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INTRO – MODULE 16 (WEEK 14, SESSION 1) 1

Labor and Social Legislation

MODULE 16
LABOR LAW AND SOCIAL LEGISLATION

WEEK 14, SESSION 1


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Labor and Social Legislation

❶ CONSTITUTIONAL BASIS. – The 1987


Constitution is replete with labor-related provisions, but
the more commonly quoted provisions are those found
under Section 3, Article XIII, to wit:

“Section 3. The State shall afford full protection to


labor, local or overseas, organized and unorganized and
promote full employment and equality of employment
opportunities for all.
“It shall guarantee the rights of all workers to
self-organization, collective bargaining and negotiations,
and peaceful concerted activities, including the right to
strike in accordance with law. They shall be entitled to
security of tenure, humane conditions of work and a
living wage. They shall also participate in policy and
decision-making processes affecting their rights and
benefits as may be provided by law.
“The State shall promote the principle of shared
responsibility between workers and employers and the
preferential use of voluntary modes in settling disputes,
including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.
“The State shall regulate the relations between
workers and employers, recognizing the right of labor to
its just share in the fruits of production and the right of
enterprises to reasonable returns on investments, and
to expansion and growth.”

⮲ These provisions somewhat sum up what


Labor Law is all about. Through the intervention of the
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Labor and Social Legislation

State, a balance has to be attained between the interests


of capital vis-à-vis the interests of the laborer or worker.
With such an aim in mind, the country saw the
promulgation of the Labor Code of the Philippines, which
provided for a two-tiered approach to labor – labor
standards and labor relations.
Hence, Books I to IV of the Labor Code is mainly
concerned with labor standards, while the remaining
Books V to VI focuses on labor relations.

⮲ Construction in favor of labor – One


essential feature of labor laws is – all doubts in the
interpretation and implementation of the provisions of
the Labor Code and other labor-related statutes shall be
resolved in favor of labor (Article 4, New Labor Code).
This statutory pronouncement under the Labor Code
underlies the state’s commitment to the constitutional
mandate of providing full protection to labor since it has
affirmed that labor is a primary social economic force
(Section 18, Article II, 1987 Constitution).

⮲ Balance between labor and capital – This


constitutional mandate of construction in favor of labor,
however, should not be taken to mean that capital will
always be at the losing end of the equation. This has to be
reconciled with another constitutional mandate to
harmonize and balance the needs and demands from both
labor and capital, since capital is recognized as having an
indispensable role in national development (Section 20,
Article II, 1987 Constitution). Both are essential cogs in
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Labor and Social Legislation

the wheels of national development and should be treated


equally.
Labor laws are there to
protect the rights of Labor
against unscrupulous
employers as well as to
protect employers from
abusive employees. It
should be noted that the
protection provided under
the Labor Laws goes both
ways, i.e., for the laborer
and the employer.

🞈 Illustrative Example: One good example to illustrate the


balance between labor and capital is on the matter of
termination of employment. Under our labor laws, a
qualified employee is granted security of tenure, and
cannot be removed except for authorized and legal causes.
This does not mean, however, that an employer is to be
burdened with undesirable employees. The Labor Code
provides for the grounds where an employer can rightfully
initiate disciplinary proceedings against an employee,
which necessarily include termination of employment.

❷ LABOR LAWS, ITS MAIN AREAS OF CONCERN.–

(A) LABOR LAWS: These laws govern the rights and


obligations of employers and employees, providing as well
for the rules by which such rights and obligations may be
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Labor and Social Legislation

enforced. This field of law is divided into three main areas


of concern – labor standards, labor relations and social
legislation.

(B) SOCIAL LEGISLATION: There is a saying that


“those who have less in life should have more in law”. This
statement encapsulates what social legislation is all about.
It refers to statutes that level the playing field between
employers and employees. Such laws endeavor to strike a
balance between the rights of workers vis-à-vis the
underlying goal of employers to generate profit. More
often than not, the lowly employee or worker is not
situated in an equal footing, so to speak, with powerful
and moneyed employers, and thus social legislation seeks
to ensure that workers are afforded what is due them in
terms of salary, benefits, working conditions and the like.
Social legislation is also designed to secure the future of
the worker as well as his family because of what happens
to the worker arising from the hazards, incidents or effects
of employment.

