(2023) Blue Notes - Labor Law

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BAR OPERATIONS 2023 LABOR LAW
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TABLE OF CONTENTS
I. FUNDAMENTAL PRINCIPLES AND CONCEPTS ........................................................................................ 9

A. LEGAL BASIS ................................................................................................................................. 9
1. 1987 CONSTITUTION ..................................................................................................................... 9
2. CIVIL CODE .................................................................................................................................. 10
3. LABOR CODE ............................................................................................................................... 10
B. STATE POLICY TOWARDS LABOR ............................................................................................. 11
1. SECURITY OF TENURE................................................................................................................ 11
2. SOCIAL JUSTICE .......................................................................................................................... 11
3. EQUAL WORK OPPORTUNITIES ................................................................................................. 11
4. RIGHT TO SELF-ORGANIZATION AND COLLECTIVE BARGAINING ........................................... 12
5. CONSTRUCTION IN FAVOR OF LABOR ...................................................................................... 12
6. BURDEN OF PROOF AND QUANTUM OF EVIDENCE ................................................................. 13
II. PRE-EMPLOYMENT ................................................................................................................................. 16

A. RECRUITMENT AND PLACEMENT OF LOCAL AND MIGRANT WORKERS ............................... 16
1. DEFINITION OF RECRUITMENT AND PLACEMENT OF LOCAL AND MIGRANT WORKERS ...... 16
2. REGULATION OF RECRUITMENT AND PLACEMENT ................................................................. 16
3. ILLEGAL RECRUITMENT [LABOR CODE AND THE MIGRANT WORKERS AND OVERSEAS
EMPLOYMENT ACT OF 1995 (RA8042), AS AMENDED BY RA 10022] ................................................. 19
4. LIABILITY OF LOCAL RECRUITMENT AGENCY AND FOREIGN EMPLOYER ............................. 24
5. TERMINATION OF CONTRACT .................................................................................................... 25
B. EMPLOYMENT OF NON RESIDENT ALIENS ............................................................................... 26
C. DISCRIMINATORY PRACTICES ................................................................................................... 26
1. AGE (RA 10911 OR THE ANTI-AGE DISCRIMINATION IN EMPLOYMENT ACT) .......................... 26
2. GENDER AND/OR MARITAL STATUS (RA 9710 OR THE MAGNA CARTA OF WOMEN) ............. 27
3. HEALTH CONDITION (RA 7277 OR THE MAGNA CARTA FOR DISABLED PERSONS) ............... 27
4. SOLO PARENTS (SEC 7, RA 8972, AS AMENDED BY RA 11861) ................................................ 28
III. EMPLOYMENT PROPER ......................................................................................................................... 30

A. MANAGEMENT PREROGATIVE ................................................................................................... 31
1. DISCIPLINE ................................................................................................................................... 31
2. TRANSFER OF EMPLOYEES ....................................................................................................... 31
3. PRODUCTIVITY STANDARD ........................................................................................................ 32
4. BONUS .......................................................................................................................................... 32
5. CHANGE OF WORKING HOURS .................................................................................................. 33
6. BONA FIDE OCCUPATIONAL QUALIFICATIONS ......................................................................... 33
7. MARRIAGE BETWEEN EMPLOYEES OF COMPETITOR-EMPLOYERS ....................................... 33
8. POST-EMPLOYMENT RESTRICTIONS ........................................................................................ 34
B. LABOR STANDARDS ................................................................................................................... 34
1. CONDITIONS OF EMPLOYMENT ................................................................................................. 34

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2. WAGES ......................................................................................................................................... 46
3. LEAVES ........................................................................................................................................ 56
4. SPECIAL GROUPS OF EMPLOYEES ........................................................................................... 60
5. SEXUAL HARASSMENT IN THE WORK ENVIRONMENT ............................................................. 70
C. SOCIAL WELFARE LEGISLATION ............................................................................................... 72
1. SSS LAW....................................................................................................................................... 72
2. GSIS LAW ..................................................................................................................................... 72
3. DISABILITY AND DEATH BENEFITS............................................................................................. 76
D. LABOR RELATIONS ..................................................................................................................... 80
1. RIGHT TO SELF-ORGANIZATION ................................................................................................ 80
2. BARGAINING UNIT ....................................................................................................................... 84
3. BARGAINING REPRESENTATIVE ................................................................................................ 86
4. RIGHTS OF LABOR ORGANIZATIONS ....................................................................................... 101
5. UNFAIR LABOR PRACTICE ........................................................................................................ 109
6. PEACEFUL CONCERTED ACTIVITIES ....................................................................................... 123
E. TELECOMMUTING ACT (R.A. 11165)......................................................................................... 135
1. DEFINITION ................................................................................................................................ 135
2. TELECOMMUTING PROGRAM ................................................................................................... 135
3. FAIR TREATMENT ...................................................................................................................... 135
IV. POST-EMPLOYMENT ........................................................................................................................... 137

A. EMPLOYER-EMPLOYEE RELATIONSHIP ................................................................................. 137
1. TESTS TO DETERMINE EMPLOYER-EMPLOYEE RELATIONSHIP ........................................... 138
2. KINDS OF EMPLOYMENT .......................................................................................................... 140
3. LEGITIMATE SUBCONTRACTING VS. LABOR-ONLY CONTRACTING ...................................... 146
B. TERMINATION OF EMPLOYMENT BY EMPLOYER ................................................................... 156
1. JUST CAUSES ............................................................................................................................ 156
2. AUTHORIZED CAUSES .............................................................................................................. 161
3. DUE PROCESS ........................................................................................................................... 166
4. TERMINATION OF CONTRACT OF MIGRANT WORKERS UNDER RA 8042 AS AMENDED BY RA
10022 ................................................................................................................................................... 167
C. TERMINATION OF EMPLOYMEMNT BY EMPLOYEE ................................................................ 168
1. RESIGNATION VS. CONSTRUCTIVE DISMISSAL ...................................................................... 168
D. PREVENTIVE SUSPENSION ...................................................................................................... 169
E. RELIEFS FROM ILLEGAL DISMISSAL ....................................................................................... 170
F. RETIREMENT ............................................................................................................................. 175
V. JURISDICTION AND REMEDIES ........................................................................................................... 180

A. LABOR ARBITER ....................................................................................................................... 180
1. JURISDICTION OF THE LABOR ARBITER AS DISTINGUISHED FROM THE REGIONAL
DIRECTOR .......................................................................................................................................... 180
2. REQUIREMENTS TO PERFECT APPEAL TO NATIONAL LABOR RELATIONS COMMISSION .. 184

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3. REINSTATEMENT AND/OR EXECUTION PENDING APPEAL .................................................... 185

B. NATIONAL LABOR RELATIONS COMMISSION ........................................................................ 186
C. COURT OF APPEALS ................................................................................................................. 186
D. SUPREME COURT...................................................................................................................... 188
E. BUREAU OF LABOR RELATIONS ............................................................................................. 188
F. NATIONAL CONCILIATION AND MEDIATION BOARD .............................................................. 189
1. CONCILIATION VS. MEDIATION ................................................................................................. 189
G. DOLE REGIONAL DIRECTORS .................................................................................................. 189
H. DOLE SECRETARY .................................................................................................................... 190
1. JURISDICTION ............................................................................................................................ 190
2. VISITORIAL AND ENFORCEMENT POWERS ............................................................................. 190
3. POWER TO SUSPEND EFFECTS OF TERMINATION ................................................................ 192
4. REMEDIES .................................................................................................................................. 193
I. VOLUNTARY ARBITRATOR....................................................................................................... 193
J. PRESCRIPTION OF ACTIONS .................................................................................................... 193
1. MONEY CLAIMS ......................................................................................................................... 193
2. ILLEGAL DISMISSAL................................................................................................................... 193
3. UNFAIR LABOR PRACTICE ........................................................................................................ 193
4. OFFENSES UNDER THE LABOR CODE..................................................................................... 193
5. ILLEGAL RECRUITMENT ............................................................................................................ 193

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I. FUNDAMENTAL PRINCIPLES AND

CONCEPTS A. LEGAL BASIS
1. 1987 Constitution
TOPIC OUTLINE UNDER THE SYLLABUS
Article III: Bill Of Rights
A. LEGAL BASIS Sec. 1. No person shall be deprived of life, liberty, or
1. 1987 Constitution property without due process of law, nor shall any
2. Civil Code person be denied the equal protection of the laws.
3. Labor Code
Due process
B. STATE POLICY TOWARDS LABOR
Under the Labor Code, the requirements for the
1. Security of Tenure
lawful dismissal of an employee by his employer are
2. Social Justice
two-fold: the substantive and the procedural. Not
3. Equal Work Opportunities
only must the dismissal be for a valid or authorized
4. Right to Self-Organization and Collective
cause as provided by law, but the rudimentary
Bargaining
requirements of due process, basic to which are that
5. Construction in Favor of Labor
an opportunity to be heard and to defend oneself
6. Burden of Proof and Quantum of Evidence
must be observed before an employee may be
dismissed. (Metro Eye Security v. Salsona, G.R. No.
167367, 2007)
.
To constitute valid dismissal from employment, two
requisites must concur: (1) the dismissal must be for
a just or authorized cause; and (2) the employee
must be afforded an opportunity to be heard and to
defend himself.(Nacague v. Sulpicio Lines, G.R. No.
172589, 2010)
Labor as Property Right

One’s employment is a property right, and the
wrongful interference therewith is an actionable
wrong. The right is considered to be property within
the protection of the constitutional guarantee of due
process of law. (Texon Mfg. v. Millena, G.R. No.
141380, 2004)
Sec. 4. No law shall be passed abridging the

freedom of speech, of expression, or of the press, or
the right of the people peaceably to assemble and
petition the government for redress of grievances.
Wearing armbands and putting up placards to

express one’s views without violating the rights of 3rd
parties are legal per se and even constitutionally
protected. (Bascon v. CA, G.R. No. 144899, 2004)
Sec. 8. The right of the people, including those

employed in the public and private sectors, to form
unions, associations, or societies for purposes not
contrary to law shall not be abridged.
Sec. 16. All persons shall have the right to a speedy

disposition of their cases before all judicial, quasi-
judicial, or administrative bodies.

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Sec. 18(2). No involuntary servitude in any form 4. To work under Humane conditions
shall exist except as a punishment for a crime 5. Right to Organize
whereof the party shall have been duly convicted. 6. To enjoy Security of tenure
7. To Engage in peaceful concerted activities,
Article XIII: Social Justice And Human Rights including strike in accordance with law
Sec. 2. The promotion of social justice shall include
the commitment to create economic opportunities 2. Civil Code
based on freedom of initiative and self-reliance. Articles 1700 to 1703, Civil Code
Art. 1700. The relations between capital and labor
Sec. 3. The State shall afford full protection to labor, are not merely contractual. They are so impressed
local and overseas, organized and unorganized, with public interest that labor contracts must yield to
and promote full employment and equality of the common good. Therefore, such contracts are
employment opportunities for all. subject to the special laws on labor unions,
collective bargaining, strikes and lockouts, closed
It shall guarantee the rights of all workers to self- shop, wages, working conditions, hours of labor and
organization, collective bargaining and negotiations, similar subjects.
and peaceful concerted activities, including the right
to strike in accordance with law. They shall be Article 1701. Neither capital nor labor shall act
entitled to security of tenure, humane conditions of oppressively against the other, or impair the interest
work, and a living wage. They shall also participate or convenience of the public.
in policy and decision-making processes affecting
their rights and benefits as may be provided by law. Art. 1702. In case of doubt, all labor legislation and
all labor contracts shall be construed in favor of the
The State shall promote the principle of shared safety and decent living for the laborer.
responsibility between workers and employers and
the preferential use of voluntary modes in settling Article 1703. No contract which practically amounts
disputes, including conciliation, and shall enforce to involuntary servitude, under any guise
their mutual compliance therewith to foster industrial whatsoever, shall be valid.
peace.
The State shall regulate the relations between 3. Labor Code

workers and employers, recognizing the right of Rights Guaranteed by the Labor Code
labor to its just share in the fruits of production and The State shall afford protection to labor, promote
the right of enterprises to reasonable returns to full employment, ensure equal work opportunities
investments, and to expansion and growth. regardless of sex, race or creed and regulate the
relations between workers and employers. The
Sec 13. The State shall establish a special agency State shall assure the right of workers to self-
for disabled person for their rehabilitation, self- organization, collective bargaining, security of
development, and self-reliance, and their integration tenure, and just and humane conditions of work.
into the mainstream of society. (Labor Code, Art. 3)
Sec. 14. The State shall protect working women by The constitutional policy to provide full protection to
providing safe and healthful working conditions, labor is not meant to be a sword to oppress
taking into account their maternal functions, and employers. The commitment of this Court to the
such facilities and opportunities that will enhance cause of labor does not prevent us from sustaining
their welfare and enable them to realize their full the employer when it is in the right. (Sarocam v.
potential in the service of the nation. Interorient Marine, G.R. No. 167813, 2006)
Management prerogative Principle of Co-Determination

See discussion in Part III. Refers to the right of workers to participate in the
policy and decision making processes directly
Seven basic rights of workers guaranteed by the affecting their rights and benefits, without intruding
Constitution: (WHOSE-CD) into matters pertaining to management prerogative.
1. To participate in policy and Decision-making (PAL v. NLRC, G.R. No. 85985, 1993)
processes affecting their rights and benefits as
may be provided by law
2. To receive a living Wage
3. To conduct Collective bargaining or negotiation
with management

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justice to ensure the well-being and economic

B. STATE POLICY TOWARDS security of all the people, and in the pledge of
LABOR protection to labor with specific authority to regulate
the relations between landowners and tenants and
between labor and capital. (Alalayan v. National
1. Security of Tenure
Power Corp., G.R. No. L-24396, 1968)
Article 294. Security of Tenure. In case of regular
Limitations of Social Justice
employment, the employer shall not terminate the
Social justice should be used only to correct an
services of an employee except for a just cause or
injustice. It must be founded on the recognition of
when authorized by this Title. xxx
the necessity of interdependence among diverse
units of a society, and of the protection that should
Security of Tenure Applicable to Probationary
be equally and evenly extended to all groups as a
Employees
combined force in our social and economic life.
The foregoing shall also apply in cases of
(Agabon v. NLRC, G.R. No. 158693, 2004)
probationary employment; provided, however, that
in such cases, termination of employment due to
Social justice is not intended to countenance
failure of the employee to qualify in accordance with
wrongdoing simply because it is committed by the
the standard of the employer made known to the
underprivileged. At best it may mitigate the penalty
former at the time of engagement may also be a
but it certainly will not condone the offense.
ground for termination of employment. (RULE XXIII
Compassion for the poor is an imperative of every
Section 1. Security of Tenure, DO 9, 1997,
humane society but only when the recipient is not a
predecessor of D.O. 40)
rascal claiming an undeserved privilege. Social
justice cannot be permitted to be a refuge of
In cases of project employment or employment scoundrels any more than can equity be an
covered by legitimate contracting or subcontracting impediment to the punishment of the guilty.
arrangements, no employee shall be dismissed prior (Tirazona v. Philippine EDS Techno-Service, G.R.
to the completion of the project or phase thereof for No. 169712, 2009)
which the employee was engaged, or prior to the
expiration of the contract between the principal and Laissez-Faire not fully embraced by the
contractor, unless the dismissal is for just or Constitution
authorized cause subject to the requirements of due The Constitution is primarily a document of social
process or prior notice, or is brought about by the justice, and although it has recognized the
completion of the phase of the project or contract for importance of the private sector, it has not
which the employee was engaged. (RULE XXIII embraced fully the concept of laissez-faire or relied
Section 1. Security of Tenure, DO 9, 1997, on pure market forces to govern the economy.
predecessor of D.O. 40) (Employers Confederation v. NWPC, G.R. No.
96169, 1991)
Security of tenure of contractor’s employees. It is
understood that all contractor’s employees enjoy
security of tenure regardless of whether the contract
3. Equal Work Opportunities
of employment is co-terminus with the service Sec. 3. The State shall afford full protection to labor,
local and overseas, organized and unorganized,
agreement, or for a specific job, work or service, or
and promote full employment and equality of
phase thereof. (Section 11, D.O. No. 18-A, 2011)
employment opportunities for all.
2. Social Justice
It shall guarantee the rights of all workers to self-
organization, collective bargaining and negotiations,
Social Justice
and peaceful concerted activities, including the right
Social justice is neither communism, nor despotism,
to strike in accordance with law. They shall be
nor atomism, nor anarchy, but the humanization of
entitled to security of tenure, humane conditions of
laws and the equalization of social and economic
work, and a living wage. They shall also participate
forces by the State so that justice in its rational and
in policy and decision-making processes affecting
objectively secular conception may at least be
their rights and benefits as may be provided by law.
approximated. (Calalang v. Williams, G.R. No.
(Art. XIII, 1987 PH Constitution)
47800, 1940)
Welfare state based on social justice Art 3. Declaration of Basic Policy. — The State shall
afford protection to labor, promote full employment,
The welfare state concept is found in the
ensure equal work opportunities regardless of sex,
constitutional clause on the promotion of social
race or creed, and regulate the relations between

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workers and employers. The State shall assure the Employees of government corporations established
rights of workers to self-organization, collective under the corporation code shall have the right to:
bargaining, security of tenure, and just and humane 1. Organize, and
conditions of work. (Labor Code) 2. Bargain collectively with their respective
employers.
Section 2. Declaration of Policies. - The State shall
promote equal opportunities in employment for All other employees in the civil service shall have the
everyone. To this end, it shall be the policy of the right to form associations for purposes not contrary
State to: to law. Infringement of the right to self- organization
(a) Promote employment of individuals on the basis
of their abilities, knowledge, skills and qualifications It shall be unlawful for any person to restrain,
rather than their age. coerce, discriminate against or unduly interfere with
(b) Prohibit arbitrary age limitations in employment. employees and workers in their exercise of the right
(c) Promote the right of all employees and workers, to self-organization [Art. 257, LC]
regardless of age, to be treated equally in terms of
compensation, benefits, promotion, training and Scope of right to self-organization
other employment opportunities. (R.A. No. 10911, 1. Right to form, join or assist labor organizations of
An Act Prohibiting Discrimination Against Any their own choosing for the purpose of collective
Individual in Employment on Account of Age and bargaining through representatives of their own
Providing Penalties Therefor) choosing [Art. 257];
2. Right to engage in lawful concerted
4. Right to Self-Organization and 3. activities for the same purpose (collective
Collective Bargaining bargaining) or for their mutual aid and protection
[Art. 257]
1987 Constitution 4. The right of any person to join an organization
The State shall guarantee: also includes the right to leave that organization and
1. The right of the people, including those employed join another one. [Heritage Hotel Manila v. PIGLAS-
in the public and private sectors, to form unions, Heritage, G.R. No. 177024 (2009)]
associations, or societies for purposes not contrary 5. The right to form or join a labor organization
to law. [Sec. 8, Art. III.] necessarily includes the right to refuse or refrain
2. The rights of all workers to – from exercising said right. It is self- evident that just
a. Self-organization [Sec. 3, Art. XIII] as no one should be denied the exercise of a right
b. Collective bargaining and negotiations granted by law, so also, no one should be compelled
[Sec. 3, Art. XIII] to exercise such a conferred right. [Reyes v.
c. Peaceful concerted activities [Sec. 3, Art. Trajano, G.R. No. 84433 (1992)]
XIII] 6. The right of the employees to self- organization is
d. Strike in accordance with law. [Sec. 3, a compelling reason why their withdrawal from the
Art. XIII] cooperative must be allowed. As pointed out by the
union, the resignation of the member- employees is
Art. 253, Labor Code an expression of their preference for union
All persons employed: membership over that of membership in the
1. In commercial, industrial and agricultural cooperative. [Central Negros Electric Cooperative v.
enterprises, and SOLE, G.R. No. 94045 (1991)]
2. In religious, charitable, medical or 7. Their freedom to form organizations would be
educational institutions, whether operating rendered nugatory if they could not choose their own
for profit or not, shall have the right to – leaders to speak on their behalf and to bargain for
a. Self-organization, them. [Pan- American World Airways, Inc v. Pan-
b. Form, join, or assist labor American Employees Association, G.R. No. L-
organization of their own choosing for 25094 (1969)]
purposes of collective bargaining.
5. Construction in Favor of Labor
Ambulant, intermittent and itinerant workers, self-
employed people, rural workers and those without Labor Code, Art 4
any definite employers may form labor organizations All doubts in the implementation and interpretation
for their mutual aid and protection. of the provisions of this Code, including its
implementing rules and regulations, shall be
Art. 254, Labor Code resolved in favor of labor. (Labor Code, Art. 4)

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In case of doubt, all legislation and all labor

contracts shall be construed in favor of the safety 6. Burden of Proof and Quantum of
and decent living for the laborer. [Art. 1702, Civil Evidence
Code]
EE has Burden of Proving Fact of Employment
Liberal Construction Of the laws and of Dismissal
Art. 4 of the Labor Code mandates that all doubts in Before a case for illegal dismissal can prosper, an
the implementation and interpretation of the employer-employee relationship must first be
provisions thereof shall be resolved in favor of labor. established by the employee
This is merely in keeping with the spirit of our [Javier v. Fly Ace Corp., G.R. No. 192558 (2012)].
Constitution and laws which lean over backwards in
favor of the working class, and mandate that every The employee must first establish by substantial
doubt must be resolved in their favor. [Hocheng evidence of the fact of his dismissal from service. If
Philippines Corporation v. Farrales, G.R. No. there is no dismissal, then there can be no question
211497 (2015)] as to the legality or illegality thereof [MZR Industries
v. Colambot, G.R. No. 179001 (2013)].
Of Labor Contracts
A CBA, as a labor contract within the contemplation ER has Burden of Proving Valid Dismissal
of Art. 1700 of the Civil Code of the Philippines Unsubstantiated accusations or baseless
which governs the relations between labor and conclusions of the employer are insufficient legal
capital, is not merely contractual in nature but justifications to dismiss an employee. The
impressed with public interest, thus, it must yield to unflinching rule in illegal dismissal cases is that the
the common good. As such, it must be construed employer bears the burden of proof
liberally rather than narrowly and technically, and [Garza v. Coca-Cola Bottlers Philippines, Inc., G.R.
the courts must place a practical and realistic No. 180972 (2014)].
construction upon it, giving due consideration to the
context in which it is negotiated and purpose which Employer that filed petition for revocation of
it is intended to serve. [Cirtek Employees Labor union’s registration has burden of proving fraud
Union-FFW v. Cirtek Electronics, G.R. No. 190515 and misrepresentation
(2010)] YTPI, being the one which filed the petition for the
revocation of YEU’s registration, had the burden of
Mutual obligation proving that YEU committed fraud and
The employer's obligation to give his workers just misrepresentation. YTPI had the burden of proving
compensation and treatment carries with it the the truthfulness of its accusations — that YEU
corollary right to expect from the workers adequate fraudulently failed to remove Pineda’s signature
work, diligence and good conduct. [Judy Philippines, from the organizational documents and that YEU
Inc. v NLRC, G.R. No. 111934 (1998)] fraudulently misrepresented that it conducted an
election of officers.[Yokohama Tires Philippines,
Limitations of Construction in Favor of Labor Inc. v. Yokohama Employees Union, G.R. No.
It is construed in favor of labor if there is a doubt as 163532, (2010)]
to the meaning of the legal and contractual
provision. If the provision is clear and unambiguous, Penalty imposed by employer should be
it must be applied in accordance with its express commensurate to offense involved
terms. (MERALCO v. NLRC, G.R. No. 78763, 1989) Although we recognize the inherent right of the
employer to discipline its employees, we should still
The law also recognizes that management has ensure that the employer exercises the prerogative
rights, which are also entitled to respect and to discipline humanely and considerately, and that
enforcement in the interest of fair play. (St. Luke’s v. the sanction imposed is commensurate to the
NLRC, G.R. No. 162053, 2007) offense involved and to the degree of the infraction.
The discipline exacted by the employer should
While labor laws should be construed liberally in further consider the employee’s length of service
favor of labor, we must be able to balance this with and the number of infractions during his
the equally important right of the [employer] to due employment. The employer should never forget that
process. (Gagui v. Dejero, G.R. No. 196036, 2013) always at stake in disciplining its employee are not
only his position but also his livelihood, and that he
If doubts exist between the evidence presented by may also have a family entirely dependent on his
the employer and the employee, the scale of justice earnings. [Nathaniel N. Dongon, v. Rapid Movers
must be tilted in favor of the latter. (Dreamland Hotel
Resort v. Johnson, G.R. No. 191455, 2014).

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and Forwarders Co., Inc., and/or Nicanor E. Jao, Jr.,

G.R. No. 163431, August 28, 2013.
-- end of topic –

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A. RECRUITMENT AND PLACEMENT

II. PRE-EMPLOYMENT OF LOCAL AND MIGRANT
WORKERS
1. Definition of Recruitment and
A. RECRUITMENT AND PLACEMENT OF Placement of Local and Migrant
LOCAL AND MIGRANT WORKERS Workers
1. Definition of Recruitment and Placement of
Local and Migrant Workers Recruitment and placement
2. Regulation of Recruitment and Placement refers to any act of canvassing, enlisting,
a. Regulatory Authorities contracting, transporting, utilizing, hiring or
b. Ban on Direct Hiring procuring workers, and includes referrals, contract
c. Entities Prohibited from Recruiting services, promising or advertising for employment,
d. Suspension or Cancellation of License locally or abroad, whether for profit or not: Provided,
or Authority That any person or entity which, in any manner,
e. Prohibited Practices [Article 34, Labor offers or promises for a fee, employment to two or
Code] more persons shall be deemed engaged in
3. Illegal Recruitment [Labor Code and the recruitment and placement. (Art 13, Labor Code)
Migrant Workers and Overseas
Employment Act of 1995 (RA8042), as 2. Regulation of Recruitment and
amended by RA 10022] Placement
a. Elements
b. Types
c. Illegal Recruitment vs. Estafa
a. Regulatory Authorities
The Secretary of Labor shall have the power to
4. Liability of Local Recruitment Agency and
restrict and regulate the recruitment and placement
Foreign Employer
activities of all agencies within the coverage of this
a. Solidary Liability
Title and is hereby authorized to issue orders and
b. Theory of Imputed Knowledge
promulgate rules and regulations to carry out the
5. Termination of Contract
objectives and implement the provisions of this Title.
(Art 36, Labor Code)
B. EMPLOYMENT OF NON-RESIDENT ALIENS
C. DISCRIMINATORY PRACTICES SOLE has the power under Section 35 of the law to
1. Age (RA 10911 or the Anti-Age apply sanctions, as well as the authority, conferred
Discrimination in Employment Act) by Section 36, not only to "restrict and regulate the
2. Gender and/or Marital Status (RA 9710 or recruitment and placement activities of all
the Magna Carta of Women) agencies," but also to "promulgate rules and
3. Health Condition (RA 7277 or the Magna regulations to carry out the objectives and
Carta for Disabled Persons) implement the provisions" governing said activities.
4. Solo Parents (Sec 7, RA 8972, as amended (Eastern Assurance Corp. v. Secretary of Labor,
by RA 11861) G.R. No. L-79436-50, January 17, 1990)
b. Ban on Direct Hiring
General Rule: No employer may hire a Filipino

worker for overseas employment except through the
Boards and entities authorized by the Secretary of
Labor.
Exceptions:
1) Members of the diplomatic corps,
2) International organizations and
3) Such other employers as may be allowed
by the
4) Secretary of Labor is exempted from this
5) provision. (Labor Code, Art. 18)
6) Name hires – those individuals who are
able to secure contracts for overseas

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employment on their own efforts and recruitment and placement for local
representation without the assistance or employment are prohibited from engaging
participation of any agency. Their hiring, in job contracting or subcontracting
nonetheless, has to be processed through activities. (Sec. 5, DO 141-14, Revised
the POEA. (Part III, Rule III of the POEA Rules and Regulations Governing
Rules Governing Overseas Employment as Recruitment and Placement for Local
amended in 2002) Employment)
Employers cannot directly hire workers for Entities disqualified from Engaging or
overseas employment EXCEPT through Participating in the Business of Recruitment
authorized entities. and Placement of Workers for Overseas
• The reason for the ban is to ensure full regulation Employment
of employment in order to avoid exploitation. 1) Travel agencies and sales agencies of
airline companies, whether for profit or not.
Entities Authorized To Engage In Recruitment (Art. 26)
And Placement 2) Officers or members of the Board of any
1) Public employment offices corporation or partners in a partnership
2) Philippine Overseas Employment engaged in the business of a travel agency;
Administration 3) Corporations and partnerships, where any
3) (POEA) of its officers, members of the board or
4) Private recruitment entities partners is also an officer, member of the
5) Private employment agencies board or partner of a corporation or
6) Shipping or manning agents or partnership engaged in the business of a
representatives travel agency;
7) Such other persons or entities as may be 4) Individuals, partners, officers, or directors
8) authorized by the DOLE Secretary of an insurance company who make,
9) Construction contractor propose or provide an insurance contract
under the compulsory insurance coverage
c. Entities Prohibited from for agency-hired OFWs;
Recruiting 5) Sole proprietors, partners or officers and
1) Travel agencies and sales agencies of members of the board with derogatory
airline companies, whether for profit or not. records, such as, but not limited to the ff:
(Art. 26) a. Those convicted or against whom
2) Those who are convicted of illegal probable cause or prima facie
recruitment, trafficking in persons, anti- finding of guilt is deterined by a
child labor violation, or crimes involving competent authority for illegal
moral turpitude; recruitment or for other related
3) Those against whom probable cause or crimes or offenses committed in
prima facie finding of guilt for illegal the course of, related to, or
recruitment or other related cases exist resulting from, illegal recruitment,
particularly to owners or directors of or for crimes involving moral
agencies who have committed illegal turpitude;
recruitment or other related cases. b. Those agencies whose licenses
4) Those agencies whose licenses have been have been revoked for violation of
previously revoked or cancelled by the RA 8042, PD 442, RA 9208, and
Department under Sec. 54 of these rules. their IRRs;
5) Cooperatives whether registered or not c. Those agencies whose licenses
under the Cooperative Act of the have been cancelled, or those
Philippines. who, pursuant to the order of the
6) Law enforcers and any official and Administrator, were included in the
employee of the Department of Labor and list of persons with derogatory
Employment (DOLE). record for violation of recruitment
7) Sole proprietors of duly licensed agencies laws and regulations;
are prohibited from securing another 6) Any official employee of the DOLE, POEA,
license to engage in recruitment and OWWA, DFA, DOJ, DOH, BI, IC, NLRC,
placement. TESDA, CFO, NBI, PNP, Civil Aviation
8) Sole proprietors, partnerships or Authority of the Philippines, international
corporations licensed to engage in private airport authorities, and other government
agencies directly involved in the

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implementation of RA 8042, as amended, Under Section 4 of R.A. No. 8042, as amended by

and/or any of his/her relatives within the Section 3 of R.A. No. 10022, it is provided that the
fourth civil degree of consanguinity or State shall allow the deployment of overseas Filipino
affinity. (Part II, Rule I, Sec. 3, 2016 workers only in countries where the rights of Filipino
Revised POEA Rules and Regulation) migrant workers are protected.
d. Suspension or Cancellation of The government recognizes any of the following as

License or Authority a guarantee on the part of the receiving country for
the protection of the rights of overseas Filipino
Power to suspend or cancel any license or authority workers:
to recruit employees for overseas employment is (a) It has existing labor and social laws
concurrently vested with the POEA and the protecting the rights of workers, including
Secretary of Labor. (Labor Code, Art. 35) migrant workers;
(b) It is a signatory to and/or a ratifier of
The Secretary of Labor has the power, under Art. 35 multilateral conventions, declarations or
of the Code, to apply the sanctions, as well as the resolutions relating to the protection of
authority, conferred by Art. 36, not only to restrict workers, including migrant workers; and
and regulate the recruitment and placement (c) It has concluded a bilateral agreement
activities of all agencies, but also to promulgate or arrangement with the government on the
rules and regulations to carry out the objectives and protection of the rights of overseas Filipino
implement the provisions governing said activities. Workers:
Provided, That the receiving country is
Pursuant to this rule-making power thus granted, the taking positive, concrete measures to
Secretary of Labor gave the POEA on its own protect the rights of migrant workers in
initiative or upon filing of a complaint or report or furtherance of any of the guarantees under
upon request for investigation by any aggrieved subparagraphs (a), (b) and (c) hereof.
person, (authority to) conduct the necessary
proceedings for the suspension or cancellation of Provided, That the receiving country is taking
the license or authority of any agency or entity for positive, concrete measures to protect the rights of
certain enumerated offenses including: migrant workers in furtherance of any of the
guarantees under subparagraphs (a), (b) and (c)
1. The imposition or acceptance, directly or hereof.
indirectly, of any amount of money, goods
or services, or any fee or bond in excess of In the absence of a clear showing that any of the
what is prescribed by the Administration. aforementioned guarantees exists in the country of
2. Any other violation of pertinent provisions destination of the migrant workers, no permit for
of the Labor Code and other relevant laws, deployment shall be issued by the POEA. (R.A. No.
rules and regulations. 8042, Sec. 4)
The Administrator was also given the power to order Remittance of Foreign Exchange Earnings
the dismissal of the case or the suspension of the
license or authority of the respondent agency or It shall be mandatory for all Filipino workers abroad
contractor or recommend to the Secretary the to remit a portion of their foreign earnings to their
cancellation thereof. (Eastern Assurance& Surety families, dependents, and/or beneficiaries in the
Corp. v. Secretary of Labor, G.R. No. L-79436-50, country. (Labor Code, Art. 22)
1990)
Amount required to be remitted (E.O. No. 857)
Termination/ Ban On Deployment
The amount of one’s salary required to be remitted
Notwithstanding the provisions of Section 4 of R.A. depends on the type or nature of work performed by
No. 8042, as amended by R.A. No. 10022, in pursuit the employee.
of the national interest or when public welfare so
requires, the POEA Governing Board, after Percentages of foreign exchange remittance
consultation with the Department of Foreign Affairs, required from various kinds of migrant workers:
may, at any time, terminate or impose a ban on the 1. Seaman or mariner – 80% of basic salary
deployment of migrant workers. (R.A. No. 10022, 2. Workers for Filipino contractors and
Sec. 5) construction companies – 70%

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3. Doctors, engineers, teachers, nurses and who has not applied for employment
other professional workers whose contract through his agency;
provide for free board and lodging – 70% 6. To engage in the recruitment or placement
4. All other professional workers whose of workers in jobs harmful to public health
employment contracts do not provide for or morality or to the dignity of the Republic
free board and lodging facilities – 50% of the Philippines;
5. Domestic and other service workers – 50% 7. To obstruct or attempt to obstruct
6. All other workers not falling under the inspection by the Secretary of Labor or by
aforementioned categories – 50% his duly authorized representatives;
7. Performing artists – 50% 8. To fail to file reports on the status of
employment, placement vacancies,
Individuals exempted from the remittance remittance of foreign exchange earnings,
requirement: separation from jobs, departures and such
1. The immediate family members, other matters or information as may be
dependents or beneficiaries of migrant required by the Secretary of Labor.
workers residing with the latter abroad; 9. To substitute or alter employment contracts
2. Filipino servicemen working within US approved and verified by the Department of
military installations; Labor from the time of actual signing
3. Immigrants and Filipino professionals thereof by the parties up to and including
working with the United Nations and its the periods of expiration of the same
agencies or other specialized bodies. without the approval of the Secretary of
4. Missionaries actually engaged in Labor;
missionary work 10. To become an officer or member of the
5. All aliens granted exemption by special Board of any corporation engaged in travel
laws and all those whose employment in agency or to be engaged directly or
the Phil. determined by the Secretary of indirectly in the management of a travel
Labor to be beneficial to national interest. agency; and
11. To withhold or deny travel documents from
applicant workers before departure for
e. Prohibited Practices [Article 34, monetary or financial considerations other
Labor Code] than those authorized under this Code and
its implementing rules and regulations.
(Article 34, Labor Code)
It shall be unlawful for any individual, entity,
licensee, or holder of authority:
1. To charge or accept, directly or indirectly, 3. Illegal Recruitment [Labor Code and
any amount greater than that specified in the Migrant Workers and Overseas
the schedule of allowable fees prescribed Employment Act of 1995 (RA8042),
by the Secretary of Labor, or to make a as amended by RA 10022]
worker pay any amount greater than that
actually received by him as a loan or ILLEGAL RECRUITMENT UNDER THE LABOR
advance; CODE (Art. 38) vs. MIGRANT WORKERS ACT
2. To furnish or publish any false notice or (Sec. 6)
information or document in relation to
recruitment or employment; Any recruitment activities, including the prohibited
3. To give any false notice, testimony, practices enumerated under Art. 34 of the Labor
information or document or commit any act Code, to be undertaken by non-licensees or non-
of misrepresentation for the purpose of holders of authority, shall be deemed illegal and
securing a license or authority under this punishable under Art. 39. (Labor Code, Art. 38)
Code.
4. To induce or attempt to induce a worker The Department of Labor and Employment or any
already employed to quit his employment in law enforcement officer may initiate complaints.
order to offer him to another unless the (Labor Code, Art. 38)
transfer is designed to liberate the worker
from oppressive terms and conditions of Any act of canvassing, enlisting, contracting,
employment; transporting, utilizing, hiring, or procuring workers
5. To influence or to attempt to influence any and includes referring, contract services, promising
person or entity not to employ any worker or advertising for employment abroad, whether for
profit or not, when undertaken by non-licensee or

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non-holder of authority contemplated under the Accused must give the impression of ability to
Labor Code. (R.A. No. 8042, Sec. 6) send complainant abroad
It must be shown that the accused gave
Policy of Selective Deployment complainants the distinct impression that she had
the power or ability to send complainants abroad for
The State shall allow the deployment of overseas work such that the latter were convinced to part with
Filipino workers only in countries where the rights of their money in order to be employed. (People v.
Filipino migrant workers are protected. Ochoa, G.R. No. 173792, 2011)
The government recognizes any of the following as Simple Illegal Recruitment for Migrant Workers
a guarantee on the part of the receiving country for (R.A. No. 8042, as amended by R.A. No. 10022)
the protection of the rights of overseas Filipino
workers: First type of Illegal Recruitment:
1. It has existing labor and social laws 1. Person charged undertakes any
protecting the rights of workers, including recruitment activity as defined in Art.13 (b)
migrant workers; of the Labor Code; and
2. It is a signatory to and/or a ratifier of 2. Said person does not have a license or
multilateral conventions, declarations or authority to do so.
resolutions relating to the protection of
workers, including migrant workers; and Second type of Illegal Recruitment:
3. It has concluded a bilateral agreement or 1. Person charged commits any of the
arrangement with the government on the enumerated acts under Sec. 6 of R.A.
protection of the rights of overseas Filipino 8042, as amended by, R.A. No. 10022.
Workers: Provided, That the receiving 2. It is immaterial whether he is a holder or not
country is taking positive, concrete of any license or authority.
measures to protect the rights of migrant
workers in furtherance of any of the Illegal recruitment shall mean any act of
guarantees under subparagraphs (a), (b) canvassing, enlisting, contracting, transporting,
and (c) hereof. (R.A. No. 8042, Sec. 3) utilizing, hiring, or procuring workers and includes
referring, contract services, promising or advertising
a. Elements for employment abroad, whether for profit or not,
when undertaken by non-licensee or non-holder of
The essential elements of illegal recruitment vary in authority contemplated under Article 13(f) of the
accordance with the following classifications: Labor Code;
1. Simple illegal recruitment Provided, That any such non-licensee or non-holder

a. Local workers who, in any manner, offers or promises for a fee
b. Migrant workers employment abroad to two or more persons shall be
2. When committed by a syndicate; or deemed so engaged. (R.A. No. 8042, Sec. 6)
3. When committed in large scale.
Illegal recruitment by a syndicate
Simple Illegal Recruitment for Local Workers 1. The offender undertakes either any activity
(Labor Code) within the meaning of "recruitment and
1. The person charged with the crime must placement" defined under Art. 13(b), or any
have undertaken recruitment activities: of the prohibited practices enumerated
a. Defined under Art. 13 (b) or under Art. 34 of the Labor Code;
b. Prohibited activities defined under 2. He has no valid license or authority
Art. 34; and required by law to enable one to lawfully
2. The said person does not have a license or engage in recruitment and placement of
authority to do so. (Labor Code, Art. 38) workers; and
3. The illegal recruitment is committed by a
Profit or Lack Thereof - Immaterial group of three (3) or more persons
It is the lack of the necessary license or authority, conspiring or confederating with one
not the fact of payment that renders the recruitment another. (People v. Gallo, G.R. No.
activity of the agency unlawful. (C.F. Sharp vs. 187730, 2010)
Espanol, G.R. No. 155903, 2007)

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Illegal recruitment in large scale activities without the necessary license or authority.
1. The accused engages in acts of (People v. Senoron, G.R. No. 119160, 1997)
recruitment and placement of workers
defined under Art. 13(b) of the Labor Code By themselves, procuring a passport, airline tickets and
or in any prohibited activities under Art. 34 foreign visa for another individual, without more, can
of the Labor Code; hardly qualify as recruitment activities. IR must be
2. The accused has not complied with the proved beyond reasonable doubt. (Darvin v. CA,G.R.
No. 125044, 1998)
guidelines issued by the Secretary of Labor
and Employment, particularly with respect
to the securing of license or an authority to b. Types
recruit and deploy workers, either locally or
overseas; and Two Kinds of Illegal Recruiters
3. The accused commits the unlawful acts
against three or more persons individually (1) Non-Licensee or Non-Holder of Authority
or as a group. The offender commits:
Note: 1. Any of the acts defined in Art. 13(b) of the
Syndicate - count the conspirators Labor Code as recruitment and placement;
Large scale - count the victims Illegal recruitment as defined in ¶ 1, Sec. 6
of R.A. No. 8042, or amended; or
Doctrines: Illegal Recruitment 2. Any of the 14 acts enumerated in Sec. 6
Where illegal recruitment is proved but the elements of R.A. No. 8042, as amended
of “large scale” or “syndicate” are absent, the
accused can be convicted only of “simple illegal (2) Licensed Recruiter or Holder of Authority
recruitment”. (People v. Balagan and Avila, G.R. No. The offender commits any of the 14 wrongful acts
183099, 2010) enumerated in Sec. 6 of R.A. No. 8042, as amended
(Sto. Tomas v. Salac, G.R. No. 152642, 2012)
These categories are separate or independent
categories. If there is only one complainant in Kinds of Illegal Recruitment
several complaints, there is no illegal recruitment in
large scale. But where there are three conspiring (1) Simple Illegal Recruitment
recruiters, there is illegal recruitment by a syndicate. Illegal recruitment committed by a person who is
(People v. Fernandez, et. al., G.R. No. 141221-36, neither a licensee nor a holder of authority;
2002)
(2) Illegal Recruitment as Economic Sabotage
Appellant’s acts, which were clearly described in the Illegal recruitment when committed:
lucid testimonies of the three victims, such as collecting 1. By a syndicate; or
from each of the complainants payment for passport, 2. In large scale,
medical tests, placement fee, plane tickets and other shall be considered an offense involving
sundry expenses, promising them employment abroad, economic sabotage. (R.A. No. 10022, Sec.
contracting and advertising for employment, constitute 5[m])
acts of large scale illegal recruitment. (People v. Diaz,
G.R. No. 112175, 1996) Illegal Recruitment shall be considered an offense
involving economic sabotage if any of the following
Receipt of payments, after the expiration of the license,
qualifying circumstances exist:
for services rendered before said expiration does not
constitute illegal recruitment. Recruitment refers to the
offering of inducements to qualified personnel to enter ILLEGAL ILLEGAL
a particular job or employment. The advertising, the RECRUITMENT RECRUITMENT
promise of future employment and other come-ons COMMITTED BY COMMITTED IN
took place while the recruiter was still licensed. The SYNDICATE LARGE SCALE
payments are necessary in order to defray the
Carried out by a group Committed against 3 or
expenses entailed in any overseas contract of
of 3 or more persons more persons
employment. They are intended for administrative and
business expenses and for the traveling expenses of conspiring and/or individually or as a
the applicants once cleared for overseas travel. confederating with one group
(Aquino v. CA, G.R. No. 91896, 1991) another in carrying out
any unlawful or illegal
It is not the issuance or signing of receipts for the transaction, enterprise
placement fees that makes a case for illegal or scheme falling under
recruitment, but rather the undertaking of recruitment illegal recruitment

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LABOR CODE R.A. NO. 8042 – MIGRANT WORKERS

ACT, AS AMENDED
Local Recruitment and employment Applies to recruitment for overseas
employment
Illegal Recruitment (Art. 38) Illegal Recruitment (Sec. 6):
Any recruitment activity including Prohibited Acts 1. Any recruitment activity committed by non-
under Art. 34 committed by non-licensees or non- licensees / non- holders of authority; OR
holders of authority. 2. Prohibited Acts (same as Art. 34 of LC) committed
by any person, whether a non-licensee, non-holder,
Elements: licensee or holder of authority.
1. That the offender has no valid license or 3. Added the following in the list of Prohibited Acts
authority required by law to enable one to (DEMIL- RETSI):
lawfully engage in recruitment and placement a. Fail to actually Deploy Without valid reason;
of workers; and, b. Fail to reimburse Expenses incurred by the
2. That the offender undertakes either any worker in connection with his/her
activity within the meaning of recruitment and documentation and processing for purposes
placement defined under Article 13(b), or any of deployment, in cases where the
of the prohibited practices enumerated under deployment does not actually take place
Article 34. without the worker’s fault
c. To allow a non-Filipino citizen to head or
Manage a licensed recruitment/manning
agency.
d. Grant a loan to an OFW with Interest
exceeding 8% per annum, to be used for
payment of legal and allowable placement
fees and make the OFW issue postdated
checks in relation to the said loan;
e. Impose a compulsory and exclusive
arrangement whereby an OFW is required to
avail of a Loan only from specifically
designated institutions, entities or persons;
f. Refuse to condone or renegotiate a loan
incurred by an OFW after the latter's
employment contract has been prematurely
terminated through no fault of his or her own;
g. Impose a compulsory and Exclusive
undergo health examinations only from
specifically designated medical clinics,
institutions, entities or persons, (except in the
case of a seafarer whose medical exam cost
is shouldered by the principal/ ship- owner);
h. Impose a compulsory and exclusive
undergo Training, seminar, instruction or
schooling of any kind only from specifically
designated institutions, entities or persons,
except for recommendatory trainings
mandated by principals/ ship owners where
the latter shoulder the cost of such trainings;
i. For a Suspended recruitment/manning
agency to engage in any kind of recruitment
activity including the processing of pending
workers' applications;
j. For a recruitment/ manning agency or a
foreign principal/ employer to pass on the
OFW or deduct from his or her salary the

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payment of the cost of Insurance fees,

premium or other insurance related charges,
as provided under the compulsory worker's
insurance coverage.
A Non-Licensee / Non-Holder of authority is any The offender may be a non-licensee or a non-

person, corporation or entity which has not been holder of authority and commits any of the acts of
issued a valid license or authority to engage in recruitment;
recruitment and placement by the Secretary of Labor,
or whose license or authority has been suspended, OR
revoked or cancelled by the POEA or the Secretary.
A licensee or holder of authority commits any of the
prohibited acts under section 6, RA 8042, as
amended.

