1. Serious insults by the ER and or his representative on the honor and person o f the EE; 2. Ihuman and unbreakable Treatment accorded the EE by the ER or his representat ive; 3. Commission of a crime or offense or his representative against the person of the EE,or any immediate members of his family, and Analogous cases. Without Just Cause Requisites Art. 285(a) : An EE may terminate without just cause the ER-EE relationship by serving a written notice on the ER at least 1 month in advance. The ER upon whom no such notice has been served may hold the EE liable for damages. A. RESIGNATION a voluntary act of an EE who finds himself in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service, t hen he has no other choice but to disassociate himself from his employment. The ER has no control over resignation and so, in order to ensure that no disruptio n of work would be involved by reason of resignation. This practice has been rec ognized because every business enterprise endeavors to increase its profits by ad opting a device or means designed towards that goal. Resignation once accepted a nd being the sole act of the EE may not be withdrawn without the consent of the ER. ( Intertrod Maritime vs. NLRC) B. CONSTRUCTIVE DISCHARGE A constructive discharge is a quitting because continued employment is rendered impossible, unreasonable or unlikely; as, an offer involving a demotion in rank and diminution in pay. (Philippine Japan Active Carbon vs. NLRC) This is not a c ase of voluntary resignation. It is in the nature of a contrivance to effect to dismissal without cause. (Rizal Memorial vs. NLRC) 2006 notes: Constructive dismissal means ee s employment become impossible that he is force to resign. (BAR)Z was hired as a production recorder by a tobacco company. After 14 years o f occupying the position, she was demoted to picker by reason of inefficiency du e to alleged frequent mistakes in her report. Z refused to report for work and f iled a complaint for illegal dismissal. Was the dismissal justified?No. The mana gement based its action merely on communications between officers of the company . She was not notified in advance of the company s actions. The demotion done in b ad faith constitute constructive dismissal. Suspension of Operations Art. 286 : The bona fide suspension of the operation of a business or undertakin g for a period not exceeding 6 months, or the fulfillment by the EE of a militar y or civic duty shall not terminate employment. In all such cases, the ER shall reinstate the EE to his former position without loss of seniority rights if he indicates his desire to resume his work not later than 1 month from the resumpti on of operations of his ER or from his relief from the military or civic duty. It is settled that when the bona fide suspension of operations of a business und ertaking exceed 6 months, then the worker s employment shall be deemed terminated. (Lucky Textile vs. NLRC) RETIREMENT Art. 287 : Any EE may be retired upon reaching the retirement age established in the CBA or other applicable employment contract. 2006 notes: if mining worker ,it is 50 yrs or more but not beyond 60.

2006 notes:er may provide retirement age at 40 when there exist an optional reti rement at option of the ER or the EE. In case of retirement, the EE shall be entitled to receive such retirement benef its as he may have earned under existing laws and any CBA agreement and other ag reements: Provided, however, That an EE s retirement benefits under any CBA and o ther agreements shall not be less than those provided therein. 2006 notes:In the absence of a retirement plan or agreement providing for retire ment benefits of EE s in the establishment, an EE upon reaching the age of 60 year s or more, but not beyond 65 years which is hereby declared the compulsory retir ement age, who has served at least 5 years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least ½ month salary for every year of service, a fraction of at least 6 months being considered as 1 wh ole year. Unless the parties provide for broader inclusions, the term ½ month salary shall m ean 15 days plus 1/12th of the 13th month pay and the cash equivalent of not mor e than 5 days of service incentive leaves. 2006 notes:Retail, service and agricultural establishments or operations employi ng not more than 10 EE s or workers are exempted from the coverage of this provisi on. Violation of this provision is hereby declared unlawful and subject to the penal provisions under Art. 288 of this Code.

Obligation 1. The law does not impose any obligation upon ER s to set up a retirement scheme for their EE s over and above that already established under existing laws. (Llora Motors vs. Drilon) 2. Entitlement of EE s to retirement benefits must be specifically granted under e xisting laws, a CBA or employment contract or an established EE policy. (GVM vs. NLRC)

Benefit Retirement benefits are intended to help the EE enjoy the remaining years of his life, lessening the burden of worrying for his financial support, and are a for m of reward for his loyalty and service to the ER. (Aquino vs. NLRC) The CBA between a university and its faculty members provided that in case of un usual circumstances, faculty members whose services are terminated shall be gran ted retirement benefits. Are faculty members affected by an unusual circumstance , such a phase-out, and who are given separation pay pursuant to law also entitl ed to retirement benefits?Yes. There is no provision in the CBA to the effect th at termination benefits received under the law shall preclude the EE from receiv ing other benefits under the agreement. Separation arising from a forced termina tion of employment and benefits given as a contractual right due to many years o f faithful service and are not necessarily antagonistic to each other. (UE vs. M inister of Labor)

Sign up to vote on this title
UsefulNot useful