⮲ Examples of such laws are as follows:


(1) RA 8187 (Paternity Leave Act of 1996)
11 June 1996
● “AN ACT GRANTING PATERNITY LEAVE OF
SEVEN (7) DAYS WITH FULL PAY TO ALL MARRIED
EMPLOYEES IN THE PRIVATE AND PUBLIC
SECTORS FOR THE FIRST FOUR (4) DELIVERIES
OF THE LEGITIMATE SPOUSE WITH WHOM HE IS
COHABITING AND FOR OTHER PURPOSES.”
(2) RA 7610 (Special Protection of Children Act)
17 June 1992
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Labor and Social Legislation

● ”AN ACT PROVIDING FOR STRONGER


DETERRENCE AND SPECIAL PROTECTION
AGAINST CHILD ABUSE, EXPLOITATION AND
DISCRIMINATION, PROVIDING PENALTIES FOR
ITS VIOLATION AND FOR OTHER PURPOSES.”
(3) RA 7877 (Anti-Sexual Harassment Act of 1995)
14 February 1995
● ”AN ACT DECLARING SEXUAL HARASSMENT
UNLAWFUL IN THE EMPLOYMENT, EDUCATION
OR TRAINING ENVIRONMENT, AND FOR OTHER
PURPOSES.”
(4) RA 7655 (An Act Increasing the Minimum Wage for
House helpers)
19 August 1993
● “AN ACT INCREASING THE MINIMUM WAGE OF
HOUSEHELPERS, AMENDING FOR THE PURPOSE
ARTICLE 143 OF PRESIDENTIAL DECREE NO. 442,
AS AMENDED.”
(5) RA 8042 (Migrant Workers Act of 1995)
7 June 1995
● ”AN ACT TO INSTITUTE THE POLICIES OF
OVERSEAS EMPLOYMENT AND ESTABLISH A
HIGHER STANDARD OF PROTECTION AND
PROMOTION OF THE WELFARE OF MIGRANT
WORKERS, THEIR FAMILIES AND OVERSEAS
FILIPINOS IN DISTRESS, AND FOR OTHER
PURPOSES
(6) RA 8282 (Social Security Act of 1997)
1 May 1997
● AN ACT FURTHER STRENGTHENING THE
SOCIAL SECURITY SYSTEM THEREBY
AMENDING FOR THIS PURPOSE REPUBLIC
ACT NO. 1161, AS AMENDED, OTHERWISE
KNOWN AS THE SOCIAL SECURITY LAW
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Labor and Social Legislation

(7) RA 8291 (Government Service Insurance


System Act of 1997) - 30 May 1997
● “AN ACT
AMENDING
PRESIDENTIAL
DECREE NO. 1146,
AS AMENDED,
EXPANDING AND
INCREASING THE
COVERAGE AND
BENEFITS OF THE
GOVERNMENT
SERVICE
INSURANCE
SYSTEM,
INSTITUTING
REFORMS THEREIN
AND FOR OTHER
PURPOSES.”

(8) RA 7875 (National Health Insurance Act of 1995)


10 February 2004
● “AN ACT INSTITUTING A NATIONAL HEALTH
INSURANCE PROGRAM FOR ALL FILIPINOS AND
ESTABLISHING THE PHILIPPINE HEALTH
INSURANCE CORPORATION FOR THE PURPOSE.”
(9) RA 7641 (Retirement Pay Law)
9 December 1992
● “AN ACT AMENDING ARTICLE 287 OF
PRESIDENTIAL DECREE NO. 442, AS AMENDED,
OTHERWISE KNOWN AS THE LABOR CODE OF
THE PHILIPPINES, BY PROVIDING FOR
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RETIREMENT PAY TO QUALIFIED PRIVATE