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precedent for its approval. (R.A. No. 8042, as

c. Illegal Recruitment vs. Estafa amended, Sec. 10)
ILLEGAL ESTAFA Even if the recruiter and the principal had already
RECRUITMENT severed their agency agreement at the time
It is malum prohibitum It is malum in se employee was injured, the recruiter may still be sued
for a violation of the employment contract because
no notice of the agency agreement's termination
The criminal intent of the The criminal intent is
accused is not imperative
was given to the employee.
necessary
The obligations covenanted in the recruitment
Penalized under the Penalized under the agreement entered into by and between the local
Labor Code Revised Penal Code agent and its foreign principal are not coterminous
Limited in scope Wider in scope and with the term of such agreement so that if either or
covers deceits whether both of the parties decide to end the agreement, the
related or not related to responsibilities of such parties towards the
recruitment activities contracted employees under the agreement do not
at all end, but the same extends up to and until the
Note: Conviction under the Labor Code for illegal expiration of the employment contracts of the
recruitment does not preclude punishment under the employees recruited and employed pursuant to the
RPC for estafa (People v. Fernandez, G.R. No. said recruitment agreement. (Catan v. NLRC, G.R.
199211, 2014) No. 77279, 1988).
A worker who suffers pecuniary damage, regardless Purpose of Solidary Liability

of amount, as a result of previous or simultaneous The agency agreement with the principal even if
false pretense resorted to by a non-licensee or non- ended as between them, still extends up to and until
holder of authority, may complain of estafa under the expiration of, the employment contracts of the
Art. 315, par. 2(a) of the RPC, aside from illegal employees recruited and employed pursuant to the
recruitment. (People v. Fernandez, G.R. Nos. said recruitment agreement. (OSM Shipping Phil,
141221-36, 2002) Inc. v. NLRC, G.R. No. 138193, 2003)
Estafa is committed by any person who defrauds Venue of Criminal Action

another by using fictitious name, or falsely pretends The complainant, may, at his option, file at the RTC
to possess power, influence, qualifications, of the province or city:
property, credit, agency, business or imaginary 1. Where the offense was committed; or
transactions, or by means of similar deceits 2. Where the offended party resides at the
executed prior to or simultaneously with the time of the commission of the offense (R.A.
commission of the fraud. (Revised Penal Code, Art. No. 8042, Sec. 9)
315)
Prescriptive Period
The offended party must have relied on the false SIMPLE ECONOMIC
pretense, fraudulent act or fraudulent means of the SABOTAGE
accused-appellant and as a result thereof, the Within 5 years from Within 20 years from
offended party suffered damages. time the illegal the time the illegal
recruitment happened recruitment happened
4. Liability of Local Recruitment
Agency and Foreign Employer When maximum penalty is imposed:
1. If the person illegally recruited is less than
a. Solidary liability 18 years of age; or
2. If committed by a non-licensee or non-
Solidary Liability holder of authority (R.A. No. 8042, Sec. 7)
The liability of the principal/employer and the
recruitment/placement agency for any and all claims Local Recruitment Agency
under this section shall be joint and several. This The persons criminally liable are the principals,
provision shall be incorporated in the contract for accomplices and accessories. In case of juridical
overseas employment and shall be a condition persons, the officers having ownership, control,

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management or direction of their business who are employment-related claims and, hence, public
responsible for the commission of the offense and policy dictates that the recruitment or placement
the responsible employees/agents thereof shall be agency in the Philippines be made to share in the
liable. (RA 8042, as amended, Section 6) employer's responsibility. (Capricorn Travel & Tours
• Local Recruitment Agency is v. CA, G.R. No. 91096, April 3, 1990)
solidarily liable with foreign
principal. (IRR of the Labor Code, The surety bond is intended to insure that if the
Book I, Rule V, Sec. 17) rights of overseas workers are violated by their
employers, recourse would still be available against
• Severance of relations between the local companies that recruited them for the
local agent and foreign principal foreign principal. (Stronghold Insurance Co. v. CA,
does not affect liability of local G.R. No. 88050, 1992)
recruiter.
Where the workers themselves insisted for the
recruitment agency to send them back to their
5. Termination of Contract
foreign employer despite their knowledge of its
inability to pay their wages, the Supreme Court
Under the Migrant Workers’ Act
absolved the agency from liability (Feagle
A worker dismissed from overseas employment
Construction Corp. v. Dorado, G.R. No. 86042,
without just, valid or authorized cause as defined by
1991)
law or contract, is entitled to:
1. Full reimbursement of the placement fee with
Foreign Employer
interest at 12% per annum PLUS
In case of a final and executory judgement against
2. His salary for unexpired portion of his
a foreign employer/principal, it shall be automatically
employment contract OR salary for 3 months
disqualified, without further proceedings, from
for every year of the unexpired term,
participating in the POEA Program and from
WHICHEVER IS LESSER. (R.A. No. 8042,
recruiting and hiring Filipino workers until and unless
Sec. 10)
it fully satisfies the judgement award. (R.A. No.
Rule before Serrano (1995-2009): 3-month salary
8042, Sec. 10)
rule
• The employment contract involved in the instant
b. Theory of Imputed Knowledge case covers a two-year period but the overseas
contract worker actually worked for only 26 days
[This theory means] knowledge of the agent is prior to his illegal dismissal. Thus, the three months’
knowledge of the principal. (New Life v. CA, G.R. salary rule applies. (Flourish Maritime Shipping v.
No. 94071, 1992) Almanzor, G.R. No. 177948, 2008)
For the liability of the agent to attach, this theory Rule after Serrano (2009-present): it invalidated
states that the agent knew of and consented to the the 3-month salary cap clause
extension of period of employment. Otherwise, the • Full reimbursement of the placement fee with
liability of the recruitment agency shall expire from interest at 12% per annum. This decision held that
the termination of the worker's original contract. Sec. 10 of 8042, which limited the separation pay to
(Sunace International Management v. NLRC, G.R. three months, was unconstitutional for violating the
No. 161757, 2006, Carpio Morales, J. as seen in equal protection clause. (Serrano v. Gallant, G.R.
Veloso’ answers to the 2011 Bar Examination) No. 167614, 2009)
• Despite the fact that the clause “or for three (3)
Posting of Cash Bond by Recruiter months for every year of the unexpired term,
The requirement for the posting of a cash bond is whichever is less” was reinstated in R.A 8042 upon
also an indispensable requirement. By posting such, promulgation of R.A. 10022 in 2010, the Supreme
the agency undertakes to assume joint and solidary Court reiterated its finding in Serrano v. Gallant
liability with the employer for all claims and liabilities Maritime that limiting wages that could be recovered
which may arise in connection with the by an illegally dismissed overseas worker to three
implementation of the overseas employment months is both a violation of due process and the
contract and to guarantee compliance with existing equal protection clauses of the Constitution.
Philippine labor laws and the laws of country of (Sameer Overseas Placement Agency v. Cabiles,
employment. G.R. 170139, 2014)
The peculiar nature of overseas employment makes
it very difficult for the Filipino overseas worker to
effectively go after his foreign employer for

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B. EMPLOYMENT OF NON
RESIDENT ALIENS C. DISCRIMINATORY PRACTICES
ART. 40. Employment Permit of Non-resident 1. Age (RA 10911 or the Anti-Age
Aliens. - Any alien seeking admission to the Discrimination in Employment Act)
Philippines for employment purposes and any
domestic or foreign employer who desires to engage Prohibition of Discrimination in Employment on
an alien for employment in the Philippines shall Account of Age
obtain an employment permit from the Department
of Labor. A. It shall be unlawful for an employer to:
(1) Print or publish, or cause to be printed or
The employment permit may be issued to a non- published, in any form of media, including the
resident alien or to the applicant employer after a internet, any notice of advertisement relating to
determination of the non-availability of a person in employment suggesting preferences, limitations,
the Philippines who is competent, able and willing at specifications, and discrimination based on age;
the time of application to perform the services for (2) Require the declaration of age or birth date
which the alien is desired. during the application process;
(3) Decline any employment application because of
For an enterprise registered in preferred areas of the individual’s age;
investments, said employment permit may be (4) Discriminate against an individual in terms of
issued upon recommendation of the government compensation, terms and conditions or privileges of
agency charged with the supervision of said employment on account of such individual’s age;
registered enterprise. (5) Deny any employee’s or worker’s promotion or
opportunity for training because of age;
ART. 41. Prohibition Against Transfer of (6) Forcibly lay off an employee or worker because
Employment. of old age; or
(a) After the issuance of an employment permit, the (7) Impose early retirement on the basis of such
alien shall not transfer to another job or change his employee’s or worker’s age.
employer without prior approval of the Secretary of
Labor. B. It shall be unlawful for a labor contractor or
(b) Any non-resident alien who shall take up subcontractor, if any, to refuse to refer for
employment in violation of the provision of this Title employment or otherwise discriminate against any
and its implementing rules and regulations shall be individual because of such person’s age.
punished in accordance with the provisions of
Articles 289 and 29043 of the Labor Code. C. It shall be unlawful for a labor organization to:
(1) Deny membership to any individual because of
In addition, the alien worker shall be subject to such individual’s age;
deportation after service of his sentence. (2) Exclude from its membership any individual
because of such individual’s age; or
ART. 42. Submission of List. Any employer (3) Cause or attempt to cause an employer to
employing non- resident foreign nationals on the discriminate against an individual in violation of this
effective date of this Code shall submit a list of such Act.
nationals to the Secretary of Labor within thirty (30)
days after such date indicating their names, D. It shall be unlawful for a publisher to print or
citizenship, foreign and local addresses, nature of publish any notice of advertisement relating to
employment and status of stay in the country. The employment suggesting preferences, limitations,
Secretary of Labor shall then determine if they are specifications, and discrimination based on age.
entitled to an employment permit.
Exceptions
Considering that McBurnie, an Australian, alleged It shall not be unlawful for an employer to set age
illegal dismissal and sought to claim under our labor limitations in employment if:
laws, it was necessary for him to establish that he
was qualified and duly authorized to obtain 1. Age is a bona fide occupational
employment within our jurisdiction. His failure to qualification reasonably necessary in the
obtain an employment permit, by itself, necessitates normal operation of a particular business or
the dismissal of his labor complaint. (McBurnie v. where the differentiation is based on
Ganzon, G.R. Nos. 178034, 178117 & 186984-85 reasonable factors other than age;
(Resolution), October 17, 2013)

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2. The intent is to observe the terms of a bona No entity, whether public or private, shall
fide seniority system that is not intended to discriminate against a qualified PWD by reason of
evade the purpose of this Act; disability in regard to job application procedures, the
3. The intent is to observe the terms of a bona hiring, promotion, or discharge of employees,
fide employee retirement or a voluntary employee compensation, job training, and other
early retirement plan consistent with the terms, conditions and privileges of employment. (RA
purpose of this Act: Provided, That such 7277, Sec. 32)
retirement or voluntary retirement plan is in
accordance with the Labor Code, as The following constitute acts of discrimination:
amended, and other related laws; or
4. The action is duly certified by the Secretary 1. Limiting, segregating or classifying a job
of Labor and Employment in accordance applicant with disability in such a manner
with the purpose of this Act.1awp++i1 that adversely affects his work
opportunities;
2. Gender and/or Marital Status (RA 2. Using qualification standards, employment
9710 or the Magna Carta of Women) tests or other selection criteria that screen
out or tend to screen out a PWD unless
Unlawful for any employer to discriminate against such standards, tests or other selection
any woman employee with respect to terms and criteria are shown to be job-related for the
conditions of employment solely on account of her position in question and are consistent with
sex (Labor Code, Art. 135) business necessity;
3. Utilizing standards, criteria, or methods of
Acts of Discrimination administration that:
1. Payment of a lesser compensation, 4. Have the effect of discrimination on the
including wage, salary or other form of basis of disability; or
remuneration and fringe benefits, to a 5. Perpetuate the discrimination of others who
female employees as against a male are subject to common administrative
employee, for work of equal value control.
2. Favoring a male employee over a female 6. Providing less compensation, such as
employee with respect to promotion, salary, wage or other forms of
training opportunities, study and remuneration and fringe benefits, to a
scholarship grants solely on account of qualified employee with disability, by
their sexes reason of his disability, than the amount to
a. Person guilty of committing these which a non-disabled person performing
acts are criminally liable under Arts. the same work is entitled;
288-289 of the Labor Code 7. Favoring a non-disabled employee over a
b. That the institution of any criminal qualified employee with disability with
action under this provision shall not respect to promotion, training opportunities,
bar the aggrieved employee from study and scholarship grants, solely on
filing an entirely separate and distinct account of the latter’s disability;
action for money claims, which may 8. Re-assigning or transferring an employee
include claims for damages and with a disability to a job or position he
other affirmative reliefs. The actions cannot perform by reason of his disability;
hereby authorized shall proceed 9. Dismissing or terminating the services of an
independently of each other. employee with disability by reason of his
3. Favoring a male applicant with respect to disability unless the employer can prove
hiring where the particular job can equally that he impairs the satisfactory
be handled by a woman; and performance of the work involved to the
4. Favoring a male employee over a female prejudice of the business entity; provided,
employee with respect to dismissal of however, that the employer first sought to
personnel provide reasonable accommodations for
persons with disability;
3. Health Condition (RA 7277 or the 10. Failing to select or administer in the most
effective manner employment tests which
Magna Carta for Disabled Persons)
accurately reflect the skills, aptitude or
other factor of the applicant or employee
What is the rule on discrimination against
with disability that such tests purports to
employment of PWDs?
measure, rather than the impaired sensory,

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manual or speaking skills of such applicant

or employee, if any; and
11. Excluding PWD from membership in labor
unions or similar organizations.
4. Solo Parents (Sec 7, RA 8972, as

amended by RA 11861)
No employer shall discriminate against any solo

parent employee with respect to terms and
conditions of employment on account of his or her
status. Employers may enter into agreements with
their solo parent employees for a telecommuting
program, as provided in Republic Act No. 11165,
otherwise known as the 'Telecommuting
Act': Provided, That said solo parent employees
shall be given priority by their employer.
-- end of topic --

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3. Leaves
III. EMPLOYMENT PROPER
a. Service Incentive Leave
b. Maternity Leave
TOPIC OUTLINE UNDER THE SYLLABUS c. Paternity Leave
d. Solo Parent Leave (RA 8972, as
A. MANAGEMENT PREROGATIVE amended by RA 11861)
1. Discipline e. Leave Benefits for Women Workers
2. Transfer of Employees under Magna Carta of Women (RA
3. Productivity Standard 9710) and Anti-Violence Against
4. Bonus Women and their Children of 2004 (RA
5. Change of Working Hours 9262)
6. Bona Fide Occupational Qualifications f. Compassionate Leaves
7. Marriage between Employees of 4. Special Groups of Employees
Competitor-Employers a. Women
8. Post-Employment Restrictions (1) Discrimination
(2) Stipulation Against Marriage
B. LABOR STANDARDS (3) Prohibited Acts
1. Conditions of Employment b. Minors
a. Coverage c. Kasambahays
b. Hours of Work d. Homeworkers
(1) Normal Hours of Work and Hours e. Night Workers
Worked f. Apprentices and Learners
(2) Compressed Work Week g. Persons with Disabilities
(3) Meal Periods (1) Discrimination
(4) Night-Shift Differential (a) Magna Carta for Disabled
(5) Overtime Work Persons (RA 7277)
(6) Computation of Additional (b) Mental Health Act (RA 11036)
Compensation (Rates only) (2) Incentives for Employers
c. Rest Periods 5. Sexual Harassment in the Work
d. Holidays Environment
e. Service Charge [Article 96 of the Labor a. Sexual Harassment Act (RA 7877)
Code, as amended by RA 11360] b. Safe Spaces Act (Article IV of RA
f. Occupational Safety and Health 11313 only; Exclude Liability of
Standards Law (RA11058) Employers)
(1) Covered Workplaces [Sec. 3(c)]
(2) Duties of Employers Workers and C. SOCIAL WELFARE LEGISLATION
Other Persons [Sec 4] 1. SSS Law (RA 8282, as amended by RA
(3) Workers’ Right to Know [Sec. 5] 11199)
(4) Workers’ Right to Refuse Unsafe a. Coverage
Work [Sec. 6] b. Dependents and Beneficiaries
(5) Workers’ Right to Personal c. Benefits
Protective Equipment (PPE) [Sec. 2. GSIS Law (RA 8291)
8] a. Coverage
2. Wages b. Dependents and Beneficiaries
a. Definitions c. Benefits
(1) Wage vs. Salary 3. Disability and Death Benefits
(2) Facilities vs. Supplements a. Labor Code
b. Principles b. POEA-Standard Employment Contract
(1) No Work, No Pay
(2) Equal Pay for Equal Work D. LABOR RELATIONS
(3) Fair Wage for Fair Work 1. Right to Self-Organization
(4) Non-Diminution of Benefits a. Coverage
c. Payment of Wages b. Eligibility for Membership
d. Prohibitions Regarding Wages c. Doctrine of Necessary Implication
e. Wage Distortion d. Commingling or Mixed Membership
(1) Concept e. Effect of Inclusion as Members of
f. Minimum Wage Law Employees Outside of the Bargaining
g. Holiday Pay Unit
h. 13th Month Pay 2. Bargaining Unit

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3. Bargaining Representative A. MANAGEMENT PREROGATIVE

4. Rights of Labor Organizations
a. Check Off, Assessment, and Agency Overview of Management Prerogative
Fees The law in protecting the rights of the employees
b. Collective Bargaining authorizes neither oppression nor self-destruction of
(1) Economic Terms and Conditions the employer. It should be made clear that when the
(2) Non-Economic Terms and law tilts the scale of justice in favor of labor, it is but
Conditions a recognition of the inherent economic inequality
between labor and management. Never should the
(3) Duty to Bargain Collectively scale be so tilted if the result is an injustice to the
(4) Mandatory Provisions in the employer. (Panuncillo v. CAP, G.R. No. 161305,
Collective BargainingAgreement 2007)
(CBA)
5. Unfair Labor Practices General Rule: An employer is free to regulate,
a. Nature and Aspect according to his own discretion and judgment, all
b. By Employers aspects of employment, including hiring, work
c. By Organizations assignments, working methods, time, place and
6. Peaceful Concerted Activities manner of work, tools to be used, processes to be
a. Strikes (Valid vs. Illegal) followed, supervision of workers, working
b. Picketing regulations, transfer of employees, work
c. Lockouts supervision, lay-off of workers and the discipline,
d. Assumption of Jurisdiction by the dismissal and recall of workers (Peckson v.
DOLE Secretary Robinson’s Supermarket Corporation, G.R. No.
E. TELECOMMUTING ACT (RA 11165) 198534, 2013)
1. Deﬁnition [Sec. 3]
2. Telecommuting Program [Sec. 4] 1. Discipline
3. Fair Treatment [Sec. 5]
Management has the prerogative to discipline its
employees and to impose appropriate penalties on
erring workers, pursuant to company rules and
regulations (Artificio v. NLRC, G.R. No. 172988,
2010)
Although the right of employers to shape their own
work force, is recognized, this management
prerogative must not curtail the basic right of
employees to security of tenure. (Alert Security
Investigation Agency v. Saidali Pasawilan, G.R. No.
182397 (2011)
2. Transfer of Employees
An employee’s right to security of tenure does not

give him such a vested right in his position as would
deprive the company of its prerogative to change his
assignment or transfer him where he will be most
useful.
The employer has the right to transfer or assign

employees from one area of operation to another, or
one office to another or in pursuit of its legitimate
business interest, Provided there is no demotion in
rank or diminution of salary, benefits and other
privileges and not motivated by discrimination or
made in bad faith, or effected as a form of
punishment or demotion without sufficient cause.
(Westin Phil. Plaza Hotel v. NLRC, G.R. No.
121621, 1999)

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When the transfer is not unreasonable, or effort to avoid them. (Universal Staffing Services,
inconvenient, or prejudicial to the employee, and it Inc. vs. NLRC, G.R. No. 177576, 2008)
does not involve a demotion in rank or diminution of
salaries, benefits, and other privileges, the The imposition of productivity standards is an
employee may not complain that it amounts to a allowable exercise of company rights. An employer
constructive dismissal. (Bisig ng Manggagawa sa is entitled to impose productivity standards for its
TRYCO v. NLRC, G.R. No. 151309, 2008) workers and non-compliance may be visited with a
penalty even more severe than demotion.
It is management prerogative for employers to (Leonardo v. NLRC, G.R. No. 125303, 2000)
transfer employees on just and valid grounds such
as genuine business necessity. (William Barroga v. Poor performance may not always amount to gross
Data Center College of the Philippines, G.R. No. and habitual neglect of duty, but it is still recognized
174158, 2011) as a just case for dismissal (analogous to gross and
habitual neglect). (Buiser v. Leogardo, G.R. No. L-
Re-assignments made by management pending 63316, 1984)
investigation of irregularities allegedly committed by
an employee fall within the ambit of management 4. Bonus
prerogative. The purpose of reassignments is no
different from that of preventive suspension which The granting of bonus is a management prerogative,
management could validly impose as a disciplinary something given in addition to what is ordinarily
measure for the protection of the company's received by or strictly due the recipient. (Producers
property pending investigation of any alleged
Bank of the Philippines v. NLRC, G.R. No. 100701,
malfeasance or misfeasance committed by the 2001)
employee. (Ruiz v. v. Wendel Osaka Realty, G.R.
No. 189082, 2012) There is unfair and unjust discrimination in the
granting of salary adjustments where the evidence
In cases of a transfer of an employee, the employer shows that
is charged with the burden of proving that its 1. The management paid the employees of
conduct and action are for valid and legitimate the unionized branch;
grounds such as genuine business necessity and 2. Salary adjustments were granted to
that the transfer is not unreasonable, inconvenient employees of one of its non - unionized
or prejudicial to the employee. If the employer branches although it was losing in its
cannot overcome this burden of proof, the operations; and
employee’s transfer shall be tantamount to unlawful 3. The total salary adjustments given every
constructive dismissal. (Jonathan Morales v. Harbor ten of its unionized employees would not
Centre Port Terminal, G.R. No. 174208, 2012) even equal to the salary adjustments given
to one employee in the non – unionized
3. Productivity Standard branch. (Manila Hotel Company v. Pines
Hotel Employees Association(CUGCO)
The employer has the right to demote and transfer and CIR, G.R. No. L-30818, 1972)
an employee who has failed to observe proper
diligence in his work and incurred habitual tardiness Bonus in the CBA
and absences and indolence in his assigned work. Generally, a bonus is not a demandable and
(Petrophil Corporation v. NLRC, G.R. No. L-64048, enforceable obligation. For a bonus to be
1986) enforceable, it must have been promised by the
As a general concept, “poor performance” is employer and expressly agreed upon by the parties.
equivalent to inefficiency and incompetence in the Given that the bonus in this case is integrated in the
performance of official duties. Under Art. 282 of the CBA, the same partakes the nature of a
Labor Code, an unsatisfactory rating can be a just demandable obligation. Verily, by virtue of its
cause for dismissal only if it amounts to gross and incorporation in the CBA, the Christmas bonus due
habitual neglect of duties. Thus, the fact that an to respondent Association has become more than
employee’s performance is found to be poor or just an act of generosity on the part of the petitioner
unsatisfactory does not necessarily mean that the but a contractual obligation it has undertaken.
employee is grossly and habitually negligent of his (Lepanto Ceramics v. Lepanto Ceramics
duties. Gross negligence implies a want or absence Employees Association, G.R. No. 180866, March 2,
of or failure to exercise slight care of diligence, or 2010)
the entire absence of care. It evinces a thoughtless
disregard of consequences without exerting any

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A bonus, however, becomes a demandable or standards of PAL is justified. (Yrasuegi v. PAL, G.R.
enforceable obligation when it is made part of the No. 168081)
wage or salary or compensation of the employee. In
the case at bench, it is indubitable that ETPI and 7. Marriage between Employees of
ETEU agreed on the inclusion of a provision for the Competitor-Employers
grant of 14th, 15th and 16th month bonuses in the
1998-2001 CBA Side Agreement. (Eastern It is unlawful for an employer to require as a condition
Telecoms v. Eastern Telecoms Employees Union, of employment or continuation of employment that:
February 8, 2012) 1. A woman employee shall not get married, or
2. To stipulate expressly or tacitly that upon
5. Change of Working Hours getting married a woman employee shall be
deemed resigned or separated; or
Management retains the prerogative, whenever 3. To actually dismiss, discharge, discriminate
exigencies of the service so require, to change the or otherwise prejudice a woman employee
working hours of its employees. So long as such merely by reason of her marriage. (Labor
prerogative is exercised in good faith for the Code, Art. 136)
advancement of the employer’s interest and not for
The company policy of not accepting or considering as
the purpose of defeating or circumventing the rights
disqualified from work any woman worker who
of the employees under special laws or under valid contracts marriage runs afoul of the test of, and the
agreements, this Court will uphold such exercise. right against, discrimination afforded all women
(Sime Darby Pilipinas, Inc. v. NLRC, G.R. No. workers by our labor laws and by no less than the
119205, 1998) Constitution. (Philippine Telegraph and Telephone
Company v. NLRC, G.R. No. 118978, 1997)
Except as limited by special laws, an employer is
free to regulate, according to his own discretion and The following policies were struck down as invalid for
judgment, all aspects of employment, including violating the standard of reasonableness which is being
hiring, work assignments, working methods, time, followed in our jurisdiction, called the “Reasonable
place and manner of work, tools to be used, Business Necessity Rule”:
processes to be followed, supervision of workers, 1. New applicants will not be allowed to be
working regulations, transfer of employees, work hired if in case he/she has (a) relative, up
supervision, lay-off of workers and discipline, to (the) 3rd degree of relationship, already
dismissal and recall of workers. (San Miguel employed by the company.
Brewery v. Ople, G.R. No. L-53515, 1989) 2. In case of two of our employees (both
singles (sic), one male and another female)
6. Bona Fide Occupational developed a friendly relationship during the
Qualifications course of their employment and then
decided to get married, one of them should
Employment in particular jobs may not be limited to resign to preserve the policy stated above.”
persons of a particular sex, religion, or national origin (Star Paper Corp. v. Simbol, Comia and
UNLESS, the employer can show that sex, religion, or Estrella, G.R. No. 164774, 2006)
national origin is an actual qualification for performing
the job. The qualification is called a bona fide In this case, the prohibition against marriage
occupational qualification (BFOQ). embodied in the following stipulation in the
employment contract was held valid:
BFOQ is valid "provided it reflects an inherent quality “You agree to disclose to management any existing
reasonably necessary for satisfactory job
or future relationship you may have, either by
performance."
consanguinity or affinity with co-employees or
Weight standards of PAL show its effort to comply with employees of competing drug companies. Should it
the exacting obligations imposed upon it by law by pose a possible conflict of interest in management
virtue of being a common carrier. On board an aircraft, discretion, you agree to resign voluntarily from the
the body weight and size of a cabin attendant are Company as a matter of Company policy.”
important factors to consider in case of emergency.
The job of a cabin attendant during emergencies is to SC ruled that the dismissal based on this stipulation
speedily get the passengers out of the aircraft safely. in the employment contract is a valid exercise of
Being overweight necessarily impedes mobility. management prerogative.
Indeed, in an emergency situation, seconds are what
cabin attendants are dealing with, not minutes. Hence, The prohibition against personal or marital
separation from service for failure to meet weight relationships with employees of competitor

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companies upon its employees was held reasonable oppressive, or not an undue or unreasonable
under the circumstances because relationships of restraint of trade, thus, unenforceable for being
that nature might compromise the interests of the repugnant to public policy. (Rivera v. Solidbank,
company. G.R. No. 163269, 2006)
In laying down the assailed company policy, the Two principal grounds on which the doctrine is
employer only aims to protect its interests against founded that a contract in restraint of trade is
the possibility that a competitor company will gain void as against public policy.
access to its secrets and procedures. (Duncan 1. The injury to the public by being deprived of
Ass’n of Detailman-PTGWO v. Glaxo Welcome the restricted party’s industry; and
Philippines, G.R. No. 162994, 2004) 2. The injury to the party himself by being
precluded from pursuing his occupation,
Prohibition against Pregnancy and thus being prevented from supporting
Respondents were constructively dismissed. himself and his family.
Hence, their termination was illegal. The termination
of respondents' employment happened when they In cases where an employee assails a contract
were pregnant and expecting to incur costs on containing a provision prohibiting him or her from
account of child delivery and infant rearing. accepting competitive employment as against public
Pregnancy is a time when they need employment to policy, the employer has to adduce evidence to
sustain their families. Indeed, it goes against normal prove that the restriction is reasonable and not
and reasonable human behavior to abandon one's greater than necessary to protect the employer’s
livelihood in a time of great financial need. It is clear legitimate business interests. The restraint may not
that respondents intended to remain employed with be unduly harsh or oppressive in curtailing the
Saudia. All they did was avail of their maternity employee’s legitimate efforts to earn a livelihood
leaves. Evidently, the very nature of a maternity and must be reasonable in light of sound public
leave means that a pregnant employee will not policy.
report for work only temporarily and that she will
resume the performance of her duties as soon as In determining whether the contract is
the leave allowance expires. (Saudia v. Rebesencio, reasonable or not, the trial court should
G.R. No. 198587, January 14, 2015) consider the following factors:
1. Whether the covenant protects a legitimate
8. Post-Employment Restrictions business interest of the employer;
2. Whether the covenant creates an undue
A post-retirement competitive employment burden on the employee;
restriction is designed to protect the employer 3. Whether the covenant is injurious to the
against competition by former employees who may public welfare;
retire and obtain retirement or pension benefits and, 4. Whether the time and territorial limitations
at the same time, engage in competitive contained in the covenant are reasonable;
employment. (Rivera v. Solidbank, G.R. No. and
163269, 2006) 5. Whether the restraint is reasonable from
the standpoint of public policy. (Rivera v.
Petitioner retired under the Special Retirement Solidbank Corporation, G.R. No. 163269,
Program and received P963,619.28 from 2006)
respondent. However, petitioner is not proscribed, 6. Whether the restraint has reasonable
by waiver or estoppel, from assailing the post- limitations as to time, trade and place.
retirement competitive employment ban since under (Daisy Tiu v. Platinum Plans, G.R. No.
Article 1409 of the New Civil Code, those contracts 163512, 2007)
whose cause, object or purpose is contrary to law, 7. Whether the restraint imposed on the
morals, good customs, public order or public policy employee is no greater than what the
are inexistent or void from the beginning. Estoppel employer requires. (Daisy Tiu v. Platinum
cannot give validity to an act that is prohibited by law Plans, G.R. No. 163512, 2007)
or to one that is against public policy. (Rivera v.
Solidbank, G.R. No. 163269, 2006)
B. LABOR STANDARDS
Respondent, as employer, is burdened to establish
that a restrictive covenant barring an employee from 1. Conditions of Employment
accepting a competitive employment after Book III of the Labor Code provides the conditions
retirement or resignation is not unreasonable or or standards of employment. These standards apply

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only if an employer-employee relationship (EER) Non-agricultural employees who regularly perform

exist. their duties away from the principal place of
business or branch office of the employer and
a. Coverage whose actual hours of work in the field cannot be
determined with reasonable certainty) (Autobus
Excluded Employees (Go-Ma-Off- FiFa-DoPe): Transport v. Bautista, G.R. No. 156367, 2005)
1. Government employees
2. Managerial employees if they meet all of 5. Members of the Family of the employer who
the following conditions: are dependent on him for support
• Their primary duty consists of the
management of the establishment 6. Domestic Helpers
in which they are employed or of a The mere fact that the househelper or domestic
department or sub-division servant is working within the premises of the
thereof. business of the employer and in relation to or in
• They customarily and regularly connection with its business, as in its staff houses
direct the work of two or more for its guest or even for its officers and employees,
employees therein. warrants the conclusion that such househelper or
domestic servant is and should be considered as a
• They have the authority to hire or regular employee of the employer and not as a mere
fire employees of lower rank; or family househelper or domestic servant. (Apex
their suggestions and Mining Company v. NLRC, G.R. No. 94951, 1991).
recommendations as to hiring and
firing and as to the promotion or 7. Persons in the personal service of another
any other change of status of other
employees, are given particular 8. Workers who are paid by Results (IRR
weight. (IRR Labor Code, Book III, Labor Code, Book III, Rule I, Sec. 2)
Rule I, Sec. 2)
3. Officer or members of a managerial staff if
they perform the following duties and b. Hours of Work
responsibilities:
• The primary duty consists of the Principles in Determining Hours Worked
performance of work directly 1. All hours are hours worked which the
related to management policies of employee is required to give to his
their employer; employer, regardless of whether or not
• Customarily and regularly exercise such hours are spent in productive labor or
discretion and independent involve physical or mental exertion.
judgment; and(i) Regularly and 2. An employee need not leave the premises
directly assist a proprietor or a of the workplace in order that his rest period
shall not be counted, it being enough that
managerial employee whose
primary duty consists of the he stops working, may rest completely and
management of the establishment may leave his workplace.
3. If the work performed was necessary or it
in which he is employed or
subdivision thereof; or (ii) execute benefited the employer, or the employee
under general supervision work could not abandon his work at the end of
his normal working hours because he had
along specialized or technical lines
requiring special training, no replacement, all time spent or such work
experience, or knowledge; or (iii) shall be considered as hours worked, if the
execute, under general work was with the knowledge of his
supervision, special assignments employer or immediate supervisor.
and tasks; and 4. The time during which an employee is
inactive by reason of interruptions in his
• Who do not devote more than 20
work beyond his control shall be
percent of their hours worked in a
considered working time either if:
work week to activities which are
not directly and closely related to a. The imminence of the
the performance of the work resumption of work requires
described in paragraphs (1), (2) the employee's presence at
and (3) above. the place of work; or
4. Non-agricultural Field Personnel b. The interval is too brief to be
utilized effectively and

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gainfully in the employee's

own interest. (IRR of Labor Compressed Work Week
Code, Sec. 4, Book III, Rule Department Order No. 21-90/ DOLE Advisory No. 2-
I) 09 and No. 02-04
Considered as Compensable Hours Worked Resorted to by the employer to prevent serious

1. All time during which an employee is losses due to causes beyond his control (i.e. when
required to be on duty or to be at the there is substantial slump in demand for his goods
employer’s premises or to be at a and services or when there is lack of raw materials).
prescribed work place; (DOLE Explanatory Bulletin, July 23, 1985)
2. All time during which an employee is Under this scheme, the number of workdays is
suffered or permitted to work; (IRR Labor reduced, but the number of work hours in a day is
Code, Book III, Rule I, Sec. 3) and increased to more than eight (8), but no overtime
3. Rest periods of short duration during pay may be claimed. Thus, a CWW scheme is an
working hours. (Philippine Airlines v. alternative arrangement wherein the normal
NLRC, G.R. No. 132805, 1999). workweek is reduced to less than six (6) days but
the total number of normal work hours per week
Normal Hours of Work and Hours Worked shall remain at 48 hours. (Azucena Vol. I, 9th ed., p.
265).
General Rule: The normal hours of work of any
employee shall not exceed eight (8) hours a day. Conditions for implementation of the CWW
(Labor Code, Art. 83) (DOLE Department Advisory No. 02 Series of
2004)
Part-time work, or a day’s work of less than 8 hours, a. The scheme is expressly and voluntarily
is not prohibited (Legend Hotel v. Realuyo, G.R. No. supported by majority of employees
153511, 2012) affected;
b. In firms using substances, or operating in
Purpose of the Law conditions that are hazardous to health, a
To protect the health of the workers. certification is needed from an accredited
safety organization or the firm’s safety
The law is designed to minimize unemployment by committee that work beyond eight (8) hours
forcing employers, in case where more than eight- is within the limits or levels of exposure set
hour operation is necessary, to utilize different shifts by DOLE’s occupational safety and health
of laborers or employees working only for eight standards; and
hours each. (Manila Terminal Company v. CIR, G.R. c. The DOLE Regional Office is duly notified.
No. L- 4148, 1952).
Effects of a CWW Scheme:
Exception to 8-Hour Law: Work Hours of Health a. Unless there is a more favorable practice
Personnel existing in the firm, work beyond eight (8)
Health Personnel in: hours will not be compensable by overtime
a. Cities and municipalities with a population premium provided the total number of
of at least one million (1,000,000) or hours worked per day shall not exceed
b. Hospitals and clinics with a bed capacity of twelve (12) hours. In any case, any work
at least one hundred (100) shall hold performed beyond 12 hours a day or 48
regular office hours for eight (8) hours a hours a week shall be subject to overtime
day, for five (5) days a week, exclusive of premium.
time for meals, except where the b. Consistent with Articles 85 of the Labor
exigencies of the service require that such Code, employees under a CWW scheme
personnel work for six (6) days or forty- are entitled to meal periods of not less than
eight (48) hours (Labor Code, Art. 83) sixty (60) minutes. Nothing herein shall
impair the right of employees to rest days
WORK DAY CALENDAR DAY as well as to holiday pay, rest day pays or
24-hour period leaves in accordance with law or applicable
commencing from the time 24-hour period collective bargaining agreement or
an employee regularly commencing at 12 company practice.
starts to work regardless of midnight and ending at c. Adoption of the CWW scheme shall in no
whether the work is broken 11:59 p.m. case result in diminution of existing
or continuous. benefits. Reversion to the normal eight-
hour workday shall not constitute a

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diminution of benefits. The reversion shall 1. The employees voluntarily agree in writing
be considered a legitimate exercise of to a shortened meal period of 30 minutes
management prerogative, provided that the and are willing to waive the overtime pay for
employer shall give the employees prior such shortened meal period;
notice of such reversion within a 2. There will be no diminution whatsoever in
reasonable period of time. the salary and other fringe benefits of the
employees existing before the effectivity of
Meal Periods the shortened meal period;
3. The work of the employees does not
General Rule: Meal periods are NOT compensable. involve strenuous physical exertion and
Meal periods should not be less than 60 minutes. they are provided with adequate “coffee
(Labor Code, Art. 85) breaks” in the morning and afternoon.
4. The value of the benefits derived by the
Exceptions: employees from the proposed work
1. Where the lunch period or meal time is arrangement is equal to or commensurate
predominantly spent for the employer’s with the compensation due them for the
benefit; shortened meal period as well as the
2. Meal periods of 1 hour are deemed overtime pay for 30 minutes as determined
compensable when the employee is on by the employees concerned;
continuous shift (National Dev’t Corp. v. 5. The overtime pay of the employees will
CIR, G.R. No. 15422, 1962) become due and demandable if ever they
3. Shortened meal period of less than 1 hour are permitted or made beyond 4:30pm; and
must be compensable (IRR Labor Code, 6. The effectivity of the proposed working time
Book III, Rule 1, Sec. 7) arrangement shall be of temporary duration
as determined by the Secretary of Labor
Meal period of not less than 20 minutes in the (2004 BWC Manual on Labor Standards).
following cases are compensable hours worked:
a. Where the work is non-manual work in Note: For a full one (1) hour undisturbed lunch
nature or does not involve strenuous break, the employees can freely and effectively use
physical exertion; this hour not only for eating but also for their rest and
b. Where the establishment regularly comfort. Since the employees are no longer
operates not less than 16 hours a day; required to work during this 1-hour lunch break,
c. In case of actual or impending emergencies there is no more need for them to be compensated
or there is urgent work to be performed on for this period. (Sime Darby Pilipinas v. NLRC, G.R.
machineries, equipment or installations to No. 119205, 1998)
avoid serious loss which the employer
would otherwise suffer; and Waiting Time
d. Where the work is necessary to prevent Whether waiting time constitutes working time
serious loss of perishable goods (IRR depends upon the circumstances of each particular
Labor Code, Book III, Rule 1, Sec. 7) case. The facts may show that the employee was
engaged to wait or may show that he waited to be
Note: Rest periods or coffee breaks running from 5- engaged. The controlling factor is whether waiting
20 minutes shall be considered compensable time spent in idleness is spent predominantly for the
working time. (IRR Labor Code, Book III, Rule 1, employer’s benefit or the employee’s (Azucena Vol.
Sec. 7) I, 9th ed., p. 231).
Note: To shorten meal time to less than 20 minutes A laborer need not leave the premises of the factory,
is not allowed. If it is less than 20 minutes, it shop or boat in order that his period of rest shall not
becomes only a REST PERIOD and is considered be counted, it being enough that he "cease to work",
working time (Labor Code, Art. 84, ¶ 2) may rest completely and leave or may leave at his
will the spot where he actually stays while working,
If standby is for emergency work, meal break is to go somewhere else, whether within or outside the
part of hours worked. (Pan-American World premises of said factory, shop or boat. If these
Airways System Philippines v. Pan-American requisites are complied with, the period of such rest
Employees Association G.R. No.L-16275, 1961) shall not be counted. (Luzon Stevedoring v. Luzon
Marine Department Union, G.R. No. L-9265, 1957)
Exception to the exception: Shortened meal
breaks upon the employee’s request are NOT Waiting time spent by an employee shall be
compensable, provided that: considered as working time if:

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NSD = (10% x regular wage/hr.) x no. of hrs. of

1. Waiting is an integral part of his work; or work between 10 pm – 6 am
2. The employee is required or engaged by
the employer to wait. (IRR Labor Code, NOTE: If work done between 10 pm and 6 am is OT
Sec. 5[a], Rule 1, Book III) work, the NSD should be based on the OT rate.
NOTE: Additional compensation for nighttime work
is founded on public policy. (Mercury Drug v. Dayao,
When Employee is Considered Working while on G.R. No. L-30452) NSD is not waivable except for
call - When employee higher and bigger benefits.
1. Is required to remain on call in the Overtime Work
employer’s premises or so close thereto; or
2. Cannot use the time effectively and
gainfully for his own purpose (IRR Labor OVERTIME PAY (OT)
Code, Sec. 5[b], Rule 1, Book III)
Overtime compensation is additional pay for service
Night-Shift Differential or work rendered or performed in excess of eight
hours a day by employees or laborers covered by
Night Worker: the Eight-hour Labor Law
Any employed person whose work requires [National Shipyard and Steel Corp. v. CIR, G.R. No.
performance of a substantial number of hours of L-17068 (1961)].
night work which exceed a specified limit. This limit
shall be fixed by the Secretary of Labor after Coverage:
consulting the workers’ representatives/labor This benefit applies to all employees EXCEPT (Go-
organizations and employers. (Labor Code, Art. Ma-Off-FiFa-DoPe):
154, as amended by R.A. No. 10151)
1. Government employees
Night Shift Differential, defined (R.A. 10151)
2. Managerial employees if they meet all of
Definition: Every employee shall be paid a night
the following conditions:
shift differential of not less than 10% of his regular
wage for each hour of work performed between ten
o’clock in the evening (10 pm) and six o’clock in the a. Their primary duty consists of the
morning (6 am). (Labor Code, Art. 86) management of the establishment
in which they are employed or of
Coverage: a department or sub-division
This benefit applies to ALL employees EXCEPT: thereof.
(Go-FR-PMS) b. They customarily and regularly
1. Those of the government and any of its direct the work of two or more
political subdivisions, including employees therein.
government- owned and/or controlled c. They have the authority to hire or
corporations; fire employees of lower rank; or
2. Those of retail and service establishments their suggestions and
regularly employing not more than five (5) recommendations as to hiring and
workers; firing and as to the promotion or
3. Domestic helpers and persons in the any other change of status of
personal service of another; other employees, are given
4. Managerial employees as defined in Book particular weight. (IRR Labor
Three of this Code; Code, Book III, Rule I, Sec. 2)
5. Field personnel and other employees 3. Officer or members of a managerial staff if
whose time and performance is they perform the following duties and
unsupervised by the employer including responsibilities:
those who are engaged on task or contract a. The primary duty consists of the
basis, purely commission basis, or those performance of work directly
who are paid a fixed amount for performing related to management policies of
work irrespective of the time consumed in the their employer;
performance thereof. (IRR Labor Code, Book b. Customarily and regularly exercise
III, Rule II, Sec. 1) discretion and independent
judgment; and

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c. (i) Regularly and directly assist a OT ON A HOLIDAY Rest day & holiday
proprietor or a managerial WHICH FALLS ON A wage rate (150%) +
employee whose primary duty REST DAY 30% thereof
consists of the management of the
establishment in which he is Conditions to be entitled to OT pay
employed or subdivision thereof; 1. Actual rendition of OT work
or (ii) execute under general 2. Submission of sufficient proof that said
supervision work along specialized work was actually performed (Cagampan v.
or technical lines requiring special NLRC, G.R. No. 85122-24)
training, experience, or 3. OT work is with the knowledge and consent
knowledge; or (iii) execute, under of the employer (Azucena, 254)
general supervision, special
assignments and tasks; and NOTE: On rest days and holidays, written authority
d. Who do not devote more than 20 after office hours is required for entitlement to
percent of their hours worked in a compensation (Global Incorporated v. Atienza)
work week to activities which are
not directly and closely related to Proof of Hours Worked
the performance of the work Entitlement to overtime pay must first be established
described in paragraphs (1), (2) by proof that said overtime work was actually
and (3) above. performed, before an employee may avail of said
benefit. (Lagatic v. NLRC, G.R. No. 121004, 1998)
4. Non-agricultural Field Personnel
Non-agricultural employees who regularly perform Burden of Proof: When an employer alleges that
their duties away from the principal place of his employee works less than the normal hours of
business or branch office of the employer and employment as provided for in the law, the employer
whose actual hours of work in the field cannot be bears the burden of proving his allegation with clear
determined with reasonable certainty) (Autobus and satisfactory evidence. (Prangan v. NLRC, G.R.
Transport v. Bautista, G.R. No. 156367, 2005) No. 126569, 1998)
5. Members of the Family of the employer who Emergency OT Work

are dependent on him for support General Rule: Employees cannot be compelled to
render overtime work against their will.
6. Domestic Helpers
The mere fact that the househelper or domestic servant Exceptions: (P2W2IM)
is working within the premises of the business of the 1. When the country is at war or when any
employer and in relation to or in connection with its other national or local emergency has been
business, as in its staff houses for its guest or even for declared by Congress or the Chief
its officers and employees, warrants the conclusion Executive;
that such househelper or domestic servant is and 2. When overtime work is necessary to
should be considered as a regular employee of the prevent loss of life or property, or in case of
employer and not as a mere family househelper or imminent danger to public safety due to
domestic servant. (Apex Mining Company v. NLRC, actual or impending emergency in the
G.R. No. 94951, 1991).
locality caused by serious accident, fire,
floods, typhoons, earthquake, epidemic or
7. Persons in the personal service of another other disaster or calamities;
8. Workers who are paid by Results (IRR Labor 3. When there is urgent work to be performed
Code, Book III, Rule I, Sec. 2) on machines, installations, or equipment, in
order to avoid serious loss or damage to the
Overtime Pay Rates employer or some other causes of similar
SCENARIO RATE nature;
OT ON A REGULAR Regular Wage + at 4. When the work is necessary to prevent loss
DAY least 25% thereof or damage to perishable goods;
OT ON A HOLIDAY / Rest day or special 5. When the completion or continuation of
SPECIAL DAY/ holiday wage rate work started before the 8th hour is
EMPLOYEES REST (130%) + 30% thereof necessary to prevent serious obstruction or
DAY prejudice to the business or operations of
the employer; or
6. When overtime work is necessary to avail
of favorable weather or environmental

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conditions where performance or quality of overtime pay, and premium pay. (Republic Planters
work is dependent thereon (IRR Labor Bank v. NLRC, G.R. 117460, 1997)
Code, Book III, Rule I, Sec. 10)
Note: Compressed work week is an exception to OT
Note: This is an exclusive list. (IRR Labor Code, (DOLE Advisory No. 2-04)
Book III, Rule I, Sec. 10)
Work Hours of Seamen
Undertime NOT offset by OT Seamen are required to stay on board of their
Offsetting of undertime hours against the OT hours vessels by the very nature of their duties, and it is
whether on the same or any other day is prohibited for this reason that, in addition to their regular
by law. (Labor Code, Art. 88) compensation, they are given free living quarters to
be on board. It could not have been the purpose of
Overtime pay does not preclude night shift the law to require their employers to pay them
differential pay overtime pay even when they are not actually
When the tour of duty of a laborer falls at nighttime working. The correct criterion in determining
[between 10:00pm and 6:00am], the receipt of whether sailors are entitled to overtime pay is
overtime pay will not preclude the right to night whether they actually rendered service in excess of
differential pay. The latter is payment for work done said number of hours. (Cagampan v. NLRC, G.R.
during the night while the other is payment for the No. 85122-24, 1991)
excess of the regular eight-hour work. (Naric v.
Naric Workers Union, G.R. No. 12075, 1959) Composite or package pay is not per se illegal
Composite or “package pay” or “all-inclusive salary”
is an arrangement where the employee’s salary
Waiver of overtime pay includes the overtime pay. The overtime pay is “built-
Right to OT pay cannot be waived. But when the in” (Trans-Asia Phils. Employees Association v. NLRC,
alleged waiver of OT pay is in consideration of G.R. No. 118289, 1999)
benefits and privileges, which may even exceed the
OT pay, the waiver may be permitted. (Bisig Two conditions for validity of such arrangement:
Manggagawa sa Tryco v. NLRC, G.R. No. 151309, 1. There is a clear written arrangement
2008) knowingly and freely entered by the
employee; and
In Intertranz Container Lines, Inc. v. Bautista, (G.R. 2. The mathematical result shows that the
agreed legal wage rate and the overtime pay,
No. 187693, 2010), the Court held that an employee
computed separately, are equal to or higher
may not sweepingly claim that overtime work was
than the separate amounts legally due
performed and consequent payment for such work (Damasco v. NLRC, G.R. No. 115755, 2000)
is compensable absent any evidence that overtime
work was indeed performed considering that a pre- Synthesis: Overtime Rules
approved overtime schedule and daily time record is 1. An employer cannot compel an employee to
required before overtime pay can be claimed. work overtime
While as a general rule, the parties may enter into Exception: Emergency overtime work (Labor
any kind of stipulation in a contract and the same Code, Art. 89)
shall be considered as the law between them,
however, it must be emphasized that a labor 2. Additional compensation is demandable only
contract is not an ordinary contract since it is if the employer had knowledge and consented
impressed with public interest. Thus, the parties are to the overtime work rendered by the
prohibited to enter into any stipulation which may employee
result in the reduction of any employee benefits.
(Labor Code, Art. 100; Republic Planters Bank v. Exception: Express approval by a superior
NLRC, G.R. 117460, 1997) NOT a requisite to make overtime
compensable:
The employer and the employee are not prohibited a. If the work performed is
under the law to enter into an agreement for the necessary, or that it benefited the
increase of whatever benefit being mandated by law company; or
for the simple reason that any such increase b. That the employee could not
certainly redounds to the benefit of the employee. abandon his work at the end of his
Thus, the employer and the employee may legally eight-hour work because there
and validly agree to increase the minimum was no substitute ready to take his
percentage provided for night differential pay,

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place (Manila Railroad Co. v. CIR, Business on Sundays/Holidays –

G.R. No. L-4614, 1952) All establishments and enterprises may operate or
open for business on Sundays and holidays
NOTE: The claim for overtime is not justified in the provided that the employees are given the weekly
absence of a written authority to render overtime rest day and the benefits as provided.
after office hours during Sundays and holidays
(Global Incorporate v. Atienza, G.R. No. L-51612, Who Determines Weekly Rest Days
1986) The employer determines and schedules the weekly
rest period subject to the following:
3. Compensation for work rendered in excess 1. Collective Bargaining Agreement;
of the 8 normal working hours a day 2. Rules and regulations issued by the
a. For ordinary days, additional 25% of Secretary of Labor; and
the basic hourly rate 3. Employee’s preference based on religious
b. For rest day/special day/holiday, grounds
additional 30% of the basic hourly
rate Preference of employee – The preference of the
4. A given day is considered an ordinary day, employee as to his weekly day of rest shall be
unless it is a rest day respected by the employer if the same is based on
5. Undertime does not offset overtime (Labor religious grounds. (Labor Code, Art. 91)
Code, Art. 88)
The employee shall make known his preference to
the employer in writing at least seven (7) days
Computation of Additional Compensation before the desired effectivity of the initial rest day so
(Rates only) preferred. (IRR Labor Code, Sec. 4, Rule III, Book
Computation of Additional Compensation III) Exception: Where, the choice of the employee as
Base of Computation: Regular wage - means to his rest day based on religious grounds will
regular base pay. inevitably result in serious prejudice or obstruction
to the operations of the undertaking and the
It includes the cash wage only without deduction on employer cannot normally be expected to resort to
account of facilities provided by the employer [Art. other remedial measures, the employer may
90]. schedule the weekly rest day of his choice for at
least two (2) days in a month. (IRR Labor Code, Sec.
It excludes money received in different concepts, 4, Rule III, Book III)
such as Christmas bonus and other fringe benefits
[Bisig ng Manggagawa ng Philippine Refining Co. v. Schedule of Rest Day
Philippine Refining Co., G.R. L-27761 (1981)]. a. Where the weekly rest is given to all
employees simultaneously – the employer
BUT when the overtime work was performed on the shall make known such rest period by
employees’ rest day or on special holidays or means of a written notice posted
regular holidays (Art. 93 and 94), the premium pay, conspicuously in the work place at least
must be included in the computation of the overtime one week before it becomes effective
pay [See: p. 19 of Handbook on Workers Statutory b. Where the rest period is not granted to all
Monetary Benefits, issued by the Bureau of Working employees simultaneously and collectively
Conditions, 2006]. – the employer shall make known to the
employees their respective schedules of
weekly rest through written notices posted
c. Rest Periods conspicuously in the work place at least
one week before they become effective
Weekly Rest Periods – applies to all employers
whether operating for profit or not, including public Employer May Require Work on Rest Day
utilities operated by private persons
General Rule: The employer may not require the
It is the duty of every employer, whether operating employees to work on a rest day.
for profit or not, including public utilities operated by
private persons, to provide each of his employees a Exceptions: (UAAP NAN)
rest period of not less than 24 consecutive hours for 1. In case of Urgent work to be performed on
every 6 normal work days. (Labor Code, Art. 91) machineries, equipment or installations to
avoid serious loss which the employer
would otherwise suffer

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2. In case of Actual or impending Note: There can be no valid waiver of compensation

emergencies caused by serious accident, for work done on a rest day or holiday.
fire, flood, typhoon, earthquake, epidemic
or other disaster or calamity, to prevent loss Synthesis of the Rules
of life or property, or in cases of force 1. Rest day of not less than 24 consecutive
majeure or imminent danger to public hours after 6 consecutive days of work.
safety 2. No work, no pay principle applies
3. In the event of Abnormal pressure of 3. If an employee works on his designated
work due to special circumstances, where rest day, he is entitled to a premium pay.
the employer cannot ordinarily be expected 4. Premium pay is additional 30% of the basic
to resort to other measures
pay.
4. To prevent serious loss of Perishable
5. Employer selects the rest day of his
goods
employees
5. Where the Nature of the work is such that
6. However, employer must consider the
the employees have to work continuously
religious reasons for the choice of a rest
for 7 days in a week or more, as in the case
day.
of the crew members of a vessel to
7. When the choice of the employee as to his
complete a voyage and in other similar
rest day based on religious grounds will
cases (IRR Labor Code, Sec. 6, Rule III,
inevitably result in serious prejudice or
Book III)
obstruction to the operations and the
6. Under other Analogous or similar
employer cannot normally be expected to
circumstances
resort to other measures, the employer
7. Where Nature of work requires continuous
may so schedule the weekly rest day of his
operations and the stoppage of work may
choice for at least two days in a month.
result in irreparable injury or loss to the
(IRR Labor Code, Sec. 4, Book III, Rule III)
employer (Labor Code, Art. 92)
Other than the above circumstances, no employee d. Holidays

shall be required against his will to work on his
scheduled rest day. Holiday Pay: Coverage; Exclusions
When an employee volunteers to work on his rest Right to Holiday Pay

day under other circumstances, he shall express Holiday pay refers to the payment of the regular
such desire in writing, subject to payment of daily wage for any unworked regular holiday.
additional compensation. (Handbook on Workers’ Statutory Monetary
Benefits, Bureau of Working Conditions, p. 12,
An employee shall be entitled additional 2016)
compensation for work performed on a Sunday only
when it is his established rest day. Coverage:
General Rule: Applies to ALL employees.
The failure to work during an employer’s rest day
does not justify the disciplinary sanction of outright Exceptions:
dismissal from employment as such is so severe a 1. Those of the government and any of the
consequence, more so when justifiable grounds political subdivision, including government-
exist for said failure (Remerco Garments owned and controlled corporation;
Manufactuing v. Minister of Labor, G.R. No. L- 2. Those of retail and service establishments
56176-77, 1985) regularly employing less than ten (10)
workers;
Employees NOT covered 3. Domestic helpers and persons in the
Employees excepted under Article 82 of the Labor personal service of another;
Code are, generally, not covered by the rule on 4. Managerial employees as defined in Book
additional compensation. Three of the Code;
5. Field personnel and other employees
Remuneration of employee working on a rest whose time and performance is
day unsupervised by the employer including
– REGULAR REMUNERATION (100%) + those who are engaged on task or contract
PREMIUM PAY (additional sum of at least 30% of basis, purely commission basis, or those
the regular remuneration) who are paid a fixed amount for performing
work irrespective of the time consumed in

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the performance thereof (IRR Labor Code, which case he is entitled to his holiday pay on the
Sec. 1, Rule IV, Book III) second holiday.
Regular Holidays Double Holiday

1. New Year’s Day – Jan. 1 1. If unworked – employee entitled to 200% of basic
2. Maundy Thursday – Movable Date wage, provided he was present or on leave with pay
3. Good Friday – Movable Date on the preceding work day
4. Araw ng Kagitingan – April 9 2. If worked – employee entitled to 300% of basic
5. Labor Day – May 1 wage. Only an employee who works on the day
6. Independence Day – June 12 immediately preceding or after a regular holiday
7. Nat’l Heroes Day – Last Mon. of Aug. shall be entitled to the holiday pay. A paid legal
8. Bonifacio Day – Nov. 30 holiday occurring during the scheduled vacation
9. Eid al Fit’r – Movable Date leave will result in holiday payment in addition to
10. Eid al Adha – Movable Date normal vacation pay but will not entitle the employee
11. Christmas Day – Dec. 25 to another vacation leave. (Asian Transmission v.
12. Rizal Day – Dec. 30 CA, GR No. 144664, March 15, 2004)
Special Days Holiday-Sunday

1. Ninoy Aquino Day – August 21 A legal holiday falling on a Sunday creates no legal
2. All Saints’ Day – Nov. 1 obligation for the employer to pay extra, aside from
3. Last Day of the Year – Dec. 31 the usual holiday pay, to its monthly-paid
4. Special Non-Working Days employees.
5. Special Public Holidays
6. Special National Holiday In cases temporary cessation of work
Regular holidays falling within this period are
Muslim Holidays compensable (i.e. yearly inventory, repair or
General Rule: Muslim holidays are observed only cleaning of machineries or equipment, etc).
in specified areas:
1. Amun Jadid (New Year) However, in the case of a regular holiday during the
2. Maulid un-Nabi (Birthday of the Prophet cessation of operations due to business reverses as
Muhammad) authorized by the Secretary of Labor, the employer
3. Lailatul Isra Wal Miraj (Nocturnal Journey may not pay the regular holidays during this period.
and the Ascencion of the Prophet
Muhammad) In cases of periodic and temporary closures, the
Omnibus Rules Implementing the Labor Code Book
Exception: Eid al Fit’r and Eid ul Adha (Celebrated 3 Rule IV Section 7 provides that in cases of
nationwide) temporary or periodic shutdown and temporary
Muslim employees working outside of the specified cessation of work of an establishment, as when a
areas shall be excused from reporting for work yearly inventory or when the repair of cleaning
during the observance of the Muslim holidays as machines and equipment is undertaken, the regular
recognized by law, without diminution of salary or holidays falling within the period shall be
wages during the period. compensated.
Considering that all private corporations, offices, Teachers, Pieceworkers, Takay, Seasonal
agencies, and entities or establishments operation Workers, Seafarers
within the designated Muslim provinces and cities
are required to observe Muslim holidays, both 1. Holiday Pay of Certain Employees:
Muslims and Christians working within the Muslim Private School teachers including
areas may not report for work on the days faculty members of college and
designated by law as Muslim Holidays. (SMC v. CA, universities – may not be paid for the
G.R. No. 146775, January 30, 2002). regular holidays during semestral
vacations. Paid for the regular holidays
Successive Regular Holidays during Christmas vacation (Jose Rizal
Where there are 2 successive regular holidays, like College v. NLRC & NATOW, G.R. No. L-
Holy Thursday and Good Friday, an employee may 65428, 1987)
not be paid for both holidays if he absents himself 2. Employee paid by results (payment on
from work on the day immediately preceding the first piece- work) – holiday pay shall not be less
holiday, unless he works on the first holiday, in than his average daily earnings for the last
7 actual working days preceding the regular

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holiday; Provided, However, that in no case days in a year. If the employees are already paid for
shall the holiday pay be less than the all non-working days, the divisor should be 365 and
applicable statutory minimum wage rate not 251. (Chartered Bank v. Ople, GR No. L-44717,
3. Seafarers – any hours of work or duty 1985)
including hours of watch keeping
performed on designated rest days and Outline of Rules on Payment of Holiday Pay
holidays shall be paid rest day or holiday REGULAR HOLIDAYS
4. Seasonal workers – may not be paid the Falling on a regular work day
required holiday pay during off-season Unworked 100% (EXCEPT: in retail and
when they are not at work service establishments
5. Workers without regular working days – employing less than 10 workers)
entitled to the benefits, under item d,
Section 8, Rule IV of the Omnibus Rules Worked First 8 hours 200%
Implementing the Labor Code.
Holiday pay is a legislated benefit enacted as part of Excess of 8 + 30% of

the Constitutional imperative that the State shall hours hourly rate on
afford protection to labor. Its purpose is not merely said date
“to prevent diminution of the monthly income of the Fallin on a rest day
workers on account of work interruptions. In other
Unworked 100%
words, although the worker is forced to take a rest,
he earns what he should earn, that is, his holiday
pay.” (RFM Corporation v. Kasapian, GR No.
162324, 2009)
There is no provision of law requiring any employer

to make such adjustments in the monthly salary rate
set by him to take account of legal holidays falling Worked First 8 hours + 30% of 200%
on Sundays in a given year, or, contrary to the legal
provisions bearing on the point, otherwise to reckon
a year at more than 365 days. What the law requires Excess of 8
+ 30%of hourly
of employers opting to pay by the month is to assure hours rate on said
that “the monthly minimum wage shall not be less day
than the statutory minimum wage multiplied by 365 SPECIAL DAYS
days divided by twelve,” and to pay that salary “for
all days in the month whether worked or not,” and
“irrespective of the number of working days therein.”
(Wellington v. Trajano, GR No. 114698, 1995) Unworked NO PAY, unless there is a
favorable company policy,
Divisors practice or CBA granting
The divisor assumes an important role in payment of wages on special
determining whether or not holiday pay is already days even if unworked
included in the monthly paid employee’s salary and Worked First 8 hours + 30% of the
in the computation of his daily rate. (Union of Filipro daily rate
Empl. V. Vivar, Jr., G.R. No. 79255, 1992) (100%)
Excess of 8 + 30% of
The divisor used in arriving at an employee’s daily hours hourly rate on
rate for the purpose of computing salary-related said day
benefits is 261. From the 365 days in a year, we Worked & First 8 hours + 50% of daily
deduct 104 rest days which gives a total of 261 days. Falling On rate
Now, if 261 days is the number of working days of a Rest Day Excess of 8 + 30% of
the employees then, there is a disputable
hours hourly rate
presumption that the employees are paid their
holiday pay. (Producer’s Bank v. NLRC, G.R. SPECIAL WORKING HOLIDAYS – only the
No.100701, 2001) basic rate
The 251 working days divisor is the result of e. Service Charge [Article 96 of the
subtracting all Saturdays, Sundays and the ten (10) Labor Code, as amended by RA
legal holidays from the total number of calendar 11360]

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Refers to establishments, projects, sites and all

Definition: other places where work is being undertaken
Service charges are considered part of the cost of wherein the number of employees, nature of
the food, goods, or services ordered by the operations, and risk or hazard involved in the
customers. business, as determined by the Secretary of Labor
and Employment, require compliance with the
Establishments provisions of this Act (Sec. 3, R.A. No. 11058)
Applies only to establishments collecting service
charges such as hotels, restaurants, lodging Duties of Employers Workers and Other Persons
houses, night clubs, cocktail lounge, massage 1. Every employer, contractor or
clinics, bars, casinos and gambling houses, and subcontractor, if any, and any person
similar enterprises, including those entities who manages, controls or supervises
operating primarily as private subsidiaries of the the work being undertaken shall:
Government. (Labor Code, Art. 96) a. Furnish the workers a place of
employment free from hazardous
Coverage conditions that are causing or are
All employees of covered employers, regardless of likely to cause death, illness or
their positions, designations or employment status, physical harm to the worker;
and irrespective of the method by which their wages b. Give complete job safety
are paid instructions or orientation to all the
workers especially to those
EXCEPT to managerial employees entering the job for the first time,
including those relating to
Service Charge different from Tip familiarization with their work
Tip, not normally part of the salary, it being given environment;
voluntarily by the customer. Service charges are c. Inform the workers of the hazards
considered part of the cost of the food, goods, or associated with their work, health
services ordered by the customers. risks involved or to which they
are exposed to, preventive
Distribution: measures to eliminate or
All service charges collected by hotels, restaurants minimize the risks, and steps to
and similar establishments shall be distributed be taken in cases of emergency
completely and equally among the covered workers d. Use only approved devices and
except managerial employees. (R.A. No. 11360) equipment for the workplace;
e. Comply with OSH standards
including training, medical
In the event that the minimum wage is increased by
examination and, where
law or wage order, service charges paid to the
necessary, provision of protective
covered employees shall not be considered in
determining the employer's compliance with the and safety devices such as
increased minimum wage personal protective equipment
(PPE) and machine guards;
Resolution of dispute on distribution of service f. Allow workers and their safety
charges and health representatives to
To facilitate resolution of any dispute between the participate actively in the
management and the employees on the distribution process of organizing, planning,
of service charges, a grievance mechanism shall be implementing and evaluating the
established. If no grievance mechanism is safety and health program to
established or if inadequate, the grievance shall be improve safety and health in the
referred to the regional office of the Department of workplace; and
Labor and Employment which has jurisdiction over g. Provide, where necessary. for
the workplace for conciliation. (R.A. No. 11360) measures to deal with
emergencies and accidents
f. Occupational Safety and Health including first-aid arrangements.
Standards Law (RA11058)
2. Every worker shall participate in
Covered Workplaces [Sec. 3(c)] ensuring compliance with OSH
standards in the workplace.

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hazards capable of causing injury or impairment in

The worker shall make proper use of all safeguards the function of any part of the body through
and safety devices furnished for the worker's absorption, inhalation or physical contact. The cost
protection and that of others, and shall observe of the PPE shall be part of the safety and health
instructions to prevent accidents or imminent danger program which is a separate pay item pursuant to
situations in the workplace. The worker shall Section 20 of this Act. (Sec. 8, R.A. No. 11058)
observe the prescribed steps to be taken in cases of
emergency. 2. Wages
The worker shall report to the supervisor any work a. Definitions

hazard that may be discovered in the workplace.
Wage vs. Salary
3. It shall be the duty of any person,
including the· builder or contractor who Wages paid to any employee shall mean the:
visits, builds, renovates or installs 1. Remuneration or earnings, however
devices or conducts business in any designated, capable of being expressed in
establishment or workplace, to comply terms of money, whether fixed or
with the provisions of this Act and all ascertained on a time, task, piece, or
other regulations issued by the commission basis, or other method of
Secretary of Labor and Employment. calculating the same, which is payable by
an employer to an employee under a
4. Whenever two (2) or more undertakings written or unwritten contract of employment
are engaged in activities simultaneously for work done or to be done, or for services
in one (1) workplace, it shall be the duty rendered or to be rendered;
of all engaged to collaborate in the 2. INCLUDES, the fair and reasonable value,
application of OSH standards and as determined by the DOLE Secretary, of
regulations. board, lodging, or other facilities
customarily furnished by the employer to
the employee. (Labor Code, Art. 97)
Workers’ Right to Know
The right to safety and health at work shall be "Fair and reasonable value" shall not
guaranteed. All workers shall be appropriately include any profit to the employer, or to any
informed by the employer about all types of hazards person affiliated with the employer. (Id.)
in the workplace, provided access to training and
education on chemical safety, and to orientation on
the data sheet of chemical safety, electrical safety, WAGE SALARY
mechanical safety, and ergonomical safety. (Sec. 5, Paid for skilled or Paid to white collar
R.A. No. 11058) unskilled manual labor workers and denote a
higher grade of
Workers’ Right to Refuse Unsafe Work employment
The worker has the right of refusal to work without
threat or reprisal from the employer if, as determined Not subject to Not exempt from
by the DOLE, an imminent danger situation exists in execution, execution,
the workplace that may result in illness, injury or garnishment or garnishment or
death, and corrective actions to eliminate the danger attachment except for attachment. (Gaa v.
have not been undertaken by the employer. (Sec. 6, debts related to CA, G.R. No. L-44169,
R.A. No. 11058) necessities (Civil 1985)
Code, Art. 1708)
Workers’ Right to Personal Protective
Equipment (PPE)
Every employer, contractor or subcontractor, if any, Minimum wage is set by law or wage order issued
shall provide his workers, free of charge, protective by the Regional Tripartite Wages and Productivity
equipment for their eyes, face, hands and feet, and Boards (RTWPB’s) or the rate which may be fixed
lifeline, safety belt or harness, gas or dust by the employer provided the same is not lower than
respirators or masks, and protective shields the legally mandated minimum wage for agricultural
whenever necessary by reason of the hazardous or non-agricultural workers.
work process or environment, chemical,
radiological, mechanical and other irritants or

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Wage or Salary includes: Commission; Facilities; No Work, No Pay

and Commodities General Rule: A fair day’s wage for a fair day’s
labor. (Sugue v. Triumph International [Phils.], G.R.
Facilities vs. Supplements No. 164804, 2009)
Facilities Exception: Where the employer was able, willing,

Articles or services for the benefit of the employee and ready to work but was prevented by
or his family but shall not include tools of the trade management or was illegally locked out, suspended
or articles or ; may be deducted from the employees’ or dismissed, or otherwise illegally prevented from
wages. working (Sugue v. Triumph International, supra)
Acceptance of Facilities BUT: Where the failure of employees to work was

In order that the cost of facilities furnished by the not due to the employer’s fault, the burden of
employer may be charged against an employee, the economic loss suffered by the employees should not
employee’s acceptance of such facilities must be be shifted to the employer. Each party must bear his
voluntary. own loss.
Requirements for deducting value of facilities: Equal Pay for Equal Work
1. Proof must be shown that such facilities are Employees holding the same position and rank are
customarily furnished by the trade
presumed to be performing equal work. The rule
2. The provision of deductible facilities must equal pay for equal work applies whether the
be voluntarily accepted in writing by the employee is hired locally or abroad (ISAE v.
employee Quisumbing, G.R. No. 128845, 2000)
3. The facilities must be charged at fair and
reasonable value. (SLL International Cable Fair Wage for Fair Work
Specialists v. NLRC, G.R. No. 172161,
2011). Non-Diminution of Benefits
Note: As regards meals and snacks, the employer There is diminution of benefits when:
may deduct from the wages not more than 70% of 1. The grant or benefit is founded on a policy
the value of the meals and snacks enjoyed by the or has ripened into a practice over a long
employees, provided that such deduction is period of time
authorized in writing by the employees. 2. The practice is consistent and deliberate
The remaining 30% of the value has to be 3. The practice is not due to error in the
subsidized by the employer. (IRR Labor Code, Sec. construction or application of a doubtful or
1, Rule VII- A, Book III) difficult question of law, and
4. The diminution or discontinuance is done
Supplements unilaterally by the employer. (TSPIC v.
The benefit or privilege given to the employee which TSPIC Employee Union, G.R. No. 163419,
constitutes an extra remuneration over and above 2008).
his basic or ordinary earning or wage, is 5. The “benefits” refer to monetary benefits or
supplement. Thus, free meals supplied by the ship privileges given to the employee with
operator to crew members, out of necessity, cannot monetary equivalents. (Royal Plant
be considered as facilities but supplements which Workers Union vs. Coca-Cola Bottlers
could not be reduced having been given not as part Philippines, Inc.-Cebu Plant, G.R. 198783,
of wages but as a necessary matter in the 2013).
maintenance of the health and efficiency of the crew
personnel during the voyage. (States Marine Non-Diminution Rule
Corporation and Royal Line, Inc. v. Cebu Seamen’s
Association, Inc., G.R. No. L-12444, 1963). General Rule: Nothing in the Labor Code shall be
construed to eliminate or in any way diminish
Criterion: In determining whether a privilege is a supplements, or other employee benefits being
facility, the criterion is not so much its kind but its enjoyed at the time of promulgation of the Labor
PURPOSE (Millares v NLRC & PICOP, G.R. no. Code. Benefits being given to employees shall not
122827, 1999 be taken back or reduced unilaterally by the
employer because the benefit has become part of
b. Principles the employment contract, written or unwritten.
(Labor Code, Art. 100)

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A benefit which is contingent or conditional; its

Exception: To correct an error, otherwise, if the demandability depends on certain pre-conditions.
error is left uncorrected for a reasonable period of
time, it ripens into a company policy and employees It is an amount granted voluntarily to an employee
can demand for it as a matter of right. for his/her industry and loyalty, which contributed to
the success and realization of profits of the
When Non-Diminution Rule Applicable employer’s business.
Note: Only applies to monetary benefits or those
monetary equivalents (Royal Plant Workers Union General Rule: Bonus is not demandable as a
v. Coca-Cola Bottlers, G.R. No. 198783, 2013) matter of right. It is a management prerogative,
given in addition to what is ordinarily received by or
The rule is applicable if it is shown that: strictly due to the recipient (Producers Bank v.
1. The practice is consistent and deliberate NLRC, G.R. No. 100701, 2001)
(Metrobank v. NLRC, G.R. No. 152928,
2009) Exceptions:
2. The diminution or discontinuance is done 1. When it was promised to be given without
unilaterally by the employer (Steel any conditions imposed for its payment in
Corporation v. Nagkakaisang which case it is deemed part of the wage;
Manggagawang Supreme Independent and
Union, G.R. No. 185556, 2011); 2. When it has ripened into practice (Marcos
3. The grant of the benefit is founded on a v. NLRC, G.R. No. 111744, 1995)
policy or has ripened into a practice over a
long period (Phil. Appliance Corp. v. CA, c. Payment of Wages
G.R. No. 149434, 2004); and
4. The practice is not due to error in the Means of Payment
construction or application of a doubtful or The employer cannot pay his workers by means of
difficult question of law (Vergara, Jr., v. any of the following:
Coca Cola, G.R. No. 176985, 2013) 1. Vouchers;
2. Promissory notes;
When not applicable 3. Any object other than legal tender;
1. At least one of the requisites is absent 4. Coupons;
2. Mistake in the application of the law (Globe 5. Chits;
Mackay v. NLRC, G.R. No. 82511, 1988) 6. Tokens; or
3. Negotiated benefits (Azucena) 7. Tickets (Labor Code, Art. 102)
4. Reclassification of Positions – e.g. loss of
some benefits by promotion. General Rule: No employer shall pay the wages of
5. Contingent or Conditional Benefits – the an employee by any other means other than legal
rule does not apply to a benefit whose grant tender, even when expressly requested by the
depends on the existence of certain employee. (Congson v. NLRC, G.R. No. 114250,
conditions, so that the benefit is not April 5, 1995)
demandable if those preconditions are
absent. Exception: Payment of wages by bank checks,
postal checks or money orders is allowed where:
Past Errors 1. Such manner of wage payment is
If it is a past error that is being corrected, no vested customary on the date of the Labor Code’s
right may be said to have arisen nor any diminution effectivity;
of benefit under Art. 100 may be said to have 2. It is stipulated in a collective agreement;
resulted by virtue of the correction (TSPIC Corp. v. 3. All of the following conditions are met; or
TSPIC Employees Union, G.R. No. 163419, 2008) a. There is a bank or other facility for
encashment within a radius of 1
Benefits initiated through negotiation between kilometer from the workplace
Employee and Employer, e.g. CBA, can only be b. The employer or any of his agents
eliminated or diminished bilaterally. A union is not or representatives does not
prohibited from offering and agreeing to reduce receive any pecuniary benefit
wages and benefits of the employees during CBA directly or indirectly from the
negotiations. (Insular Hotel Employees Union v. arrangement
Waterfront, G.R. 174040-41, 2010) c. The employees are given
reasonable time during banking
Bonus hours to withdraw their wages from

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the bank which time shall be epidemic or other calamity rendering

considered as compensable hours payment thereat impossible
worked if done during working 2. When the employer provides free
hours transportation to the employees back and
d. The payment by check is with the forth
written consent of the employees 3. Under any other analogous circumstances;
concerned if there is no collective Provided, That the time spent by the
agreement authorizing the employees in collecting their wages shall
payment of wages by bank checks be considered as compensable hours
4. Necessary because of special worked (Labor Code, Art. 103; IRR Labor
circumstances as specified in appropriate Code, Sec. 4, Rule VIII, Book III)
regulations issued by the Secretary of
Labor (IRR Labor Code, Sec. 2, Rule VIII, Prohibited Place of Payment
Book III)
General Rule: Payment cannot be made in a bar,
Time of Payment night or day club, drinking establishment, massage
General Rule: At least once every 2 weeks or clinic, dance hall, or other similar places or in places
twice a month at intervals not exceeding 16 days. where games are played with stakes of money or
things representing money
Exceptions:
1. In case of force majeure or other Exception: Persons employed in the
circumstances beyond the employer’s abovementioned places may be paid there (IRR
control, payment must be made Labor Code, Sec. 4[b], Rule VIII, Book III)
immediately after such occurrence has
ceased; and
2. In case of payment of wages by result Payment through Banks; Requisites
involving work which cannot be completed 1. There must be a written permission of the
in two weeks and in the absence of CBA or majority of the employees concerned in an
arbitration award: establishment
- Payments are made at intervals not 2. The establishment must have 25 or more
exceeding 16 days, in proportion to the employees
amount of work completed; and 3. The establishment must be located within 1
- Final settlement is made upon completion km. radius to the bank.
of the work. (IRR Labor Code, Sec. 3, Rule
VIII, Book III) Payment through ATM; Requisites
Payment through automated teller machines (ATM)
In ALL Cases: No employer shall make payment of banks is allowed, provided the ff. conditions are
with less frequency than once a month. met [CTARRDR]:
1. The ATM system of payment is with the
If on account of force majeure or circumstances written Consent of the employees
beyond the employer’s control, payment of wages concerned;
on or within the time herein provided cannot be 2. The employees are given reasonable Time
made, the employer shall pay the wages to withdraw their wages from the bank
immediately after such force majeure or facility which time, if done during working
circumstances have ceased. hours, shall be considered compensable
hours worked;
Place of Payment 3. The system shall Allow workers to receive
their wages within the period or frequency
General Rule: Payment of wages shall be made at and in the amount prescribed under the
or near the place of undertaking Labor Code;
4. There is a bank or ATM facility within a
Exceptions: Payment in a place other than the work Radius of one (1) kilometer to the place of
place shall be permissible only under the following work;
circumstances: 5. Upon request of the concerned
1. When payment cannot be effected at or employee/s, the employer shall issue a
near the place of work by reason of the Record of payment of wages, benefits and
deterioration of peace and order conditions, deductions for a particular period;
or by reason of actual or impending
emergencies caused by fire, flood,

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6. There shall be no additional expenses and the employer in accordance with a

no Diminution of benefits and privileges as collective agreement
a result of the ATM system of payment; iii. Authorized in writing by the
7. The employer shall assume Responsibility individual employees concerned
in case the wage protection provisions of (IRR of Labor Code, Sec. 5[b],
law and regulations are not complied with Rule VIII)
under the arrangement (DOLE’s
Explanatory Bulletin on Wage Payment 2. Payment through heirs of the worker
Through ATM Facility, November 25, 1996) Where the worker has died – the employer may pay
the wages of the deceased worker to the heirs of the
Payment through Transaction Accounts (DOLE latter without the necessity of intestate proceedings.
Labor Advisory No. 26, Series of 2020) (Labor Code, Art. 105[b])
Transaction Account Procedure:

• Bank or e-money account held with a BSP- • The claimants, if they are all of age (or in
regulated financial service provider that can case of a minor, by the natural guardians or
be used to store, send and receive funds next-of- kin), shall execute an affidavit
attesting to their relationship to the
Effort to promote the use of transaction accounts as deceased and the fact that they are his
preferred mode of payment of wages and other heirs, to the exclusion of all other persons.
monetary benefits in view of the safety, security, and • If any of the heirs is a minor, the affidavit
financial inclusivity considerations shall be executed on his behalf by his
natural guardian or next-of-kin.
Highly encourages the employees of the private • The affidavit shall be presented to the
sector to explore and/or initiate opening of employer who shall make payment through
transaction accounts. the Secretary or his representative. The
• Employees coordinate with their employer representative of the Secretary shall act as
to facilitate the opening of transaction referee in dividing the amount paid among
accounts in: the heirs.
o the bank or EMI where employer • he payment of wages under this Article
maintains an account; or shall absolve the employer of any further
o Existing transaction account held liability with respect to the amount paid.
in a PESONet-participating bank, if
any 3. Payment through member of worker’s
family
To Whom Wages are Paid Where the employer is authorized in writing by the
employee to pay his wages to a member of his
General Rule: Wages shall be paid directly to the family (IRR Labor Code, Sec. 5[a], Rule VIII, Book
workers to whom they are due (Labor Code, Art. III)
105)
Summary of Rules on Payment of Wages
Exceptions:
WHAT MUST Legal tender; Prohibited:
BE PAID Promissory notes, vouchers,
1. Payment through another person coupons, tokens, tickets, chits,
a. In cases of force majeure rendering such or any other object other than
payment impossible or under other special legal tender
circumstances to be determined by the
Secretary – the worker may be paid through
WHEN Once every two weeks or
another person under written authority
twice a month at intervals not
given by the worker for the purpose (Labor
exceeding 16 days
Code, Art. 105[a]); or
b. When authorized under existing law,
including: WHERE At or near the place of
i. Payments for the insurance undertaking
premiums of the employee
ii. Union dues where the right to HOW Directly to the employee
check-off has been recognized by entitled thereto

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d. Prohibitions Regarding Wages Requisites for Valid Deduction for Loss/Damage

1. The employee concerned is clearly shown
Deductions from Wages (Labor Code, Art. 113) to be responsible for the loss or damage
General Rule: Wage deduction is strictly prohibited. 2. The employee is given reasonable
opportunity to show cause why deduction
Exceptions: should not be made
1. With Employee’s Consent in Writing 3. The amount of such deduction is fair and
• SSS payments reasonable and shall not exceed the actual
• PHILHEALTH payments loss or damage
• Contributions to PAG-IBIG Fund 4. The deduction from the wages of the
employee does not exceed 20% of the
• Value of meals and other facilities
employee's wages in a week (IRR Labor
• Payments to third persons with
Code, Sec. 11, Rule VIII, Book III)
employee’s consent and without
pecuniary benefit
Note: Art. 144 provides for the rule on deposits for
• Deduction for unpaid absences
the loss or damage to tools, materials, or equipment
supplied by the employer. The same does not apply
2. Without Employee’s Consent
to or permit deposits to defray any deficiency, which
the taxi driver may incur in the remittance of
• Worker’s insurance acquired by “boundary” (Five J Taxi v. NLRC, G.R. No. 111474,
the employer 1994)
• Union dues, where the right to
check-off has been recognized by Prohibited / Unlawful Acts
the employer or authorized in 1. Withhold any amount from the wages of a
writing by the employee worker or induce him to give up any part of
• Cases where the employer is his wages by force, stealth, intimidation,
authorized by law or regulations threat or by any other means whatsoevr
issued by the Secretary of Labor without the worker’s consent. (Labor Code,
• Withholding tax Art. 116)
2. Deduction from the wages of any employee
NOTE: Persons earning minimum wage are for the benefit of the employer or his
exempted from income tax. representative or intermediary as
consideration of a promise of employment
3. When Authorized by Law or retention in employment. (Labor Code,
• Deposit for loss/breakage (Labor Advisory, Art. 117)
No. 11 [2014], Sec. 3) 3. Refuse to pay or reduce the wages and
benefits, discharge or in any manner
• In cases where the employee is indebted to
discriminate against any employee who
the employer, where such indebtedness
has filed any complaint or instituted any
has become due and demandable (Civil
proceeding under this Title or has testified
Code, Art. 1706)
or is about to testify in such proceedings.
• Court judgment, but only for debts incurred (Labor Code, Art. 118)
for food, shelter, clothing, and medical 4. Make any statement, report, or record filed
attendance (Civil Code, Art. 1708) or kept pursuant to the provisions of this
Code knowing such statement, report or
4. Regulation Issued by the Secretary of record to be false in any material respect.
Labor (Labor Code, Art. 119)
Deposits for Loss or Damage Non-Interference in Disposal of Wages (Civil

General Rule: No employer shall require his worker Code Provisions)
to make deposits for the reimbursement of loss of or 1. The laborer’s wages shall be paid in legal
damage to material, equipment, or tools supplied by currency (Civil Code, Art. 1705)
the employer. 2. Withholding of wages, except for a debt
due, shall not be made by the employer
Exception: When the trade, occupation or business (Civil Code, Art. 1706)
of the employer recognizes or considers the practice 3. The laborer’s wages shall be a lien on the
of making deductions or requiring deposits goods manufactured or the work done (Civil
necessary or desirable. (Labor Code, Art. 114) Code, Art. 1707)

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4. The laborer’s wages shall not be subject to

execution or attachment, except for debts Frequency
incurred for food, shelter, clothing, and General Rule: A wage order issued by the Board
medical attendance (Civil Code, Art. 1708) may not be disturbed for a period of 12 months from
5. The employer shall neither seize nor retain its effectivity and no petition for wage increase shall
any tool or other articles belonging to the be entertained during said period (NWPC
laborer (Civil Code, Art. 1709) Guidelines No. 001-05, Sec. 3, Rule IV)
Wage Order Exceptions:

An order issued by the Regional Board whenever 1. When Congress itself issues a law
the conditions in the region so warrant after studying increasing wages; or
and investigating and studying all pertinent facts and 2. Supervening conditions, such as
based on the standards and criteria prescribed by extraordinary increases in prices of
the Labor Code. (Labor Code, Art. 123) petroleum products and basic goods /
services
A wage order adjusts the minimum level but not the
levels above the minimum. It does not mandate Standards/Criteria for Minimum Wage Fixing
across the board salary increase. Must be economically feasible to maintain the
minimum standards of living necessary for the
Employees NOT Covered health, efficiency and general well-being of the
1. Household or domestic helpers, including employees within the framework of the national
family drivers and workers in the personal economic and social development program.
service of another
2. Workers and employees in retail/service Factors to Consider: (SNAPE CRIED)
establishments regularly employing not
more than 10 workers, when exempted 1. Improvements in Standards of living
from compliance, for a period fixed by the 2. The Needs of workers and their families
Commission/Boards 3. Wage Adjustment vis-à-vis the consumer
3. Workers and employees in new business price index
enterprises outside the National Capital 4. The Prevailing wage levels
Region and export processing zones for a 5. Effects on employment generation and
period of not more than two or three years, family income
as the case may be, from the start of 6. The Cost of living and changes or increases
operations when exempted (R.A. No. 6727) 7. Fair Return of the capital invested and
capacity to pay of employers
In addition to setting the minimum wage, the 8. The need to induce Industries to invest in
RTWPB can provide additional exemptions since it the countryside
is vested with the competence to determine the 9. The Equitable distribution of income and
industries and sectors to exempt from the coverage wealth along the imperatives of economic
of their wage orders. (National Wages and
and social development
Productivity Commission (NWPC) and the Regional 10. The Demand for living wages (Labor Code,
Tripartite Wages and Productivity Board (RTWPB) Art. 124)
vs. Alliance of Progressive Labor (APL) and the
Tunay na Nagkakaisang Manggagawa sa Royal Appeal
(TNMR), G.R. No. 150326, 2014) A party aggrieved by a Wage Order may appeal to
the NWPC not later than 10 days from the date of
Effectivity of Wage Orders
the publication of the order (NWPC Guidelines No.
Takes effect after 15 days from its complete 001- 95, Sec. 1, Rule V)
publication in at least one newspaper of general
circulation in the region. (NWPC Guidelines No. Effect of Appeal
001- 95, Sec. 4, Rule IV)
General Rule: Appeal does not stay the effect of the
Public Hearings and Consultations Mandatory wage order
Notice must be given to employees’ and employers’
groups, provincial, city and municipal officials and Exception: Unless the party appealing such order
other interested parties. shall file with the NWPC an undertaking with a
A wage order issued without the required public surety/sureties (surety bond) satisfactory to the
consultation and newspaper publication is null and Commission for payment to employees affected by
void.

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the order for the corresponding increase, in the A. Correction of Wage Distortion
event that such order is affirmed (IRR of R.A. No. In case of an ORGANIZED
6727, Sec. 5, Rule V) establishment
1. Employer and union shall negotiate to
Doctrine of Double Indemnity correct the distortion
Payment to a concerned employee of the prescribed 2. Any dispute arising should be resolved
increase or adjustments in the wage rate which was through grievance procedure under CBA
not paid by an employer in an amount equivalent to If dispute remains unresolved, through
twice the unpaid benefits owing to such employee voluntary arbitration (Labor Code, Art.
(D.O. No. 10, Sec. 2[1] [1998]) 124)
B. In case of an UNORGANIZED
e. Wage Distortion establishment
1. The employer and employees shall
Definition of Wage Distortion endeavor to correct the distortion
A situation where an increase in prescribed wage 2. Any dispute shall be settled through
rates results in the elimination or severe contraction National Conciliation and Mediation Board
of intentional quantitative differences in wage or (NCMB)
salary rates between and among employee groups 3. If remains unresolved after 10 days of
in an establishment as to effectively obliterate the conciliation, it shall be referred to the NLRC
distinctions embodied in such wage structure based (Labor Code, Art. 124)
on skills, length of service or other logical basis of
differentiation. (Labor Code, Art. 124) Note: Any issue involving wage distortion is not a
valid ground for a strike or a lockout. (Ilaw at Buklod
Simply, if the pay advantage of a position over ng Manggagawa, G.R. No. 91980, 1991)
another is removed or significantly reduced by a pay
adjustment required by a wage order, such pay Amount of Distortion Adjustment
advantage should be restored. Manila Mandarin The restoration of the previous pay advantage is the
Employees Union v. NLRC, (G.R. No. 108556, aim but not necessarily to the last peso. Restoration
1996) of appreciable differential, a significant pay gap,
should suffice as correction.
For a distortion to exist, the law does not require an
elimination or total abrogation of quantitative wage Suggested Formula to Correct a Salary
or salary difference; a severe contraction thereof is Distortion
enough. (MBTC Employees Union-ALU-TUCP v. Minimum Wage = % x Actual Salary Prescribed
NLRC, G.R. No. 102636, 1993) Increase
Wage distortion involves comparison of jobs located The distortion that should be rectified refers to
in the same region. Examination of alleged salary distortion arising from compliance with a
distortion is limited to jobs or positions in the same government wage order. It does not refer to
employer in the same region; thus, the comparison distortion caused by salary revisions voluntarily
of salaries has to be intra-region, not inter-region. initiated by the employer unless such a duty exists
(Prubankers Association v. Prudential Bank and because of a CBA stipulation or company practice.
Trust Co., G.R. No. 131247, 1999) (Bankard Employees Union – WATU v. NLRC, G.R.
No. 140689, 2004)
Elements of Wage Distortion:
1. An existing hierarchy of positions with CBA vis-à-vis Wage Orders – CBA Creditability
corresponding salary rates. The provisions of the CBA should be read in
2. A significant change in the salary rate of a harmony with the wage orders, whose benefits
lower pay class without a concomitant should be given only to those employees covered
increase in the salary rate of a higher one. thereby. (P.I. Manufacturing, Inc., v. P.I.
3. The elimination of the distinction between Manufacturing Supervisors and Foreman Ass’n and
the two levels. the NLRC, G.R. No. 167217, 2008).
4. The existence of the distortion in the same
region of the country. (Alliance Trade Summary of Principles on Wage Distortion (NFL
unions v. NLRC, G.R. No. 140689, 2004) v. NLRC, G.R. No. 103586, 1994)

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The concept of wage distortion assumes an existing 9. Effects on employment generation and
grouping or classification of employees which family income
establishes distinctions among such employees on 10. The equitable distribution of income and
some relevant or legitimate basis. This classification wealth along the imperatives of economic
is reflected in a differing wage rate for each of the and social development (Labor Code, Art.
existing classes of employees. 124)
Wage distortions have often been the result of Two Methods of fixing the minimum wage rate.
government-decreed increases in minimum wages.
There are, however, other causes of wage 1. Floor Wage Method
distortions (such as merger). Method which involves the fixing of a determinate
amount to be added to the prevailing statutory
Should a wage distortion exist, there is no legal minimum wage rates.
requirement that the gap which had been previously
existed be restored in precisely the same amount. 2. Salary Cap Method
Correction of a wage distortion may be done by re- Method where the wage adjustment is to be applied
establishing a substantial or significant gap (as to employees receiving a certain denominated
distinguished from the historical gap) between the salary ceiling. In other words, workers already being
wage rages of the differing classes of employees. paid more than the existing minimum wage (up to a
certain amount stated in the Wage Order) are also
The re-establishment of a significant wage to be given a wage increase. (Employers
difference may be done through the grievance Confederation of the Philippines v. National Wages
procedure or collective bargaining negotiations. and Productivity Commission, G.R. No. 96169,
1991).
f. Minimum Wage Law Pursuant to its authority, the Regional Wage Boards
may issue wage orders which set the daily minimum
wage rates. It has no authority to grant an across-
Current Minimum Wage the-board wage increase. (Metropolitan Bank and
PhP 570 (Wage Order No. NCR-23) Trust Company v. NWPC, 2007)
PhP 570 is the minimum wage for the non-
Agricultural Sector.
g. Holiday Pay
Right to Holiday Pay

Standards/Criteria for minimum wage fixing
Holiday pay refers to the payment of the regular
The regional minimum wages to be established by
daily wage for any unworked regular holiday.
the Regional Board shall be as nearly adequate as
(Handbook on Workers’ Statutory Monetary
is economically feasible to maintain the minimum
Benefits, Bureau of Working Conditions, p. 12,
standards of living necessary for the health,
2016)
efficiency and general well-being of the employees
within the framework of the national economic and
Coverage:
social development program.
General Rule: Applies to ALL employees.
In the determination of such regional minimum
Exceptions:
wages, the Regional Board shall, among other
1. Those of the government and any of the
relevant factors, consider the following:
political subdivision, including government-
1. The demand for living wages;
owned and controlled corporation;
2. Wage adjustment vis-à-vis the consumer
2. Those of retail and service establishments
price index
regularly employing less than ten (10)
3. The cost of living and changes or increases
workers;
therein
3. Domestic helpers and persons in the
4. The needs of workers and their families
personal service of another;
5. The need to induce industries to invest in
4. Managerial employees as defined in Book
the countryside
Three of the Code;
6. Improvements in standards of living
5. Field personnel and other employees
7. The prevailing wage levels
whose time and performance is
8. Fair return of the capital invested and
unsupervised by the employer including
capacity to pay of employees
those who are engaged on task or contract

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basis, purely commission basis, or those Computation of 13th month pay

who are paid a fixed amount for performing 13th Month Pay = 1/12th of the basic salary of an
work irrespective of the time consumed in employee within a calendar year.
the performance thereof (IRR Labor Code,
Sec. 1, Rule IV, Book III) Basic Salary
INCLUDES:
h. 13th Month Pay All remunerations or earnings paid by an employer
to an employee for services rendered
Governing Laws
P.D. No. 851 (The 13th-month Pay Law) and the DOES NOT INCLUDE:
Revised Guidelines on the Implementation of the 1. Cost of living allowances (COLA),
13th Month Pay Law 2. Profit-sharing payments and
3. All allowances and monetary benefits (e.g.
Coverage: unused VL and sick leave credits, OT
All employers are required to pay all their rank-and- premium, night differential and holiday pay)
file employees, a 13th month pay not later than which are not considered or integrated as
December 24 of every year, provided that they have part of the regular or basic salary of the
worked for at least 1 month during a calendar year. employee. However, the above should be
included in the computation if by individual
Exempted employers: or collective agreement, company practice
1. Government and any of its political or policy.
subdivisions, including GOCCs, except
those corporations operating essentially as Time of Payment
private subsidiaries of the Government; The thirteenth-month pay shall be paid not later than
2. Employers already paying their employees December 24 of every year. An employer, however,
13th month pay or more in a calendar year may give to his or her employees one-half (1/2) of
or its equivalent at the time of issuance of the thirteenth-month pay before the opening of the
PD 851 regular school year and the remaining half on or
o “Its equivalent” – includes before December 24 of every year.
Christmas bonus, mid-year
bonus, cash bonuses and The frequency of payment of this monetary benefit
other payments amounting to may be the subject of an agreement between the
not less than 1/12 of the basic employer and the recognized/collective bargaining
salary but shall not include agent of the employees.
cash and stock dividends,
COLA and all other 13th Month Pay for Certain Types of Employees
allowances regularly enjoyed 1. Employees paid by results – entitled to 13th
by the employee as well as month pay
non-monetary benefits. 2. Those with Multiple Employers – entitled to
3. Employers of household helpers and the 13th month pay from all their private
persons in the personal service of another employers regardless of their total earnings
in relation to such workers from each or all of their employers
4. Employers of those who are paid on 3. Private School Teachers – entitled
commission, boundary, or task basis, and regardless of the number of months they
those who are paid a fixed amount for teach or are paid within a year, if they have
performance of a specific work, irrespective rendered service for at least 1 month within
of the time consumed in the performance a year.
thereof
13th Month Pay of Resigned or Separated
Exception: where the workers are paid on a piece- Employee
rate basis, in which case the employer shall grant Employee is entitled to the benefit in proportion to
the required 13th month pay to such workers. the length of time he worked during the year,
• Piece Rate – employees who are paid a reckoned from the time he started working during
standard amount for every piece or unit of the calendar year up to the time of his resignation or
work produced that is more or less regularly termination from the service. Can be demanded by
replicated, without regard to the time spent the employee upon the cessation of EER.
in producing the same.
Non-inclusion in Regular Wage

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Benefit need not be credited as part of regular wage Employers who are already paying their employees
a 13 month pay “or its equivalent” are not covered
th
of employees for purposes of determining OT pay
and premium pays, fringe benefits as well as by the decree.
contributions to the state insurance fund, Social
Security, Medicare, and private retirement plans. Note: “Equivalent” includes:
a) Christmas bonus, mid-year bonus, cash bonuses;
Nature of 13th month pay b) and Other payments amounting to not less than
All employers are hereby required to pay all their 1/12 of the basic salary;
employees receiving a basic salary of not more than c) But shall not include cash and stock dividends,
P1,000 a month, regardless of the nature of their cost of living allowances, and all other allowances
employment, a 13th-month pay not later than regularly enjoyed by the employee as well as non-
December 24 of every year. (P.D. No. 851, Sec. 1) monetary benefits (IRR P.D. 851, Sec. 3[e])
The payment of a thirteenth-month pay is a statutory An employer is not obliged to give a 13th month
grant, and compliance therewith is mandatory. The salary in addition to other bonuses stipulated in a
benefit is deemed written in every CBA. CBA amounting to more than a month’s pay. (See
Brokenshire Memorial Hospital Inc., v. NLRC, G.R.
Food and other material things are not substitute for No. L-69741, 1986)
th
13 month pay.
th
In Relation to Collective Bargaining Agreements
Proportionate 13 month pay accrues to employees and Employer-Employee Agreements
who worked only for a period of less than twelve Nothing in the Rules shall prevent the employer and
months in a given year. employee from entering into any agreement with
th
terms more favorable to the employees than those
Note: 13 month pay is a non-strike able issue. granted therein, or be used to diminish any benefit
th
granted to the employees under existing laws,
Commissions vis-à-vis 13 month pay agreement AND voluntary employer practice. (Sec.
If the commissions may be properly considered part 6, Rule VI, Book 3, IRR)
of the basic salary – included in computing the 13
th
month pay The rule is without prejudice to existing, future

collective bargaining agreements. (Sec. 7, Rule VI,
If the commissions are not part of basic salary – Book 3, IRR)
excluded.
In Boie-Takeda Chemicals v. Hon. Laserna (GR No.