SECTOR EMPLOYEES IN THE ABSENCE OF ANY
RETIREMENT PLAN IN THE ESTABLISHMENT.”
(10) RA 9231 (Act Against Child Labor)
19 December 2003
● “AN ACT PROVIDING FOR THE ELIMINATION OF
THE WORST FORMS OF CHILD LABOR AND
AFFORDING STRONGER PROTECTION FOR THE
WORKING CHILD, AMENDING FOR THIS
PURPOSE REPUBLIC ACT NO. 7610, AS
AMENDED, OTHERWISE KNOWN AS THE
"SPECIAL PROTECTION OF CHILDREN AGAINST
CHILD ABUSE, EXPLOITATION AND
DISCRIMINATION ACT."
(11) PD 851 (13th Month Pay Law)
16 December 1976
● “REQUIRING ALL EMPLOYERS TO PAY THEIR
EMPLOYEES A 13th-MONTH PAY”
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(C) LABOR STANDARDS LAW: The area of labor


standards provides for the basic requirement as provided
by law that employers have to provide for their employees
whether in the workplace or in the matter of wages. These
minimum requirements are established in order to protect
workers’ rights as well as set the standard in all business
establishments. In short, labor standards provide for the
conditions of employment in any business.
⮲ A matter of right – These minimum
standards prescribed by law in relation to work is a matter
of right on the part of the laborer, and non-compliance by
an employer of said minimum standards would be met
with the punitive force of the law.
⮲ Provision for higher but not below the
minimum prescribed – These minimum conditions are
normally indicated in an employee’s employment contract.
Some firms or employers even provide for higher
standards than that provided for under the law. What is
important is that the conditions of work, more particularly
the benefits, do not fall below the minimum prescribed
under the Labor Code.
⮲ Workers not covered – These minimum
standards prescribed by law in relation to work applies to
employees in all establishments and undertakings,
whether for profit or not, EXCEPT the following:
(a) Government employees;
(b) Managerial employees;
(c) Field personnel;
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(d) Members of the family of the employer who are


dependent on him for support;
(e) Domestic helpers, or persons in the personal
service of another; and
(f) Workers paid by result.

⮲ Some prescribed minimum conditions – The


conditions regarding employment or work are covered
under Book III of the Labor Code, and are generally
categorized into the following:

① Normal hours of work, including hours worked –


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


suffered or permitted to work.
⮚ Rest periods of short duration during working hours
shall be counted as hours worked. (Arts. 83 & 84, Labor
Code)
⮚ The following are
other circumstances
relative to normal
working hours as
provided in the Labor
Code:
(a) Compressed Work Week (CWW) is valid,
subject to regulations provided by the Department of
Labor and Employment (DOLE);
(b) Health personnel in government service are
not covered by this provision. Their employment benefits
are governed by Republic Act No. 7305;
(c) Waiting time is considered hours worked if
it is an integral part of one’s work, or one is engaged by his
employer to wait; and
(d) It is considered hours worked when an
employee is required to remain on call in the employer’s
premises or close thereto that he cannot use the time
effectively for his own purpose.

② Meal periods – The


law mandates every
employer to give his
employees not less than
sixty (60) minutes
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time-off for their regular


meals (Art. 85, Labor
Code).

③ Night Shift Differential – Every employee shall be paid


a night shift differential of not less than ten percent (10%)
of his regular wage for each hour of work performed
between ten o’clock in the evening and six o’clock in the
morning (Art. 86, Labor Code).
⮚ Night shift differential pay is given as an
incentive because the employee is rendering work past his
supposed bedtime.

④ Overtime work – Work may be performed beyond


eight hours a day provided that the employee is paid, for
the overtime work, an additional compensation equivalent
to his regular wage plus at least twenty-five percent (25%)
thereof (Art. 87, Labor Code).
⮚ Overtime on a holiday or rest day – Work
performed beyond eight hours on a holiday or rest day
shall be paid an additional compensation equivalent to the
rate for the first eight hours on a holiday or rest day, plus at
least thirty percent (30%) thereof.
⮚ Undertime not offset by overtime – Undertime
work on any particular day shall not be offset by overtime
work on any other day. Permission given to the employee
to go on leave on some other day of the week shall not
exempt the employer from paying the additional
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compensation required under the Labor Code (Art. 88,


Labor Code).
✔ Rationale: The value paid for overtime
work is more than the value paid for undertime work. If
undertime work is allowed to be offset by overtime work,
the worker will be at a disadvantage.