3. Leaves
92174, 1993) we note that productivity bonuses are
generally tied to the productivity, or capacity for a. Service Incentive Leave
revenue production, of a corporation; such bonuses
closely resemble profit-sharing payments and have Right To Service Incentive Leave Definition:
no clear director necessary relation to the amount of Every employee who has rendered at least 1 year of
work actually done by each individual employee. service shall be entitled to a yearly service incentive
More generally, a bonus is an amount granted and leave of 5 days with pay. (Labor Code, Art. 95)
paid ex gratia to the employee; its payment
constitutes an act of enlightened generosity and Coverage:
self- interest on the part of the employer, rather than This benefit applies to all employees,
as a demandable or enforceable obligation.
EXCEPT:
In principle, where these earnings and remuneration 1. Government employees, whether
are closely akin to fringe benefits, overtime pay or employed by the National Government or
profit-sharing payments, they are properly excluded any of its political subdivisions, including
in computing the 13th month pay. However, sales those employed in government-owned
commissions which are effectively an integral and/or controlled corporations with original
portion of the basic salary structure of an employee, charters or created under special laws;
shall be included in determining his 13th month pay. 2. House helpers and persons in the personal
(Philippine Duplicators v. NLRC, GR No. 110068, service of another;
1995) 3. Managerial employees, if they meet all of
the following conditions.
a. Their primary duty is to manage
th
CBA vis-à-vis 13 month pay the establishment in which they

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are employed or of a department 4. That the SSS shall immediately reimburse

or subdivision thereof; the employer of one hundred percent
b. They customarily and regularly (100%) of the amount of maternity benefits
direct the work of two or more advanced to the female worker by the
employees therein; employer upon receipt of satisfactory and
c. They have the authority to hire or legal proof of such payment*; and
fire other employees of lower rank;
or their suggestions and *Sec. 4, Rule VI of the IRR of RA 11210
recommendations as to hiring, provides that the reimbursement is “...only
firing, and promotion, or any other to the extent of one hundred percent
change of status of other (100%) of her average daily salary credit for
employees are given particular one hundred five (105) days, one hundred
weight. twenty (120) days or sixty (60) days, as the
4. Field personnel and those whose time and case may be…” Furthermore, Sec. 5
performance is unsupervised by the provides that the employer shall bear any
employer; difference between the worker’s actual
5. Those already enjoying this benefit; salary and the applicable SSS maternity
6. Those enjoying vacation leave with pay of benefits.
at least five (5) days; and
7. Those employed in establishments 5. That if a female worker should give birth or
regularly employing less than ten (10) suffer a miscarriage or emergency
employees. (IRR Labor Code, Sec. 1, Rule termination of pregnancy without the
V, Book III) required contributions having been remitted
for her by her employer to the SSS, or
Meaning of “at least 1 year of service” without the latter having been previously
Service for not less than 12 months, whether notified by the employer of the time of the
continuous or broken reckoned from the date the pregnancy, the employer shall pay to the
employee started working SSS damages equivalent to the benefits
which said female member would
b. Maternity Leave otherwise have been entitled to. (RA
11210, Sec. 5a)
105-Day Expanded Maternity Leave Law
A female Social Security System (SSS) member In case the employee qualifies as a solo parent
who has paid at least three (3) monthly contributions under the Solo Parents’ Welfare Act, the employee
in the twelve (12)-month period immediately shall be paid an additional maternity benefit of 15
preceding the semester of her childbirth, days. (RA 11210, Sec. 5a)
miscarriage, or emergency termination of
pregnancy shall be granted one hundred five (105) An additional maternity leave of 30 days, without
days maternity leave with full pay, regardless of pay, can be availed of, at the option of the female
whether she gave birth via caesarian section or worker, provided:
natural delivery. 1. That the employer shall be given due
notice, in writing, at least 45 days before the
Conditions for entitlement: end of her maternity leave;
1. That the female worker shall have notified 2. That no prior notice shall be necessary in
her employer of her pregnancy and the the event of a medical emergency but
probable date of her childbirth, which notice subsequent notice shall be given to the
shall be transmitted to the SSS in head of the agency. (RA 11210, Sec. 5b)
accordance with the rules and regulations it
may provide; Workers availing of the maternity leave period and
2. That the full payment shall be advanced by benefits must receive their full pay. Employers from
the employer within thirty (30) days from the the private sector shall be responsible for payment
filing of the maternity leave application; of the salary differential between the actual cash
3. That payment of daily maternity benefits benefits received from the SSS by the covered
shall be a bar to the recovery of sickness female workers and their average weekly or regular
benefits provided under Republic Act No. wages, for the entire duration of the maternity leave,
1161, as amended, for the same period for except:
which daily maternity benefits have been 1. Those operating distressed
received; establishments; Those retail/service

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establishments and other enterprises Certified true copy of death certificate or

employing not more than 10 workers; medical certificate or abstract is provided to
2. Those considered as micro-business employers
enterprises and engaged in the production,
processing, or manufacturing of products or SSS-covered female workers
commodities including agro-processing, • SSS shall pay the amount of maternity
trading, and services, whose total assets benefit corresponding to the period
are not more than Three million pesos transferred
(₱3,000,000.00); and • Female worker AND father OR alternate
3. Those who are already providing similar or caregiver must notify employer the option
more than the benefits herein provided. to allocate inclusive of dates
(RA 11210, Sec. 5c) • If transferred to an alternate caregiver, he
or she shall be granted a paid leave
Notes: Women in the military, police, and other equivalent to 1-7 days, continuous or
services shall be entitled to leave benefits such as
intermittent
maternity leave, as provided for by existing laws
(Magna Carta of Women, Sec. 15)
Female workers in public sector
It is not necessary that the woman be impregnated • Must submit a written notice to the head of
by her legitimate husband. It is immaterial who the agency or the head of agency’s authorized
father is. representative, with application for
maternity leave
Every pregnant woman in the private sector, • If transferred, excused from work but
whether married or unmarried, is entitled to the considered as a leave without pay within a
maternity leave benefits. period not later than the period of the
maternity leave availed of
Note: Transferability of maternity leave to a
secondary caregiver c. Paternity Leave
Allocation of Maternity Leave Credits (Sec. 1, Rule
VIII, RA 11210 IRR) Definition:
• Up to 7 days of Maternity Leave benefits of Paternity Leave refers to the benefits granted to a
a female worker may, at her option, be married male employee allowing him not to report
transferred to the following: for work for seven (7) days but continues to earn the
o Child’s Father (married or not); or compensation therefor, on the condition that his
o Upon election of the mother, spouse has delivered a child or suffered a
Alternate Caregiver (in case of miscarriage for purposes of enabling him to
death, absence, or incapacity of effectively lend support to his wife in her period of
the child’s father) who may be: recovery and/or in the nursing of the newly-born
child. (R.A. No. 8187, Sec. 3)
▪ Relative within fourth
degree of consanguinity;
Coverage
or
Paternity Leave is granted to all married male
▪ Current partner, employees in the private sector, regardless of their
regardless of sexual employment status (e.g., probationary, regular,
orientation or gender contractual, project basis).
identity
Government employees are also entitled to the
• Not applicable and available in case of paternity leave benefit. They shall be governed by
miscarriage, or emergency termination of the Civil Service rules.
pregnancy.
Conditions to entitlement:
1. A married male employee at the time of
• In case of death or permanent incapacity of delivery of his child;
female worker, balance of maternity leave 2. Cohabiting with his spouse at the time she
credits shall accrue to the secondary gives birth or suffers a miscarriage;
caregivers, provided: 3. Applied for paternity leave within a
reasonable period from the expected date
o Not yet been commuted to cash, if of delivery by the pregnant spouse, or
applicable; and within such period as may be provided by

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company rules or by CBA; provided that 5. A parent left alone with the responsibility of
prior application is not required in case of parenthood because his spouse
miscarriage; abandoned him for at least one year.
4. Wife has given birth or suffered a 6. A parent left solo or alone with the
miscarriage. responsibility of parenthood because his
5. Where a male employee is already spouse is detained or is serving sentence
enjoying the paternity leave benefits by for a crime for at least one year.
reason of contract, company policy or CBA, 7. An unmarried mother or father who has
the greater benefit prevails. preferred to keep and rear the child himself,
instead of having others care for them or
Application for Paternity Leave give up to a welfare institution.
The male employee applying for paternity leave 8. Solely provides parental care and support
shall notify his employer of the pregnancy of his to a child or children.
legitimate spouse and the expected date of such 9. Assumes responsibility of head of the
delivery by the pregnant spouse, or within such family as a result of the death,
period as may be provided by company rules and abandonment, disappearance or prolonged
regulations or by collective bargaining agreement, absence of the children’s parents or solo
provided that prior application for leave shall not be parent.
required in case of miscarriage (IRR of R.A. No. 10. A victim of rape and/or other crimes against
8187 for the private sector, Sec. 4) chastity, have given birth to a child as a
result and have decided to keep and raise
Non-conversion to Cash his child. (R.A. No. 8972, Sec. 3[a])
In the event that the paternity leave is not availed of,
it shall not be convertible to cash and shall not be Children
cumulative. IRR of R.A. No. 8187, Sec. 7) 1. Those living with and dependent upon the
solo parent for support who are unmarried,
d. Solo Parent Leave (RA 8972, as unemployed and not more than 18 years of
amended by RA 11861) age; or
2. Those even over 18 years but are
Parental (Solo Parent Leave) incapable of self-support because of
Benefits granted to a solo parent to enable him/her mental and/or physical defect (R.A. No.
to perform parental duties and responsibilities where 8972, Sec. 3[e])
physical presence is required. The parental leave, in
addition to leave privileges under existing laws, shall Conditions to Entitlement
be for seven (7) work days every year, with full pay, 1. He/she has rendered at least 1 year of
consisting of basic salary and mandatory service, whether continuous or broken;
allowances fixed by the Regional Wage Board, if 2. He/she has notified his/her employer of the
any, provided that his/her pay shall not be less than availment thereof within a reasonable
the mandated minimum wage. (IRR of R.A. No. period
8972, Sec. 6[g]) 3. He/she has presented a Solo Parent
Identification Card to his/her employer
Coverage: which may be obtained from the DSWD
Who are considered Solo Parents: office of the city or municipality where
1. A parent left alone with the responsibility of he/she resides (IRR of R.A. No. 8972, Sec.
parenthood because of death of one’s 19)
spouse.
2. A parent left alone with the responsibility of Availment
parenthood because of any physical and/or A parental leave of not more than 7 working days
mental incapacity of one’s spouse as every year shall be granted to any solo parent
certified by a public medical practitioner employee who has rendered service of at least 1
3. A parent left alone with the responsibility of year.
parenthood because one has legally
separated from his spouse or because they Non-Conversion to Cash
have been separated for at least one year Unused parental leave is not convertible to cash
and the child is in solo parent’s custody unless otherwise provided by the CBA. (IRR of R.A.
4. A parent left alone with the responsibility of No. 8972, Sec. 20)
parenthood because the marriage was
annulled by a court or a church decree, and Termination of the benefit
the child is in solo parent’s custody.

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A change in the status or circumstance of the parent to other paid leaves under the Labor Code, other
claiming benefits under this Act, such that he/she is laws and company policies.
no longer left alone with the responsibility of
parenthood, shall terminate his/her eligibility for Conditions to entitlement
these benefits. (R.A. No. 8972, Sec. 3[a]) 1. The employee has to submit a certification
from the Punong Barangay or Kagawad or
prosecutor or Clerk of Court that an action
e. Leave Benefits for Women under RA 9262 has been filed and is
Workers under Magna Carta of pending.
Women (RA 9710) and Anti- 2. The use of the 10-day leave is at the option
of the employee.
Violence Against Women and
3. It shall be used for the days that she need
their Children of 2004 (RA 9262) to attend to medical and legal concerns.
4. Leaves not availed of are non-cumulative
R.A. No. 9710 or the Magna Carta for Women and not convertible to cash.
A special leave benefit for women was granted
under R.A. No. 9710 (August 14, 2009). Women Availment
who qualify under R.A. No. 9710 are entitled to a Leave of up to ten (10) days in addition to other paid
special leave benefit of two (2) months with full pay leaves under the Labor Code, or other laws. (Sec.
based on her gross monthly compensation following 43, RA 9262)
surgery caused by gynecological disorders.
Conditions for Entitlement:

f. Compassionate Leaves
1. A woman employee must have rendered
continuous aggregate employment service Section 3 of the proposed “Bereavement Act of
of at least six (6) months for the twelve (12) 2022” defines bereavement leave as a leave taken
by an employee to grieve the death, or to attend or
months immediately prior to the surgery
2. She has filed an application for special plan for the funeral, of an immediate family member
leave with her employer within a such as an employee's spouse, parent, child,
brother, or sister, and relatives within the third
reasonable period of time from the
expected date of surgery or within such degree of consanguinity or affinity. (House Bill No.
period as may be provided by company 2345)
rules and regulations or collective
bargaining agreement; and This bill seeks to grant employees, both in private
3. She has undergone surgery due to and public sector, bereavement leave of ten days
gynecological disorders as certified by a with full pay. It shall allow the employee to take a
competent physician. leave from work to grieve and recover from the loss
without sacrificing his/her income
R.A. No. 9262 or the Anti-Violence Against
Women and their Children Act of 2004 4. Special Groups of
Violence against women and their children refers to Employees
any act or a series of acts committed by any person
against a woman who is his wife, former wife, or a. Women
against a woman with whom the person has or had
a sexual or dating relationship, or with whom he has Discrimination
a common child, or against her child whether Unlawful for any employer to discriminate against
legitimate or illegitimate, within or without the family any woman employee with respect to terms and
abode, which will result in or is likely to result in conditions of employment solely on account of her
physical, sexual, psychological harm or suffering, or sex (Labor Code, Art. 135)
economic abuse including threats of such acts,
battery, assault, coercion, harassment or arbitrary Acts of Discrimination
deprivation of liberty. (R.A. 9262 “Anti-Violence 1. Payment of a lesser compensation,
Against Women and Their Children Act of 2004”) including wage, salary or other form of
remuneration and fringe benefits, to a
Coverage: female employees as against a male
Allows the victim of violence, which may be physical, employee, for work of equal value
sexual, or psychological, to apply for the issuance of 2. Favoring a male employee over a female
a protection order. If such victim is an employee, she employee with respect to promotion,
is entitled to a paid leave of up to 10 days in addition training opportunities, study and

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scholarship grants solely on account of of relationship, already employed by the company.

their sexes
1. Person guilty of committing these ii) In case of two of our employees (both singles [sic],
acts are criminally liable under one male and another female) developed a friendly
Arts. 288-289 of the Labor Code relationship during the course of their employment
2. That the institution of any criminal and then decided to get married, one of them should
action under this provision shall resign to preserve the policy stated above.
not bar the aggrieved employee
from filing an entirely separate and 3. Duncan Association of Detailman-PTGWO v.
distinct action for money claims, Glaxo Welcome Philippines, Inc (G.R. No.
which may include claims for 162994, Sept. 17, 2004)
damages and other affirmative
reliefs. The actions hereby In this case, the prohibition against marriage
authorized shall proceed embodied in the following stipulation in the
independently of each other. employment contract was held as valid: “10. You
3. Favoring a male applicant with respect to agree to disclose to management any existing or
hiring where the particular job can equally future relationship you may have, either by
be handled by a woman; and consanguinity or affinity with co- employees or
4. Favoring a male employee over a female employees of competing drug companies. Should it
employee with respect to dismissal of pose a possible conflict of interest in management
personnel discretion, you agree to resign voluntarily from the
Company as a matter of Company policy.”
Stipulation Against Marriage
The Supreme Court ruled that the dismissal based
It shall be unlawful for the employer: on this stipulation in the employment contract is a
1. To require as a condition of employment or valid exercise of management prerogative. The
continuation of employment that a woman prohibition against personal or marital relationships
employee shall not get married; with employees of competitor companies upon its
2. To stipulate expressly or tacitly that upon employees was held reasonable under the
getting married, a woman employee shall circumstances because relationships of that nature
be deemed resigned or separated might compromise the interests of the company. In
3. To actually dismiss, discharge, discriminate laying down the assailed company policy, the
or otherwise prejudice a woman employee employer only aims to protect its interests against
merely by reason of her marriage (Labor the possibility that a competitor company will gain
Code, Art. 136) access to its secrets and procedures.
Jurisprudence: Stipulations on Marriage Bona fide occupational qualification exception

When the employer can prove that the reasonable
1. Philippine Telegraph and Telephone demands of the business require a distinction based
Company v. NLRC (G.R. No. 118978, 1997) on marital status and there is no better available or
acceptable policy which would better accomplish the
It was declared here that the company policy of not business purpose, an employer may discriminate
accepting or considering as disqualified from work against an employee based in the identity of the
any woman worker who contracts marriage runs employee’s spouse. (Star Paper Corp. vs. Simbol,
afoul of the test of, and the right against, G.R. No. 164774, 2006)
discrimination afforded all women workers by our
labor laws and by no less than the Constitution. The Court sustained the validity of employer policy
prohibiting an employee from having a personal or
2. Star Paper Corp. v. Simbol, (G.R. No. 164774, marital relationship with an employee of a
2006) competitor. The prohibition was reasonable under
the circumstances because relationships of such
The following policies were struck down as invalid nature might compromise the interests of the
for violating the standard of reasonableness which company. (Duncan Association of Detailmen v.
is being followed in our jurisdiction, otherwise called Glaxo Wellcome, G.R. no. 162994, 2004)
the “Reasonable Business Necessity Rule”:
Classification of Certain Women Workers
i) New applicants will not be allowed to be hired if in
case he/she has [a] relative, up to [the] 3rd degree Any woman who is permitted or suffered to work,
with or without compensation, in any night club,

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cocktail lounge, massage clinic, bar or similar normal development;

establishments under the effective control or and
supervision of the employer for a substantial period • the parent/legal
of time as determined by the Secretary of Labor and guardian provides the
Employment, shall be considered as an employee child with
of such establishment for purposes of labor and primary/secondary
social legislation. (Labor Code, Art. 138) education
2. When the child’s employment
Prohibited Acts or participation in public
entertainment or information
Art. 137 Prohibited Acts (DEP-R-TeC) through cinema, theater, radio
or television is essential,
It is unlawful for any employer: provided that:
1. To Deny any woman the benefits provided • the employment
for under the Code contract is concluded
2. To discharge any woman employed by him by the child’s
for the purpose of preventing such woman parents/legal guardian,
from Enjoying the maternity leave, facilities with the express
and other benefits provided under the Code agreement of the child
3. To discharge such woman employee on concerned, if possible,
account of her Pregnancy, or while on leave and the approval of the
or in confinement due to her pregnancy DOLE
(Del Monte v. Velasco, G.R. No. 153477 • the following
(March 6, 2007). requirements complied
4. To discharge or refuse the admission of with:
such woman upon Returning to her work for a. employer shall
fear that she may be pregnant ensure
5. To discharge any woman or child or any protection,
other employee for having filed a complaint health, morals,
or having Testified or being about to testify and normal
under the Code development of
6. To require as a Condition for a continuation the child
of employment that a woman employee b. employer shall
shall not get married or to stipulate institute
expressly or tacitly that upon getting measures to
married, a woman employee shall be prevent child’s
deemed resigned or separated, or to exploitation /
actually dismiss, discharge, discriminate or discrimination
otherwise prejudice a woman employee taking into
merely by reason of her marriage account the
system and
b. Minors level of
remuneration,
Allowable work for minors duration, and
Below 15 NOT employable, EXCEPT: arrangement of
1. When the child works directly working time
under the sole responsibility c. employer shall
of his/her parents/legal formulate and
guardian and where only implement a
members of his/her family are continuing
employed, under the ff. program for
conditions: training and
• employment does not skills
endanger the child’s acquisition of
life, safety, health and the child,
morals subject to
• employment does not approval
impair the child’s supervision of

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competent 4. Work which by its nature or the

authorities (as circumstances in which it is carried out is
amended by RA hazardous or likely to be harmful to the
9231) health, safety, or morals of children (Sec. 3)
In these two cases: employer c. Kasambahay

must first secure a work permit
from the DOLE before engaging Coverage
the child This Act applies to all domestic workers employed
and working within the country.
15 - ALLOWED ONLY in: non-
Below 18 hazardous or non-deleterious Definition
undertakings
Domestic worker or “Kasambahay” refers to any
“Hazardous Workplaces” person engaged in domestic work within an
1. Nature of the work employment relationship such as, but not limited to,
exposes the workers to the following: general househelp, nursemaid or
dangerous environmental “yaya”, cook, gardener, or laundry person, but shall
elements, contaminants exclude any person who performs domestic work
or work conditions only occasionally or sporadically and not on an
2. Workers are engaged in occupational basis. (R.A. No. 10361, Sec. 2[d])
construction work,
logging, fire-fighting, Benefits accorded to househelpers
mining, quarrying,
blasting, stevedoring, Rights and privileges of domestic worker:
dock- work, deep sea 1. The domestic worker shall not be subjected
fishing, and mechanized to any kind of abuse or any form of physical
farming violence or harassment or any act tending
3. Workers are engaged in to degrade his or her dignity.
the manufacture or 2. The employer shall provide for the basic
handling of explosives necessities of the domestic worker to
and other pyrotechnic include at least three (3) adequate meals a
products day and humane sleeping arrangements
4. Exposed to or use of that ensure safety.
heavy power-driven 3. Respect for the privacy of the domestic
machinery or equipment worker shall be guaranteed at all times and
5. Workers use or are shall extend to all forms of communication
exposed to power-driven and personal effects.
tools 4. The employer shall grant the domestic
worker access to outside communication
during free time.
Employment of the child in public entertainment 5. The employer shall afford the domestic
(please refer to the table above) worker the opportunity to finish basic
education and may allow access to
Prohibition on the employment of children in alternative learning systems and, as far as
certain undertaking and certain advertisements practicable, higher education or technical
and vocational training.
NO CHILD shall be employed as a model in any 6. All communication and information
advertisement directly/indirectly promoting alcoholic pertaining to the employer or members of
beverage, intoxicating drinks, tobacco and its the household shall be treated as privileged
byproducts, gambling or any form of violence or and confidential, and shall not be publicly
pornography. (Sec. 5) disclosed by the domestic worker during
and after employment.
Prohibition against worst forms of child labor
“Worst forms of child labor”: Employment contract
1. All forms of slavery
2. Prostitution An employment contract shall be executed by and
3. Production and trafficking of dangerous between the domestic worker and the employer
drugs and prohibited volatile substances before the commencement of the service in a

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language or dialect understood by both parties and (PhilHealth), and the Home Development
shall include the following: Mutual Fund or Pag-IBIG, and shall be
1. the kasambahay's duties and entitled to all the benefits in accordance
responsibilities with the pertinent provisions provided by
2. period of employment law.
3. compensation • Premium payments or contributions shall
4. authorized deductions be shouldered by the employer. However,
5. working conditions if the domestic worker is receiving a wage
6. Termination of employment of P5,000.00 and above per month, the
7. any other lawful condition agreed upon by domestic worker shall pay the
both parties. (Sec. 11) proportionate share in the premium
payments or contributions.
Note: A kasambahay assigned to work in a
commercial, industrial or agricultural enterprise, will Termination of Employment
be entitled to the applicable minimum wage for
agricultural or non-agricultural workers. A. Initiated by the domestic worker
1. Verbal or emotional abuse of the domestic
Pre-employment requirements: worker by the employer or any member of the
1. Medical certificate or a health certificate issued by household
a local government health officer 2. Inhuman treatment including physical abuse of
2. Barangay and police clearance the domestic worker by the employer or any
3. NBI clearance member of the household
4. Duly authenticated birth certificate or if not 3. Commission of a crime or offense against the
available, any other document showing the age of domestic worker by the employer or any
the domestic worker such as voter’s identification member of the household
card, baptismal record or passport. (Sec. 12) 4. Violation by the employer of the terms and
conditions of the employment contract and
Terms and conditions of employment other standards set forth under this law
1. Minimum Wage 5. Any disease prejudicial to the health of the
• Those employed in the National domestic worker, the employer, or member/s of
Capital Region – P6,000 a month the household
• Those employed in chartered cities and first 6. Other causes analogous to the foregoing
class municipalities – Between P4,000 - (Sec.32)
P5,500 a month depending on the region
• Those employed in other municipalities – Note: If the domestic worker leaves without
Between P3,500 - P5,000 a month justifiable reason, any unpaid salary due not
depending on the region exceeding the equivalent 15 days work shall be
2. Rest period forfeited. In addition, the employer may recover from
• Daily rest period – aggregate of 8 hours per the domestic worker costs incurred related to the
day deployment expenses, provided that the service has
• Weekly rest period - at least 24 consecutive been terminated within 6 months from the domestic
hours of rest in a week worker’s employment.
3. Thirteenth month pay
B. Initiated by the employer
• The domestic worker is entitled to 13th 1. Misconduct or willful disobedience by the
month pay as provided for by law
domestic worker of the lawful order of the
4. Leave benefits employer in connection with the former’s work
• A domestic worker who has rendered at 2. Gross or habitual neglect or inefficiency by the
least 1 year of service shall be entitled to an domestic worker in the performance of duties
annual service incentive leave of 5 days 3. Fraud or willful breach of the trust reposed by
with pay. Any unused portion of said annual the employer on the domestic worker
leave shall not be cumulative or carried 4. Commission of a crime or offense by the
over to the succeeding years. Unused domestic worker against the person of the
leaves shall not be convertible to cash. employer or any immediate member of the
5. Social and other benefits employer’s family
• A domestic worker who has rendered at 5. Violation by the domestic worker of the terms
least 1 month of service shall be covered by and conditions of the employment contract and
the Social Security System (SSS), the other standards set forth under this law
Philippine Health Insurance Corporation

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6. Any disease prejudicial to the health of the thereafter to be returned or to be disposed

domestic worker, the employer, or member/s of of or distributed in accordance with his
the household directions
7. Other causes analogous to the foregoing (Sec. • Sells any goods, articles or materials to be
34) processed or fabricated in or about a home
and then re-buys them after such
Reliefs for unjust termination processing or fabrication, either by himself
If the domestic worker is unjustly dismissed, the or through some other person (D.O. No. 05-
domestic worker shall be paid the compensation 92)
already earned plus the equivalent of 15 days work
by way of indemnity. Rights and benefits accorded to homeworkers
Penalties
Any violation of R.A. No. 10391 declared unlawful Immediately upon receipt of the finished goods or
shall be punishable with a fine of not less than Ten articles, the employer shall pay the homeworker of
thousand pesos (P10,000.00) but not more than the contractor or subcontractor, as the case may be,
Forty thousand pesos (P40,000.00) without for, the work performed less corresponding
prejudice to the filing of appropriate civil or criminal homeworkers’ share of SSS, MEDICARE AND ECC
action by the aggrieved party. premium contributions which shall be remitted by
the contractor/subcontractor or employer to the SSS
d. Homeworkers with the employer’s share. However, where
payment is made to a contractor or subcontractor,
Definition the homeworker shall likewise be paid immediately
after the goods or articles have been collected from
Homeworker the workers. (D.O. No. 05-92, Sec. 6)
Applies to any person who performs industrial Conditions for deductions from homeworker’s
homework for an employer, contractor or sub- earnings
contractor
No employee, contractor, or sub-contractor shall
Industrial Homework make any deduction from the homeworker's
earnings for the value of materials which have been
Industrial Homework is a system of production lost, destroyed, soiled or otherwise damaged unless
under which work for an employer or contractor is the following conditions are met:
carried out by a homeworker at his/her home. • The homeworker concerned is clearly
Materials may or may not be furnished by the shown to be responsible for the loss or
employer or contractor. It differs from regular factory damage;
production principally in that it is a decentralized • The employee is given reasonable
form of production where there is ordinarily very little opportunity to show cause why deductions
supervision or regulation or methods of work. (D.O. should not be made;
No. 05-92, Sec. 2[a]) • The amount of such deduction is fair and
reasonable and shall not exceed the actual
Industrial Homeworker loss or damages; and
• The deduction is made at such rate that the
System of production under which work for an amount deducted does not exceed 20% of
employer or contractor is carried out by a the homeworker's earnings in a week.
homeworker at his/her home. Materials may or may
not be furnished by the employer or contractor
Liability of employer and contractor
Whenever an employer shall contract with another
Employer of Homeworker for the performance of the employer's work, it shall
be the duty of such employer to provide in such
Includes any person, natural or artificial who, for his contract that the employees or homeworkers of the
account or benefit, or on behalf of any person contractor and the latter's sub-contractor shall be
residing outside the country, directly or indirectly, or paid in accordance with the provisions of this Rule.
through an employee, agent contractor, sub- In the event that such contractor or sub-contractor
contractor or any other person: fails to pay the wages or earnings of his employees
• Delivers, or causes to be delivered, any or homeworkers, such employer shall be jointly and
goods, articles or materials to be processed severally liable with the contractor or sub-contractor
or fabricated in or about a home and

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to the workers of the latter, to the extent that such transmitted to others without the workers’ consent
work is performed under such contract, in the same and shall not be used to their detriment.
manner as if the employees or homeworkers were
directly engaged by the employer. Mandatory Facilities
Prohibitions for Homework Suitable first-aid facilities shall be made available for
1. Explosives, fireworks and articles of like workers performing night work, including
character arrangements where such workers, where
2. Drugs and poisons necessary, can be taken immediately to a place for
3. Other articles, the processing of which requires appropriate treatment. The employers are likewise
exposure to toxic substance required to provide safe and healthful working
conditions and adequate or reasonable facilities
e. Night Workers such as sleeping or resting quarters in the
establishment and transportation from the work
R.A. No. 10151 premises to the nearest point of their residence
subject to exceptions and guidelines to be provided
An Act Allowing the Employment of Night Workers, by the DOLE.
Thereby Repealing Articles 130 and 131 of
Presidential Decree Number Four Hundred Forty- Transfer
Two, as amended, otherwise known as the Labor
Code of the Philippines, 2011 Night workers who are certified as unfit for night
work, due to health reasons, shall be transferred,
This new Republic Act provides that women can whenever practicable, to a similar job for which they
now work on night time. are fit to work. If such transfer to a similar job is not
practicable, these workers shall be granted the
Coverage same benefits as other workers who are unable to
work, or to secure employment during such period.
All persons, who shall be employed or permitted or A night worker certified as temporarily unfit for night
suffered to work at night, except those employed in work shall be given the same protection against
agriculture, stock raising, fishing, maritime transport dismissal or notice of dismissal as other workers
and inland navigation, during a period of not less who are prevented from working for reasons of
than seven (7) consecutive hours, including the health.
interval from midnight to five o’clock in the morning,
to be determined by the Secretary of Labor and Compensation
Employment, after consulting the workers’
representative/labor organizations and employers. The compensation for night workers in the form of
working time, pay or similar benefits shall recognize
Night Worker means any employed person whose the exceptional nature of night work.
work requires performance of a substantial number
of hours of night work which exceeds a specified Social Services
limit. This limit shall be fixed by the Secretary of
Labor after consulting the workers’ Appropriate social services shall be provided for
representative/labor organizations and employers.” night workers and, where necessary, for workers
performing night work.
Health Assessment
At their request, workers shall have the right to Night Work Schedules
undergo a health assessment without charge and to
receive advice on how to reduce or avoid health Before introducing work schedules requiring the
problems associated with their work: services of night workers, the employer shall consult
a. Before taking up an assignment as a night the workers’ representatives/labor organizations
worker; concerned on the details of such schedules and the
b. At regular intervals during such an assignment; forms of organization of night work that are best
and adapted to the establishment and its personnel, as
c. If they experience health problems during such well as on the occupational health measures and
an assignment which are not caused by factors social services which are required. In
other than the performance of night work. establishments employing night workers,
consultation shall take place regularly.
With the exception of a finding of unfitness for night
work, the findings of such assessments shall not be CBA provision vis-à-vis overtime work

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For both, the normal ratio is one hundred

CBA may stipulate higher overtime pay rate. (100) hours for every two thousand 2,000
hours of practical or on-the-job training
The basis of computation of overtime pay beyond Competency-based system
that required by Art. 87 of the Labor Code must be
It is required that Not required
the collective agreement. It is not for the court to
impose upon the parties anything beyond what they learnership be
have agreed upon which is not tainted with illegality. implemented on the
On the other hand, where the parties fail to come to TESDA-approved
an agreement, on a matter not legally required, the competency-based
court abuses its discretion when it obliges any of system
them to do more than what is legally obliged. (PNB Duration of training
v. PNB Employee’s Assoc., G.R. No. L-30279, Not exceeding three More than three (3)
1982) (3) months of months, but not over
f. Apprentices and Learners practical training six (6) months
Qualifications
LEARNERS APPRENTICES Law does not Art. 59 of the Labor
1. Persons hired as 1. Practical training mention any Code:
trainees in semi- on the job qualification 1. Be at least fifteen
skilled and other 2. Supplemented (15) years of age;
industrial by related (IRR and R.A.
occupations 3. theoretical 7610, as
2. Non- 4. instruction amended by R.A.
apprenticeable 5. Covered by a 7658)
3. May be learned 6. Written 2. Possess
through practical apprenticeship vocational
training on the job agreement with aptitude and
in a relatively short an individual capacity for
period of time employer or appropriate tests;
4. Shall not exceed 3 entity and
months 7. Needs DOLE 3. Possess the
approval ability to
8. Shall not exceed comprehend and
6 months follow oral and
Training Agreement written
Governed by Apprenticeship instructions.
Learnership Agreement Circumstances justifying hiring of trainees
Agreement Art. 74. Pre- Law does not
Occupation requisites before expressly mention
learnable Apprenticeable learners may be any
occupations occupations or any validly employed:
consisting of semi- trade, form of 1. When no
skilled and other employment or experienced
industrial occupation approved workers are
occupations which for apprenticeship by available;
are non- the DOLE Secretary 2. The employment
apprenticeable of learners is
Theoretical instructions necessary to
Learnership may or Apprenticeship prevent
may not be should always be curtailment of
supplemented by supplemented by employment
related theoretical related theoretical opportunities;
instructions instructions and
Ratio of theoretical instructions and on 3. The employment
OJT does not create
unfair

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competition in The premises of one or several firms designated for

terms of labor the purpose by the organizer of the program if such
costs or impair organizer is an association of employers, civic
or lower working groups and the like.
standards
DOLE training center or other public training
Limitation on the number of trainees institutions with which the Bureau has made
In learnership, a No similar cap is appropriate arrangements.
participating imposed in the case
enterprise is allowed of apprenticeship Contents of Learnership Agreement
to take in learners Names and addresses of employer and learner
only up to a Occupation to be learned and the duration of the
maximum of twenty training period which shall not exceed 3 months
Wage of the learner which shall be at least 75% of
percent (20%) of its
the applicable minimum wage
total regular
Commitment to employ the learner, if he so desires,
workforce as a regular employee upon completion of training
Option to employ (Labor Code, Art. 75)
The enterprise is The enterprise is
obliged to hire the given only an “option” A learner who has worked during the first two
learner after the to hire the apprentice months shall be deemed a regular employee if
lapse of the as an employee. training is terminated by the employer before the
learnership period; end of the stipulated period through no fault of the
Wage rate learner.
The wage rate of a learner or an apprentice
is set at seventy-five percent (75%) of the SPECIAL CASES
statutory minimum wage. 1. Working scholars
No EER between students on one hand,
and schools, colleges or universities on the
Requisites for a Valid Apprenticeship
other, where:
1. Qualifications of apprentice are met
2. The apprentice earns not less than 75% of a. There is written agreement between them
under which the former agree to work for
the prescribed minimum salary
the latter in exchange for the privilege to
3. Apprenticeship agreement duly executed
and signed study free of charge
b. Provided, the students are given real
4. Apprenticeship program approved by the
opportunities, including such facilities as
sec. Of labor; otherwise, the apprentice
shall be deemed as a regular employee may be reasonable and necessary to finish
5. Period of apprenticeship not exceed 6 their chosen courses under such
agreement
months
2. Resident physicians in training
At the termination of the apprenticeship, the There is EER between resident physicians
employer is not required to continue the and the training hospital UNLESS:
employment. a. There is a training agreement
between them
Employer may not pay wage if the apprenticeship is: b. The training program is duly
A requirement for graduation accredited or approved by the
Required by the School appropriate government agency.
Required by the Training Program Curriculum
Requisite for Board examination g. Persons With Disabilities
Art. 63, Labor Code. Venue of Apprenticeship PERSONS WITH DISABILITY

Programs (R.A. No. 7277, as Amended by R.A. No. 9442)
The plant, shop, premises of the employer or firm
concerned if the apprenticeship program is Persons with Disability are those suffering from
organized by an individual employer or firm. restriction or different abilities, as a result of a
mental, physical or sensory impairment, to perform

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an activity in the manner or within the range 4. Duration of the employment (Labor Code,
considered normal for a human being. Art. 80)
Impairment refers to any loss, diminution or Equal Opportunity for Employment

aberration of psychological, physiological, or
anatomical structure or function. No disabled person shall be denied access to
opportunities for suitable employment. Qualified
Disability means: disabled employees shall be subject to same terms
a. A physical or mental impairment that and conditions of employment and the same
substantially limits one or more compensation, privileges, benefits, fringe benefits,
psychological, physiological or anatomical incentives or allowances as a qualified able-bodied
functions of an individual or activities of person
such individual;
b. Record of such an impairment; or What are the rights of PWDs?
c. Being regarded as having such an
impairment Under the law, PWDs are entitled to equal
opportunity for employment. Consequently, no PWD
Handicap refers to a disadvantage for a given shall be denied access to opportunities for suitable
individual, resulting from an impairment or a employment. A qualified employee with disability
disability that limits or shall be subject to the same terms and conditions of
prevents the function or activity that is considered employment and the same compensation,
normal given the age and sex of the individual. privileges, benefits, fringe benefits, incentives or
allowances as a qualified able-bodied person.
When Employable
1. their employment is necessary to prevent What is the wage rate of PWDs?
curtailment of employment opportunities;
2. does not create unfair competition in labor The wage rate of PWDs is 100% of the applicable
costs; and minimum wage.
3. does not impair or lower working standards.
What is the wage rate of PWD if hired as
Handicapped workers may be hired as apprentice or learner?
apprentices or learners if their handicap is not
such as to effectively impede the performance of job A PWD hired as an apprentice or learner shall be
operation in the particular position for which they are paid not less than seventy-five percent (75%) of the
hired. applicable minimum wage.
Handicapped Workers May Become Regular Discrimination on Employment
Employees – if their handicap is not such as to
effectively impede the performance of job What is the rule on discrimination against
operations in the particular occupations for which employment of PWDs?
they were hired.
No entity, whether public or private, shall
Rules on Handicapped Workers discriminate against a qualified PWD by reason of
Handicapped workers may be employed when: disability in regard to job application procedures, the
1. Their employment is necessary to prevent hiring, promotion, or discharge of employees,
curtailment of employment opportunities employee compensation, job training, and other
2. Does not create unfair competition in labor terms, conditions and privileges of employment. (RA
costs 7277, Sec. 32)
3. Does not impair or lower working
standards. (Labor Code, Art. 79) The following constitute acts of discrimination:
1. Limiting, segregating or classifying a job applicant
Employment Agreement; Contents with disability in such a manner that adversely
1. Names and addresses of the employer and affects his work opportunities;
the handicapped worker 2. Using qualification standards, employment tests
2. Rate of pay of the handicapped worker or other selection criteria that screen out or tend to
which shall not be less than 75% of the screen out a PWD unless such standards, tests or
legal minimum wage other selection criteria are shown to be job-related
3. Nature of work to be performed by the
handicapped worker

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for the position in question and are consistent with taxable income, equivalent to 50% of the direct
business necessity; costs of the improvements or modifications.
3. Utilizing standards, criteria, or methods of
administration that: 5. Sexual Harassment in the Work
4. Have the effect of discrimination on the basis of Environment
disability; or
5. Perpetuate the discrimination of others who are a. Sexual Harassment Act (R.A.
subject to common administrative control. 7877)
6. Providing less compensation, such as salary,
wage or other forms of remuneration and fringe Where Committed (WET)
benefits, to a qualified employee with disability, by 1. Working
reason of his disability, than the amount to which a 2. Education
non-disabled person performing the same work is 3. Training environment
entitled;
7. Favoring a non-disabled employee over a
Who Commits (MEE-PATIS-COT)
qualified employee with disability with respect to
1. Manager
promotion, training opportunities, study and 2. Employer
scholarship grants, solely on account of the latter’s 3. Employee
disability; 4. Professor
8. Re-assigning or transferring an employee with a 5. Agent of the employer
disability to a job or position he cannot perform by 6. Teacher
reason of his disability;
7. Instructor
9. Dismissing or terminating the services of an 8. Supervisor
employee with disability by reason of his disability 9. Coach
unless the employer can prove that he impairs the 10. Trainer
satisfactory performance of the work involved to the 11. Any Other person having authority,
prejudice of the business entity; provided, however, influence or moral ascendancy over
that the employer first sought to provide reasonable another (R.A. No. 7877, Sec. 3)
accommodations for persons with disability;
10. Failing to select or administer in the most How Committed
effective manner employment tests which
accurately reflect the skills, aptitude or other factor Person liable demands, requests, or otherwise
of the applicant or employee with disability that such requires any sexual favor from the other, regardless
tests purports to measure, rather than the impaired of whether the demand, request or requirement for
sensory, manual or speaking skills of such applicant submission is accepted by the latter.
or employee, if any; and
11. Excluding PWD from membership in labor It is not necessary that a demand, request or
unions or similar organizations. requirement of sexual favor be articulated in a
categorical oral or written statement. It may be
Incentives for Employers discerned, with equal certitude, from acts of the
offender. (Domingo v. Rayala, G.R. No. 155831,
To encourage the active participation of the private 2008).
sector in promoting the welfare of disabled persons
and to ensure gainful employment for qualified It is also not essential that the demand, request, or
disabled persons, adequate incentives shall be requirement be made as a condition for continued
provided to private entities which employ disabled employment or for promotion to a higher position. It
persons. is enough that the offender’s acts result in creating
an intimidating, hostile, or offensive environment for
Private entities that employ disabled persons who the employee. (Domingo v. Rayala, G.R. No.
met the required skills or qualifications, either as 155831, 2008)
regular employee, apprentice or learner, shall be
entitled to an additional deduction, from their gross Work-Related/Employment Environment, Sexual
income, equivalent to 25% of the total amount paid Harassment Committed When
as salaries and wages to disabled persons. 1. The sexual favor is made as a condition:
a. In hiring or in the employment,
Private entities that improve or modify their physical reemployment or continued employment of
facilities in order to provide reasonable said individual
accommodation for disabled persons shall also be
entitled to an additional deduction from their net

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b. In granting said individual favorable through the use of technology such as text
compensation, terms, conditions, messaging or electronic mail or through any other
promotions or privileges forms of information and communication systems;
c. The refusal to grant the sexual favor results (c) A conduct that is unwelcome and pervasive and
in limiting, segregating or classifying the creates an intimidating, hostile or humiliating
employee which in any way would environment for the recipient: Provided, That the
discriminate, deprive or diminish crime of gender-based sexual harassment may also
employment opportunities or otherwise be committed between peers and those committed
adversely affect said employee to a superior officer by a subordinate, or to a teacher
2. The above acts would impair the employee’s by a student, or to a trainer by a trainee; and
rights or privileges under existing labor laws.
3. The above acts would result in an intimidating, (d) Information and communication system refers to
hostile or offensive environment for the a system for generating, sending, receiving, storing
employee. (Sec. 3[a]) or otherwise processing electronic data messages
or electronic documents and includes the computer
Education or Training Environment, Sexual system or other similar devices by or in which data
Harassment Committed When are recorded or stored and any procedure related to
1. The sexual favor is made as a condition: the recording or storage of electronic data
2. The above acts would impair the employee’s messages or electronic documents. (RA 11313)
rights or privileges under existing labor laws.
3. The above acts would result in an intimidating, Duties of Employer
hostile or offensive environment for the Employers or other persons of authority, influence
employee. (Sec. 3[a]) or moral ascendancy in a workplace shall have the
duty to prevent, deter, or punish the performance of
Duty of Employer acts of gender-based sexual harassment in the
1. Promulgate appropriate rules and regulations workplace. Towards this end, the employer or
prescribing the procedure for investigation of person of authority, influence or moral ascendancy
sexual harassment cases as well as guidelines shall:
on proper decorum in the workplace. 1. Disseminate or post in a conspicuous place
2. Create a committee on decorum and a copy of this Act to all persons in the
investigation of cases on sexual harassment. workplace;
(Sec. 4) 2. Provide measures to prevent gender-based
sexual harassment in the workplace, such
Liability of Employer / Head of Office as the conduct of anti-sexual harassment
Solidarily liable for damages arising from the acts of seminars;
sexual harassment committed in the employment, 3. Create an independent internal mechanism
education or training environment if the employer is or a committee on decorum and
informed of such acts by the offended party and no investigation to investigate and address
immediate action is taken. complaints of gender-based sexual
Prescriptive period to file action: 3 years (Sec. 7) harassment which shall;
a. Adequately represent the
b. Safe Spaces Act management, the employees from
The crime of gender-based sexual harassment in the supervisory rank, the rank-
the workplace includes the following: and-file employees, and the union,
if any;
(a) An act or series of acts involving any unwelcome b. Designate a woman as its head
sexual advances, requests or demand for sexual and not less than half of its
favors or any act of sexual nature, whether done members should be women;
verbally, physically or through the use of technology c. Be composed of members who
such as text messaging or electronic mail or through should be impartial and not
any other forms of information and communication connected or related to the alleged
systems, that has or could have a detrimental effect perpetrator;
on the conditions of an individual’s employment or d. Investigate and decide on the
education, job performance or opportunities; complaints within ten days or less
upon receipt thereof;
(b) A conduct of sexual nature and other conduct- e. Observe due process;
based on sex affecting the dignity of a person, which f. Protect the complainant from
is unwelcome, unreasonable, and offensive to the retaliation; and
recipient, whether done verbally, physically or

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g. Guarantee confidentiality to the 2. Not taking action on reported acts of

greatest extent possible gender-based sexual harassment
4. Provide and disseminate, in consultation committed in the workplace.
withall persons in the workplace, a code of
conduct or workplace policy which shall; Any person who violates subsection (a) of this
a. Expressly reiterate the prohibition section, shall upon conviction, be penalized with a
on gender-based sexual fine of not less than Five thousand pesos
harassment; (P5,000.00) nor more than Ten thousand pesos
b. Describe the procedures of the (P10,000.00).
internal mechanism created under
Section 17(c) of this Act; and Any person who violates subsection (b) of this
c. Set administrative penalties. (Sec. section, shall upon conviction, be penalized with a
17, RA 11313) fine of not less than Ten thousand pesos
(P10,000.00) nor more than Fifteen thousand pesos
Duties of Employees and Co-workers (P 15,000.00). (Sec. 19, RA 11313)
a. Refrain from committing acts of
gender- based sexual harassment;
b. Discourage the conduct of gender-
based sexual harassment in the
workplace;
c. Provide emotional or social support to
fellow employees, co-workers,
colleagues or peers who are victims of
gender-based sexual harassment; and
d. Report acts of gender-based sexual
harassment witnessed in the
workplace.
Liability of Employers
1. Non-implementation of their duties under
Section 17 of this Act, as provided in the
penal provisions: or
C. SOCIAL WELFARE LEGISLATION
1. SSS Law
2. GSIS Law
SOCIAL SECURITY ACT OF 1997 (R.A. No. GOVERNMENT SERVICE INSURANCE ACT
8282) OF 1997 (R.A. No. 8291)
1. Employer – any person, natural or judicial,
domestic or foreign who carries on in the
Philippines any trade, business, industry
undertaking, or activity of any kind and uses the 1. Employer – the national government, its
services of another person who is under his political subdivisions, branches, agencies or
orders as regards employment. instrumentalities, including GOCCs, and
financial institutions with original charters, the
COVERED constitutional commissions and the judiciary
*EXCEPT: Government and any of its political
SCOPE
subdivisions, branches and instrumentality,
including GOCCs, i.e., those under GSIS. 2. Employee – any person receiving
compensation while in service of an employer
as defined herein, whether by election or
2. Employee – any person who performs services appointment
for an employer who receives compensation for
such services, where there is an employer-
employee relationship.

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3. Self-Employed – considered both employer

and employee.
1. Legal spouse entitled for support;

DEPENDENTS 2. Child, whether legitimate, legitimated, legally adopted or illegitimate;
3. Parents receiving regular support from the member.
1. Unmarried;
CONDITIONS Not gainfully employed
FOR CHILD TO 2.Not over age of majority; OR
BE 2. Has not reached 21 years of age; OR
CONSIDERED
DEPENDENT 3. Incapable of supporting himself either physically or mentally prior to 21 years of age or
age of majority, as the case may be
a. Legal Dependent Spouse until remarriage
a. Dependent Spouse, until remarriage; AND
BENEFICIARIES ;AND
b. Dependent Children
b. Dependent Legitimate or Legitimated or
1. PRIMARY
Legally Adopted and Illegitimate Children
a. Dependent Parents
a. Dependent Parents AND
2. SECONDARY b. Absent primary and secondary
b. Legitimate descendants, subject to
beneficiaries, any other person designated
restrictions on dependent children
by member as secondary beneficiary
As to DEATH BENEFITS, if no beneficiary
qualifies under the Act, benefits shall be paid
3. OTHERS
to Legal Heirs in accordance with Law of
Succession
1. Monthly Pensions
2. Separation
3. Unemployment or Involuntary Separation
1. Monthly Pension 4. Retirement
2. Dependents Pension 5. Disability
3. Retirement 6. Survivorship
4. Death 7. Funeral
5. Permanent Disability 8. Life Insurance
BENEFITS 6. Funeral 9. Loan Grants
7. Sickness
8. Maternity (ONLY 1ST FOUR
DELIVERIES OR MISCARRIAGES *EXCEPT Judiciary and Constitutional
Commissions who shall have life insurance
only
a. All employees not over 60 years of age

and their employers; (effective date: on the
first day of his operation and that of the
employee on the day of his employment)
COVERAGE
1. Compulsory b. Self-employed persons, as may be
determined by the Commission under such
rules and regulations as it may prescribe,
including, but not limited to:

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i. all self-employed professionals;
ii. partners and single- proprietors of

business;
iii. actors and actresses, directors,

scriptwriters and news correspondents not
employees;
iv. professional athletes, coaches, trainers

and jockeys, and individual farmers and
fishermen; (effective date: on registration
with the SSS)
c. Domestic helpers 60 years of age and

below, provided, that their monthly income is
not less than P1,000; (effective date: upon
rendering at least 1 month of service)
a. Filipinos recruited by foreign-based
employers for employment abroad;
b. Employee separated from employment to

maintain his right to full benefits;
c. Self-employed who realizes no income for

a certain month;
d. Spouses who devote full time to

2. VOLUNTARY managing household and family affairs,
unless specifically mandatorily covered.
*BY AGREEMENT: Any foreign government,

international organization or wholly owned
instrumentality employing workers in the
Philippines or employing Filipinos outside
the Philippines, may enter agreement with
Philippines for inclusion of such employees
in SSS EXCEPT those already covered by
their respective civil service retirement
system.
1. Employment purely casual and not for the 1. Members of the AFP and PNP, subject to
purpose of occupation, or business of the the condition that they must settle first their
employer financial obligation with the GSIS;
2. Service performed on or in connection 2. Contractual employees, who have no

with alien vessel, if employed when such employer-employee relationship with the
EXCLUSIONS vessel is outside of Philippines agencies they serve;
FROM
COVERAGE 3. Employees of Philippine government or 3. Uniformed personnel of the Bureau of Fire
instrumentality or agency thereof Protection (BFP);
4. Service performed in the employ of a 4. Uniformed personnel of the Bureau of Jail

foreign government, or international Management and Penology (BJMP);
organizations, or wholly owned
instrumentality employing workers in the

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Philippines or employing Filipinos outside of 5. Barangay and Sanggunian Officials who are
the Philippines not receiving fixed monthly compensation;
5. Services performed by temporary 6. Employees who do not have monthly

employees and other employees excluded regular hours of work and are not receiving
by SSS regulation; employees of bona fide fixed monthly compensation (IRR of R.A. No.
independent contractors shall not be 8291, Rule II, Sec 3, Par. 2)
deemed employees of the employer
engaging the services of an independent
contractor.
The basic pay or salary received by an
All actual remuneration for employment, employee, pursuant to his
including the mandated cost-of-living election/appointment, excluding per diems,
allowance, the cash value of any bonuses, overtime pay, honoraria, allowances
COMPENSATION and any other emoluments received in
remuneration paid in any medium other than
cash EXCEPT that part of the remuneration addition to the basic pay
in excess of the maximum salary credit
Non-work connected disability, sickness, Work-connected exempt from liability where

maternity, death and old age and other permanent disability due to his grave
BASIS OF CLAIM
contingencies resulting in loss of income or misconduct, habitual intoxication, or willful
financial burden (Sec. 2) intention to kill himself or another (Sec. 15- 17)
1. Employer’s contribution on his account
ceases at the end of the month of
separation;
2. Employee’s obligation to contribute also

1. Member shall continue to be a member; and
EFFECTS OF ceases at the end ofthe month of separation;
SEPARATION
FROM 2. Member shall be entitled to whatever
3. Employee shall be credited with all
EMPLOYMENT benefits he has qualified to in the event of any
contributions paid on his behalf and entitled
contingency compensable under this Act.
to benefits;
4. Employee may continue to pay the total

contributions to maintain his right to full
benefits.
A. Employer:
Report immediately to SSS the names,
ages, civil status, occupations, salaries and
dependents of all his covered employees. Employer:
Report to GSIS the names, employment
REPORTING status, positions, salaries of the employee and
B. Self-employed: such other matter as determined by the GSIS.
REQUIREMENTS
Report to SSS within 30 days from the first

day of his operation, his name, age, civil
status, occupation, average monthly net
income and his dependents.
1. Employer’s contributions
FUNDING
2. Employee’s/member’s contributions
EXEMPTION Dispute arising from: Any dispute arising under this Act and other
FROM TAX/ laws administered by GSIS
LEGAL 1. Coverage
PROCESS/ LIEN 2. Benefits Jurisdiction: GSIS
3. Contributions

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4. Penalties When decision made: 30 days from receipt of

5. Any matters related thereto the hearing officer’s findings and
recommendations or 30 days after submission
Jurisdiction: Social Security Commission for decision
When decision made: Mandatory period of Appeal:

20 days from submission of evidence CA – Rule 43, Section 31 SC – Rule 45
Appeal:
CA – questions of law and facts
SC – questions of law only
20 years from:
1. time delinquency is known;

4 years from date of contingency EXCEPT for
PRESCRIPTIVE 2. time the assessment is made by the life and retirement benefits
PERIOD SSS;or
3. time the benefit accrues.
(as the case may be)
3. Disability and Death Benefits The period covered by any relapse he suffers, or
recurrence of the illness, which results in disability
TEMPORARY TOTAL DISABILITY and is determined to be compensable, shall be
considered independent of, and separate from, the
As a result of injury or sickness, the employee is period covered by the original disability. Such a
unable to perform any gainful occupation for a period shall not be added to the period covered by
continuous period not exceeding 120 days. (Barko his original disability (Amended Rules on Employees’
International v. Alcayno, G.R. No. 188190, 2014) Compensation, Rule X, Sec. 2[b])
Amount of Benefits PERMANENT TOTAL DISABILITY
Income benefit equivalent to 90% of his average daily In means incapacity to perform gainful work which is
salary credit subject to the following: expected to be permanent. This status does not
1. Benefit shall not be less than P10 or more require a condition of complete helplessness. Nor is
than P90; not paid lower than 120 days it affected by the performance of occasional odd jobs.
unless injury or sickness requires more
extensive treatment that lasts beyond 120 There is permanent total disability if as a result of the
days not exceeding 240 days from the onset injury or sickness, the employee is unable to perform
of disability, in which case he shall be paid any gainful occupation for a continuous period
benefit for Temporary Total Disability during exceeding 240 days. (Abaya v. ECC, G.R. No.
the extended period (P10 – P200 per day, 64255, 1989)
maximum 120 days).
2. Benefit shall be suspended if employee Test of Permanent Total Disability
failed to submit monthly medical report The test of whether an employee suffers from
certified by attending physician. (Amended “permanent total disability” is a showing of the
Rules on Employees’ Compensation, Rule capacity of the employee to continue performing his
X, Sec. 3) work notwithstanding the disability he incurred.
(Vicente v. ECC, G.R. No. 85024, 1991)
Period of Relapse
Instances of Permanent Total Disability

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1. Temporary total disability lasting

continuously for more than one hundred A disability is partial and permanent if as a result of
twenty days, except as otherwise provided the injury or sickness, the employee suffers a
for in the Rules; permanent partial loss of the use of any part of his
2. Complete loss of sight of both eyes; body. (Abaya v. ECC, G.R. No. 64255, 1989)
3. Loss of two limbs at or above the ankle or
wrist; Distinguished from Permanent Total Disability
4. Permanent complete paralysis of two limbs;
5. Brain injury resulting in incurable imbecility The test of whether an employee suffers from
or “permanent total disability” is a showing of the
insanity; and capacity of the employee to continue performing his
6. Such cases as determined by the Medical work notwithstanding the disability he incurred.
Director of the System and approved by the (Vicente v. ECC, G.R. No. 85024, 1991)
Commission. (Labor Code, Art. 198[c])
Receipt of Disability Benefit Precludes Claim for
When temporary total disability becomes Loss of Future Earnings
permanent total disability Once given disability compensation for loss of
1. Declared by the company-designated earning capacity, an additional award for loss of
physician within 120 or 240 day treatment earnings (future earnings) no longer lies, otherwise,
period; or it will result in double recovery. (Magsaysay Maritime
2. In case of absence of such a declaration Corp.v. Chin, Jr., G.R. No. 199022, 2014)
either of fitness or permanent total disability, NOTES: It must be shown that the injury or illness
upon the lapse of the 120 or 240 day was contracted during the term of employment. The
treatment period, while the employee’s unqualified phrase “during the term” covers all
disability continues and he is unable to injuries or illnesses occurring during the lifetime of
engage in gainful employment during such LABOR
period, and the company physician fails to the contract. (Wallem Maritime Services v. Tanawan,
arrive at a definite assessment of the G.R. No. 160444, 2012)
employee’s fitness or disability (Alpha Ship
Management v. Calo, G.R. No. 192034, Reimbursement for Medical Expenses are separate
2014) and distinct from Disability Benefits. (Javier v. PH,
Inc., G.R. No. 204101, 2014)
When the company-designated physician and
employee-designated physician disagree DISABILITY BENEFITS (2010 AMENDED POEA-
SEC)
If a doctor appointed by the seafarer disagrees with Liabilities of Employer (ER) for Work-related
the assessment of the company-designated doctor, a Injury or Illness (IN/ILL) of the Seafarer During
3rd doctor may be agreed jointly between the Term of Contract
1. ER will continue to pay the seafarer his
employer and the seafarer, and the 3rd doctors’
wages during the time he is on board the
decision shall be final and binding on both parties.
ship.
(Bahia Shipping v. Constantino, G.R. No. 180343, 2. If IN/ILL requires medical and/or dental
2014)
treatment in a foreign port, ER shall be
liable for full cost of such treatment as
Suspension of Income Benefits well as board and lodging until the
Monthly income benefits can be suspended under
seafarer is declared fit to work or to be
any of the following conditions:
repatriated.
1. Failure of the employee to present himself
for examination at least once a year upon
NOTE: If after repatriation, seafarer still requires
notice by the System;
medical attention, he shall be provided such
2. Failure to submit a quarterly Medical Report
treatment until he is declared fit or the degree of his
certified by the attending physician; disability had been established by company-
3. Complete or full recovery from his
designated physician at the expense of the ER.
permanent disability; or
4. Upon being Gainfully employed. (Amended
3. Seafarer shall also receive sickness
Rules on Employees’ Compensation, Rule
allowance from his employer. The
XI, Sec. 2)
amount is equivalent to his basic wage
computed from the time he signed off
PERMANENT PARTIAL DISABILITY
until he is declared fit to work or the
Back to TOC Page 77 OF 198

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degree of disability has been assessed physician, the company shall approve
by the company-designated physician. the appropriate mode of transportation
The period within which the seafarer and accommodation.
shall be entitled to his sickness
allowance shall not exceed 120 days. The reasonable cost of actual traveling
Payment shall be made on a regular expenses and/or accommodation shall
basis, but not less than once a month. be paid subject to liquidation and
submission of official receipts and/or
NOTE: Under the 2000 POEA-SEC, the assessment proof of expenses.
made by company-designated physician for
permanent disability shall in no case exceed 120 NOTE: To be entitled to the foregoing monetary
days. benefits, seafarer shall submit himself to a post-
employment medical examination by a company-
Elburg Shipmanagement Phils., Inc. v. Ouioguie, Jr. designated physician within 3 working days upon
provided a summation of periods when the company- his return.
designated physician must assess the seafarer: EXCEPT when he is physically incapacitated to do
a. The company-designated physician must issue a so. In such case, a written notice to the agency within
final medical assessment on the seafarer's disability the same period (3 working days upon return) is
grading within a period of 120 days from the time the deemed as compliance.
seafarer reported to him;
b. If the company-designated physician fails to give The seafarer shall also report regularly to the
his assessment within the period of 120 days, company-designated physician.
without any justifiable reason, then the seafarer's
disability becomes permanent and total; Failure of the seafarer to comply with the
c. If the company-designated physician fails to give mandatory reporting requirement shall result in
his assessment within the period of 120 days with a his forfeiture of the right to claim the above
sufficient justification (e.g., seafarer required further benefits.
medical treatment or seafarer was uncooperative),
then the period of diagnosis and treatment shall be When the seafarer suffers work-related illness during
extended to 240 days. The employer has the burden the term of his contract, the employer shall be liable
to prove that the company-designated physician has to pay for: (1) the seafarer's wages; (2) costs of
sufficient justification to extend the period; and medical treatment both in a foreign port and in the
d. If the company-designated physician still fails to Philippines until the seafarer is declared fit to work,
give his assessment within the extended period of or the disability rating is established by the company-
240 days, then the seafarer's disability becomes designated physician; (3) sickness allowance which
permanent and total, regardless of any shall not exceed 120 days; and (4) reimbursement of
justification. reasonable medicine, traveling, and accommodation
expenses. However, to be qualified for the foregoing
Hence, the general rule is that the 120-day period is monetary benefits, the same section of the POEA
an absolute rule. The company-designated physician Contract requires the seafarer to submit
must provide a sufficient justification to extend himself/herself to a post-employment medical
the original 120-day period of assessment. examination by a company-designated physician
(Career Philippines Shipmanagement, Inc. v. within three working days upon his return to the
Silvestre, G.R. No. 213465, 2018). Philippines, except when he is physically
incapacitated to do so. The seafarer is likewise
NOTE: Prior to Elburg ruling, the Court held in required to report regularly to the company-
Vergara v. Hammonia Maritime Services, Inc. that designated physician during the course of his
seafarers could not automatically claim permanent treatment. The three-day reporting requirement is
and total disability even though the 120-day period MANDATORY. (Manila Shipmanagement &
for medical evaluation was exceeded for it was Manning, Inc. v. Aninang, G.R. No. 217135, 2018)
possible to extend the evaluation or treatment period
to 240 days. (Vergara v. Hammonia Maritime, 2008). 5. Illnesses NOT listed in Sec. 32 of
POEA- SEC are disputably presumed
4. Seafarer is entitled to reimbursement of as work- related.
the cost of medicines prescribed by
company- designated physician. 6. In case seafarer is disembarked from
ship for medical reasons, ER shall bear
If treatment is on an out-patient basis as full cost of repatriation if seafarer is
determined by the company-designated declared:

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means that the seafarer's injury or illness has a

1. fit for repatriation; or possible connection to one's work, and thus, allows
2. fit to work but the employer is the seafarer to claim disability benefits.
unable to find employment for the
seafarer on board his former ship or Whoever claims entitlement to the benefits provided
another ship of the employer. by law should establish his or her right thereto by
substantial evidence. Petitioner failed to prove that
7. In case of permanent total or partial the injury suffered is work-related. Hence, he is not
disability of the seafarer, he shall be entitled to disability benefits. (Guerrero v. Philippine
compensated in accordance with the Transmarine Carriers, Inc., G.R. No. 222523, 2018)
schedule of benefits enumerated in
Section 32 of POEA-SEC. Computation DEATH BENEFITS
of his benefits shall be governed by the
rates and the rules of compensation The System shall pay to the primary beneficiaries,
applicable at the time the illness or upon the death of the covered employee, an amount
disease was contracted. equivalent to his monthly income benefit, plus 10%
thereof, for each dependent child, but not exceeding
NOTE: The disability shall be based solely on the 5, beginning with the youngest and without
disability gradings provided under Section 32. It substitution. The income benefit shall be guaranteed
shall NOT be measured or determined by the number for 5 years. (Amended Rules on Employees’
of days a seafarer is under treatment or the number Compensation, Rule XIII, Sec.3)
of days in which sickness allowance is paid.
Conditions to entitlement
8. The aforementioned benefits are 1. The employee has been duly reported to the
separate and distinct from other benefits System;
the seafarer is entitled to. 2. He died as a result of an injury or sickness;
and
In determining the compensability of an illness, it is 3. The System has been duly notified of his
not required that the employment be the sole factor death, as well as the injury or sickness which
in the growth, development, or acceleration of a caused his death.
claimants' illness to entitle him to the benefits
provided for. It is enough that his employment NOTES: Employer shall be liable for the benefit if
contributed, even if only in a small degree, to the such death occurred before the employee is duly
development of the disease. reported for coverage to the System.
Even assuming that the ailment of the worker was If the employee has been receiving monthly income
contracted prior to his employment, this still would not benefit for permanent total disability at the time of his
deprive him of compensation benefits. For what death, the surviving spouse must show that the
matters is that his work had contributed, even in a marriage has been validly subsisting at the time of his
small degree, to the development of the disease. disability.
Neither is it necessary, in order to recover
compensation, that the employee must have been in The cause of death must be a complication or natural
perfect health at the time he contracted the disease. consequence of the compensated Permanent Total
A worker brings with him possible infirmities in the Disability
course of his employment, and while the employer is (Amended Rules on Employees’ Compensation,
not the insurer of the health of the employees, he Rule XIII, Sec.1)
takes them as he finds them and assumes the risk of
liability. (Skippers United Pacific, Inc. v. Lagne, G.R. Amount of Benefits
No. 217036, 2018) 1. For life to the primary beneficiaries,
guaranteed for 5 years;
For disability to be compensable, two elements must 2. For not more than 60 months to secondary
concur: (1) the injury or illness must be work-related; beneficiaries;
and (2) the work-related injury or illness must have 3. Total benefits shall be at least P15,000
existed during the term of the seafarer's employment (Labor Code, Art. 200[a])
contract.
Persons Entitled to Funeral Benefits
Work-related injury pertains to injuries resulting in A funeral benefit of P30,000 (ECC Board Resolution
disability or death arising out of, and in the course of No. 16-05-28, May 31, 2016) shall be paid to:
employment. Work-relatedness of an injury or illness 1. Surviving spouse; or

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2. Legitimate child who spent for funeral Injury/Incapacity/Disability/Death Resulting from

services; Willful or Criminal Act or Intentional Breach of
3. Any other person who can show Duties
incontrovertible proof of having borne the
funeral expenses. (Amended Rules on Compensation and benefits shall not be payable in
Employees’ Compensation, Rule XI) case of injury, incapacity, disability or death of the
seafarer resulting from his willful or criminal act or
Death Benefits (2010 AMENDED POEA-SEC) intentional breach of his duties.
Work-related death of seafarer during the term of his PROVIDED HOWEVER, that the employer can prove
contract, the employer shall pay his beneficiaries that such injury, incapacity, disability or death is
$50,000 in Philippine currency and an additional directly attributable to the seafarer. (Sec. 20 (C)
amount of $7,000 to each child under the age of 21 POEA-SEC)
but not exceeding 4 children, at the exchange rate
prevailing during the time of payment. (Sec. 20 (B) Disqualification due to Misrepresentation
(1), POEA-SEC)
A seafarer who knowingly conceals a pre-existing
Compensation payable shall be doubled where death illness or condition in the Pre- Employment Medical
is caused by warlike activity while sailing within a Examination (PEME) shall be liable for
declared war zone or war risk area, the misrepresentation and shall be disqualified from any
compensation payable shall be doubled. (Sec. 20 (B) compensation and benefits.
(2), POEA-SEC)
This is likewise a just cause for termination of
The aforementioned benefits are separate and employment and imposition of appropriate
distinct from other benefits the seafarer is entitled to. administrative sanctions. (Sec. 20 (D) POEA-SEC)
(Sec. 20 (B) (3), POEA-SEC)
D. LABOR RELATIONS
The other liabilities of the employer when seafarer
dies as a result of work-related injury or illness during 1. Right to Self-Organization
the term of employment:
1. Pay the deceased’s beneficiary all a. Coverage
outstanding obligations due the seafarer
under the Contract.
Scope of Self-Organization Under the Labor Code
2. Transport the remains and personal effects
of the seafarer to the Philippines at 1. Forming, joining, or assisting labor
employer’s expense EXCEPT: organizations for the purpose of collective
bargaining through representatives of their
own choosing.
a) If death occurred in a port where 2. To engage in lawful concerted activities for
local government laws or the purpose of collective bargaining or for
regulations do not permit the their mutual aid and protection. (Labor
transport of such remains. Code, Art. 257)
b) In case death occurs at sea, the
disposition of the remains shall be The right to form, join, assist a union is specifically
handled or dealt with in protected by Art. XIII, Section 3 of the Constitution
accordance with the master’s best and Art 257 of the Labor Code, and shall not be
judgment. abridged. (SS Ventures Intl. v. SS Ventures Labor
Union, G.R. No. 161690)
In all cases, the employer/master shall communicate
with the manning agency to advise for disposition of What the Constitution guarantees is the right to form
seafarer’s remains. or join organizations. It is the employee who should
decide for himself whether he should join or not in an
3. Pay the beneficiaries of the seafarer $1,000 association. The right to join a union includes the
in Philippine currency for burial. expenses at right to abstain from joining any union. (Victoriano v.
the exchange rate prevailing during the time Elizalde Rope Workers’ Union, G.R. L-25246)
of payment. (Sec. 20 (B) (4), POEA-SEC)
UNION VS. WORKER’S ASSOCATION
The two general kinds of labor organizations:

ATENEO CENTRAL
1. Union
2. Worker’s Association EMPLOYEES OF GOCCs CREATED UNDER THE
CORPORATION CODE
WORKERS’
UNION (See discussion below.)
ASSOCIATION
Organization of workers
Any labor formed for the mutual aid SUPERVISORY EMPLOYEES
organization in and protection of its Supervisory employees shall not be eligible for
the private members or for any membership in the collective bargaining unit of the
rank-and-file employees but may join, assist or form
sector organized legitimate purpose other
separate collective bargaining units and/or legitimate
for collective than collective bargaining
labor organizations of their own. (Labor Code, Art.
bargaining and 255)
for other NOTE: Workers have the
legitimate right to choose whether to Rationale: Supervisory employees, while in the
purpose form or join a union or performance of supervisory functions, become the
workers’ association. alter ego of the management in the making and the
implementing of key decisions. It would be difficult to
b. Eligibility for Membership find unity or mutuality of interests in a bargaining unit
consisting of a mixture of rank-and-file and
GENERAL RULE: supervisory employees. (Toyota Motor Phil. Corp. v.
Toyota Motor Phil. Corp. Labor Union, G.R. No.
ALL EMPLOYEES 121084)
1. As to who may form, join or assist a union:
ALL persons employed in: Commercial, ALIENS
industrial, agricultural enterprises, religious, General Rule: All aliens, natural or juridical, [...] are
charitable, medical or educational institutions, strictly prohibited from engaging directly or indirectly
whether or not operated for profit. in all forms of trade union activities. (Labor Code, Art.
284)
Purpose: Collective bargaining, engaging in
lawful concerted activities for collective Exceptions: Aliens may exercise the right to self-
bargaining, and mutual aid and protection (Labor organization and join or assist labor unions for
Code, Art. 253). purposes of collective bargaining, provided the
following requisites are fulfilled:
2. As to who may form, join and assist a union 1. With valid working permits issued by DOLE;
or a workers’ association: Ambulant, and
intermittent and itinerant and rural workers, the 2. They are nationals of a country which grants
self-employed and those with no definite the same or similar rights to Filipino workers:
employers may form labor organizations. a. As certified by the DFA; or
b. Ratified either the ILO Convention
Purpose: Mutual aid and protection (Labor Code, No. 8 or ILO Convention No. 98
Art. 253).
SECURITY GUARDS
Who can join a workers’ association? The security guards and other personnel employed
The last sentence of Art. 253 broadens the coverage by the security service contractor shall have the right
of workers who can form or join a workers’ to form, join, or assist in the formation of a labor
association and is not exclusive to ambulant, organization and even engage in concerted activities.
intermittent and itinerant workers.
• Unlike in a labor union, Employee-Employer Note: The right to organize cannot be bargained
relationship is not necessary to join a away (Southern Philippines Federation of Labor v.
workers’ association. (Samahan ng mga Calleja, G.R. No. 80882)
Manggagawa sa Hanjin, G.R. 211145,
2015). EXCEPTIONS TO THE GENERAL RULE THAT
ALL EMPLOYEES MAY FORM/JOIN/ASSIST A
Note: Employees of non-profit organizations are now UNION:
permitted to form, organize, or join labor unions of
their choice for purposes of collective bargaining 1. MANAGERIAL AND CONFIDENTIAL
(FEU-Dr. Nicanor Reyes Medical Foundation v. EMPLOYEES
Trajano, G.R. No. 76273)

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Managerial vs. Supervisory vs. Confidential Note: The power of the position, not the title, make
Employees the position-holder a manager or a supervisor.
MANAGERIAL EMPLOYEE: For an Employee to be Considered a Supervisor,

Managers cannot unionize. (United Pepsi-Cola Recommendation Must Be;
Supervisory Union v. Laguesma, G.R. No. 122226; a. Discretionary or judgmental (not clerical);
Labor Code, Art. 255) c. Independent (not a dictation of someone else);
and
Who is considered a managerial employee? d. Effective (given particular weight in making the
A managerial employee is one who is vested with management decision). (Azucena, Everyone’s
powers or prerogatives: Labor Code, 2015 ed.)
1. To lay down and execute management policies
and/or DEFINITION OF A MANAGERIAL EMPLOYEE:
2. To hire, transfer, suspend, layoff, recall, LABOR STANDARDS VS. LABOR RELATIONS
discharge, assign or discipline employees.
(Labor Code, Art. 219[m]) LABOR STANDARDS LABOR RELATIONS
Includes the officers Does not include the
Managerial employees have the authority to devise, and members of the managerial staff since
implement, and control strategic and operational managerial staff they are classified as
policies (decision maker). (supervisory supervisory
employees); such is employees; used in
Managerial Functions refers to powers such as important to be able to order to determine an
to: determine if employees employee’s eligibility in
A. Effectively recommend managerial actions; are covered by the joining or forming a
B. Formulate or execute management policy or Labor Code on union.
decisions; or Conditions of
C. Hire, transfer, suspend, lay-off, recall, dismiss, Employment.
assign or discipline employees (San Miguel
Supervisors v. Laguesma, G.R. No. 110399) Extent of Limitation on Right to Self-
Organization
SUPERVISORS Art. 255 only disallows managerial employees from
Supervisors can unionize. (Pagkakaisa ng mga joining “labor organizations” (means any union or
Manggagawa sa Triumph International v. Pura association of employees which exists in whole or in
Ferrer-Calleja, G.R. No. 85915) part for the purpose of collective bargaining or of
dealing with the employer concerning terms and
Who is considered a supervisory employee? conditions of employment).
Supervisors are those employees, who in the interest • Art. 255 does not absolutely disqualify
of the employer: managerial employees from exercising their
a. Effectively recommend such managerial right of association. (United Pepsi v.
actions Laguesma, G.R. No. 122226, 1998)
b. If the exercise of such authority is not merely
routinary or clerical in nature but requires CONFIDENTIAL EMPLOYEES
independent judgment. (Labor Code, Art. 219) They are those who:
b. By the nature of his functions, assist or act in a
Supervisors have the task of simply ensuring that confidential capacity, in regard to persons who
such policies are carried out by the rank-and-file formulate, determine; and
employees, or who may merely recommend strategic c. Assists the person who effectuate
and operational policies (recommender). management policies, specifically in the field of
labor relations. (Sugbuanon Rural Bank v.
Managerial Employee vs. Supervisor Laguesma, G.R. No. 116194)
MANAGERIAL
SUPERVISOR
EMPLOYEE Because of such fiduciary role, he has necessary
Has power to access to confidential information in the area of labor
recommend those relations.
Has power to decide
managerial acts, such
and do managerial
as laying down policy, Confidential employees, by reason of their position or
acts.
hiring, or dismissing nature of work are required to assist or act in a
employees, and so on. fiduciary manner to managerial employees, they are
likewise privy to sensitive and highly confidential

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records. (Standard Chartered Bank Union v. 4. EMPLOYEES OF FOREIGN EMBASSIES,

Standard Chartered Bank, G.R. No. 161933) CONSULATES AND INTERNATIONAL
ORGANIZATIONS
Confidentiality Must be Related to Labor For example, the employees of International Catholic
Relations, and Not a Business Standpoint Migration Commission cannot unionize nor conduct a
An employee must assist or act in a confidential certification election (International Catholic Migration
capacity and obtain confidential information relating Commission v. Hon. Calleja, G.R. No. 85750)
to labor relations policies. Exposure to internal
business operations of the company is not per se a The International Rice Research Institute (“IRRI”)
ground for the exclusion in the bargaining unit. enjoys immunity from local jurisdiction; it has the
(Tunay na Pagkakaisa ng Manggagawa sa Asia discretion whether to waive its immunity (Callado v.
Brewery v. Asia Brewery, G.R. No. 162025) International Rice Research Institute, G.R. No.
106483)
2. EMPLOYEE-MEMBERS OF COOPERATIVES Note: Aliens working in the country with valid work
An employee of a cooperative who is a member and permits issued by the DOLE, may exercise right to
co-owner thereof cannot invoke the right to collective self-organization subject to rule on comity. (Labor
bargaining, for certainly, an owner cannot bargain Code, Art. 284)
with himself or his co-owners.
5. GOVERNMENT EMPLOYEES
However, insofar as it involves cooperatives with Note: The prohibition/s are not absolute.
employers who are not members or co-owners
thereof, such employees are entitled to exercise the Employees of government corporations established
rights of all workers to organization, collective under the Corporation Code shall have the right to
bargaining negotiations and others. (San Jose organize and to bargain collectively with their
Electric Service Cooperative v. Ministry of Labor, respective employers.
G.R. No. 77231)
All other employees of the civil service shall have the
Employee-Members of cooperatives cannot invoke right to form associations for purposes not contrary
the right to collective bargaining due to the fact of to law. (Art. 254, Labor Code)
ownership but they are allowed to form an
association for their mutual aid and protection as E.O. 180:
employees. (Planters Products, G.R. No. 78524, Guidelines for the exercise of the right to
1989; Benguet Electric, G.R. No. 79025) organize of government employees, creating a
Public Sector Labor-Management Council, and
3. RELIGIOUS OBJECTORS for other purposes.
Under the Industrial Peace Act (1953), members of
religious sects cannot be compelled or coerced to Right to Self-Organization under EO 180 is for a
join labor unions even when said unions have closed limited purpose – only for the furtherance and
shop agreements with employers (Victoriano v. protection of their interests not for purposes of
Elizalde Rope Workers’ Union, G.R. no. L-25246) collective bargaining.
Note: While the Victoriano decision was penned Coverage of EO 180

citing the Industrial Peace Act, and while said act was a. Applies to all government employees
repealed by R.A. No. 3350, which does not contain b. Employees of all branches,
the same exception, subsequent decisions still subdivisions, instrumentalities, and
uphold the religious objector exception (see agencies of the government, including
Ebralinag v. Division Superintendent of Cebu, G.R. GOCCs with original charters. (§1)
No. 95770)
Excluded from Coverage
However: The Victoriano decision does not bar the c. Members of the Armed Forces of the
members of the Iglesia ni Kristo from forming their Philippines
own union. (Kapatiran sa Meat and Canning Division d. Including police officers
v. BLR Director, G.R. No. L-82914) e. Policemen
f. Firemen and
In fact, religious objectors can vote for “No-Union” in
g. Jail guards (§4)
a certification election in the exercise of their right to
self-organization (Reyes v. Trajano, G.R. No. 84433)

ATENEO CENTRAL
Who are Ineligible to Join Organization of Rank & Registration) of the Labor Code. [SMCC-Super v.
File Government Employees Charter Chemical and Coating Corporation, G.R. No.
High-level employees whose functions are normally 169717 (2011)]
considered as policy-making or managerial or whose
duties are of a highly confidential nature. (§3) Supervisor and Rank and File Union Affiliation
RA 9481: AN ACT STRENGTHENING THE
Non-Interference of Government Authorities WORKERS' CONSTITUTIONAL RIGHT TO SELF-
Government authorities shall not interfere in the ORGANIZATION, amending the Labor Code
establishment, functioning or administration of modified previous Supreme Court rulings prohibiting
government employees' organizations through acts supervisors’ unions from joining with the same
designed to place such organizations under the federation as the rank and file.
control of government authority. (§6)
New law now explicitly ALLOWS for the
c. Doctrine of Necessary commingling of the two.
Implication Sec. 8 of new law provides: “Article 245 (now 255)
of the Labor Code is hereby amended to read as
Doctrine of necessary implication follows –
While Art. 255 of the Labor Code singles out
managerial employees as ineligible to join, assist or Art. 245 (now 255). Ineligibility of Managerial
form any labor organization, under the doctrine of Employees to Join any Labor Organization; Right
necessary implication, confidential employees are of Supervisory Employees. - Managerial
similarly disqualified. This doctrine states that what employees are not eligible to join, assist or form any
is implied in a statute is as much a part thereof as labor organization. Supervisory employees shall not
that which is expressed. (NATU v. Republic Planters be eligible for membership in the collective
Bank, G.R. No. 93468; United Pepsi Cola v. bargaining unit of the rank-and-file employees but
Laguesma, G.R. No. 9663) may join, assist or form separate collective
bargaining units and/or legitimate labor organizations
Note: Confidentiality may attach to a managerial or of their own. The rank and file union and the
non-managerial position. Confidentiality is not supervisors’ union operating within the same
determined by rank, but by the nature of the job. establishment may join the same federation or
national union.
Note: Confidential employees are excluded from
joining labor organization under the doctrine of e. Effects of Inclusion as Members
necessary implication. If confidential employees of Employees Outside of the
could unionize in order to bargain for advantages for Bargaining Unit
themselves, then they could be governed by their
own motives rather than the interest of the The inclusion as union members outside the
employers. They may become the source of undue bargaining unit shall render said employees
advantage. Said employees may act as spy or spies automatically removed from the list of
of either party to a collective bargaining agreement. membership of said union. (Labor Code, Art.
(Pepsi-Cola Products, Inc. v. Secretary of Labor, 256)
G.R. 96663)
2. Bargaining Unit
d. Commingling or Mixed
Membership
Bargaining Unit
A group of employees sharing mutual interests within
Commingling or Mixture of Membership
a given employer unit, comprised of all or less than
Effect of Inclusion of Employees Outside the
all of the entire body of employees in the employer
Bargaining Unit or Commingling
unit or any specific occupational or geographical
grouping within such employer unit. (D.O. No. 40-03,
General Rule: It shall not be a ground for the
Sec. 1[d], Rule I, Book V)
cancellation of the registration of the union. Said
employees are automatically deemed removed from
Appropriate Bargaining Unit (ABU)
the list of membership of said union. [Art. 256]
A group of employees of a given employer comprised
of all or less than all of the entire body of employees,
Exception: Unless such mingling was brought about
which the collective interests of the employees,
by misrepresentation, false statement or fraud under
consistent with the equity of the employer, indicate to
Art. 247 (Grounds for cancellation of Union
be best suited to serve reciprocal rights and duties of

ATENEO CENTRAL
the parties. (Belyca Corp. v. Calleja, G.R. No. 77395, Of employees, i.e. the
1988) collective interest of
EQUITY
employees consistent with
Right of Individual or Group to Present the equity of the employer
Grievances Not Impaired To serve the reciprocal rights
An individual employee or group of employees shall and duties of the parties
have the right at any time to present grievances to PURPOSE
under the CB provisions and
their employer. with law
Any provision of law to the contrary notwithstanding,

workers shall have the right, to participate in the Factors in Determining Community of Interest
policy and decision-making processes of the a) Similarity in the scale and manner of
establishment where they are employed insofar as determining earnings
said processes will directly affect their rights, benefits b) Similarity in employment benefits, hours
and welfare. of work and other terms and conditions
of employment
For this purpose, workers and employers may form c) Similarity in the kinds of work performed
labor-management councils: Provided, that the d) Similarity in the qualifications, skills and
representatives of the workers in such labor- training of the employees
management councils shall be elected by at least the e) Frequency of contact or interchange
majority of all employees in said establishment. among the employees
(Labor Code, Art. 267) f) Geographic proximity
g) Continuity or integration of production
Note: In establishments where no legitimate labor process
organization exists, the workers’ representative shall h) Common supervision and determination
be elected directly by the employees at large. of labor-relations policy
(Azucena Vol. I, 7th ed., p.458). i) History of collective bargaining
j) Desires of the affected employees
Test to determine the constituency of an k) Extent of union organization (Azucena
appropriate bargaining unit Vol. I, 7th ed., p. 461).
The law fixes no maximum or minimum number of
bargaining units. Union members come from the Globe doctrine: If units in one industry cannot be
CBU and several rival unions can come from the determined, the employees can decide how to
CBU. The representative is the union, and the group organize themselves into units. The best way to
represented is the CBU. determine such preference is through referendum or
plebiscite. (Kapisanan ng Mga Manggagawa sa
Fundamental Factors in Determining the Manila Road Co. v. Yard Crew Union, G.R. Nos. L-
Appropriate Collective Bargaining Unit: 16292-94, 1960)
1. Will of the Employees
2. Substantial Mutual Interests Geography and Location play a significant role in
3. Prior Collective Bargaining History determining community of interests if:
4. Similarity of Employment Status 1. The separation between the camps and the
Out of these, the controlling test of grouping is different kinds of work in each all militate in
mutuality or commonality of interest (San Miguel favor of the system of separate bargaining
Corporation v. Laguesma, G.R. 100485, 1994). units;
2. When the problems and interests of the
Community of Interests Rule: States that the workers are peculiar in each camp or
employees within an appropriate bargaining unit department;
must have commonality of collective bargaining 3. The system of having one collective
interests in the terms of employment and working bargaining unit in each camp has operated
conditions as evidenced by the type of work they satisfactorily in the past. (Benguet
perform. (San Miguel Foods Inc. v. San Miguel Corp. Consolidated v. Bobok Lumberjack
Supervisors and Exempt Union, G.R. No. 146206, Association, G.R. No. L-11029, 1958)
2011)
Prior Collective Bargaining History
ELEMENTS OF AN APPROPRIATE The existence of a prior collective bargaining history
BARGAINING UNIT is neither decisive nor conclusive in the determination
All or less than all of the entire of what constitutes an appropriate bargaining unit.
COMPOSITION
body of employees (National Association of Free Trade Unions v. Mainit

ATENEO CENTRAL
Lumber Development Company Workers Union, Selection/Designation of an exclusive bargaining

G.R. No. 79526, 1990) representative
General Rule: The labor organization
Single or “Employer Unit” Preferred designated/selected by the majority of the employees
General Rule: The proliferation of unions in an in an ABU shall be the exclusive bargaining
employer unit is discouraged as a matter of policy representative of the employees in such unit for the
unless there are compelling reasons which would purpose of collective bargaining.
deny a certain class of employees the right to self-
organization for purposes of collective bargaining. Exceptions:
(Philtranco v. BLR, G.R. No. 85343, 1989) 1. An individual employee or group of
Exceptions: employees shall have the right at any time to
1. Supervisory employees who are allowed to present grievances to their exclusive
form their own unions apart from the rank- bargaining representative.
and-file employees; 2. Any provision of law to the contrary
2. Where the employees exercise their right to notwithstanding, workers shall have the right
form unions or associations for purpose not to participate in policy and decision-making
contrary to law, to self-organization, and to processes of the establishment where they
enter into collective bargaining negotiations are employed insofar as said processes will
(Barbizon Phil. v. Nagkakaisang Supervisor directly affect their rights, benefits and
ng Barbizon, G.R. Nos. 113204-05, 1996) welfare. Workers and employees may also
form labor management councils for the
Two Companies with Related Business same purpose. In such case, its
General Rule: Two corporations cannot be treated representatives shall be elected by a
as a single bargaining unit even if their businesses majority of all employees in said
are related. (Diatagon Labor Federation Local v. establishment. (Labor Code, Art. 267)
Ople, G.R. No. L-44493-94, 1980)
Note: A bargaining unit is a group of employees
Exception: Application of Piercing Doctrine sought to be represented by a petitioning union. Such
The cross-linking of the agencies command, control, employees need not be members of a union seeking
and communication systems indicate their unitary the conduct of a certification election. A union
corporate personality. Accordingly, the veil of certified as an exclusive bargaining agent represents
corporate fiction should be lifted for the purpose of not only its members but also other employees who
allowing the employees of the three agencies to form are not union members (Holy Child Catholic School
a single labor union. (Philippine Scouts Veterans v. v. BHCCS-TELI-PIGLAS, G.R. 179146 ,2013).
Torres, G.R. No. 92357, 1993)
Creation of Labor Management and Other
Spin-Off Corporations Councils
In the case of subsidiaries or corporations formed out The Department shall promote the formation of labor-
of former divisions of a mother company following a management councils in organized and unorganized
bona fide reorganization, it is best to have separate councils.
bargaining units for the different companies. (San
Miguel v. Confesor, G.R. 11262, 1996) Purpose of the Labor-Management Councils
To enable the workers to participate in policy and
Summary: Signification of Determining the decision-making processes in the establishment,
Bargaining Unit insofar as said processes will directly affect their
a. In a Certification Election, the voters are rights, benefits and welfare.
the whole bargaining unit, whether
union or non-union members (Labor Services to be rendered by the Department in line
Code, Arts. 267); with the said policy
b. In a CBA Ratification, the voters are the 1. Conduct awareness campaigns
whole bargaining unit, and not just the 2. Assist the parties in setting up labor-
union members (Labor Code, Art 237); management structures, functions and
and procedures
c. In Strike Voting, the voters are the 3. Provide process facilitators upon request of
members of the union, not the whole the parties
bargaining unit. (Labor Code, Art. 278[f]) 4. Monitor the activities of labor-management
structures as may be necessary and
3. Bargaining Representative conduct studies on best practices aimed at

ATENEO CENTRAL
promoting harmonious labor-management The certificate of registration or certification of

relations. creation as duly certified by the president of the
requesting union or of the federation of the local,
SELECTION OF EMPLOYEES’ respectively, shall be attached to the request.
REPRESENTATIVES TO THE COUNCIL
Action on the Request
NO LEGITIMATE Within 1 day from the submission of the request, the
ORGANIZED
LABOR
ESTABLISHMENT Regional Director shall:
ORGANIZATION 1. Determine whether the request is compliant
Nominated by the By the employees at with the rules and whether the bargaining
exclusive bargaining large. unit sought to be represented is organized or
representatives. not
Modes to acquire status as Sole and Exclusive 2. Request a copy of the payroll for purposes
Bargaining Agent (SEBA) of SEBA certification
Representation is determined through:
a. SEBA (Sole and Exclusive Bargaining If he/she finds it deficient, the Regional Director shall
Agent) Certification advise the requesting union or local to comply within
b. Certification Election 10 days from notice. Failure to comply is deemed a
c. Consent Election withdrawal of the request.
d. Bars to the holding of Certification/Consent
Election REQUEST FOR CERTIFICATION
e. Run-Off Election UNORGANIZED
UNORGANIZED
f. Re-run Elections ESTABLISHMENT WITH
ESTABLISHMENT
ONLY 1 LEGITIMATE
WITH MORE THAN
a. SEBA Certification LABOR ORGANIZATION
1 LLO
(LLO)
Voluntary recognition was repealed and replaced by The RD shall call a
a Request for the Sole and Exclusive Bargaining conference within 5 work
Agent Certification (D.O. No. 40-I-15 Series of 2015) days for the submission of
the following:
SEBA Certification may be issued if it is proved 1. The names of the
that the following concur: employees in the
1. The bargaining unit is ununionized; covered bargaining
2. The requesting union is the only union in that unit who support the
bargaining unit; and certification, provided
3. The CBU majority are members of the union that said employees
comprise at least
Requesting Union majority of the number
The RD shall refer
Any legitimate labor organization of employees in the
the same to the
covered bargaining
Election Officer for
Where to File unit; and
the conduct of a
Regional Office which issued the legitimate labor 2. Certification under
Certification
organization’s certificate of registration or certificate oath by the president
Election.
of creation of chartered local. of the requesting union
or local that all
Requirements for Request of SEBA Certification: documents submitted
The request shall indicate: are true and correct
1. The name and address of the requesting based on his/her
legitimate labor organization personal knowledge.
2. The name and address of the company
where it operates If the RD finds the
3. The bargaining unit sought to be requirements complete,
represented he/she shall issue during
4. The approximate number of employees in the conference a
the bargaining unit; and certification as SEBA.
5. The statement of the existence/non-
existence of other labor organization/CBA Request for Certification In Organized
Establishment

ATENEO CENTRAL
If the RD finds the establishment organized, he/she 2. Veracity of membership claims of the
shall refer the same to the Mediator-Arbiter for the competing unions so as to identify the union
determination of the propriety of conducting a that will serve as the bargaining
certification election. representative of the entire bargaining unit
Effects of Certification Note: The questions to be resolved in a Certification