⮚ Requirement for overtime –


✔ An employee cannot, as a rule, be
compelled to render overtime work for his employer,
except only under certain conditions provided under
Article 89 of the Labor Code when an employee may be
required by the employer to perform emergency overtime
work.
✔ It is enough that an employee renders
overtime work. An express instruction from the employer
is not a requirement. However, if overtime work will be
rendered on holidays or rest days, an express instruction
from the employer is required.
⑤ Right to weekly rest periods – The law mandates that
it shall be the duty of every employer, whether operating
for profit or not, to provide each of his employees a rest
period of not less than twenty-four consecutive hours after
every six consecutive normal work days.
⮚ Factors such as preference of worker,
prerogative of employer and DOLE regulations shall play a
part in the determination when such rest day will be given.
⮚ However, the employer shall respect the
preference of employees as to their weekly rest day when
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such preference is based on religious grounds (Art. 91,


Labor Code).

⑥ Holiday pay – Holiday pay is a day’s pay given by law


to an employee even if he does not work on a regular or
legal holiday as listed by law. Such grant, however, does
not apply to a retail and service establishment regularly
employing less than ten (10) workers (Art. 94, Labor
Code).
⮚ The employer may require an employee to
work on any holiday, but such employee shall be paid
compensation equivalent to twice his regular rate.
⮚ For holiday pay to be compensable, the
employee should have reported for work on the day
preceding the holiday.

⑦ Service incentive leave – Every employee who has


rendered at least one (1) year of service shall be entitled to
a yearly service incentive leave of five (5) days with pay
(Art. 95, Labor Code).
⮚ Such grant shall not apply to those who are
already enjoying the benefit, those enjoying vacation leave
with pay of at least five (5) days, and those employed in
establishments regularly employing less than ten (10)
employees, or in establishments exempted from granting
this benefit by the Secretary of Labor after considering the
viability or financial condition of such establishment.
⮚ Service Incentive Leave can be converted to
cash (i.e., commutable) if not availed at the end of the
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year. This is to encourage continuous work of the


employees.
⮚ Vacation and Sick Leaves are not required by
law. It is a management prerogative.
⑧ 13th Month Pay – Thirteenth-month pay refers to
one-twelfth (1/12) of the basic salary of an employee
within a calendar year.
⮚ All employers are required to pay all their
employees, regardless of the nature of their employment,
a thirteenth-month pay not later than 24 December of
every year, provided that they have worked for at least one
(1) month during a calendar year (P.D. No. 851, 16
December 1975).
⮚ An employee who resigned or was terminated
from work at any time before payment of the 13th month
pay, is still entitled to said pay in proportion to the time he
worked during the year.

(D) LABOR RELATIONS LAW: Labor Relations Law


refers to laws, rules and regulations which govern the
relationship between employees and their employers,
promote the right of the employees to self-organization
and collective bargaining, penalize unfair labor practice,
and provide modes for the settlement of labor disputes
such as conciliation, mediation, grievance machinery,
voluntary arbitration and compulsory arbitration.

❸ MANAGEMENT PREROGATIVE. – Management


prerogative refers to the right of management to regulate
according to its own discretion and judgment all aspects of
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employment, and if practiced properly and in good faith, is


protected by labor laws. Some of the more common
management prerogatives are as follows:
(a) Right to selection of employees;
(b) Right to discipline employees;
(c) Right to prescribe company rules;
(d) Right to transfer or re-assign employees; and
(e) Right to determine company policy.

⮲ Limitations to its exercise – Management


prerogative, however, is subject to limitations provided by
the following:
(a) Law;
(b) Contract or collective bargaining agreements; and
(c) General principles of fair play and justice.

❹ EMPLOYER-EMPLOYEE RELATIONSHIP. –
⮲ Importance of determination - The
determination of whether employer-employee relation
exists between the parties is very important.
(a) Entitlement to labor standard benefits (i.e.,
minimum wages, hours of work, overtime pay, etc.), or to
social benefits under the laws (i.e., social security law,
workmen’s compensation law, etc.), or to termination pay,
or to unionism and other labor relations provisions under
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the Labor Code, are largely dependent on the existence of


employer-employee relationship between the parties.
(b) The existence of employer-employee relationship
between the parties will determine whether the
controversy should fall within the exclusive jurisdiction of
the labor agencies or not. If for example the parties are
not employer-employee of each other, respectively, but
perhaps partners or associates, then any dispute between
them will not be covered by the jurisdiction of labor

👓
agencies but by regular courts.
READ THIS CASE IN ITS ORIGINAL TEXT:
Indophil Textile Mills, Inc. vs. Engr. Salvador
Adviento,
G.R. No. 171212, 4 August 2014.
⮚ NLRC – The National Labor Relations
Commission is a quasi-judicial body attached to the
Department of Labor and Employment (DOLE), which is
tasked to promote and maintain industrial peace by
resolving labor and management disputes involving both
local and overseas workers through compulsory arbitration
and alternative modes of dispute resolution.