1. Upon the issuance of the certification as Election:
SEBA, the certified union or local shall enjoy 1. Whether the employees what to be
the rights and privileges of an exclusive represented
bargaining agent of all the employees in the 2. By whom should they be represented
covered bargaining unit.
2. The certification shall bar the filing of a
petition for certification by any labor
organization for a period of 1 year from the Pending Petition for Cancellation of Registration
date of its issuance. Upon expiration of this is not a Bar for a Certification Election
1-year period, any legitimate labor An order to hold a certification election is proper
organization may file a petition for despite the pendency of the petition for cancellation
certification election in the same bargaining of the registration certificate of the respondent union
unit represented by the certified labor because at that time the union filed its petition, it still
organization, unless a CBA between the had the legal personality to perform such act absent
employer and the certified labor organization an order directing the cancellation (Legend
was executed and registered with the International Resorts Limited v. Kilusang
Regional Officer in accordance with Rule Manggagawa ng Legenda, G.R. 169754, 2006).
XVII of this rules. (D.O. 40-i-15)
Certification Election Union Election
b. Certification Election To determine the
exclusive bargaining To elect union officers
Process of determining through secret ballot the sole agent
and exclusive bargaining agent of the employees in All members of the
an appropriate bargaining unit for purposes of Only union members
appropriate bargaining
collective bargaining or negotiations. may vote
unit may vote
Conducted by Med-Arbiter of the Bureau of Labor
Relations of the DOLE. (IRR Labor Code, Sec. 1[x], Note: The process in certification elections depends
Rule I, Book V) upon whether the establishment is organized or
unorganized. The general flow remains the same, but
Purpose there are some differences, as will be discussed
The ascertainment of the wishes of the majority of the below.
employees in the appropriate bargaining unit: to be
or not to be represented by a labor organization, and IN AN UNORGANIZED ESTABLISHMENT
in the affirmative case, by which particular labor Unorganized establishment: an establishment
organization. (Reyes v. Trajano, G.R. No. 84433, without a bargaining representative.
1992)
Who May File
Whenever there is doubt as to whether a particular Any legitimate labor organization including
union represents the majority of the rank-and-file 1. A national union or federation which has
employees, in the absence of a legal impediment, the already issued a charter certificate to its
holding of a certification election is the most local/chapter participating in the certification
democratic method of determining the employees’ election or a local/chapter which has been
choice of their bargaining representative. It is the issued a charter certificate by the national
appropriate means whereby controversies and union or federation. (Labor Code, Art. 269)
disputes on representation may be laid to rest, by the 2. An employer may file a Petition for
unequivocal vote of the employees themselves. Certification Election when:
(Philippine Airlines Employees’ Association (PALEA) a. Requested to bargain collectively;
v. Ferrer-Calleja, G.R. No. 76673, 1988) and
b. No bargaining agent nor a
Issues Involved in a Certification Election registered CBA exists in the unit.
1. Proper composition and constituency of the (Labor Code, Art. 270)
bargaining unit; and

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Requisites for holding a certification election in

an unorganized establishment (Labor Code, Art. If the bargaining unit has a CBA, the petition can be
269) filed only within the “freedom period” which is the last
Once a petition is filed by a legitimate labor 60 days of the 5th year of the CBA.
organization, the Med-Arbiter shall automatically
order the conduct of a certification election. Comparison of Organized v. Unorganized
establishments
When to File
Any time, except within 12 months of a previous
election (if any). ART. 268 ART. 269
ORGANIZED UNORGANIZED
IN AN ORGANIZED ESTABLISHMENT
BARGAINING AGENT
Organized establishment: an establishment with a
Existing None
duly certified bargaining agent and/or an existing
FREEDOM PERIOD
CBA.
Not applicable. Can file
No petition for
Who May File petition anytime,
certification except
Any legitimate labor organization, including except within 12
within the 60-day
1. A national union or federation which has months of a previous
freedom period
already issued a charter certificate to its election (if any).
local chapter participating in the certification SUBSTANTIAL SUPPORT RULE
election. (Labor Code, Art. 268) (National Must be duly supported
union or federation shall not be required to by 25% of all the
disclose the names of the local/chapter’s Substantial support
members of the
officers and members, but shall attach to the rule not applicable
appropriate bargaining
petition the charter certificate it issued to its unit
local/chapter Sec. 1, Rule VIII of D.O. 40-I- GRANT OF PETITION FOR CERT. ELECTION
15) Appealable Not Appealable
2. A local chapter which has been issued a (Protest may be filed)
charter certificate by the national union or
federation before the DOLE within the 60- REQUIREMENTS FOR VALID CERTIFICATION
day freedom period. (Labor Code, Art. 268) ELECTION
1. The union should be legitimate which
Requisites for holding a certification election in means that it is duly registered and listed in
an organized establishment (Labor Code, Art. the registry of legitimate labor unions of the
268): BLR or that its legal personality has not been
1. The Med-Arbiter shall automatically order an revoked or cancelled with finality.
election by secret ballot when 2. In case of organized establishments, the
2. Verified petition supported by at least 25% petition for certification election is filed
of all the employees in the bargaining unit, during (and not before or after) the 60-
questioning the majority status of the day freedom period of a duly registered
incumbent bargaining agent. CBA.
3. Filed before the DOLE within the 60-day 3. In case of organized establishments, the
period before the expiration of the five year petition complied with the 25% written
representation aspect of the CBA support of the members of the bargaining
unit.
Note: The requisite written consent of at least 20%
4. The petition is filed not in violation of any of
(now 25%) of the workers in the bargaining unit
the three (3) bar rules.
applies to certification election only, and not to
motions for intervention. (PAFLU v. Calleja, G.R. No.
79347, 1989) COMMON REQUISITES
When to file Where to file the PCE

The proper time to file a petition for C.E. depends on With the Regional Office which issued the petitioning
whether the bargaining unit has a CBA or not. union’s certificate of registration or certificate of
creation of chartered local.
If it has no CBA, the petition may be filed anytime 1. Where two/more petitions involving the
except within 12 months of a previous election (if same bargaining unit are filed in one
any). Regional Office, the same shall be

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automatically consolidated with the Med- 5. The petition was filed before or after the
Arbiter who first acquires jurisdiction. freedom period of a duly registered
2. Where the petitions are filed in different collective bargaining agreement; provided
Regional Offices, the Regional office in that the 60-day period based on the original
which the petition was first filed shall exclude collective bargaining agreement shall not be
all others; in which case, the latter shall affected by any amendment, extension or
endorse the petition to the former for renewal of the collective bargaining
consolidation. agreement; (Contract Bar)
3. At the option of the petitioner, a PCE and its
supporting document may also be filed 6. The petition was filed within 1-year from
ONLINE. (DO No. 40-I-15) entry of voluntary recognition or a valid
The Regional Director or his/her authorized certification, consent or run-off election and
personnel shall be responsible for the posting of the no appeal on the results of the certification,
Notice of Petition for Certification Election. consent or run-off election is pending; (1-
Year Bar/Certification Year Bar)
Grounds for Denying Petition (R.A. 9481; D.O. No.
40-F-03) (ALCEC-YDS) 7. A duly certified union has commenced and
1. If the petitioner union does not Appear in two sustained negotiations with the employer or
successive conferences called by the Med- there exists a bargaining deadlock which
Arbiter, upon showing that the petitioner was had been submitted to conciliation or
duly notified.(Non-Appearance) arbitration or had become the subject of a
2. The petitioner is not Listed in the valid notice of strike or lockout to which an
Department’s registry of legitimate labor incumbent or certified bargaining agent is a
unions or that its legal personality has been party; (Deadlock Bar/Negotiation Bar)
revoked or cancelled with finality.
(Illegitimacy – Unregistered Union) 8. In case of an organized establishment,
failure to submit the 25% Support
The filing or pendency of any inter/intra-union dispute requirement for the filing of the petition for
and other related labor relations dispute is not a certification election. (Lack of Support)
prejudicial question to any petition for certification
and shall not be a ground for the dismissal of a A certification may be called by the Med-Arbiter even
petition for certification election or suspension of through the 25% support requirement has not been
proceedings for certification election. (D.O. No. 40- complied with. The requirement is relevant only when
03, as amended by D.O. No. 40-F-03, Sec. 2, Rule it becomes mandatory to conduct a certification
XI) election. In all other instances, the discretion ought to
be exercised in favor of a petition for certification
Certification election may be ordered despite the election. (California Manufacturing Corp., v. Usec of
pendency of a ULP charge against a union filed by Labor, G.R. No. 97020, 1992)
the employer (Barrera v. CIR, G.R. No. L-32853,
1981) or the pendency of a petition to cancel the In Summary, the Grounds for Denying Petition for
union’s registration certificate based on an alleged Certification Election:
illegal strike by the union. (National Union of Bank 1. Non-Appearance
Employees v. Minister of Labor, G.R. No. L-53406, 2. Illegitimacy – Unregistered Union
1981) 3. Illegitimacy – No Charter
4. No Employee-Employer Relationship
3. Failure of a local/chapter or national union or 5. Contract Bar
federation to submit a duly issued Charter 6. 1-Year Bar/Certification Year Bar
Certificate upon filing of the petition for 7. Negotiation/Deadlock Bar
certification election. (Illegitimacy – No 8. Lack of Support
Charter)
PROTESTS/APPEAL AND OTHER QUESTIONS
4. Absence of an Employment relationship ARISING FROM CONDUCT OF CERTIFICATION
between all the members of the petitioning ELECTION
union and the establishment where the The order granting the conduct of a certification
proposed bargaining unit is sought to be election in an unorganized establishment shall not
represented. (Absence of EER be subject to appeal. Any issue arising therefrom
Relationship) may be raised by means of protest on the conduct
and results of the certification election.

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ELECTION MECHANICS (Rule VIII of D.O. 40-03).

The order granting the conduct of a certification
election in an organized establishment and the 1. RAFFLE OF THE CASE
decision dismissing or denying the petition, whether Upon the filing of the petition, the Regional Director
in an organized or unorganized establishment, may or any of his/her authorized representative shall allow
be appealed to the Office of the Secretary within 10 the party filing the petition to personally determine the
days from receipt thereof. Med-Arbiter assigned to the case by means of a raffle
(Sec. 17, Rule VIII of D.O. 40-03). (Sec. 5, Rule VIII of D.O. 40-03).
PROTEST (Sec. 13, Rule IX, Book V) 2. PRELIMINARY CONFERENCE

Who may file: Any party-in-interest The Med-Arbiter shall conduct a preliminary
Ground: On the conduct or mechanics of election conference and hearing within 10 days from the
receipt of the petition to determine the following:
How to protest: 1. The bargaining unit to be represented;
1. Record the protest in the minutes of the 2. Contending Labor Unions;
election proceedings; AND 3. Possibility of labor unions consent
2. Formalize the protest with specific grounds elections;
and arguments before the Med-Arbiter 4. Existence of any of the bars to certification
within five (5) days after the close of the election; and
election proceedings 5. Such other matters as may be relevant for
the final disposition of the case. (Sec.
Protests deemed dropped
10[s], Rule VIII of D.O. 40-03).
Protests which are:
When parties fail to agree to a consent election
1. Not recorded in the minutes; AND
during the preliminary conference, hearing/s will be
2. Not formalized within the prescribed period
conducted.
General Reservation to file protest prohibited
Number of Hearings
Protesting party shall specify the grounds.
The Med-Arbiter may conduct as many hearings as
he/she may deem necessary, but in no case shall the
Failure to formalize within 5-days cannot be taken
conduct thereof exceed 15 days from the date of the
against the union.
scheduled preliminary conference/hearing, after
The union misrepresented that they were
which time the petition shall be considered submitted
independent which caused the members to for decision (Sec. 12, Rule VIII of D.O. 40-03)
disaffiliate and form a new union and their protest
was not filed within the 5-day period.
Failure to Appear Despite Notice
Failure of any party to appear in the hearing/s when
The failure to follow strictly the procedural
notified or to file its pleadings shall be deemed a
technicalities regarding the period for filing their
waiver of its right to be hear. (Sec. 12 Rule VIII of
protest (within the 5-day period) should not be taken D.O. 40-03)
against them. Mere technicalities should not be
allowed to prevail over the welfare of the workers.
Note: See diagram in the succeeding pages.
What is essential is that they be accorded an
opportunity to determine freely and intelligently which 3. ORDER/DECISION ON THE PETITION
labor organization shall act on their behalf. (DHL-
Within 10 days from the date of the last hearing, the
URFA-FFW v. BMP, G.R. No. 152094 2004)
Med-Arbiter shall issue a formal order granting or
denying the petition.
ELECTION PROCEEDINGS refer to the period
Included:
In organized establishments, no order or decision
1. Starting from the opening to the closing of shall be issued during the freedom period.
the polls
2. Counting, tabulation and consolidation of
The order granting the petition shall state the
votes
following:
1. Name of the employer or establishment
Excluded:
2. Description of the bargaining unit
1. Period for the final determination of the
challenged votes 3. Statement that none of the grounds for
2. Canvass dismissal exists
(Sec. 1[p], Rule I of D.O. 40-03). 4. Names of contending labor unions

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5. Directive to an unregistered local/chapter (Sec. 14 Rule VIII of D.O. 40-03)

or a federation/national union representing
an unregistered local/chapter to personally 4. APPEAL
submit to the Election Officer its certificate Order granting conduct of certification election in
of creation at least 5 working days before unorganized establishments – NOT appealable
the actual conduct of the certification
election. Non-submission of this All others – appealable to the DOLE Sec. within 10
requirement as certified by the Election days from receipt.
Officer shall disqualify the local/chapter
from participating in the certification 5. PRE-ELECTION CONFERENCE
Within 24 hours from receipt of the assignment for the
election
conduct of a certification election, the Election Officer
6. Directive upon the employer and the
shall cause the issuance of notice of pre-election
contending union(s) to submit within 10 conference upon the contending unions and the
days from receipt of the order, the certified employer.
list of employees in the bargaining unit, or
where necessary, the payrolls covering the Must be scheduled within 10 days from receipt of the
members of the bargaining unit of at least assignment.
3 months prior to the issuance of the order
(Sec. 14 Rule VIII of D.O. 40-03). Must be completed within 30 days from the last
hearing.
Grounds for Denial of the Petition for
Certification Election: The employer shall be required to submit the certified
1. Petitioner is not listed as a LLO or its legal list of employees in the bargaining unit, or where
personality has been revoked necessary, the payrolls covering the members of the
2. Petition was filed outside of the freedom bargaining unit at the time of the filing of the petition.
period
3. Petition was filed within one (1) year from Importance: The pre-election conference shall set
entry of valid certification/consent or run the mechanics for the election and determine the
off election AND no appeal on the results following:
of the election is pending 1. Date, time and place of the election
4. Petition was filed in violation of the 2. Not be later than 45 days from the date of
negotiation/deadlock bar rule or had the first pre-election conference
become the subject of a valid notice of 3. On a regular working day
strike or lockout to which an incumbent or 4. Within the employer’s premises, unless
CBA is a party circumstances require otherwise
5. In case of organized establishment, failure 5. List of eligible and challenged voters
to submit the twenty-five percent (25%) 6. Number and location of polling places or
support requirement (Sec. 15, Rule VIII of booths and the number of ballots to be
D.O. 40-03) prepared with appropriate translations, if
necessary
Prohibited Grounds for Denial of Petition 7. Name of watchers or representatives and
The following must be heard and resolved by the their alternates for each of the parties
Regional Director in an independent petition for during election
cancellation of registration: 8. Mechanics and guidelines of the election
1. Validity of petitioning union’s certificate of (Rule IX of D.O. 40-03)
registration or its legal personality as a
labor organization Effect of failure to appear during the pre-election
2. Validity of registration and execution of conference
CBA 1. Considered as a waiver to be present and
to question or object to any of the
The following issues shall be raised before the Med- agreements reached in said pre-election
Arbiter during the hearing and in the pleadings in the conference.
petition for certification election and shall be resolved 2. However, the non-appearing party or the
in the same order: employer still has the right to be furnished
1. Existence of Employer-Employee notices of subsequent pre-election
relationship
2. Eligibility or mixture in union membership

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conferences and to attend the same (Sec. owner after the conduct of the certification election.
4, Rule IX of D.O. 40-03). (Sec. 12, Rule IX of D.O. 40-I-15)
Qualification of Voters Preparation of Ballots

1. All employees who are members of the The Election Officer shall prepare the ballots in
appropriate bargaining unit 3 MONTHS English and Filipino or the local dialect
PRIOR to the filing of the petition/request
shall be eligible to vote. The number of ballots should correspond to the
number of voters in the bargaining unit plus a
2. An employee who has been dismissed
reasonable number of extra ballots for contingencies.
from work but has contested the legality of
the dismissal in a forum of appropriate All ballots shall be signed at the back by the Election
jurisdiction at the time of the issuance of Officer and an authorized representative each of the
the order for the conduct of a certification contending unions.
election shall be considered a qualified
voter UNLESS his/her dismissal was A party who refuses or fails to sign the ballots waives
declared valid in a final judgment at the its right to do so and the Election Officer shall enter
time of the conduct of the certification the fact of refusal or failure and the reason therefore
election (Sec. 6, Rule IX of D.O. 40-I-15). in the records of the case(Sec. 9, Rule IX of D.O. 40-
03).
Inclusion/Exclusion of Voters
In case of disagreement over the voters’ list or over Challenging of Votes
the eligibility of voters, all contested voters shall be An authorized representative of any of the
allowed to vote, but their votes shall be segregated contending unions and employer may challenge the
and sealed in individual envelopes with their names. vote.
6. POSTING OF NOTICES OF ELECTION The challenge must be raised before vote is

At least 10 days before the actual date of the election deposited in the ballot box.
in 2 most conspicuous places in the company
premises Grounds for Challenging Votes
1. No employer-employee relationship
Contents of the Notice between the voter and the company
1. Date and time of the election, which is 2. Voter is not a member of the appropriate
preferably within the establishment bargaining unit which petitioner seeks to
2. Names of all contending unions represent
3. The description of the bargaining unit and
the list of eligible and challenged voters Procedure in Challenging of Votes
1. The Election Officer shall place the ballot
The posting of the list of employees comprising the of the voter who has been properly
bargaining unit shall be done by the DOLE personnel. challenged during the pre-election
conferences in an envelope.
Note: The posting of the notice of election, the a. Sealed in the presence of the
information required to be included therein and the voter and the representatives of
duration of posting cannot be waived by the the contending unions and
contending unions or the employer (Sec. 7, Rule IX employer.
of D.O. 40-I-15).
b. Indicate on the envelope the
voter’s name, the union or
Secrecy and Sanctity of the Ballot
The Election Officer and the authorized employer challenging the voter,
representatives of the contending unions shall before and the ground for the challenge.
the start of the actual voting, inspect the polling place, c. Envelope shall be signed by the
the ballot boxes and the polling booths. Election Officer and the
representatives of the contending
No device that could record or identify the voter or unions and employer.
otherwise undermine the secrecy and sanctity of the 2. The Election Officer shall note all
ballot shall be allowed within the premises, except challenges in the minutes of the election
those devices brought in by the election officer. proceedings and shall have custody of all
Any other device found within the premises shall be
confiscated by the election officer and returned to its

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envelopes containing the challenged shall be made within 15 days from the
votes. conduct thereof (Sec. 14, Rule IX of D.O.
3. The envelopes shall be opened and the 40-03).
question of eligibility shall be passed upon
by the mediator-arbiter only if the number CONDUCT OF ELECTION AND CANVASS OF
of segregated voters will materially alter VOTES
the results of the election (Sec. 11, Rule 1. The election precincts shall open and
IX of D.O. 40-03) close on the date and time agreed upon
during the pre-election conference.
Protest 2. The opening and canvass shall proceed
Any party-in-interest may file a protest based on the immediately after the precincts have
conduct or mechanics of the election. closed
3. Failure of any party or the employer or
Protests not so raised immediately after the last ballot his/her/their representative to appear
cast are deemed waived. during the election proceedings shall be
considered a waiver to be present and to
General Reservation to file a protest shall be question the conduct thereof (Sec. 15,
prohibited. The protesting party shall specify the Rule IX of D.O. 40-03).
grounds for protest.
Double Majority Rule
Requirements in order that a protest may
For there to be a valid certification election:
prosper:
1. Majority of the bargaining unit must have
1. Filed with the representation officer and
voted; AND
made of record in the minutes of the
2. The winning union must have garnered
proceedings before the close of election
majority of the valid votes cast. (National
proceedings; and
Union of Workers In Hotels, Restaurant
2. Formalized before the Med-Arbiter within
and Allied Industries-Manila Pavilion Hotel
5 days after the close of the election
Chapter v. Secretary of Labor, G.R. No.
proceedings.
181531, 2009)
3. If not recorded in the minutes and
formalized within the prescribed period,
Note: Spoiled ballots are not reckoned to
the protest shall be deemed dropped
determine majority (PAFLU v. BLR, G.R. No. L-
(Sec. 14, Rule IX of D.O. 40-I-15).
43760, 1976) Valid votes are those not
Canvassing of Votes challenged, damaged, etc.
1. Votes shall be counted and tabulated by
CERTIFICATION OF COLLECTIVE BARGAINING
the Election Officer in the presence of the
AGENT
representatives of the contending unions.
The union which obtained a majority of the valid
2. Each representative is entitled to a copy of votes cast shall be certified as the sole and
the minutes of the election proceedings exclusive bargaining agent of all the employees in the
and results of the election. appropriate bargaining unit.
3. The ballots and the tally sheets shall be:
a. Sealed in an envelope Certification must be done within five (5) days from
b. Signed by the Election Officer and the day of election provided there was no protest.
the representatives of the
contending unions When the winning choice is a local chapter
c. Transmitted to the Med-Arbiter, without a certificate of creation of chartered local
together with the minutes and The local chapter shall submit its DOLE issued
results of the election, within 24 certificate of creation within five (5) days from the
hours from the completion of the conclusion of election (Sec. 15, Rule IX of D.O. 40-I-
canvass 15)
4. Where the election is conducted in more
than one region, consolidation of results

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FILING PETITION FOR CERTIFICATION ELECTION
File PETITION for

certification election
RAFFLE
Dispensed with if there is only
one Med-Arbiter
Service of NOTICE of
preliminary conference
PRELIMINARY CONFERENCE
Must be within 10 days from receipt of
petition for certification election
Parties AGREE on a consent Parties FAIL TO AGREE on a

election consent election
FORWARD RECORDS of HEARINGS

petition to RD / authorized No set #, but must not exceed
representative 15 days from date of
preliminary conference
First PRE-ELECTION
CONFERENCE DECISION
Must be within 10 days from Must be within 10 days from last
date of entry of agreement hearing

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APPEAL OF DECISIONS RE: GRANTING / DENYING CONDUCT OF CERTIFICATION ELECTION
DECISION
UNORGANIZED ORGANIZED
Establishment Establishment
Petition Petition Petition Petition

GRANTED DENIED GRANTED DENIED
File MEMORANDUM OF APPEAL within 10 days from receipt of

Unappealable decision with the REGIONAL DIRECTOR where the petition
originated
REGIONAL DIRECTOR to transmit entire record within 24 hours

from receipt of appeal to OFFICE OF THE SECRETARY OF
LABOR
REPLY
Any party may file a reply within 10 days from receipt of the
Memorandum of Appeal
Decision of the SECRETARY OF LABOR
Secretary shall have 15 days from receipt of the entire records to

decide the appeal
CERTIFICATION ELECTION PROPER
The decision shall be final and executory
within 10 days from receipt by the parties
No motion for reconsideration shall be entertained
The entire records of the case shall be remanded to the

Regional Office for implementation
within 48 hours from notice of receipt of the decision
RECEIPT OF ENTRY OF FINAL JUDGMENT granting conduct of a Certification Election

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Regional Director to cause the RAFFLE of the case to an ELECTION OFFICER

within 24 hours from receipt of notice
Election Officer to cause issuance of NOTICE OF PRE-ELECTION CONFERENCE upon contending

unions and employer w/in 24 hours from receipt of assignment
Posting of notices must be done at least 10 days before election,

in 2 most conspicuous places in the company premises
PRE-ELECTION CONFERENCE
Must be within 10 days from receipt of assignment, and completed within 3 days of first hearing
Failure to appear in pre-election conference is a waiver of the right to question any agreement in pre-
election conference. However, the non-appearing party retains the right to be given notices of subsequent
pre-election conferences.
CERTIFICATION ELECTION
Must not be later than 45 days from date of first pre-election conference
ELECTION PRECINCTS CLOSE

On the date and time agreed upon during the pre-election conference
CANVASS OF VOTES
Opening and canvassing of votes shall begin immediately after the precincts have closed
NOTE: FAILURE OF ELECTIONS

Exists when the votes cast is less than the majority of eligible voters, and there are no material challenged
votes. Another certification or consent election may be held within 6 months.
TRANSMIT RECORDS OF CASE to MED-ARBITER. MED-ARBITER to issue an order PROCLAIMING

THE RESULTS of the Certification Election.
Any of the following conditions must have been present:

[1] No protest was filed, or protest filed but not perfected within the 5-day period for perfection of protest
[2] No challenge or eligibility issue raised, or even if raised, will not materially change results of elections

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c. Consent Elections the results thereof shall constitute a bar to another

Definition petition for certification election. (Sec. 25 Rule VIII of
Election voluntarily agreed upon by the parties, with D.O. 40-03).
or without the intervention of the Department of Labor
and Employment, to determine the issue of majority d. Bars to the holding of
representation of all the workers in the appropriate Certification/Consent Election
collective bargaining unit. (IRR Labor Code, Sec.
1[h], Rule I, Book V) Petition for certification may be filed:
General Rule: Anytime
Note: If done as part of a certification election case, Exceptions:
i.e., with the intervention of the DOLE, a consent 1. Contract bar rule
election shall have the same legal effect as a 2. Deadlock bar rule
certification election. 3. Negotiation bar rule
4. One-year bar rule
Procedure in Consent Elections if Agreed in the
Course of Proceeding of Petition for certification 1. CONTRACT BAR RULE
Election General Rule: The representation status of the
1. In case the contending unions agree to a incumbent exclusive bargaining agent which is a
consent election, the Med-Arbiter shall not party to a duly registered CBA shall be for a term of
issue a formal order calling for the conduct five (5) years from the date of effectivity of the CBA.
of certification election, but shall enter the No petition questioning the majority status of the
fact of the agreement in the minutes of the incumbent exclusive bargaining agent or petition for
hearing. certification election shall be filed (Sec. 7, Rule XVII
2. The minutes of the hearing shall be signed of D.O. 40-03).
by the parties and attested to by the Med-
Arbiter. Exception: (Freedom period) Arts. 264, 265, 268:
3. The employer may be required to submit Within 60 days before expiration of the 5-year term of
the certified list of employers in the the representational aspect of the CBA.
bargaining unit or where necessary, the
payrolls at the time of filing of the petition. Note: This freedom period is different from the sixty
(Sec. 2, Rule IX) day period within which to start negotiations for a new
4. The Med-Arbiter shall, immediately CBA.
thereafter, forward the records of the
Requisites for Contract-Bar Rule
petition to the Regional Director or his/her
1. Agreement is existing;
authorized representative for the 2. Ratified by the union membership;
determination of the Election Officer by 3. It is adequate for it contains substantial
the contending unions through raffle. terms and conditions for employment;
5. The first pre-election conference shall be 4. It encompasses the employees in the
scheduled within 10 days from the date of appropriate bargaining unit;
entry consent election agreement. (See 5. It was not prematurely extended; the CBA
Annex G) (Sec. 11, Rule VIII of D.O. 40- was not hastily entered into;
03). 6. It is for a definite period;
7. No schism or mass disaffiliation affects the
Effects of Consent Election contracting union during the lifetime of the
Where a petition for certification election is filed, and agreement;
upon the intercession of the Med-Arbiter, the parties 8. The contracting union is not defunct; and
agreed to hold a consent election, the results shall 9. The contracting union is not company-
constitute a bar to the holding of a certification dominated
election for one year from the holding of such consent
election. Where an appeal has been filed from the Exceptions: The existence of a CBA will not bar
results of the consent election, the running of the certification election in the following instances:
one-year period shall be suspended until the decision 1. CBA is not registered
on appeal has become final and executory. 2. CBA deregistered
3. CBA is incomplete in itself
Where no petition for certification election was filed 4. CBA where the identity of the representative is in
but the parties themselves agreed to hold a consent doubt (Associated Labor Unions v. Hon. Ferrer-
election with the intercession of the Regional Office, Calleja, G.R. No. 85085, 1989)

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5. CBA was hastily entered into, i.e. signed before

the freedom period (Associated Trade Unions- 4. ONE-YEAR BAR RULE OR CERTIFICATION
ATU v. Hon. Noriel, G.R. No. L-48367, 1979) YEAR BAR RULE
6. CBA entered into between the employer and the No petition for a certification election may be filed
union during the pendency for certification within 1 year from the date of a valid certification,
election (Vassar Industries EU v. Estrella, G.R. consent, or run-off election, or from the date of entry
No. L-46562, 1978) of a voluntary recognition of the union by the
7. CBA was concluded in violation of an order employer.
enjoining the parties from entering into a CBA
until the issue of representation is resolved Certification year rule will apply even if the “No union”
8. Referendum to register an independent union choice won. Therefore, for one year, no PCE will be
entertained (Samahang Manggagawa sa Permex v.
Secretary, G.R. No. 107792, 1998)
2. DEADLOCK BAR RULE
Deadlock arises when there is an impasse, which Note: The 12-month prohibition presupposes that
presupposes reasonable effort at good faith there was an actual conduct of election, i.e. ballots
bargaining which, despite noble intentions, did not were cast and there was a counting of votes. In a
conclude in an agreement between the parties. case where there was no certification election
conducted precisely because the first petition was
Genuine Deadlock dismissed on the ground that it did not include all the
1. The submission of the deadlock to a 3rd party employees who should be properly included in the
conciliator or arbitrator; or collective bargaining unit, the certification year bar
2. The deadlock is the subject of a valid notice does not apply. (R Transport Corp. v. Laguesma,
of strike or lockout (National Congress of G.R. No. 106830, 1993)
Unions in the Sugar Industry v. Trajano,
G.R. No. 67485, 1992) Date of election
Date to be considered is when the election was
Petition for certification election cannot be conducted; if results are appealed, then the date
entertained if: when appeal is finally resolved.
1. A duly certified union has commenced and
sustained negotiations with the employer in Where less than majority of CBU voted
accordance with Art. 261 within the 1-year There is a failure of election when less than majority
period referred to in Sec. 14.d of the IRR. of the CBU members voted. A failure of election shall
2. Before the filing of the petition for not bar the filing of a motion for the immediate holding
certification election, a bargaining deadlock of another certification or consent election may be
to which an incumbent or certified filed within 6 months from date of declaration of the
bargaining agent is a party, had been failure of election. (D.O. No. 40-03, Sec. 18, Rule IX)
submitted to conciliation or arbitration or had
become the subject of a valid notice of strike Note: The last sentence pertains to the re-run
or lockout. election as provided under D.O. No. 40-I-15.
Requisites: When Certification Year Bar Rule will NOT APPLY

d. Parties must have negotiated in good faith 1. In a case where there was no certification
e. Deadlock must have been submitted to election conducted precisely because the
voluntary conciliation or arbitration or is subject first petition was dismissed on the ground
of a valid notice of strike / lock-out. that it did not include all the employees who
should be properly included in the collective
When Deadlock Bar Not Applicable: bargaining unit. (R Transport Corp. v.
Artificial Deadlock: A deadlock prearranged or Laguesma, G.R. No. 106830, 1993)
preserved by collusion of the employer and the 2. A failure of election where less than majority
majority union. (See Kaisahan ng Manggagawang of the CBU members voted. A failure of
Pilipino (KAMPIL-KATIPUNAN) v. Trajano, G.R. No. election shall not bar the filing of a motion for
758110, 1991) the immediate holding of another
certification or consent election may be filed
3. NEGOTIATION BAR RULE within 6 months from date of declaration of
Negotiation bar rule exists when a union has the failure of election. (D.O. No. 40-03, Sec.
already commenced and sustained collective 18, Rule IX)
bargaining negotiations in good faith within the 1-
year period, but there is no CBA yet.

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Failure of election 5. There is no unresolved challenge of voter

Where the number of votes cast in a certification or or election protest
consent election is less than the majority of the
number of eligible voters and there are no material Note: “No Union” shall not be a choice in the run-off
challenged votes (Sec. 17, Rule IX of D.O. 40-03). election (Sec. 1, Rule X of D.O. 40-03)
A failure of election shall not bar the filing of a motion Abstention refers to a blank or unfilled ballot validly
for the immediate holding of another certification or cast by an eligible voter. It is not considered as a
consent election within 6 months from date of negative vote but is considered a valid vote in
declaration of failure of election (Sec. 19, Rule IX of determining a valid election. (Sec. 1[a], Rule I, D.O.
D.O. 40-03). No. 40-I-15).
Action on motion for the immediate holding of Spoiled Ballot refers to a ballot that is torn, defaced,
another certification or consent election or contains marking which can lead another to clearly
Within 24 hours from receipt of the motion, the identify the voter who casts such vote (Sec. 1[ww],
Election Officer shall immediately schedule the Rule I, D.O. No. 40-I-15).
conduct of another certification or consent election
within 15 days from receipt of the motion and cause Example 1: 100 members in the appropriate
the posting of the notice of certification election at bargaining unit. All members cast their votes.
least 10 days prior to the scheduled date of election
in 2 most conspicuous places in the establishment. Election results:
The same guidelines and list of voters shall be used Union A – 24 Union C - 10
in the election. Union B – 15 No Union - 5
e. Run-off Election Total number of votes: 54 valid votes, with the rest
declared spoiled.
An election between the labor unions receiving the
two (2) highest number of votes in a certification or Q1: Is the election valid?
consent election with three (3) or more choices, Yes, because everyone voted.
where such results in none of the choices (unions or
“no union” choice) receiving a majority of the valid Q2: Who won?
votes cast. None of the three unions won, because not one
received a majority of the valid votes cast. (Majority
Provided, that the total number of votes for all is 28 votes)
contending union is at least fifty (50%) of the number
of votes cast (Sec. 1[uu], Rule I of D.O. 40-03) Q3: Is run-off election a remedy here?
No. The total number of votes for all contending
Procedure in Run-off Elections unions is LESS than 50% of ALL of the number of
The Election Officer shall motu propio conduct a votes cast (Unions A, B and C garnered 49 votes, or
run-off election within 10 days from the close of the at least one vote short of the requirement, since there
election proceedings between the labor unions are 100 members in the ABU).
receiving the two highest numbers of votes.
Q4: Is a re-run election a remedy here?
Notice of run-off elections shall be posted by the No. There is no failure of election and none of the
Election Officer at least 5 days before the actual date choices obtained the same number of votes. (D.O.
of run-off election. No. 40-I-15)
Requirements for Run-Off Election Example 2: 200 members in the appropriate

1. A valid election took place because bargaining unit. All members cast their votes.
majority of the CBU members voted
2. There are three or more choices in the Election results:
election (including no union) Union A – 40
3. Not one of the choices obtained majority Union B – 30
of the valid votes Union C - 20
4. Total number of votes for all contending No Union – 80
Spoiled – 30
unions is at least 50% of the number of
votes cast.
Total number of votes: 170 valid votes, with 30
spoiled votes.

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Situation contemplated
Step 1: Check for first majority: WoN there was a When a Certification, Consent or Run-off Election
Valid Election — 50% +1 of the Bargaining Unit results to a tie between 2 choices.
Step 2: Check for second majority: WoN a union/no Duty of Election Officer (EO)
union won the majority of valid votes cast — 50% + 1 1. Immediately notify the parties of a Re-run
of VVC Election.
2. Cause the posting of the NOTICE within 5
In example 2, days from the Certification, Consent or
Step 1: Run-off Election. The Re-run shall be
First majority – 50%+1 of the BU = (200*50% +1 ) = conducted within 10 days after the
101 votes posting. (Sec. 18, Rule IX, D.O. No. 40-I-
15)
40+30+20+80+30 = 200 ; There is a valid election
since all 200 members voted, which satisfies the When will re-run be conducted
first majority of 50% + 1 of the BU. Within ten (10) days after the posting of the notice.
Step 2:
Declared as winner and certified
Second majority – 50%+1 of VVC = Choice who receives the HIGHEST VOTES CAST.
((40+30+20+80)*50%+1) = 86
Note: ‘No Union’ is still included in the Re-run
Q1: Is the election valid? Elections, since D.O. No. 40-I-15 did not specify
Yes, because everyone voted. otherwise.
Q2: Who won?
Employer as a mere bystander rule
None of the three unions won, because not one
received a majority of the valid votes cast. (Majority
IN ALL CASES (including when petition for
is 86 votes)
certification is filed by employer), the employer’s
participation shall be limited to:
Q3: Is run-off election a remedy here?
1. Being notified or informed of petitions of
No. The total number of votes for all contending
such nature; and
unions is LESS than 50% of ALL of the number of
2. Submitting the list of employees during the
votes cast (Unions A, B and C garnered 90 votes, or
pre-election conference should the Med-
10 votes short of the requirement, since there are 200
Arbiter act favorably on the petition. (Labor
members in the ABU).
Code, Art. 271)
Q4: Is a re-run election a remedy here?
However, manifestation of facts that would aid the
No. There is no failure of election and none of the
Med-Arbiter in expeditiously resolving the petition
choices obtained the same number of votes. (D.O.
may be considered (i.e. existence of bars). (D.O. No.
No. 40-I-15)
40-I-15)
Note: The above given examples are for illustration
Note: An employer has no legal standing in a
purposes only existing as it does in its most basic and
certification election. He cannot oppose the petition
ideal form. Answers may vary depending on the
or appeal the Med-Arbiter’s orders related thereto.
circumstances.
(San Miguel Foods Inc.-Cebu B-Meg Feed Plant v.
Laguesma, G.R. No. 116172, 1996)
f. Re-run Election
An employee has the right to intervene for the
Re-Run Election Takes Place in Two Instances protection of his individual right. (D.O. No. 40-F-03)
1. An election conducted to break a tie
between contending unions, including “no 4. Rights of Labor
union” and one of the unions. Organizations
2. If a failure of election has been declared
by the election officer and/or affirmed by 1. To act as the representative of its
the Med-Arbiter (Sec. 1[tt], Rule I, D.O. members for the purpose of collective
No. 40-I-15) bargaining;
2. To be certified as the exclusive
representative of all the employees in an

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appropriate bargaining unit for purposes A method of deducting from an employee’s pay at a
of collective bargaining; prescribed period, the amounts due the union for
3. To be furnished by the employer, upon fees, fines or assessments.
written request, with its annual audited
financial statements, including the Deductions for union service fee are authorized by
balance sheet and the profit and loss law and do not require individual check-off
statement, within 30 calendar days from authorizations.
the date of receipt of the request, after the
Nature and Purpose of Check-Off
union has been duly recognized by the
All unions are authorized to collect reasonable
employer or certified as the sole and membership fees, union dues, assessments, and
exclusive bargaining representative of the fines and other contributions for labor education and
employees in the bargaining unit, or within research, mutual death and hospitalization benefits,
60 calendar days before the expiration of welfare fund, strike fund and credit and cooperative
the existing collective bargaining undertakings. (Labor Code, Art. 250)
agreement, or during the collective
bargaining negotiation; Requirements Regarding Check-Offs
4. To own property, real or personal, for the General Rule: No special assessment, attorney’s
use and benefit of the labor organization fees, registration fees, or other extraordinary fees
and its members; may be checked off from any amount due an
5. To sue and be sued in its registered name; employee without an individual written
and authorization duly signed by the employee (Labor
6. To undertake all other activities designed Code, Art. 250[o])
to benefit the organization and its
members, including cooperative, housing, The authorization should specifically state the:
welfare and other projects not contrary to 1. Beneficiary of the deduction;
law. (Labor Code, Art. 251) 2. Amount; and
3. Purpose
Reportorial Requirements to be Submitted to the
BLR by the Legitimate Labor Organization Note: There can be no valid check-off if the majority
of the union members had already withdrawn their
1. Its constitution and by-laws, or
individual authorization. (Palacol v. Ferrer-Calleja,
amendments thereto, the minutes of
G.R. No. 85333, 1990)
ratification, and the list of members who
took part in the ratification of the Exceptions to Written Authorization Requirement
constitution and by-laws within thirty (30) 1. For mandatory activities provided under
days from adoption or ratification of the the Labor Code; and
constitution and by-laws or amendments 2. When Non-members of the union avail of
thereto; the benefits of the CBA:
2. Its list of officers, minutes of the election of a. Said non-members may be
officers, and list of voters within thirty (30) assessed union dues equivalent
days from election; to that paid by members; and
3. Its annual financial report within thirty (30) b. Only a board resolution approved
days after the close of every fiscal year; by majority of the members in a
and general meeting called for the
4. Its list of members at least once a year or purpose; and
whenever required by the Bureau. 3. Check-off for union service fees
authorized by law (Radio
Failure to comply with the above requirements
Communications of the Philippines, Inc. v.
shall not be a ground for cancellation of union
registration but shall subject the erring officers or Sec. of Labor, G.R. No. 77959, 1989)
members to suspension, expulsion from
Requisites for a Valid Special Assessment (RMI)
membership, or any appropriate penalty. (Labor
Code, Art. 252) 1. Authorization by a written Resolution of
the majority of all the members at the
general membership meeting duly called
a) Check off, assessments, union
for that purpose.
dues, and agency fees
2. Secretary’s record of the Minutes of the
meeting including the list of members

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present, votes cast, purpose of the special

assessments and the recipient of such 2) Non-Economic Terms and
assessments which must be attested to by Conditions
the President.
3. Individual written authorization for check- Non-economic provisions are those whose
off duly signed by the employee monetary cost can not be directly computed such as
concerned to levy such assessments. no-strike-no-lockout, union security clause,
management security clause, check-off clause,
Agency fees grievance procedures, etc.
Dues equivalent to union dues, charged from the
non-union members who are benefited by or under 3) Duty to Bargain Collectively
the CBA.
Meaning of the Duty to Bargain Collectively
Requisites for the Imposition of Agency Fees
1. The performance of a mutual (employer
1. Employee is part of the bargaining unit; and the exclusive bargaining agent)
2. He is not a member of the union; and obligation to meet and convene,
3. He partook of the benefits of the CBA 2. Promptly and expeditiously in good faith
(Labor Code, Art. 259[e]) 3. For the purpose of negotiating an
agreement with respect to wages, hours of
NOTE: No written authorization is required from the
non-union employees in order to effect a valid check-
work and all other terms and conditions of
off. (Del Pilar Academy v. Del Pilar Academy employment, including proposals for
Employees, G.R. No. 170112, 2008) adjusting any grievances or questions
arising under such agreement, and
Rule on Levy 4. Executing a contract incorporating such
Article 250, par. (n) of the Labor Code provides that agreements, if requested by either party.
no special assessment or extraordinary fees may be (Labor Code, Art. 263)
levied upon the members of a labor organization
unless authorized by a written resolution of a majority Parties to Collective Bargaining
of all the members at a general membership meeting 1. Employer
duly called for the purpose. The secretary of the 2. Employees, represented by the exclusive
organization shall record the minutes of the meeting bargaining agent
including the list of all members present, the votes
cast, the purpose of the special assessment or fees The duty to bargain collectively arises only between
and the recipient of such assessment or fees. The the employer and its employee. (Allied Free Workers
record shall be attested to by the president. Union v. Compania Maritima, G.R. Nos. L-122951-
52, 1967)
Rule on Collection
Article 250, par (o) of the Labor Code provides that Jurisdictional Pre-Conditions of Collective
other than for mandatory activities under the Code, Bargaining
no special assessments, attorney’s fees, negotiation 1. Status of majority representation of the
fees or any other extraordinary fees may be checked employees’ representative;
off from any amount due to an employee without an 2. Proof of majority representation; and
individual written authorization duly signed by the 3. Demand to bargain under Art. 261(a)
employee. The authorization should specifically state (Kiok Loy v. NLRC, G.R. No. 54334,
the amount, purpose and beneficiary of the 1986).
deduction.
Pending Petition for Cancellation of Union
b) Collective Bargaining Registration
Pendency of a petition for cancellation of union
1) Economic Terms and registration does NOT preclude collective bargaining.
Conditions It shall not suspend the proceedings for certification
election nor shall it prevent the filing of a petition for
Economic provisions are those which have direct certification election (Sec. 3, Rule XI of D.O. 40-03).
and measurable monetary cost consequences such
as wage rates, paid vacations, pensions, health and
welfare plans, penalty premiums and other fringe Purpose of Collective Bargaining
benefits. Purpose of collective bargaining is the reaching of an
agreement resulting in a contract binding on the
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parties; but the failure to reach an agreement after 1. When a party desires to negotiate an
negotiations have continued for a reasonable period agreement, it shall serve a written notice
does not establish a lack of good faith. The statutes upon the other party with a statement of its
invite and contemplate a collective bargaining proposals the other party shall make a
contract, but they do not compel one. The duty to reply thereto not later than 10 calendar
bargain does not include the obligation to reach an days from the receipt of such notice;
agreement. (Union of Filipro Employees v. Nestle 2. Should differences arise on the basis of
Phils., G.R. 158930-31, 2008) such notice and reply either party may
request for a conference which shall begin
4) Mandatory Provisions in the not later than 10 calendar days from the
Collective Bargaining date of request.
Agreement (CBA) 3. If the dispute is not settled, the NCMB
shall intervene upon the request of either
Collective Bargaining Agreement (CBA) or both parties or at its own initiative and
A contract executed upon request of either the immediately call the parties to conciliation
employer or the exclusive bargaining representative meetings.
of the employees, incorporating the agreement
reached after negotiations with respect to the The NCMB shall have the power to issue subpoenas
following:
requiring the attendance of the parties to such
1. Wages; meetings. It shall be the duty of the parties to
2. Hours of work; and participate fully and promptly in the conciliation
3. All other terms and conditions of meetings the NCMB may call.
employment, including proposals for
adjusting any grievance or questions 4. During the conciliation proceedings in the
under the agreement (Davao Integrated NCMB, the parties are prohibited from
Port Stevedoring Services v. Abarquez, doing any act which may disrupt or
G.R. No. 102132, 1993) impede the early settlement of the
disputes; and
Note: CBA constitutes the law between the parties 5. The NCMB shall exert all efforts to settle
when freely and voluntarily entered into. The goal of disputes amicably and encourage the
collective bargaining is the making of agreements parties to submit their case to a voluntary
that will stabilize business conditions and fix fair
arbitrator.
standards of working conditions. (PI Manufacturing
Inc. v. PI Manufacturing Supervisors and Foremen
When There Is No Collective Bargaining
Associations, G.R. No. 167217, 2008)
Agreement (Labor Code, Art. 262)
In absence of an agreement OR other voluntary
Coverage of CBA
arrangement providing for a more expeditious
It is a well-settled doctrine that the benefits of a CBA
manner of collective bargaining, it shall be the duty of
extend to the laborers and employees in the
the employer AND the representatives of the
collective bargaining unit, including those who do not
employees to bargain collectively in accordance with
belong to the chosen bargaining labor organization.
the provisions of this Code.
Otherwise, it would be a clear case of discrimination
(PAL v. PALEA, G.R. 142399, 2008).
The duty to bargain collectively where no CBA exists
involves the performance of a mutual obligation:
Commencement of Bargaining
1. To meet and convene promptly and
During Certification Year or within 12 months after
the determination and certification of the employees’ expeditiously in good faith for the purpose of
exclusive bargaining representative. negotiating an agreement with respect to
wages, hours of work, and all other terms
Bargaining Procedure and conditions of employment including
The parties may agree on the bargaining procedure. proposals for adjusting any grievances or
If there is a procedure agreed upon, the Labor Code questions arising under such agreement;
Procedure applies supplementary. and
2. To execute a contract incorporating such
Labor Code Procedure in Collective Bargaining agreements, if requested by either party.
(Labor Code, Art. 261) (Labor Code, Art. 263)
The following procedures shall be observed in
collective bargaining:

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Essentially, the duty to bargain in this situation still Automatic Renewal Clause
requires the performance of the obligation by the At the expiration of the freedom period, the employer
employer and the union to meet, convene and shall continue to recognize the majority status of the
confer for collective purposes. incumbent bargaining agent where no petition for
certification election is filled. It shall be the duty of
Limitations to the Duty to Bargain both parties to keep the status quo and to continue in
The duty to bargain does not compel any party to full force and effect the terms and conditions of the
agree to a proposal or to make any concession existing agreement during the 60-day period and/or
(Labor Code, Art. 263). until a new agreement is reached by the parties.
Notes: The provisions of the Code are only
supplementary and not mandatory with regard to the Duty to Bargain Collectively when there is a
process of collective bargaining. It is the policy of the Collective Bargaining Agreement (Labor Code,
state to promote the primacy of FREE collective Art. 264)
bargaining. (Labor Code, Art. 218[a])
General Rule: When there is a CBA, the duty to
The Code authorizes parties to provide for their own bargain also means that neither party shall terminate
procedure in CB but it must be more expeditious than nor modify such agreement during its lifetime.
that provided in Art. 261.
Exception: 60 days before the CBA expires, either
If they are unable to agree, they must follow the Code party may notify the other in writing that it wants to
procedure (i.e. in Art. 261). terminate or modify the agreement. The CBA
remains in full force and effect during the 60 day
period and until a new agreement is reached.