⮲ How established – To establish an


employer-employee relationship, a contract of
employment is necessary. This can be in writing, or there
may only be an oral agreement.

⮲ Four-fold test to determine its existence –


The usual test to determine the existence of an
employer-employee relationship is the so-called four-fold
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test. In applying this test, the existence of four (4)


elements that are determinative of such a relationship are
generally considered, to wit:
(a) Right to hire or to the selection and engagement of
the employee.
(b) Payment of wages and salaries for services.
(c) Power of dismissal or the power to impose
disciplinary actions.
(d) Power to control the employee with respect to the
means and methods by which the work is to be
accomplished. This is known as the “Control Test.”

⮚ Of the above-mentioned elements, the


“control test” is considered the most important element in
determining the existence of employment relation. The
“control test” refers to the employer’s power to control
the employee’s conduct not only as to the result of the
work to be done, but also with respect to the means and
methods by which the work is to be accomplished.
⮚ It should be noted that control by the
employer need not be actually exercised in order to be
determinative of an employer-employee relationship. It is
sufficient that such power is reserved to the employer
although the use of the same has never arisen.

👓 READ THIS CASE IN ITS ORIGINAL TEXT:


South East International Rattan, Inc. vs.
Jesus Coming,
G.R. No. 186621, 12 March 2014.
❺ KINDS OF EMPLOYEES –
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(A) REGULAR EMPLOYEES – Typically, regular


employees are those who are entitled to benefits such as:
SSS, Pag-IBIG, PhilHealth, 13th month pay, holiday pay,
overtime pay, vacation leave, and other benefits provided
by law.
⮲ Regular employees by nature of work – It is
commonly believed that all employees must serve at least
six months before they become regular. This is untrue.
Under the Labor Code, so long as an employee performs
any function that is necessary and desirable in the ordinary
course of business, then such employee is deemed regular
regardless of the term of his service. The only way to
prevent such an employee from becoming regular on his
first day would be to hire him on a probationary basis.
⮲ Regular employees by years of service – Any
employee who has rendered at least one year of service,
whether continuous or intermittent, is deemed regular
with respect to the activity he performed and while such
activity actually exists (Art. 281, Labor Code).

👓 READ THIS CASE IN ITS ORIGINAL TEXT:


Moises De Leon vs. NLRC, G.R. No. 70705,
21 August 1989.

⮲ Security of tenure – Regular employees


enjoy security of tenure. Their employment may only be
terminated for just causes or authorized causes set out in
the law. In addition, regular employees enjoy procedural
due process, where the employee must be informed of the
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grounds for termination, and be given the opportunity to


present his defense or evidence. Thereafter, the employee
must be notified of the employer’s decision to terminate
his services. This is also referred to as the “two-notice
rule” where the employer must send a first notice to the
erring employee composed of the formal charge and the
opportunity to defend himself. The second notice is the
notice of termination.

(B) PROBATIONARY EMPLOYEES – Probationary


employees are those hired for a trial (or probationary)
period during which the employee must demonstrate the
ability to perform the job for which he has been hired.
Upon doing so, at the end of the probationary period, the
employee becomes a regular employee.
⮲ Probationary period – Under the law, (a) a
probationary period must not exceed six (6) months and
(b) at the start of this period, the employer must inform
the employee of the standard by which his performance
will be evaluated. If any of these requirements are not
met, then the probationary employment is void and the
employee is deemed regular from day one. It is advisable
therefore to properly document the probationary
employment to ensure that all legal requirements have
been met.
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⮲ Security of tenure – It is important to


remember that probationary employees also enjoy
security of tenure during the probationary period, and the
employment may not be terminated without a substantive
reason and compliance with the aforementioned
two-notice rule.
(C) CONTRACTUAL EMPLOYEES – Contractual
employees are employees whose period and condition of
employment are dependent on the provisions of their
contract. The Labor Code does not explicitly permit
contractual or fixed-term employment, but the courts have
ruled that so long as the term in the contract is not used to
pre-emptively end the employment and deny the
employee’s security of tenure, then it is valid.

⮲ Security of tenure – It should be noted that


contractual or fixed-term employees enjoy the right to
security of tenure while the contract is in effect.

(D) SEASONAL and PROJECT EMPLOYEES –


Seasonal employees are employed for seasonal work.
Project employees are called to work only for the
accomplishment of a particular project. The period of
employment is co-terminus with the season or the project,
as the case may be. In both cases, the employment is for a
temporary period at the end of which the employee ceases
to work for the employer.
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⮲ Security of tenure – During the seasonal or


project employment, the employee enjoys security of
tenure and may not be terminated without cause.

❻ TERMINATION OF EMPLOYMENT –
Termination of employment refers to the cessation of the
services of the employee by management either through
just or authorized causes. The employee’s constitutional
right to security of tenure, wherein the employer cannot
terminate his services without just or authorized causes,
applies both to regular and non-regular employees.

(A) JUST CAUSES FOR TERMINATION. – Under Article


297 of the Labor Code, the employer may terminate the
services of the employee under the following just causes:
① Serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or
representative in connection with his work;
② Gross and habitual neglect by the employee of his
duties;
③ Fraud or willful breach by the employee of the trust
reposed in him by his employer or duly authorized
representative;
④ Commission of a crime or offense by the employee
against the person of his employer or any immediate
member of his family or his duly authorized
representative; and
⑤ Other causes analogous to the foregoing.
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(B) AUTHORIZED CAUSES FOR TERMINATION. – An


authorized cause refers to an economic circumstance not
due to the employee’s fault. Under Article 298 of the
Labor Code, the employer is authorized to terminate the
employment of an employee due to the following
authorized causes:

① Installation of labor-saving devices, also known


as “Automation/Robotics”;
② Redundancy;
③ Retrenchment to prevent losses; and
④ Closure or cessation of business
(C) PRECONDITIONS TO VALID TERMINATION. –

(C.1) Due process in case of just causes; the “two-notice


rule”– The employer is required by law to furnish
employees with two written notices before termination of
their employment due to any of the just causes under
Article 297 of the Labor Code. Thus, the following steps
must be observed; otherwise, the dismissal is illegal:

① The first written notice to be served on the


employees should contain the specific causes or grounds
for termination against them, and a directive that
employees are given the opportunity to submit their
written explanation within a reasonable period. The notice
should specifically mention which company rules, if any,
are violated and/or which among the grounds under
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Article 297 of the Labor Code is being charged against the


employees.
② After serving the first notice, the employees
should schedule and conduct a hearing or conference
wherein the employees will be given the opportunity to (a)
explain and clarify their defense to the charge against
them; (b) present evidence in support of their defense;
and, (c) rebut the evidence presented against them by the
management. During the hearing or conference, the
employees are given the chance to defend themselves
personally, with the assistance of a representative or
counsel of their choice.
③ After determining that termination is
justified, the employer shall serve the employees a written
notice of termination indicating that: (a) all the
circumstances involving the charge against the employees
have been considered; and (b) grounds have been
established to justify the severance of their employment.

(C.2) Due process in case of authorized causes – To effect


the termination of any employee for any of the authorized
causes, the employer must serve a WRITTEN NOTICE on
the worker and the Department of Labor and Employment
at least one (1) month before the intended date thereof.

* * * END * * *
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HAPPY READING & LEARNING!




SOURCES of NOTES:
The discussions outlined in
this module have been
collectively lifted from the
cases cited and commentaries
made by the authors in the
references cited below:

1. Aquino, David Robert C. Introduction to Law.


Quezon City: Central Book Supply, Inc., 2017.

2. Dascil, Rodelio T. Threshold to the Legal


Profession: An Introduction to Law. Manila: Rex Book
Store, 2013.

3. Suarez, Rolando A. Introduction to Law. Manila:


Rex Book Store, 2017.
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FOOD FOR
THOUGHT

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