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BARGAINING PROCEDURE UNDER THE LABOR CODE

(Labor code, Art. 261)
The recognized or certified

labor union and its employer
may adopt such procedures Serve written notice with statement of
and processes they may proposals upon the other party.
deem appropriate and
necessary for the early
termination of their
negotiations.
NOTE: Not more than
They shall name their 10 days from receipt
respective representatives to Reply of other party
the negotiation, schedule the
number and frequency of
meetings, and agree on NOTE: Only if differences
wages, benefits and other arise between the
terms and conditions of work proposals and the reply
for all employees covered in
the bargaining unit (Section 4, Shall begin not later than
Rule XVI, Omnibus Rules CONFERENCE 10 calendar days from date
Implementing the Labor Code) of request
Board shall have the power to
issue subpoenas to require
attendance to such meetings. NOTE: Only if
(Labor code, Art 261 (c)) differences are not
Board shall intervene, call parties settled
Board shall exert all efforts to
settle disputes amicably, to conciliation meetings It shall be the duty of
encourage parties to submit the parties to
case to voluntary arbitrator. participate fully and
(Art 261 (e)) promptly in the
conciliation meetings
Parties are prohibited from
doing any act which may
disrupt or impede the early
settlement of the disputes.
(Art. 261 (d))

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Mandatory Provisions of the CBA G.R. No. 102672, Oct. 4, 1995); (Malayang Samahan
Matters considered as mandatory subjects of ng mga Manggagawa sa Greenfield v. Ramos, G.R.
bargaining No. 113907, 2000).
1. Grievance Machinery (Labor Code, Art.
271) In the case of (Nuwhrain-Dusit v. NLRC, G.R. No.
2. Voluntary Arbitration (Labor Code, Art. 163942, 2008; G.R. No. 166295), the Union’s
274-75) concerted violation of the Hotel’s Grooming Standard
3. No Strike-No Lockout Clause by deliberately shaving their heads which resulted in
4. Labor Management Council (Labor Code, the disruption of the Hotel’s operations clearly
Art. 267) violated the CBA’s “No Strike, No Lockout” provision
which states that “The Union agrees that there shall
5. Union Security Arrangements
be no strikes, walkouts, stoppage or slowdown of
6. Economic / Working Conditions
work, boycott, or any other form of interference
a. Wages and other types of and/or interruptions with any of the normal operations
compensation; including merit of the Hotel during the life of the Agreement”. The
increases; strike arose out of a bargaining deadlock in the CBA
b. Working hours and working days, negotiations with the Hotel. The concerted action is
including work shifts; an economic strike upon which the afore-quoted “no
c. Vacations and holidays; strike/work stoppage and lockout” prohibition is
d. Bonuses; squarely applicable.
e. Pensions and retirement plans;
f. Seniority; Establishment of a grievance machinery
g. Transfer; The parties to a CBA shall include therein provisions
h. Lay-offs; that will ensure the mutual observance of its terms
i. Employee workloads; and conditions.
j. Work rules and regulations;
k. Rental of company houses; They shall establish a machinery for the adjustment
l. Family planning; and resolution of grievances arising from the
m. Rates of pay; interpretation or implementation of their CBA AND
n. Mutual observance duties; and those arising from the interpretation or enforcement
of company personnel policies (Labor Code, Art. 273)
o. Provision against Drug Use in the
Workplace (R.A. No. 9165, Sec.
Establishment of Grievance Machinery
49) (Omnibus Rule Implementing the Labor Code, Rule
XIX, Sec. 1)
Where the subject of the dispute is a mandatory
1. By provision in the CBA
bargaining subject, either party may bargain to an
impasse as long as he bargains in good faith. 2. In the absence of applicable provision in the
CBA, a Grievance committee shall be created
Where the subject is non-mandatory, a party may within 10 days from the signing of the CBA.
not insist on bargaining to the point of impasse. His
insistence may be construed as evasion of the duty The grievance committee shall be composed of at
to bargain. least 2 representatives each from the members of the
bargaining unit, designated by the union and the
Valid Stipulation – No Strike No Lockout employer, unless otherwise agreed upon by the
A “no strike, no lockout” provision in the CBA is a parties.
valid stipulation, although the clause may be invoked
by an employer only when the strike is economic in “Grievance” or “Grieveable Issue”
nature or one which is conducted to force wage or 1. Interpretation or implementation of the CBA
other concessions from the employer that are not 2. Interpretation or enforcement of company
mandated to be granted by the law itself. Such personnel policies
provision CANNOT be used to assail the legality 3. Any claim by either party that the other party
of a strike which is grounded on ULP. In this is violating any provisions of the CBA or
situation, it is not essential that the ULP act has, in company personnel policies.
fact, been committed; it suffices that the striking
workers are shown to have acted honestly on an In order to be grieveable, the violations of the CBA
impression that the company has committed ULP should be ordinary and not gross in character;
and the surrounding circumstances could warrant otherwise, they shall be considered as unfair labor
such belief in good faith (Panay Electric v. NLRC, practice (ULP).

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in the registration of the CBA (Sec. 2, Rule XVII of

Gross violation of the CBA is defined as flagrant D.O. 40-03).
and/or malicious refusal by a party thereto to
comply with the economic provisions thereof. Where to file
Accordingly, violations of a CBA, except those which With the Regional Office which issued the certificate
are gross in character, shall no longer be treated as of registration/certificate of creation of chartered
ULP, and shall be resolved as grievances. (Labor local.
Code, Art. 274)
If the certificate of creation of the chartered local was
If what is violated, therefore, is a non-economic or a issued by the Bureau, the agreement shall be filed
political provision of the CBA, the same shall not be with the Regional Office which has jurisdiction over
considered as unfair labor practice and may thus be the place where it principally operates.
processed as a grievable issue in accordance with Multi-employer collective bargaining agreements
and following the grievance machinery laid down in shall be filed with the Bureau (Sec. 1, Rule XVII of
the CBA. D.O. 40-03).
Note: In the case of (Liberal Labor Union v. Phil Can When to file
Co., 1952), the Court declared as illegal the strike Within 30 days from execution of the CBA.
staged by the union for not complying with the (Sec. 1, Rule XVII of D.O. 40-03)
grievance procedure provided in the collective
bargaining agreement ruling that “xxx the main Procedure for registration
purpose of the parties in adopting a procedure in the 1. The Regional Office or the Bureau shall
settlement of their disputed is to prevent a strike. This act on the applications within 5 days from
procedure must be followed in its entirety if it is to receipt of the application.
achieve its objective. xxx strikes held in violation of 2. The Regional Office or Bureau may within
the terms contained in the collective bargaining 5 days from receipt of the application,
agreement are illegal, especially when they provide a. Approve the application and issue the
for conclusive arbitration clauses.” certificate of registration or
b. Deny the application for failure to
In abandoning the grievance proceedings and comply with the requirements.
stubbornly refusing to avail of the remedies under the If the supporting documents are not complete, or are
CBA, respondent Union violated the mandatory not verified under oath, the Regional Office or the
provisions of the collective bargaining agreement. Bureau shall notify the applicants in writing of the
(San Miguel Corporation v. NLRC, G.R. No. 99266, requirements needed to complete the registration.
1999)
NOTE: If the applicant fails to complete the
Signing, posting, registration requirements within 10 days from receipt of notice,
application is denied without prejudice.
Registration of Collective Bargaining
Agreements Denial of Registration; Grounds of Appeal
1. The denial shall be in writing, stating in
Requirements for registration clear terms the reason therefore and
The application for CBA registration shall be served upon the applicant union and
accompanied by the original and 2 duplicate copies employer within 24 hours from issuance.
of the following documents: 2. The denial by the Regional Office of the
1. CBA registration of single enterprise collective
2. A statement that the CBA was posted in at bargaining agreements may be appealed
least 2 conspicuous places in the
to the Bureau while the denial by the
establishment concerned for at least 5 days
Bureau of the registration of multi-
before its ratification.
3. Statement that the CBA was ratified by the employer collective bargaining
majority of the employees in the bargaining agreements may be appealed to the
unit. Office of the Secretary, both within 10
days from receipt of the notice of denial.
Note: The foregoing documents must be certified 3. The memorandum of appeal is filed with
under oath by the representative of the employer and the Regional Office or the Bureau, as the
the labor union. No other document shall be required case may be.

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4. The memorandum of appeal and the 2. The Regional Office or Bureau may within
entire records of the application shall be 5 days from receipt of the application,
transmitted to the Bureau or the Office of a. Approve the application and issue the
the Secretary within 24 hours from receipt certificate of registration or
of the memorandum of appeal. b. Deny the application for failure to
5. Bureau or the Office of the Secretary shall comply with the requirements.
resolve within the same period and in the If the supporting documents are not complete, or are
same manner as that prescribed for not verified under oath, the Regional Office or the
inter/intra-union disputes (Sec. 5, Rule XVII Bureau shall notify the applicants in writing of the
of D.O. 40-03). requirements needed to complete the registration.
Term of CBA, freedom period NOTE: If the applicant fails to complete the
requirements within 10 days from receipt of notice,
Registration of Collective Bargaining application is denied without prejudice.
Agreements
Denial of Registration; Grounds of Appeal
Requirements for registration 1. The denial shall be in writing, stating in
The application for CBA registration shall be clear terms the reason therefore and
accompanied by the original and 2 duplicate copies served upon the applicant union and
of the following documents: employer within 24 hours from issuance.
1. CBA 2. The denial by the Regional Office of the
2. A statement that the CBA was posted in at registration of single enterprise collective
least 2 conspicuous places in the bargaining agreements may be appealed
establishment concerned for at least 5 days to the Bureau while the denial by the
before its ratification. Bureau of the registration of multi-
3. Statement that the CBA was ratified by the employer collective bargaining
majority of the employees in the bargaining
agreements may be appealed to the
unit.
Office of the Secretary, both within 10
Note: The foregoing documents must be certified days from receipt of the notice of denial.
under oath by the representative of the employer and 3. The memorandum of appeal is filed with
the labor union. No other document shall be required the Regional Office or the Bureau, as the
in the registration of the CBA (Sec. 2, Rule XVII of case may be.
D.O. 40-03). 4. The memorandum of appeal and the
entire records of the application shall be
Where to file transmitted to the Bureau or the Office of
With the Regional Office which issued the certificate the Secretary within 24 hours from receipt
of registration/certificate of creation of chartered of the memorandum of appeal.
local. 5. The bureau or the Office of the Secretary
shall resolve within the same period and in
If the certificate of creation of the chartered local was the same manner as that prescribed for
issued by the Bureau, the agreement shall be filed inter/intra-union disputes (Sec. 5, Rule XVII
with the Regional Office which has jurisdiction over of D.O. 40-03).
the place where it principally operates.
Multi-employer collective bargaining agreements
shall be filed with the Bureau (Sec. 1, Rule XVII of 5. Unfair Labor Practice
D.O. 40-03).
Unfair Labor Practice
When to file Any unfair labor practice expressly defined by the
Within 30 days from execution of the CBA. Labor Code. (Labor Code, Art. 219[k])
(Sec. 1, Rule XVII of D.O. 40-03)
a. Nature and Aspect
Procedure for registration
1. The Regional Office or the Bureau shall
Nature of Unfair Labor Practice
act on the applications within 5 days from
1. Inimical to the legitimate interests of both
receipt of the application.
labor and management, including their
right to bargain collectively and otherwise

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deal with each other in an atmosphere of Labor Arbiter (Labor case (Labor code, Art.
freedom and mutual respect; code, Art. 258) 258)
2. Disrupt industrial peace; NOTE: But judgment in the labor case will not serve
3. Criminal offenses against the State; as evidence of ULP in the criminal case.
4. Violation of civil rights of both labor and
management; Jurisdiction of Criminal Charge of ULP
5. Violate the constitutional right of workers The criminal charge falls under the concurrent
and employees to self-organization; and jurisdiction of the MTC or the RTC. Only substantial
6. Creates unstable labor-management evidence is required in the labor case while proof
relations (Labor Code, Art. 258) beyond reasonable doubt is need in the criminal
prosecution. Recovery of civil liability in the
administrative proceedings shall bar recovery under
Elements of Unfair Labor Practice
the Civil Code.
1. There is an employer-employee
relationship. Who can Commit ULP
2. The act done is expressly defined in the Both employers and labor organizations can commit
Code as an unfair labor practice acts of unfair labor practices in collective bargaining.
3. Act complained of as ULP must have However, the labor organization must be the
proximate and causal connection with/ representative of the employees before any act it
violation of: does may be considered as a violation of the duty to
a. Exercise the right to self- bargain collectively. (Labor Code, Arts. 259[g] and
organization 260[c])
b. Exercise of the right to collective
bargaining (Allied Banking Who are Liable when ULP is committed by
Corporation v. CA, G.R. No. Entities Other than Natural Persons
144412, 2003)
If ULP is committed by the employer corporation,
Note: Employee refers to any person working for an partnership, association, its officers or agents who
employer. It includes one whose work has ceased in have actually participated in, authorized or ratified
connection with any current labor dispute or because ULP shall be held criminally liable. [Art. 259]
of any unfair labor practice and one who has been
dismissed from work but the legality of the dismissal If the ULP is committed by a labor organization, the
is being contested in a forum of appropriate parties liable are the officers, members of governing
jurisdiction. (IRR Book V Rule 1 Sec.1 (r)) boards, representatives or agents or members of
labor associations or organizations who have actually
Prescription of actions for ULP participated in, authorized or ratified ULP shall be
The offense prescribes in 1 year. (Labor Code, Art. held criminally liable. [Art 260]
305)
b. By employers
Not every unfair act is an Unfair Labor Practice
The Court has ruled that prohibited acts refer to "acts ULP Committed By Employers
that violate the workers’ right to organize." Without The Code enumerates the acts or categories of acts
that element, the acts, even if unfair, are not ULP. considered as ULP. The enumeration does not mean
Thus, an employer may only be held liable for unfair an exhaustive listing of ULP incidents. (HSBC
labor practice if it can be shown that his acts affect in Employees Union v. NLRC, G.R. No. 125038, 1997)
whatever manner the right of his employees to self-
organize. (Bankard v. NLRC, G.R. 171664, 2013). WHEN THERE IS NO ULP AND THERE IS VALID
EXERCISE OF MANAGEMENT RIGHTS
ULP therefore, refers only to acts opposed to
workers’ right to organize. When committed by the When rules are necessary to the proper and
employer, it commonly connotes anti – unionism. effective business operation
The law on unfair labor practices is not intended to
ASPECTS OF UNFAIR LABOR PRACTICE deprive the employer of his fundamental right to
CIVIL ASPECT CRIMINAL ASPECT prescribe and enforce such rules as he honestly
May include liability for Can only be initiated believes to be necessary to the proper, productive
damages and may be after the finality of and profitable operation of his business. (Bankard,
passed upon by the judgment in the labor Inc. v. NLRC, G.R. No. 171664, 2013)
Management exercised in good faith

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So long as a company’s management prerogatives did not assume the status of strikers. They cannot,
are exercised in good faith for the advancement of therefore, validly claim that the company committed
the employer’s interest and not for the purpose of unfair labor practice. When the pilots voluntarily
defeating or circumventing the rights of the terminated their employment relationship with the
employees under special laws or under valid company, they cannot claim that they were
agreements, the Court will uphold them. (LVN Picture dismissed. (Enriquez v. Zamora, G.R. No. 51382,
Workers v. LVN, G.R. No. L-23495, 1970) 1986).
The Court has held that management is free to Differential Treatment of Employees Not Similarly
regulate, according to its own discretion and Situated
judgment, all aspects of employment, including Discrimination per se is not unlawful. There can be
hiring, work assignments, working methods, time, no discrimination where the employees concerned
place, and manner of work, processes to be followed, are not similarly situated. The grant by the employer
supervision of workers, working regulations, transfer of profit-sharing benefits to the employees outside
of employees, work supervision, lay-off of workers, the bargaining unit falls under the ambit of its
and discipline, dismissal and recall of workers. The managerial prerogative. (Wise and Co. v. Employees
exercise of management prerogative, however, is not Union, G.R. No. 87672, 1989)
absolute as it must be exercised in good faith and
with due regard to the rights of labor. (Royal Plant DETERMINATION OF VALIDITY OF EMPLOYER’S
Workers Union v. Coca-Cola Bottlers Philippines, inc, ACTS
G.R. No. 198783, 2013) Involves an appraisal of his motives. Thus, there
must be a measure of reliance on the administrative
Where the vacation leave is without pay, which the agency. It is for the CIR (NLRC now), in the first
employer requires employees to take in view of the instance, to weigh the employer’s expressed motive
economic crisis, is neither malicious, oppressive nor in determining the effect on the employees of
vindictive, ULP is not committed. (Philippine Graphic management’s otherwise equivocal act. (Republic
Arts, Inc. v. NLRC, et al., G.R. No. L-80737, 1988) Savings Bank v. CIR, G.R. No. L-20303, 1967)
In the absence of showing that the illegal dismissal ACTS CONSTITUTING ULP
was dictated by anti–union motives, the same does Rundown of Acts Constituting Unfair Labor
not constitute an unfair labor practice as would be a Practice of Employers (YIP-C2-D2-V2) (Art. 259)
valid ground for strike. The remedy is an action for 1. Interference
reinstatement with back wages and damages. (AHS/ 2. Yellow dog condition
Philippine Employees Union v. NLRC, G.R. No. 3. Contracting out
73721 , 1987) 4. Company unionism
5. Discrimination for or against union
ACTS NOT CONSIDERED AS ULP membership
6. Discrimination because of testimony
Transfer of Employees when there is No 7. Violation of duty to bargain
Interference to Self- Organization.
8. Paid negotiation
As a rule, it is the prerogative of the company to
9. Gross Violation of CBA (Labor Code, Art.
promote, transfer or even demote its employees to
other positions when the interests of the company 274)
reasonably demand it. Unless there are instances
which directly point to interference by the company FIRST ULP: INTERFERENCE (ART. 259 [A])
To interfere with, restrain or coerce employees in the
with the employees right’s to self – organization, the
transfer of an employee should be considered within exercise of their right to self-organization. (Labor
the bounds allowed by law, e.g. where despite his Code, Art. 259[a])
transfer to a lower position, his original rank and
Test
salary remained undiminished. (Rubberworld Phils.
Inc., et al. v. NLRC, G.R. No. 75704, 1989) Whether the employer has engaged in conduct
which, may reasonably be said, tends to interfere
with the free exercise of the employees’ right. It is not
Voluntary Resignation or Termination of
Employment necessary that there be direct evidence that any
Acceptance of a mass voluntary resignation is not employee was in fact intimidated or coerced by the
statements or threats of the employer if there is a
ULP. In a Philippine Airlines case, the courts said that
the pilots’ protest retirement/resignation was not a reasonable interference that the anti-union conduct
concerted activity which was protected by law. They of the employer does have an adverse effect on self-

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organization and collective bargaining. (Insular Life Discouraging Membership in a Labor

Assurance Co., Ltd. EU v. Insular Life, G.R. No. L- Organization
25291, 1971) Refusal over a period of years to give salary
adjustments according to the improved salary
Totality of Conduct Doctrine scales in the collective bargaining agreements.
The culpability of employer’s remarks is to be (Benguet Consolidated v. BCI Employees and
evaluated on the basis of their implication, against Workers Union, G.R. No. L-25471, 1968)
the background of and in conjunction with collateral
circumstances. Dismissal of an old employee allegedly for
inefficiency, on account of her having joined a
Under this doctrine, an expression which might be
union and engaging in union activities. (East
permissibly uttered by one employer, might be
Asiatic Co v. CIR, G.R. No. L-17037, 1966)
deemed improper when spoken by a more hostile
employer, because of the circumstances under which
they were uttered. The history of the particular Dismissal of teachers for fear by the school that
employer’s labor relations or anti–union bias or there would be a strike the following semester.
because of their connection with an established (Rizal Memorial Colleges Faculty Union v. NLRC,
collateral plan of coercion or interference, can G.R. Nos. 59012-13, 1989)
consequently be actionable as an unfair labor
practice. (Insular Life Assurance Co., Ltd., A company’s capital reduction efforts, to
Employees Association-ATU, et al. v. Insular Life camouflage the fact that it has been making profits
Assurance Co., Ltd., G.R. L-25291, 1971) to justify the mass lay-off of its employees
especially union members. (Madrigal & Company
ACTS CONSTITUTITNG INTERFERENCE Inc. v. Zamora, G.R. No. L-48237, 1987)
Threatening Employees Lockout or Closure Amounting to ULP

Interference with employee organizational rights A lockout, actual or threatened, as a means of
were found where the superintendent of the employer dissuading the employees from exercising their rights
threatened the employees with cutting their pay, under the Act is clearly an unfair labor practice. To
increasing rent of the company houses, or closing the hold an employer who actually or who threatens to
plant if they supported the union and where the lock out his employees guilty of a violation of this Act,
employer encouraged the employees to sign a the evidence must establish that the purpose thereof
petition repudiating the union. (NLRB v. Louisiana was to interfere with the employee’s exercise of their
Mfg. Co., 376 F 2d 696; NLRB v. Byrds Mfg. Corp., rights.
324 F 2d 329; Marshfield Steel Co. v. NLRB, 324 F (Azucena Vols. II-A and II-B, 10th ed., 2021, p. 268).
2d 333)
Sale in Bad Faith
Restriction on Right to Self-Organization Where the sale of a business enterprise is attended
The questioned acts of petitioners, namely: 1) with bad faith, there is no need to consider the
sponsoring a field trip to Zambales for its employees, applicability of the rule that labor contracts being in
to the exclusion of union members, before the personam are not enforceable against the transferee.
scheduled certification election; 2) the active The latter is in the position of tortfeasor, having been
campaign by the sales officer of petitioners against a party likewise responsible for the damage inflicted
the union prevailing as a bargaining agent during the on the members of the aggrieved union and therefore
field trip; 3) escorting its employees after the field trip cannot justly escape liability. (Cruz v. PAFLU, G.R.
to the polling center; 4) the continuous hiring of No. L-26519, 1971)
subcontractors performing respondents’ functions; 5)
assigning union members to the Cabangan site to DOCTRINE OF SUCCESSOR - EMPLOYER
work as grass cutters; and 6) the enforcement of A new company will be treated as a continuation or
work on a rotational basis for union members, all reek successor of the one that closed if the new or take-
of interference on the part of petitioners. Indubitably, over company is engaging in the same business as
the various acts of petitioners, taken together, the closed company or department, or is owned by
reasonably support an inference that, indeed, such the same people, and the "closure" is calculated to
were all orchestrated to restrict respondents’ free defeat the worker's organizational right in which case
exercise of their right to self–organization. (T&H the closure may be declared a subterfuge.
Shopfitters Corporation v. T&H Shopfitters
Corporation Union, G.R. No. 191714, 2014). This doctrine is just an enforcement of the piercing
the veil of corporate entity. (Azucena Vols. II-A and
II-B, 10th ed., 2021, p. 271).

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3. A promise by the employee that, upon

Factors to Determine Continuity: joining a labor union, he will quit his
1. Retention of control employment (Teller, Law Governing Labor
2. Use of the same plant or factory Disputes and Collective Bargaining, pp.
3. Use of the same or substantially the 118-119).
same employees, workers, supervisors
or managers THIRD ULP: CONTRACTING OUT (ART. 259 [C])
4. Similar or substantially the same work or To contract out services or functions being performed
production under similar or substantially by union members when such will interfere with,
the same working conditions restrain or coerce employees in the exercise of their
5. Use of the same machinery and rights to self-organization. (Labor Code, Art. 259[c])
equipment
6. Manufacture of the same products or the Not Guilty When Done As An Exercise of
performance of the same services Business Judgment
An employer is not guilty of an unfair labor practice in
Doctrine Applicable When The Successor Is An contracting work out for business reasons such as
Alter-Ego decline in business, the inadequacy of his equipment,
Absorbing all labor force and necessary personnel as or the need to reduce the cost, even if the employer’s
part of the merging of operations indicate the estimate of his cost is based on a projected increase
intention to continue the employer–employee attributable to unionization. (See Philcom Employees
relationship of the individual companies with its Union v. Philippine Global Communications, et al.,
employees. This is true where the transferee was G.R. No. 144315, July 7, 2006)
found to be merely an alter-ego of the different
merging firms, as in this case. Thus, the transferee It is to be emphasized that contracting out of services
has the obligation not only to absorb the workers of is not illegal per se. It is an exercise of business
the dissolved companies but also to include the judgment or management prerogative. Absent proof
length of service earned by the absorbed employees that the management acted in malicious or arbitrary
with their former employers as well. (Filipinas Port manner, the Court will not interfere with the exercise
Services v. NLRC, G.R. No.97237, 1991) of judgment by an employer. In this case, bad faith
cannot be attributed to BPI because its actions were
Doctrine Not Applicable Where There Is No authorized by BSP Circular No. 1388, Series of 1993
Retention of Control issued by the Monetary Bank of BSP. (BPI
There can be no continuity of the business operations Employees Union-Davao City-FUBU v. BPI, G.R. No.
of the predecessor employer by the successor 174912, 2013)
employer if the latter has no controlling interest and
the two companies have no privity and are strangers Conditions For A Valid Outsourcing
to each other. (Sundowner Development 1. Motivated by good faith; and
Corporation v. Drilon, G.R. No. 82341, 1989) 2. Must not have been resorted to
circumvent the law or must not have been
SECOND ULP: YELLOW DOG (ART. 259 [B]) the result of malicious or arbitrary action
To require as a condition of employment that a (Manila Electric v. Quisumbing, G.R. No.
person or an employee shall not join a labor 127598, 1999; Bankard v.NLRC, G.R. No.
organization or shall withdraw from one to which he 171664, 2013)
belongs. (Labor Code, Art. 259[b])
Resorting to a Runaway Shop is ULP
Yellow Dog Contract: A promise exacted from Runway Shop: An industrial plant moved by its
workers as a condition of employment that they are owners from one location to another to escape union
not belonging to, or attempting to foster, a union labor regulations or state laws, but the term is also
during their period of employment (Azucena Vols. II- used to describe a plant moved to a new location in
A and II-B, 10th ed., 2021, p. 273). order to discriminate against employees at the old
plant because of their union activities.
Usual Provisions under Yellow Dog Contract
1. A representation by the employee that he It is one wherein the employer moves its business to
is not a member of a labor union; another location or it temporarily closes its business
2. A promise by the employee not to join a for anti-union purposes. In this sense, it is a
labor union; and relocation motivated by anti-union animus rather than
for business reasons. (Complex Electronics

ATENEO CENTRAL
Employees Association v. NLRC, et al., G.R. No. alleged retrenchment policy; and that, after dismissal
121315, July 19, 1999) of the aforesaid officers of the rival labor union, the
company engages the services of new laborers.
Where a plant removal is for business reasons but (Oceanic Air Products, Inc. v. CIR, GR No. L-18704,
the relocation is hastened by anti–union motivation, 1963)
the early removal is unfair labor practice. It is
immaterial that the relocation is accompanied by a Not A Prejudicial Question that Bars Holding of
transfer of title to a new employer who is an alter ego Certificate of Election
of the original employer. (48 Am. Jur. 2d, Sec. 1104) A formal charge of company domination or company
unionism is similar to a petition for cancellation of
FOURTH ULP: COMPANY DOMINATION OF registration. Prior to D.O. No. 40-03 such charge was
UNION (ART. 259 [D]) a prejudicial question that, until decided, would bar
To initiate, dominate, assist or otherwise interfere the proceedings for a certification election, the
with the formation or administration of any labor reason being that the votes of the members of the
organization, including the giving of financial or other dominated union would not be free. Thus:
support to it or its organizers or supporters. (Labor
Code, Art. 259[d]) “The filing or pendency of any inter/intra-union
dispute and other related labor relations dispute is
Manifestations of Domination of a Labor Union not a prejudicial question to any petition for
1. Initiation of company union idea. certification election or suspension of proceedings for
This may further occur in three styles: certification election.” (D.O. No. 40-03, Sec. 2, Rule
a. outright formation by the employer or his XI as renumbered by D.O. No. 40-F-03)
representatives
b. employee formation on outright demand Effect of Pendency of ULP Case
or influence by employer Neither may a certification election be stayed during
c. managerially motivated formation by pendency of unfair labor practice charge against a
employees union filed by the employer. (Barrera v. CIR, G.R. No.
L-32853, 1981).
2. Financial support to the union.
By defraying the union expenses or paying the FIFTH ULP: DISCRIMINATION (ART. 259 [E])
To discriminate in regard to wages, hours of work and
attorney’s fees of the lawyer who drafted the
constitution and by–laws of the union. other terms and conditions of employment in order to
encourage or discourage membership in any labor
organization. (Labor Code, Art. 259[e])
3. Employer encouragement and assistance.
Immediately granting the union exclusive recognition
as a bargaining agent without determining whether To Constitute Discrimination, it must be
established that:
the union represents the majority of employees.
1. No reasonable distinction or classification
4. Supervisory assistance. that can be obtained between persons
This takes the form of soliciting membership, belonging to the same class
permitting union activities during working time or 2. Persons belonging to the same class have
coercing employees to join the union by threats of not been treated alike (Wise and Co., Inc.
dismissal or demotion. (Philippine American Cigar & v. Wise and Co., Inc Employees Union,
Cigarette Factory Workers Union v. Philippine G.R. No. 87672, 1989).
American Cigar & Cigarette Mfg. Co., G.R. No. L-
18364, 1963) There is discrimination only when one is denied
privileges which are granted to others under similar
A labor union is company – dominated where it conditions and circumstances (Caltex Philippines,
appears that key officials of the company have been Inc. v. Philippine Labor Organization, G.R. No. L-
forcing employees belonging to rival labor union to 5206, 1953).
join the former under pain of dismissal should they
refuse to do so; that key officials of the company, as There can be no discrimination if the employees are
well as its legal counsel, have attended the election not similarly situated. (Great Pacific Life Employees
of officers of the former union; that officers and Union v. Great Pacific Life Assurance Corporation,
members of the rival union were dismissed allegedly G.R. No. 126717, 1999).
pursuant to a retrenchment policy of the company,
after they had presented demands for the Note: To constitute an unfair labor practice, the
improvement of the working conditions despite its discrimination committed by the employer must be in

ATENEO CENTRAL
regard to the hire or tenure of employment or any

term or condition of employment to encourage or The fact that a lawful cause for discharge is available
discourage membership in any labor organization. is not a defense where the employee is actually
discharged because of his union activities. If the
The exaction by the Company, from strikers returning discharge is actually motivated by a lawful reason,
to work, of a promise not to destroy company the fact that the employee is engaged in union
property and not to commit acts of reprisal against activities at the time will not lie against the employer
the Union members who did not participate in the and prevent him from the exercise of his business
strike, cannot be considered as intended to judgment to discharge an employee for cause.
encourage or discourage Union membership. Taking (NLRB v. Ace Comb Co. 342 F. 2 841, as cited in
the circumstances surrounding the prescribing of that Cainta Catholic School v. CCSEU, G.R. No. 151021,
condition, the requirement by the Company is 2006).
actually an act of self – preservation and designed to
insure the maintenance of peace and order in the An inference that the discharge of an employee was
Company premises. (Pagkakaisang Itinataguyod ng motivated by his union activity must be based upon
mga Manggagawasa Ang Tibay, et al., G.R. No. L- evidence, direct or circumstantial, not upon mere
22273, 1967) suspicion. (NLRB v. South Rambler Co., 324 F 2d
447).
Discrimination in Bonus Allocation or Salary
Adjustments VALID DISCRIMINATION
There is unfair and unjust discrimination in granting
of salary adjustments where evidence shows that: General Rule: It is ULP to discriminate in regard to
1. The management paid the employees of wages, hours of work, and other terms and conditions
the unionized branch; of employment in order to encourage or discourage
2. Where salary adjustments were granted to membership in any labor organization.
employees of one of its non – unionized
branches although it was losing in its Exception: Union security clauses in a collective
operations; and bargaining agreement which is limitedly authorized
3. The total salary adjustments given to by Art. 259(e) which partly states:
every ten of its unionized employees
“Nothing in this Code or in any other law shall stop
would not even equal the salary
the parties from requiring membership in a
adjustments given to one employee in the
recognized bargaining agent as a condition of
non – unionized branch. (Manila Hotel employment.” (Labor Code, Art. 259[e])
Company v. Pines Hotel Employees
Association (CUGCO) and CIR, G.R. No. ENFORCEMENT OF UNION SECURITY CLAUSE
L-30818, 1972) Requisites
In terminating the employment of an employee by
Discrimination in Layoff or Dismissal enforcing the union security clause, the employer
Even where business conditions justified a layoff of needs only to determine and prove that:
employees, unfair labor practices in the form of 1. The union security clause is applicable
discriminatory dismissal were found where only 2. The union is requesting for the
unionists were permanently dismissed while non – enforcement of the union security
unionists were not.
provision in the CBA;
3. There is sufficient evidence to support the
Discharge due to union activity, a question of fact
The question of whether an employee was union’s decision to expel the employee
discharged because of his union activities is from the union; and
essentially a question of fact as to which the findings 4. The employer must comply with due
of the court of Industrial Relations are conclusive and process:
binding if supported by substantial evidence a. Notify the employees that their
considering the record as a whole. (Philippine Metal dismissal is being requested by the
Foundries, Inc., v. CIR, G.R. No. L-34948, 1979) union;
b. The employees’ explanations are
Test of Discrimination heard (Alabang Country Club v.
To determine whether or not a discharge is NLRC, G.R. No 170287, 2008)
discriminatory, it is necessary that the underlying
reason for the discharge be established. Termination Due to Union Security Provision

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Termination of employment by virtue of a union As dictated by fairness, [...] the union shall be liable
security clause embodied in a CBA is recognized and to pay their backwages. This is because
accepted in our jurisdiction. This practice strengthens management would not have taken the action it did
the union and prevents disunity in the bargaining unit had it not been for the insistence of the labor union
within the duration of the CBA. seeking to give effect to its interpretation of a closed
shop provision. (Guijarno v. CIR, G.R. Nos. L-28791-
By preventing member disaffiliation with the threat of 93, 1973)
expulsion from the union and the consequent
termination of employment, the authorized SIXTH ULP: DISCRIMINATION BECAUSE OF
bargaining representative gains more numbers and TESTIMONY (ART. 259 [F])
strengthens its position as against other unions which To dismiss, discharge or otherwise prejudice or
may want to claim majority representation. (Alabang discriminate against an employee for having given or
Country Club v. NLRC, G.R. No. 170287, 2008) being about to give testimony under this Code.
(Labor Code, Art. 259[f])
To validly dismiss an employee because of a union
shop or closed-shop provisions, there should be a Note: This is the only ULP not directly related to the
clear and unequivocal statement that loss of good right to self–organization. The testimony or
standing in the union would be a cause for dismissal. proceedings might involve wages, employee’s
(Confederated Sons of Labor v. Anakan Lumber Co., benefits disciplinary rules, or organizational rights, or
G.R. No. L-12503, 1960) anything covered by the Labor Code. What is
chargeable as ULP is the employer’s retaliatory act
Employer Must Conduct Separate Investigation regardless of the subject of the employee’s complaint
and Hearing or testimony.
While company may validly dismiss the employees
expelled under the union security upon the Unfair labor practice refers to acts that violate the
recommendation by the union, this dismissal should workers’ right to organize. The prohibited acts are
not be done hastily and summarily thereby eroding related to workers' right to self-organization with the
the employees' right to due process, self- sole exception of Art. [259 (f)]. (Philcom Employees
organization and security of tenure. Even if there are Union v. Philippine Global Communication, G.R.
valid grounds to expel the union officers, due process 126717, 1999).
requires that these union officers be accorded a
separate hearing by respondent company. SEVENTH ULP: VIOLATION OF THE DUTY TO
(Malayang Samahan ng Manggagawa sa M. BARGAIN (ART. 259 [G])
Greenfield v. Ramos, G.R. No. 113907, 2000) To violate the duty to bargain collectively as
prescribed by the Code. (Labor Code, Art. 259[g])
Requirement of Due Process
Substantive and procedural due process Both employers and labor organizations can commit
requirements in determining whether or not an acts of unfair labor practices in collective bargaining.
employee was validly terminated must still be However, the labor organization must be the
followed even if the termination is based on a (union representative of the employees before any act it
security clause) of the CBA. does may be considered as a violation of the duty to
bargain collectively. (Labor Code, Art. 259[g] and
Further, in order that any CBA-mandated dismissal 260[c])
may receive the warrant of the courts and labor
tribunals, the causes for dismissal as provided for in Four Forms of Unfair Labor Practice in
the CBA must satisfy to the evidentiary threshold of Bargaining
the NLRC and the courts. (Del Monte v. Saldivar, 1. Failure or Refusal to Meet and Convene
G.R. No. 158620, 2006) 2. Evading the Mandatory Subjects of
Bargaining
Obligations and Liabilities 3. Bad Faith Bargaining
Where the employer dismissed his employees in the 4. Gross Violation of the CBA
belief in good faith that such dismissal was required
by the (union security provision) of the collective FIRST FORM: FAILURE OR REFUSAL TO MEET
bargaining agreement with the union, he may not be AND CONVENE
ordered to pay back compensations to such An employer is guilty of unfair labor practice in
employees although their dismissal is found to be refusing to bargain with the representative of a
illegal. (Confederated Sons of Labor v. Anakan majority of his employees.
Lumber Co., G.R. No. L-12503, 1960)

ATENEO CENTRAL
To bargain in good faith, an employer must not only union and no ad interim significant changes
meet and confer with the union which represents his have taken place in the unit;
employees, but also must recognize the union for 9. Union makes unlawful bargaining demands.
the purpose of collective bargaining. (Azucena Vols.
II-A and II-B, 10th ed., 2021, p. 325). Note: Holding meetings that result in deadlocks, if
Refusal to make Counter Proposals imposes the done in good faith, does not result in ULP. The
CBA on Employer purpose of collective bargaining is the reaching of an
A company’s refusal to make a counter proposal if agreement resulting in a contract binding on the
considered in relation to the entire bargaining parties but the failure to reach an agreement after
process, may indicate bad faith and this is especially negotiations have continued for a reasonable period
true where the Union’s request for a counter proposal does not establish a lack of good faith. (Union of
is left unanswered. (Kiok Loy v. NLRC, G.R. No. L- Filipro Employees v. Nestle, G.R. Nos. 158930-31,
54334, 1986; Divine Word University of Tacloban v. 2008).
Secretary of Labor, G.R. No. 91915, 1992)
SECOND FORM: EVADING THE MANDATORY
Failure to reply SUBJECTS OF BARGAINING
Likewise, in Colegio de San Juan de Letran v. It is the obligation of the employer and the
Association of Employees and Faculty of Letran employees’ representative to bargain with each other
(G.R. No. 141471, 2000), petitioner-school was with respect to “wages, hours, and other terms and
declared to have acted in bad faith because of its conditions of employment.”
failure to make a timely reply to the proposals
presented by the union. The school merely offered a A mere remote, direct, or incidental impact is
feeble excuse that its Board of Trustees had not yet insufficient to render a subject a mandatory subject
convened to discuss the matter. of bargaining. It must materially or significantly affect
the terms and conditions of employment such as:
A local union which is not independently registered
cannot exercise the rights and privileges granted by 1. Wages and other types of compensation,
law to legitimate labor organizations. The employer including merit increases;
cannot be faulted for refusing to negotiate with the 2. Working hours and working days, including
unregistered chapter. (Abaria, et al v. Metro Cebu work shifts;
Community Hospital, G.R. No. 154113, 2011) 3. Vacation and holidays;
4. Bonuses;
An employer is guilty of ULP when he directly 5. Pensions and retirement plans;
discharges his employees to forestall a demand for 6. Seniority;
collective bargaining, and also indirectly causes that 7. Transfer;
discharge by selling to a company that he knows is 8. Lay-offs;
unwilling to accept his employees. (Fernando v. 9. Employee workloads;
Angat Labor Union, G.R. No. L-17896, 1962) 10. Rent of company houses;
11. Union security arrangements.
Acts Not Deemed Refusal to Bargain
1. Adoption of an adamant bargaining position Where the subject of the dispute is a mandatory
in good faith, particularly when the company bargaining subject, either party may bargain to a
is operating at a loss; point of impasse as long as he bargains in good faith.
2. Refusal to bargain over demands for
commission of ULP; Note: The law does not compel agreements between
3. Refusal to bargain during period of illegal employers and employees, and neither party is
strike; legally obligated to yield even on a mandatory
4. Refusal to bargain where there is no request bargaining subject.
for bargaining;
5. Union seeks recognition for an Where the subject is non-mandatory, a party may
inappropriately large unit; not insist on bargaining to the point of impasse. His
6. Union seeks to represent some persons who insistence may be construed as evasion of the duty
are excluded from the Act; to bargain.
7. Rank-and-file unit includes supervisors or
inappropriate otherwise; THIRD FORM: BAD FAITH BARGAINING
8. Demand for recognition and bargaining is Determination of Good Faith: Question of Fact
made within the year following a certification Good faith or bad faith is an inference to be drawn
election in which the clear choice was no from the facts. There is no per se test of good faith in

ATENEO CENTRAL
bargaining. The test of good-faith bargaining is not A sophisticated pretense in the form of apparent
the effect of an employer’s or a union's actions bargaining does not satisfy the statutory duty to
individually but rather it is the impact of all such bargain. The duty is not discharged by merely
occasions or actions, considered as a whole, and the meeting together or simply manifesting a willingness
inferences fairly drawn therefrom. (The Hong Kong to talk. An employer’s proposals which could not be
and Shanghai Banking Corporation Employees offered with any reasonable expectation that they
Union v. NLRC, G.R. 125038, 1997). would be accepted by the union constitute surface
An employer’s steadfast insistence to exclude a bargaining. (Standard Chartered Bank Employees
particular substantive provision from the union’s Union (NUBE) v. Confessor, G.R. No 114974, 2004)
proposal is no different from a bargaining
representatives perseverance to include one that Blue Sky Bargaining
they deem of absolute necessity. (Union of Filipro The making of exaggerated or unreasonable
Employees v. Nestle-Philippines, G.R. Nos. 158930- proposals in collective bargaining. (Standard
31, 2008) Chartered Bank Employees Union (NUBE) v.
Confessor, G.R. No. 114974, 2004)
Bargaining in Bad Faith Must Occur While
Bargaining is in Process Boulwarism
With the execution of the CBA, bad faith can no Occurs:
longer be imputed upon any of the parties thereto. All 1. When the employer directly bargains with
provisions in the CBA are supposed to have been the employee disregarding the union;
jointly and voluntarily incorporated therein by the 2. The aim was to deal with the union
parties. This is not a case where private respondent through the employees, rather than with
exhibited an indifferent attitude towards collective the employees through the union;
bargaining because the negotiations were not the 3. Employer submits its proposals and
unilateral activity of petitioner union. The CBA is adopts a “take it or leave it” stand. (NLRB
proof enough that private respondent exerted v. General Election Co., 418 F. 2d 736
“reasonable effort of good faith bargaining.”
(1970)
(Samahan Ng Manggagawa sa Top Form
Manufacturing-United Workers of the Philippines v.
FOURTH FORM: GROSS VIOLATION OF THE
NLRC, G.R. No. 13856, 1998)
CBA
A company's refusal to make counter proposal, if
Gross Violations: Flagrant and/or malicious refusal
considered in relation to the entire bargaining
by a party to comply with the [economic provisions]
process, may indicate bad faith and this is especially
(FASAP v. PAL, G.R. No. 178083, 2008).
true where the Union's request for a counter-proposal
is left unanswered." Considering the facts of that Employees’ Union of
case, the Court concluded that the company was Silva v. NLRC (1997) Bayer v. Bayer Phil. (2010)
"unwilling to negotiate and reach an agreement with ULP exists in this form
the Union." (Kiok Loy v. NLRC, G.R. 54334, 1986). when the complaint
shows prima facie the
INSTANCES OF BAD FAITH BARGAINING concurrence of two
things: Reference to the
Inflexible Demands and Strike Amid Negotiation 1. There is a economic provisions of
The parties had a total of (5) conferences for gross the CBA is not a
purposes of collective bargaining. The first strike was violation of necessary element of
staged less than a week after the fourth CBA ULP where the
the CBA; and
conference and without any benefit of any previous employer in effect
2. The violation
strike notice. Thus, from these stated facts, it can be totally disregarded the
inferred that the first strike was held while the parties pertains to CBA.
were in the process of negotiating. There is reason to the
believe that the first strike was staged only for the economic
purpose of compelling the respondent companies to provisions
accede to the inflexible demands of the complainant of the CBA
LAKAS. (Lakas ng Manggagawang Makabayan v.
Marcelo Enterprises, G.R. Nos. L-38258 & 38260, Note: The Bayer doctrine has modified the Silva
1982) doctrine in terms of when a ULP case is cognizable
by the Labor Arbiter.
Surface Bargaining
Total Disregard of CBA Constitutes ULP

ATENEO CENTRAL
An employer should not be allowed to rescind 1. The restrained misconduct was an issue in
unilaterally its CBA with the duly certified bargaining the case;
agent it had previously contracted with, and decide to 2. There was a finding of fact of said
bargain with a different group if there is no legitimate misconduct; and
reason for doing so and without first following the 3. Such finding was supported by evidence.
proper procedure. (Employees’ Union of Bayer v.
Bayer Phil., G.R. No. 162943, 2010) The Court is not authorized to issue blank cease and
desist orders, but must confine its injunction orders
EIGHTH ULP: PAID NEGOTIATION (ART. 259 [H]) to specific act or acts which are related to past
To pay negotiation or attorney’s fees to the union or misconduct. (Azucena Vols. II-A and II-B, 10th ed.,
its officers or agents as part of the settlement of any 2021, p. 303).
issue in collective bargaining or any other dispute.
(Labor Code, Art. 259[h]) Affirmative Order
In addition to a cease and desist order, the court may
Note: Self–organization and collective bargaining are issue an affirmative order to reinstate the said
treasured rights of the workers. The law zealously employee with back pay from the date of the
shields them from corruption. It is a punishable act of discrimination.
ULP for the employer to pay the union or any of its
officers or agents any negotiation fee or attorney’s The order may usually direct the full reinstatement of
fees as part of the settlement in collective bargaining the discharged employees to their substantially
or any labor dispute. To do so is not only unlawful. It equivalent position without prejudice to their seniority
is ethically reprehensible. It is akin to bribery, an and other rights and privileges.
under-the-table deal, in utter betrayal of the
members’ trust. If other laborers have been hired, the affirmative
order shall direct the respondent to dismiss these
Correspondingly, Art. 260 prohibits union officers or hired laborers to make room for the returning
agents from asking for or accepting such payments. employee. (Azucena Vols. II-A and II-B, 10th ed.,
(Azucena Vols. II-A and II-B, 10th ed., 2021, p. 303). 2021, p. 304).
NINTH ULP: [GROSS] VIOLATION OF THE CBA Order to Bargain

(ART. 259 [I]) Likewise, when an employer has failed or refused to
See above discussion on Fourth Form of ULP in bargain with the proper bargaining unit, the Court,
Bargaining. may, in addition to a cease and desist order, issue an
affirmative order to compel the respondent to
Note: Under Art. 259, simple violation of the “bargain” with the bargaining agent.
collective bargaining agreement is no longer treated
as unfair labor practice but as mere grievance, which Court may impose the union’s proposed CBA on the
should be processed through the grievance employer. (Kiok Loy v. NLRC, G.R. No. L-54334,
machinery in the CBA. It becomes an unfair labor 1986)
practice only when it is gross in nature, which means
that there is flagrant and/or malicious refusal to Disestablishment
comply with the economic provisions of such Where the employer had initiated, dominated or
agreement by either the employer or the union. assisted in or interfered with the formation or
establishment of any labor organization or
In the case of Master Union Labor Union v. NLRC, contributed financial or other support to it, the Court
(G.R. No. 92009, 1993), Master Iron Works may issue, in addition to a cease and desist order, an
Construction Corporation’s insistence that the hiring order directing the employer to withdraw all
of casual employees is a management prerogative recognition from the dominated labor union and to
betrays its attempt to coat with legality the illicit disestablish the same.
curtailment of its employees’ right to work under the
terms of the contract of employment and to a fair Not necessarily to dissolve and liquidate the structure
implementation of the CBA. and organization, rather, disestablishment
comprehends withdrawal of recognition of such labor
RELIEF IN ULP CASES organization as the employees’ bargaining agent and
Cease and Desist Order a bona fide and sufficient communication to the
To support a cease and desist order, the record must employees of such withdrawal of recognition.
show that: (Azucena Vols. II-A and II-B, 10th ed., 2021, p. 304).

ATENEO CENTRAL
ULP is not subject to compromise settlement of any issue in collective

ULP cases are not, in view of the public interest bargaining or any other dispute.
involved, subject to compromise. (CLLC E.G. 6. Violation of CBA.
Gochangco Workers Union v. NLRC, G.R. No. L-
67153, 1988) FIRST ULP: RESTRAINT OR COERCION BY
LABOR ORGANIZATION; INTERFERENCE BY
However: In another decision, the Court approved a UNION IS NOT ULP (ART. 260 [A])
compromise agreement finally settling an illegal
strike case. The agreement in that case was A labor organization commits ULP when it restrains
voluntarily entered into and represented a or coerces employees in their right to self–
reasonable settlement, thus binding. (see Reformist organization. It may interfere in the employees’ right
Union of R.B. Liner v. NLRC, G.R. No. 120482, 1997) to self-organization as long as the interference does
not amount to restraint or coercion.
ULP in a given period should be included in a
single charge Union cannot coerce employees to join a strike
When a labor union accuses an employer of acts of Similarly, a violation is committed when a union
unfair labor practice allegedly committed during a threatens the employees with bodily harm in order to
given period of time, the charges should include all force them to strike.
acts of unfair labor practice committed against any
and all members of the union during that period. The A union violates the law when, in order to restrain or
union should not, upon the dismissal of the charges coerce non-strikers from working during the strike, it:
first preferred, be allowed to split its cause of action 1. Assaults or threatens to assault them
and harass the employer with subsequent charges, 2. Threatens them with the loss of their jobs
based upon acts committed during the same period 3. Blocks their ingress to and egress from
of time. (Dionela, et. al. v. CIR et. al., G.R. No. L- the plant
18334, 1963) 4. Damages non-strikers’ automobiles or
forces them off the highway
c. By Organizations 5. Physically preventing them from working
6. Sabotages the employer’s property in their
ULP Committed By Labor Organizations
presence, thereby creating an
Kinds of ULP by Labor Organizations (Labor
code, Art. 260) atmosphere of fear or violence
1. To restrain or coerce employees in the 7. Demonstrates loudly in front of a non-
exercise of their right to self–organization. strikers’ residence with signs and shouts
2. To cause or attempt to cause an employer accusing the non-striker of “scabbing”
to discriminate against an employee, 8. Holding the non-striker up to ridicule
including discrimination against an 9. Seeking public condemnation of the non-
employee with respect to whom striker
membership in the labor organization was
Note: Interference, which is ULP with employers, is
denied or to terminate an employee on not ULP when done by a labor organization because
any ground other than the usual terms and it is part and parcel of the duties and functions of a
conditions under which membership or labor organization.
continuation of membership is made
available to other members. SECOND ULP: UNION-INDUCED
3. To violate the duty, or refuse to bargain DISCRIMINATION (ART. 260[B])
collectively with the employer, if it is the
representative of the employees. Three (3) Kinds of Discrimination that the Union
4. To cause or attempt to cause the may commit under Art. 260(b)
employer to pay or deliver or agree to pay 1. Act of the union to cause or attempt to
or deliver any money or other things of cause an employer to discriminate against
value, in the nature of an exaction, for an employee, in general, irrespective of
services which are not performed or not to whether he/she is a member or non-
be performed, including the demand for member of the union
fees for union negotiations. 2. Discriminatory act of the union against an
5. To ask or accept negotiation or attorney’s employee “with respect to whom
fees from employers as part of the membership in such organization has
been denied.”

ATENEO CENTRAL
3. Discriminatory act of the union against an a. Violation of the duty to bargain

employee whose membership therein has collectively
been terminated based “on any ground b. Refusal to bargain collectively
other than usual terms and conditions with the employer
under which membership or continuation
of membership is made available to other See above discussion on Forms of ULP in Collective
members.” Bargaining
Arbitrary use of union security clause

The broad rule is that the union has the right to FOURTH ULP: FEATHERBEDDING AND MAKE –
determine its membership and to prescribe the WORK ARRANGEMENTS (ART. 260 [D])
conditions for the acquisition and retention thereof.
Consequently, admission to membership may not be Featherbedding: Employee practices which create
compelled. or spread employment by unnecessarily maintaining
or increasing the number of employees used, or the
This rule, however, is qualified in the case of labor amount of time consumed, to work on a particular job.
unions holding a monopoly in the supply of labor,
either in a given locality, or as regards a particular In spite of employee assertions that these so-called
employer by reason of a closed – shop or similar featherbedding [or make-work] practices are directly
agreements. In such case, qualified applicants may related to job security, or health and safety, most
not be barred by unreasonable rules. Salunga v. CIR courts at common law found these practices to be
(G.R. No. L-22456, 1967) economically wasteful and without any legitimate
employee justification. (Cox, Cases and Materials on
The Court held that labor unions are not entitled to labor Law, NY, 1977, p.919, cited in Azucena Vols.
arbitrarily exclude qualified applicants for II-A and II-B, 9th ed., 2016, p. 372).
membership. A closed-shop provision will not justify
the employer in discharging, as well as a union Note: It may take the form of minimum crew
insisting upon the discharge of an employee whom it regulations on the railroad, make – work rules such
refuses to admit, without any reasonable ground as the setting of and prompt destruction of unneeded
thereof. Having been dismissed from service owing bogus type in the newspaper industry, stand – by pay
to unfair labor practice on the part of the union, for musicians when a radio station broadcasts music
petitioner is entitled to reinstatement as member of from phonograph records or production ceilings for
the union and to his former or substantially equivalent work on the assembly lines or at the construction site.
position in the company, without prejudice to his
seniority and/or rights and privileges, and with back Requisites for featherbedding:
pay. Union security clauses are also governed by law 1. Labor organization, its officers, agents or
and by principles of justice, fair play, and legality. representatives have caused or attempted
Union security clauses cannot be used by union to cause an employer either:
officials against an employer, much less their own a. To pay, or agree to pay any
members, except with a high sense of responsibility, money, including the demand for
fairness, prudence and judiciousness. (Manila fee for union negotiations
Mandarin Employees Union v. NLRC, G.R. No. b. To deliver or agree to deliver any
76989, 1987) things of value
2. Such demand for payment of money or
THIRD ULP: REFUSAL TO BARGAIN (ART. delivery of things of value is in the nature
260(C)) of an exaction
A union violates its duty to bargain collectively by
3. The services contemplated in exchange
entering negotiations with a fixed purpose of not
for the exaction are not actually performed
reaching an agreement or signing a contract.
or will not be performed (Labor code, Art.
Requisites: 260 (d)).
1. Union is the duly certified bargaining
agent (Lakas ng Manggagawang
Makabayan v. Marcelo Enterprises, G.R.
No. L-38258, 1982)
2. Commits any of the following:

ATENEO CENTRAL
UNFAIR LABOR PRACTICES OF EMPLOYERS v. UNFAIR LABOR PRACTICES OF LABOR

ORGANIZATIONS
Art. 259 Art. 260
(EMPLOYERS) (LABOR ORGANIZATIONS)
To interfere with, restrain or coerce (IRC) employees To restrain or coerce (RC) employees in the exercise
in the exercise of their right to self-organization of their right to self-organization (However, a labor
organization shall have the right to prescribe its own
rules with respect to the acquisition or retention of
membership)
To violate a collective bargaining agreement gross To violate a collective bargaining agreement (gross
violations only) violations only)
To violate the duty to bargain collectively as To violate the duty, or refuse to bargain collectively
prescribed by the Labor Code with the employer (provided it is the representative of
the employees)
To require as a condition of employment that a person To cause or attempt to cause an employer to
or an employee shall not join a labor organization or discriminate against an employee, including
shall withdraw from one discrimination against an employee with respect to
whom membership in such organization has been
denied or to terminate an employee on any ground
other than the usual terms and conditions
To contract out services or functions being performed To cause or attempt to cause an employer to pay or
by union members when such will interfere with, deliver or agree to pay or deliver any money or other
restrain or coerce employees in the exercise of their things of value, in the nature of an exaction, for
rights to self-organization services which are not performed or not to be
performed including demand for fee for union
negotiations (Featherbedding)
To initiate, dominate, assist or otherwise interfere with To ask for or accept negotiations or attorney’s fees
the formation or administration of any labor from employers as part of the settlement of any issue
organization, including the giving of financial or other in collective bargaining or any other dispute
support to it or its organizers or supporters
To discriminate in regard to wages, hours of work and
other terms and conditions of employment in order to
encourage or discourage members of any labor
organization
To dismiss, discharge or otherwise discriminate
against an employee for having given or being about
to give testimony under the Labor Code
To pay negotiation or attorney’s fees to the union or
its officers or agents as part of the settlement of any
issue in collective bargaining or any other dispute
PAGE 122 OF 198

ATENEO CENTRAL
6. Peaceful Concerted Different Kinds of Strike

Activities 1. LEGAL STRIKE – one called for a valid
purpose and conducted through means
a. Strikes allowed by law;
2. ILLEGAL STRIKE – one staged for a
Any temporary stoppage of work by the concerted purpose not recognized by law, or if for a
action of the employees as a result of an industrial valid purpose, conducted through means
or labor dispute. (Labor Code, Art. 219 (o)) not sanctioned by law, or one that did not
follow the procedural requirements;
Note: The term “strike” has been elucidated to 3. ECONOMIC STRIKE – one staged by
encompass not only concerted work stoppage, but workers to force wage or other economic
also the following: concessions from the employer which he
1. Slowdowns; is not required by law to grant
2. Mass leaves; (Consolidated Labor Association of the
3. Sit downs; Phil. vs. Marsman and Company, G.R.
4. Attempts to damage, destroy or sabotage No. L-17038, 1964);
plant equipment and facilities; and 4. ULP STRIKE – one called to protest
5. Similar activities. against the employer’s acts of unfair
(Toyota Motor Phils. Corp Workers Assoc. v. NLRC, labor practice enumerated in the Labor
G.R. Nos. 158798-99, October 19, 2007) Code;
5. SLOWDOWN STRIKE – one staged
Labor Dispute includes any controversy or matters without the workers quitting their work but
concerning terms and conditions of employment or
merely slackening or by reducing their
the association or representation of persons in
normal work output;
negotiations, fixing, maintaining, changing, or
6. WILD-CAT STRIKE – one declared and
arranging the terms and conditions of employment,
regardless of whether or not the disputants stand in staged without filing the required notice
the proximate relation of employers and employees of strike and without the majority
(Labor Code, Art. 219(l); Gold City Integrated Port approval of the recognized bargaining
Services v. NLRC, G.R. No. 103560 & 103599, agent;
1995) 7. SIT DOWN STRIKE – one where the
workers stop working but do not leave
Who can declare a strike or lockout their place.
1. Any certified or duly recognized
bargaining representative on the grounds Strike-breaker: Any person who obstructs,
of bargaining deadlock and ULP; impedes, or interferes with by force, violence,
2. Employer; coercion, threats, or intimidation any peaceful
3. In the absence of No.1, any legitimate picketing affecting wages, hours or conditions of
labor organization in the establishment work or in the exercise of the right of self-
organization or collective bargaining (Labor Code,
but only on grounds of ULP. (Sec. 6, Rule
Art. 219(r))
XXII, Book V as amended by D.O. No.
40-G-03, s. 2010) Strike Area: Establishments, warehouses, depots,
plants or offices, including the sites or premises
Characteristics of a Strike used as runaway shops, of the employer they are
1. There must be an employer-employee striking against, as well as the immediate vicinity
relationship actually used by picketing strikers in moving to and
2. Existence of a dispute fro before all points of entrance to and exit from said
3. Employment relation is deemed to establishment (Labor Code, Art. 219 (s))
continue although in a state of belligerent
suspension Boycott: A combination of many to cause a loss to
4. There is temporary work stoppage one person by causing others, against their will, to
5. Work stoppage is done through withdraw from him their beneficial business
concerted action intercourse through threats that unless others do so,
6. The striking group is a legitimate labor the many will cause similar loss to him or them. (31
organization. In case of bargaining Am Jur., Sec. 250, p. 956)
deadlock, it must be the employee’s sole
bargaining representative.

ATENEO CENTRAL
Slowdown: A method by which one’s employees, mass leaves, walk-outs and other forms of mass
without seeking a complete stoppage of work, retard action which will result in temporary stoppage or
production and distribution in an effort to compel disruption of public service. The right of government
compliance by the employer with the labor demands employees to organize is limited only to the
made upon him. (Rothenberg, p. 101) formation of unions or associations, without
including the right to strike. (Bangalisan, et al. v. CA,
Unlike other forms of strike, the employees involved G.R. No. 124687, 1997)
in a slowdown do not walk out of their jobs to hurt
the company. They need only to stop work or reduce Mandatory procedural requirements
the rate of their work while generally remaining in
their assigned post. (Fadriquelan v. Monterey Foods SECOND FACTOR: PROCEDURAL
Corp., G.R. Nos. 178409 & 178434, 2011) REQUIREMENTS
PROCEDURAL REQUIREMENTS (Labor Code,
Note: Such slowdown is generally condemned as Art. 278)
inherently illicit and unjustifiable, because while the 1. Notice of Strike
employees continue to work and remain at their 2. Cooling-off Period
positions and accept the wages due them, they at
3. Strike Vote
the same time select what part of their allocated task
4. Strike Vote Report
they care to perform of their own volition or refuse
openly or secretly to the employer’s damage, to do
5. 7-day strike/lockout ban
These requirements are mandatory, meaning, non-
other work. They work on their own terms. But
whether or not the workers’ activity in question— compliance therewith makes the strike illegal.
their concerted adoption of a different work schedule (Azucena Vol. II-A, 9th ed., p. 594).
than that prescribed by management and adhered
1. NOTICE OF STRIKE
to for several years—constitutes a slowdown need
not be gone into. The activity is contrary to RA6727
WHERE FILED: Regional Branch of the National
and the parties’ CBA (Ilaw at Buklod v. NLRC, G.R.
Conciliation and Mediation board, copy furnished
No. 91980, June 27, 1991)
the employer or the union, as the case may be.
Legal strike vs. illegal strike WHEN FILED: At least 30 days, in case of CBD, and
at least 15 days, in case of ULP, before the intended
VALID VERSUS ILLEGAL STRIKES date of strike.
An Illegal Strike is one which: PPP-MIA
1. Is contrary to a specific Prohibition of law, WHO FILES NOTICE OF STRIKE
such as strike by employees performing ULP DEADLOCK
governmental functions Duly recognized or
2. Violates a specific requirement of law (as certified bargaining
to Procedure) agent ONLY EXCLUSIVE
3. Is declared for an unlawful Purpose, such BARGAINING
as inducing the employer to commit an If none, unrecognized REPRESENTATIVE
unfair labor practice against non-union labor union, provided
employees union is duly registered.
4. Employs unlawful Means in the pursuit of
its objective, such as widespread CONTENTS OF NOTICE
terrorism of non-strikers BARGAINING DEADLOCK ULP
5. Violates an existing Injunction Notice shall, as far as Notice shall, as
6. Contrary to an existing Agreement, such practicable, further state the far as
as a no-strike clause or conclusive unresolved issues in the practicable,
arbitration clause (Toyota Motor Phil. bargaining negotiations and state the acts
Workers Association v. NLRC, G.R. No. be accompanied by the written complained of
158789, 2007) proposals of the union, the and the efforts
counter-proposals of the taken to resolve
EXPOUNDED: employer and the proof of a the dispute
FIRST FACTOR: STATUTORY PROHIBITION request for conference to amicably.
Employees in the public service may not engage in settle the differences.
strikes. While the Constitution recognizes the right NOTE: In case notice does not conform with
of government employees to organize, they are requirements of this and foregoing section/s, the
prohibited from staging strikes, demonstrations, Regional branch of the Board shall inform the

ATENEO CENTRAL
concerned party of such fact. (Club Filipino, Inc. v. vote, and the date, place, and time thereof, the
Bautista, G.R. No. 168406, 2015) NCMB cannot determine for itself whether to
supervise a strike vote meeting or not and insure its
2. COOLING-OFF PERIOD peaceful and regular conduct. The failure of a union
BARGAINING to comply with the requirement of the giving of notice
ULP to the NCMB at least 24 hours prior to the holding of
DEADLOCK
30 days 15 days a strike vote meeting will render the subsequent
strike staged by the union illegal. (Capitol Medical
NCMB, upon receipt of the notice of strike and Center Inc. v. National Labor Relations
during the cooling-off period, mediates and Commission, G.R. No. 147080, 2005)
conciliates the parties. The Regional branch of the
Board may, upon agreement of the parties, treat a NUMBER OF VOTES REQUIRED for stike/
notice as a preventive mediation case. It shall also lockout: Majority of the total UNION
encourage the parties to submit the dispute to MEMBERSHIP OR OF THE DIRECTORS OR
voluntary arbitration. PARTNERS, as the case may be.
In cases of ULP strike, the cooling-off period need Strike or lockout vote
not be observed when union-busting is present. 1. Approved by majority of total union
(Labor Code, Art. 278) membership or by majority of the BOD or
partners
Elements of Union Busting: (Labor Code, Art. 2. By a secret ballot
278(c)) 3. In a meeting called for that purpose
1. The union officers are being dismissed
2. Those officers are duly elected in 4. STRIKE VOTE REPORT
accordance with the union constitution The result of the strike/lockout vote should be
and by-laws reported to the NCMB at least 7 days before the
3. The existence of the union is threatened intended strike or lockout, subject to the cooling-off
period. Labor Code, Art. 278 (f))
3. STRIKE VOTE (Labor Code, Art. 278(f))
A strike/lockout vote should be taken by secret If the strike vote is filed within the cooling-off period,
balloting, in meetings or referenda specially called the 7-day requirement shall be counted from the day
for the purpose. following the expiration of the cooling-off period.
(NCMB’s Primer on Strike, Picketing and Lockout)
The regional branch of the Board may, at its own Note: There is no law or Supreme Court decision
initiative or upon request of any affected party, that supports this formula.
supervise the conduct of the secret balloting.
If the union is being busted, there is no need to
NOTE: The requirement of giving notice of the observe the cooling-off period but the unions must
conduct of a strike vote to the NCMB at least 24 still file a notice of strike, take a strike vote and
hours before the meeting for the said purpose is submit the strike vote report. What is being excused
designed to: in case of union busting is only the observance of
a. inform the NCMB of the intent of the union the 15-day cooling-off period.) (Sec. 7, D.O. 40-G-
to conduct a strike vote; 03, 2010)
b. give the NCMB ample time to decide on
whether or not there is a need to supervise No strike or lockout can be declared while a case is
the conduct of the strike vote to prevent any pending involving the same grounds for strike or
acts of violence and/or irregularities lockout. (Bulletin v. Sanchez, G.R. No. 74425, 1986)
attendant thereto; and
c. should the NCMB decide on its own The submission of the report gives assurance that a
initiative or upon the request of an strike vote has been taken and that, if the report
interested party including the employer, to concerning it is false, the majority of the members
supervise the strike vote, to give it ample can take appropriate remedy before it is too late.'
time to prepare for the deployment of the The seven (7)-day waiting period is intended to give
requisite personnel, including peace the Department of Labor and Employment an
officers if need be. opportunity to verify whether the projected strike
really carries the imprimatur of the majority of the
Unless and until the NCMB is notified at least 24 union members. The need for assurance that
hours of the union's decision to conduct a strike majority of the union members support the strike
cannot be gainsaid||| (Lapanday Workers Union v.

ATENEO CENTRAL
National Labor Relations Commission, G.R. Nos. 8. Company’s Sales Evaluation Policy (GTE
95494-97, 1995) Directories v. Hon. Sanchez, G.R. No.
76219, 1991); and
Legal and Enforceable Dismissal of Employees 9. Issues covered by a No-Strike Commitment
during Conciliation in the CBA
When the strike notice was filed by the union, the
chain of events which culminated in the termination ULP Strike in Good Faith
of the 14 salespersons’ employment was already It is not even required that there be in fact an unfair
taking place; the series of defiant refusals by said practice committed by the employer. It suffices if
sales representatives to comply with GTE’s such a belief in good faith is entertained by labor as
requirement to submit individual reports was already the inducing factor for staging a strike. (Shell Oil
in progress. At that time, no less than 3 of the Union v. Shell Oil Company, G.R. No. L-28607,
ultimate 6 direct orders of the employer for the 1971)
submission of the reports had already been
disobeyed. The filing of the strike notice, and the If the management performed acts which, under the
commencement of conciliation activities by the BLR circumstances, the strikers believed were unfair
did not operate to make GTE’s orders illegal and labor practices on the part of the management,
unenforceable so as to excuse continued although they were not, the court rules that the strike
noncompliance therewith. (GTE Directories v. cannot be held illegal. However, the union’s belief
Sanchez, G.R. No. 76219, 1991) needs some rational basis. (Azucena Vol. II-A and
II-B, 10th ed., 2021, p. 524)
Grounds for Strike
NOTE: The good faith strike doctrine does not
THIRD FACTOR: UNLAWFUL PURPOSE tolerate groundless strike. It does not excuse the
union’s presentation of substantial evidence to
Grounds for Strike or Lockout support its allegation of ULP by the employer.
1. Unfair Labor Practice (ULP) of the
Employer and the Union Such requirements as the filing of a notice of strike,
2. Collective Bargaining Deadlock (CBD) strike vote and notice given to DOLE are mandatory
in nature and apply even to ULP strike in good faith.
NOTE: Violations of CBA must be gross to be (Azucena Vol. II-A and II-B, 10th ed., 2021, p. 527-
considered as ULP 528)
Conversion Doctrine: A strike may start as Strike to Compel Recognition of and Bargaining
economic and, as it progresses, becomes ULP, or with the Majority Union
vice-versa. The legal way to secure union recognition is not
through strike but through a certification process.
Non-Strikeable Issues (NCMB, Manual of This is why Article 278 (b) prohibits strike due to
Procedures in Settlement and Disposition of inter-union or intra-union dispute.
Conciliation and Preventive Mediation Cases,
Rule VI, Sec. 6(c)(i); see University of San But where the majority status of a union is not in
Agustin Employees’ Union-FFW v. CA, G.R. No. doubt, not in dispute, or is certainly established and,
169632, 2006). despite this, the employer still refuses to bargain,
1. Labor Standards Cases; then the situation is one of refusal to bargain which
2. Wage Distortion; is ULP by employer. (Caltex Filipino v. CIR, G.R.
3. Inter-Union or Intra-Union Disputes; Nos. L-30632-33, 1972)
4. Physical Re-arrangement of the Office
(Reliance Surety and Insurance Co., v. Minority Union Cannot Strike
NLRC, G.R. Nos. 86917-18, 1991); Defeated union cannot lawfully undertake a strike
5. Execution and Enforcement of Final against the employer; if one is being done, it must
Orders, Decisions, Resolutions, or Awards come to a halt. (United Restauror’s Employees &
in the Cases Mentioned in # 6; Labor Union, G.R. No. L-24993, 1968).
6. Cases pending at the DOLE Regional
Offices, BLR, NLRC, DOLE Secretary, Trivial, Unjust or Unreasonable Strike Illegal
Voluntary and Compulsory Arbitrators, CA, The walkout was premature as it was declared
and SC; without giving the General Manafer, or the Board of
7. Violations of CBA which are resolved via Directors of the Company a reasonable time within
Grievance Machinery; which to consider and act on the demands
submitted by the Union. The nature of the demands

ATENEO CENTRAL
was such that no possible action could be taken because its objective or purpose is lawful, the strike
thereon by the officials to whom they were may still be declared invalid where the means
submitted. They could have only been acted upon employed are illegal. Among such limits are the
by the General Manager, or by the Board of prohibited activities under Article [279] of the Labor
Directors. The former was then in Bacolod, and the Code, particularly paragraph (e), which states that
latter could not be convened because the chairman no person engaged in picketing shall:
and two of its members were also absent. This fact (a) commit any act of violence, coercion, or
was well known to the leaders of the Union. The intimidation or
Court of Industrial Relations, therefore, acted rightly (b) obstruct the free ingress to or egress from
in declaring said strike unjustified and illegal. the employer's premises for lawful
(Industrial Paper v. Insular Sugar, G.R. No. L-7394, purposes, or
1954) (c) obstruct public thoroughfares. (Sukhothai
Cuisine v. CA, G.R. No. 150437, 2006)
Acts Calculated to Force Disruption of
Operations, Thereby Violating the No-strike NOTE: Whoever commits these acts – union officers
Clause in the CBA, Constitute Illegal Strike or members, employees or non-employees – is
The Union officers and members’ concerted action answerable for the acts.
to shave their heads and crop their hair not only
violated the Hotel’s Grooming Standards but also The use of violence, intimidation, restraint or
violated the Union’s duty to bargain in good faith. By coercion in carrying out concerted activities, which
shaving their heads and cropping their hair, the are injurious to the rights of property or to particular
Union officers and members violated then Section individuals, makes a strike illegal. (Cf. Liberal Labor
6, Rule XIII of the IRR of Book V of the Labor Code. Union v. Phil. Can Co, G.R. No. L-4834, 1952)
This rule prohibits the commission of any act which
will disrupt or impede the early settlement of the Acts of violence justify the dismissal of the guilty
labor dispute that are under conciliation. Since the strikers. (Shell Oil Workers' Union v. Shell
bargaining deadlock is being conciliated by the Company, G.R. No L-28607, 1971)
NCMB, the Union’s action to have their officers and
members’ heads shaved was manifestly calculated The mere filing of charges against an employee for
to antagonize and embarrass the Hotel alleged illegal acts during a strike does not by itself
management and in doing so effectively disrupted justify dismissal. The charges must be proved at an
the operations of the Hotel and violated their duty to investigation duly called where the employee shall
bargain collectively in good faith. (NUWHRAIN- be given an opportunity to defend himself. This is
APL-IUF v. CA, G.R. No. 163942, 2008) true even if the alleged ground constitutes a criminal
offense. (Almira v. B.F. Goodrich Phil., Inc., G.R.
Strike motivated by an unreasonable demand of the No. L-34974, 1974)
labor union for the dismissal of a factory foreman is
illegal and unjustified. (Luzon Marine v. Roldan, Violence on Both Sides
G.R. No. L-2660, 1950) Where violence was committed on both sides during
a strike, such violence cannot be a ground for
declaring the strike as illegal. (Malayang Samahan
Prohibited acts during strike ng mga Manggagawa v. Ramos, G.R. No. 113907,
2000)
FOURTH FACTOR: UNLAWFUL MEANS
Strike may be illegal for commission of prohibited Liability of union officers and members
acts. Despite the validity of the purpose of a strike for illegal strike and illegal acts during
and compliance with the procedural requirements, a strike
strike may still be held illegal where the means
employed are illegal. The means become illegal Liability of Union Officers and Ordinary
when they come within the prohibitions under Article Members
279(e) of the Labor Code. (Phimco Industries, Inc v. Declaration of a strike does not amount to a
Phimco Industries Labor Association (PILA), G.R. renunciation of the employment relation (Rex Taxi
No. 170830, 2010) Cab v. CIR, G.R. No. 47303, 1940).
The strike had been attended by the widespread
commission of prohibited acts. Well-settled is the
rule that even if the strike were to be declared valid

ATENEO CENTRAL
a.) Union Officer replacement had been committed illegal acts

Participation in Participation in Illegal hired by the employer during the strike and
Lawful Strike Strike during such lawful the striker who
Mere participation of a Mere finding or strike (Labor code, Art. participated in the
worker in a lawful strike declaration of illegality 279 (a) (paragraph 3) commission of illegal
cannot constitute of strike will result in act[s] must be
sufficient ground for the termination of all identified. But proof
termination of his union officers who beyond reasonable
employment, even if knowingly doubt is not required.
replacement had been participated in the Substantial evidence
hired by the employer illegal strike (Lapanday available under the
during such lawful Workers union v. circumstances, which
strike (Labor code, Art. NLRC, G.R. Nos. may justify the
279 (a) (paragraph 3) 9594-97, 1995) imposition of the
It is not required, for penalty of dismissal,
purposes of may suffice. (Toyota
termination that the Motors Phils. Corp v.
officers should commit NLRC, G.R. Nos.
an illegal act during the 158786 &158799,
strike (Phimco 2007)
Industries, Inc. v.
Phimco Industries Reason for distinction: The responsibility of union
Labor Association, officers, as main players in an illegal strike, is
G.R. No. 170830, greater than that of the members and, therefore,
2010) limiting the penalty of dismissal only for the former
Any union officer who for participation in an illegal strike is in order.
knowingly participates (Solidbank Corporation v. Gamier, G.R. No. 159460,
in an illegal strike and 2010)
any worker or union
officer who knowingly Officials’ Inability to Leave Premises Not Illegal
participates in the Detention
commission of illegal There was no kidnapping as the detention or
acts during a strike deprivation of liberty under the circumstance while
may be declared to certainly not to be justified, was not done with
have lost his criminal intent. (People v. Barba, 20 SCRA 663,
employment status 1969)
(Toyota Motors Phils.
Corp v. NLRC, G.R. Blockade or Obstruction
Nos. 158786 &158799, Illegal obstructions on public thoroughfares, such as
2007) streets or sidewalks, are nuisances which local
government authorities can summarily remove.
b.) Ordinary Employee
Participation in Participation in Illegal Waiver of Illegality of Strikes
Lawful Strike Strike Where the ER voluntarily agrees to reinstate the
Employee who Mere finding or strikers, such agreement on the part of the ER
participates in lawful declaration of illegality constitutes a waiver of the defense that the strike
strike is not deemed to of a strike will not result was illegal.
have abandoned his in termination of
employment but is ordinary union b. Picketing
merely exercising his members.
right to self- Definition of Picketing
organization While a strike focuses on stoppage of work,
Mere participation of a An ordinary striking picketing focuses on publicizing the labor dispute
worker in a lawful strike employee cannot be and its incidents to inform the public of what is
cannot constitute terminated for mere happening in the company struck against. A picket
sufficient ground for participation in an simply means to march to and from the employer's
termination of his illegal strike. There premises, usually accompanied by the display of
employment, even if must be proof that he placards and other signs making known the facts

ATENEO CENTRAL
involved in a labor dispute. It is a strike activity Pickets may not aggressively interfere with the right
separate and different from the actual stoppage of of peaceful ingress to and egress from the ER’s
work. (Phimco Industries, Inc. V. Phimco Industries establishment or obstruct the public thoroughfares.
Labor Association, G.R. No. 170830, 2010).
Picketing of Neutral Parties or “Innocent
Picketing as a concerted activity is subject to the Bystanders” Not Allowed
same limitations as strike, particularly as to lawful Although the right to peaceful picketing is entitled to
purpose and lawful means employed to carry it out. protection as an exercise of free speech, such right
It should be done within the bounds of law. may be regulated at the instance of third parties or
“innocent bystanders” if it appears that the inevitable
Picketing peacefully carried out is not illegal even in result of its exercise is to create an impression that
the absence of employer-employee relationship for a labor dispute with which they have no connection
it is a part of a freedom of speech guaranteed by the or interest exists between them and the picketing
Constitution. (De Leon v. NLRC, G.R. No. L-7586, union.
1957)
A picketing union has no right to prevent employees
Prohibition on those Engaged in Picketing of another company (who is not their employer) from
Article 279[e] prohibits any person engaged in getting in and out of its premises, otherwise the
picketing from obstructing the free ingress to and picketing union may be held liable for damages for
egress from the employer’s premises (Jackbilt its act against innocent bystanders.
Industries v. Jackbilt Employees Workers Union,
G.R. Nos. 171618-19, 2009) c. Lockouts
No person engaged in picketing shall: Temporary refusal of any employer to furnish work
1. Commit any act of violence, coercion or as a result of an industrial or labor dispute
intimidation, or
2. Obstruct the free ingress to or egress Conversion Doctrine: A strike may start as
from the employer’s premises for lawful economic and, as it progresses, becomes ULP, or
purposes, or vice-versa.
3. Obstruct public thoroughfares. (Art.
279(e), Labor Code) When labor may strike or when the employer
may lockout its workers
Note: No person shall obstruct, impede or interfere If the dispute remains unsettled after the lapse of the
with by force, violence, coercion, threats or requisite number of days from the filing of the notice
intimidation, any peaceful picketing by workers of strike or lockout and of the results of the election.
during any labor-controversy or in the exercise of But the regional branch of the Board shall continue
the right to self-organization or collective bargaining, mediating and conciliating.
or shall aid or abet such obstruction or interference.
When strike or lockout cannot be declared
No employer shall use or employ any person to 1. Violations of CBA which are not gross.
commit such acts nor shall any person be employed 2. Grounds involving inter/intra union
for such purpose (Sec. 9, D.O. 40-G-03, 2010) disputes.
3. When there is no notice of strike or lockout
Moving Pickets may be Illegal or without the strike or lockout vote.
A picket, although “peaceful” and “moving,” may 4. After assumption of jurisdiction by the
constitute illegal obstruction if it effectively blocks Secretary.
the entry and exit points of the company premises, 5. After certification or submission of dispute
thus violating the law and making the strike itself to compulsory or voluntary arbitration or
illegal. (PHIMCO v PILA, G.R. No. 170830, 2010) during the pendency of cases involving the
same grounds for strike or lockout.
Picketing may be considered as a nuisance if it
constitutes an obstruction to the free use of
property, so as to substantially interfere with the Prohibited activities during strikes and lockouts
comfortable enjoyment of life or property of another, (Labor Code, Art. 279)
or if it constitutes an unlawful obstruction to the free 1. Strike or lockout without first having
passage or use, in the customary manner, of a bargained collectively
street.

ATENEO CENTRAL
2. Strike or lockout without the necessary vote situation – a strike or lockout in an industry
first having been obtained and reported to indispensable to the national interest. The secretary
the DOLE. of Labor is empowered to:
3. Strike or lockout after DOLE has assumed 1. Assume jurisdiction over the dispute and
jurisdiction or the President or after decide it, or
certification or submission of dispute to the 2. Certify the dispute to the NLRC for
compulsory arbitration/voluntary arbitration compulsory arbitration, in which case,
or during the pendency of cases involving NLRC shall hear and decide.
the same grounds for the strike or lockout.
4. Knowingly participating in illegal strike or The intent of the law is to give the Labor Secretary
knowingly participating in the commission full authority to resolve all matters within the dispute
of illegal acts during a strike (ground for that gave rise to or which arose out of the strike or
termination of employment). lockout; it includes and extends to all questions and
5. Obstruct, impede, or interfere with by force, controversies arising from or related to the dispute,
violence, coercion, threats, or intimidation including cases over which the labor arbiter has
any peaceful picketing by employees exclusive jurisdiction.
during any labor controversy or shall abet
or aid such obstruction or interference. The authority of the Secretary to assume jurisdiction
6. Employment or use of any strikebreaker/ over a labor dispute causing or likely to cause a
being employed as a strike breaker. strike or lockout in an industry indispensable to
7. Bringing in, introducing, or escorting by any national interest includes and extends to all
public officer or employee, including questions and controversies arising from such labor
officers and personnel of the AFP or PNP, dispute. The power is plenary and discretionary in
or any armed person in any manner of any nature to enable him to effectively and efficiently
individual who seeks to replace strikers in dispose of the dispute. (Philcom Employees Union
entering or leaving the premises of a strike v. Philippine Global Communications, G.R. No.
area or work in place of strikers. 144315, 2006)
8. Commit any act of violence, coercion or
intimidation while engaged in picketing or As held in International Pharmaceuticals, Inc. v.
obstruct the ingress or egress from the Secretary of Labor, the Labor Secretary has
employer's premises for lawful purposes or jurisdiction over all questions and controversies
obstruct public thoroughfares (must be arising from an assumed dispute, including cases
pervasive and widespread/consistently and over which the labor arbiter has exclusive
deliberately resorted to as a matter of jurisdiction. (G.R. Nos. 92981-83, 1992)
policy)
a. INDUSTRY INDISPENSABLE TO THE
Lockouts have been held valid in the following NATIONAL INTEREST
situations:
1. In anticipation of a threatened strike, where What Constitutes a National Interest Case
motivated by economic considerations The Labor Code vests upon the Secretary of Labor
2. In response to unprotected strike or the discretion to determine what industries are
walkout indispensable to national interest. Thus, upon the
3. In response to a whipsaw strike determination of the Secretary of Labor that such
industry is indispensable to the national interest, it
Lockouts have been held unlawful in the ff. will assume jurisdiction over the labor dispute of said
circumstances: industry. (Philtread Workers Union v. Confesor,
1. To discourage and dissipate membership G.R. No. 117169, 1997).
in a labor organization
2. To aid a particular union by preventing A Police Power Measure
further work of its rival The assumption of jurisdiction is in the nature of
3. To avoid bargaining police power measure. This is done for the
promotion of the common good considering that a
d. Assumption of jurisdiction by prolonged strike or lockout can be inimical to the
the DOLE Secretary national economy. The Secretary of Labor acts to
maintain industrial peace. Thus, his certification for
SECRETARY OF LABOR AND EMPLOYMENT compulsory arbitration is not intended to impede the
Nature workers' right to strike but to obtain a speedy
Art. 278(g) is both an extraordinary and a settlement of the dispute. (Philtread Workers Union
preemptive power to address an extraordinary v. Confesor, G.R. No. 117169, 1997).

ATENEO CENTRAL
4. On other pending cases – Parties are

What are Considered “National Interest” Cases required to inform their counsels and the
The NLRC vests the President of the Philippines DOLE Secretary/ NLRC Division
and the Secretary of Labor almost unlimited concerned of all pending cases that are
discretion to determine what industries may be related or incident to the assumed/certified
considered as indispensable to the national interest. case.(Par 2, Sec. 3(b), Rule VIII, 2011
NLRC Rules of Procedure)
Industries Indispensable to the National Interest
1. Hospital Sector Such assumption or certification has the effect of
2. Electric Power Industry automatically enjoining the intended or impending
3. Water Supply Services, to exclude small strike or lockout as specified in the assumption or
water supply such as bottling and refilling certification order.
stations
4. Air traffic control If one has already taken place at the time of the
5. Such other industries as maybe assumption or certification, all striking or locked out
recommended by the National Tripartite employees shall immediately return to work and the
Peace Council (TIPC) (DO No.40-H-13) employer shall immediately resume operations and
readmit all workers under the same terms and
Examples of “National Interest” disputes: conditions prevailing before the strike or lockout. In
1. Nestle Philippines, Inc. is engaged in an such case, the assumption/certification results to a
undertaking affected with public interest return-to-work of all striking workers even if the
being one of the largest manufacturers of Secretary has not issued a Return to Work Order
food products. (Union of Filipro v. NLRC, (RTWO). (Labor Code, Art. 278 (g))
G.R. No. 91025, 1990 )
2. Academic institutions (Philippine School of Upon assumption or certification, the parties should
Business Administration v. Noriel, G.R. No. revert to the status quo ante litem which refers to the
80648, 1988) state of things as it was before the labor dispute or
3. A company supplying the sulfate the state affairs existing at the time of the filing of the
requirements of MWSS case. (Overseas Workers’ Welfare Administration v.
4. Banking is expressly classified by the Chavez, G.R. No. 169802, 2007).
General Banking Law as an industry
indispensable to the national interest. The assumption or certification also has the effect of
5. However, the Court ruled that the regulating the management prerogative of
production of telephone directories is not determining the assignment or movement of EEs.
an industry affecting the national interest.
(GTE Directories Corp v. Sanchez, G.R. Thus, in one case, the Court held the layoff of 94
No. 76219, 1991) EEs pending the resolution of the dispute illegal as
it was violative of the assumption order. (Metrolab v.
b. EFFECTS OF ASSUMPTION OF Roldan-Confesor, G.R. No. 108855, 1996)
JURISDICTION
1. On intended or impending strike or lockout When May the Secretary Assume Jurisdiction
– Automatically enjoined (Labor Code, Art. Over a Case or Certify it to the NLRC
278(g)) Under the law, when in his opinion there exists a
2. On actual strike or lockout (already taken labor dispute causing or likely to cause a strike or
place) – all striking or locked-out lockout in an industry indispensable to the national
employees shall immediately return to work interest, the Secretary [of Labor] may:
and the employer shall immediately resume 1. Assume jurisdiction over the dispute and
operations and readmit all workers under decide it, or
the same terms and conditions prevailing 2. Certify the same to the NLRC for
before the strike or lockout (Labor Code, compulsory arbitration
Art. 278(g))
3. On cases already filed and may be filed – Note: Power of DOLE Secretary to assume
considered subsumed or absorbed by jurisdiction over a labor dispute is limited to strikes
assumed or certified case, except where or lockouts adversely affecting the national interest.
certification or assumption order states (Free Telephone Workers Union v. Hon. Minister of
otherwise (Guagua National Colleges v. Labor and Employment, G.R. L-58184, 1981)
Guagua National Colleges Faculty Labor
Union, G.R. No. 204693, 2016)

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Rule on Strikes and Lockouts in Hospitals,

Clinics and Medical Institutions (Labor Code, A “national interest” dispute may be certified to the
Article 278 (g) (par.2)) NLRC even before a strike is declared since the
GR: Strikes and lockouts in these institutions must Labor Code does not require the existence of a
be avoided strike, but only of an industrial dispute.
But in case a strike or lockout is staged: When sitting in a compulsory arbitration certified to
1. It shall be the duty of the striking union or by the DOLE Secretary, the NLRC is not sitting as a
locking-out employer to provide and judicial court but as an administrative body charged
maintain an effective skeletal workforce with the duty to implement the order of the
of medical/ other health personnel whose Secretary. In such a case, the NLRC does not have
services shall be unhampered and the power to amend the Secretary’s order. (GSISEA
unrestricted to insure the proper and v. CIR, G.R. No. L-18734, 1961)
adequate protection of life and health of
Effects of Defiance of Assumption or
its patients for the duration of the
Certification
strike/lockout
Non-compliance with the certification order of the
2. DOLE Secretary shall immediately
Secretary shall be considered an illegal act
assume, within 24 hours from knowledge committed in the course of the strike or lockout, and
of the occurrence of the strike/lockout, shall authorize the NLRC to enforce the same under
jurisdiction over the same or certify it to pain of immediate disciplinary action, including loss
NLRC for compulsory arbitration of employment status or payment by the locking-out
ER of backwages or damages, even criminal
Assumption of Jurisdiction: Prior Notice Not prosecution against the liable parties.
Required
The discretion to assume jurisdiction may be Defiant Employers
exercised by the Secretary without the necessity of An assumption order was issued. However, the
prior notice or hearing given to any of the parties. company laid off employees, one batch after the
order. Company argues that it is in the employer’s
The rationale for his primary assumption of right to manage his business. Any act committed
jurisdiction can justifiably rest on his own during the pendency of the dispute that tends to give
consideration of the exigency of the situation in rise to further contentious issues or increase the
relation to the national interests. (Capitol Medical tensions between the parties should be considered
Center v. Trajano, G.R. No. 155690, 2005). an act of exacerbation. One must look at the act
itself, not on speculative reactions. A misplaced
Return-to-Work-Order (RTWO) recourse is not needed to prove that a dispute has
The moment the Secretary of Labor assumes been exacerbated. (Metrolab Industries v Roldan-
jurisdiction over a labor dispute in an industry Confesor, G.R. 108855, February 28, 1996)
indispensable to national interest, such assumption
shall have the effect of automatically enjoining the Defiant Strikers, Whether Officer or Ordinary
intended or impending strike. It was not even Members of the Striking Union, are Deemed
necessary for the Secretary of Labor to issue Dismissed
another order directing a return to work. The mere Once DOLE Sec. assumes jurisdiction over a labor
issuance of an assumption order by the Secretary of dispute or certifies it to NLRC for compulsory
Labor automatically carries with it a return-to-work arbitration, such jurisdiction should not be interfered
order, even if the directive to return to work is not with by the application of the application of coercive
expressly stated in the assumption order. (Steel processes of a strike or lockout.
Corporation of the Philippines v. SCP Employees
Union, G.R. 169829-30, 2008) Any defiance thereof is a valid ground for the loss of
employment status regardless of whether the
Note: defiant worker is an officer or an ordinary member
● It is always part of the assumption/ of the union. Defiance of the assumption order or a
certification order even if not expressly return-to work order by a striking employee, whether
stated. a union officer or a member, is an illegal act and,
● RTWO is compulsory in character therefore, a valid ground for loss of employment
status. (Manila Hotel Employees Association v.
Certification to NLRC Manila Hotel Corp., G.R. No. 154591, 2007)
“Certified labor disputes” are cases certified [or
referred] to the NLRC for compulsory arbitration

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Certification to the NLRC makes the continuation of and prove that there was no defiance at all.
the strike illegal, provided that the parties are duly (Azucena Vol. II-A-II-B, 10th ed., 2021, p. 557)
notified of the certification order. Notice is a
prerequisite even if the order states that it is Actual, Not Payroll, Reinstatement
“immediately executory.” Under the law, “the striking or locked out employees
shall return to work and the employer shall readmit
Refusal to Receive the Assumption of them.” The Court has interpreted this to mean, as a
Jurisdiction Order Amounts to Defiance general rule, actual, not payroll, readmission to the
Refusal to receive the Assumption of Jurisdiction EEs’ positions. (Azucena Vol. II-A, 9th ed., 2016, p.
Order (AJO) amounts to defiance of the order, which 655)
makes the continuation of the strike an illegal act,
thus subjecting the strikers to possible termination With respect to the Secretary's Order allowing
of employment. payroll reinstatement instead of actual
reinstatement for the individual respondents herein,
The strikers should resume work immediately upon an amendment to the previous Orders issued by her
receipt or constructive receipt of the order. A grace office, the same is usually not allowed. Article 263(g)
period may be given but that is not required by the of the Labor Code aforementioned states that all
law. (Azucena Vol. II-A and II-B, 10th ed., 2021, p. workers must immediately return to work and all
551-552) employers must readmit all of them under the same
terms and conditions prevailing before the strike or
Effects of Defying the RTWO lockout. The phrase "under the same terms and
The mere issuance of an assumption order conditions" makes it clear that the norm is actual
automatically carries with it a return-to-work order. reinstatement. This is consistent with the idea that
(Steel Corporation of the Philippines v. SCP any work stoppage or slowdown in that particular
Employees Union, G.R. Nos. 169829-30, 2008) industry can be detrimental to the national interest.
(University of Immaculate Concepcion, Inc. v.
From the moment a worker defies a RTWO, he is Secretary of Labor, G.R. No. 151379, 2005)
deemed to have abandoned his job. (St.
Scholastica's College v. Torres, G.R. No. 100158, Thus, placing the striking employees to substantially
1992) equivalent positions could not be considered
reinstatement “under the same terms and conditions
Those workers who refuse to obey the RTWO are prevailing before the strike.” The remedy of payroll
not entitled to be paid for work not done or to reinstatement is nowhere to be found in the orders
reinstatement to the positions they have abandoned of the Secretary of Labor and hence it should not
by their refusal to return thereto as ordered. (Asian have been imposed by the public respondent NLRC.
Transmission Corporation v. NLRC, G.R. No. Article 263(g) is one such limitation provided by law.
88725, 1989) To the extent that Art. 263(g) calls for the admission
of all workers under the same terms and conditions
Where the RTWO is issued pending the prevailing before the strike. It was error for the
determination of the legality of the strike, it is not NLRC to order the alternative remedies of payroll
correct to say that it may be enforced only if the reinstatement or actual reinstatement. However,
strike is legal and may be disregarded if the strike is the order did not amount to grave abuse of
illegal. Precisely, the purpose of the RTWO is to discretion. Such error is merely an error of judgment
maintain the status quo while the determination is which is not correctible by a special civil action for
being made. (Union of Filipro Emplees v. Nestle certiorari. The NLRC was only trying its best to work
Philippines, G.R. No. 88710-13, 1990) out a satisfactory ad hoc solution to a festering and
serious problem. In the light of our rulings on the
Not only union officers but also union members who impropriety of the substantially equivalent academic
defy an RTWO are subject to dismissal. assignments and the need to defer the changes of
teachers until the end of the first semester, the
But to justify the dismissal, the defiance of the payroll reinstatement will actually minimize the
RTWO must be clearly proven. (Batangas Laguna petitioners problems in the payment of full
Tayabas Bus Company v. NLRC, G.R. No. 101858, backwages. (University of Sto. Tomas v. NLRC,
1992) G.R. No. 89920, 1990)
Thus, the alleged or perceived defiance of the Appeal of Secretary’s Order

RTWO does not mean automatic dismissal of the In “national interest” cases, the Secretary’s Order
defying employees. Due process must be observed. may be appealed to the Office of the President.
The employees must be given the chance to explain

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In “non-national interest” cases, the Order may be or growing out of labor disputes shall be issued by
appealed via a Petition for Certiorari (Rule 65). any court or other entity (Labor Code, Art. 225 (e)
paragraph 1)
The parties may at any stage withdraw the case
from compulsory arbitration to bring it instead to a Exceptions:
voluntary arbitrator. (Labor Code, Art. 278(h)). 1. Art. 225 (e) – NLRC can enjoin or restrain an
actual or threatened commission of any or all
Arrest and Detention (Labor Code, Art. 281) prohibited or unlawful acts or to require the
GR: No Union members or union organizers may be performance of a particular act in any labor dispute
arrested or detained for union activities without which, if not restrained or performed forthwith,
previous consultation with the Secretary of Labor. may cause grave or irreparable damage to any
party or render ineffectual any decision in favor of
Exception: On grounds of national security and such party
public peace. 2. Art. 279 – NLRC can enjoin or restrain the
commission of the prohibited acts under Art. 279.
Consequences 3. Innocent Bystander Rule – The no-injunction rule
Generally, the effects of employment are merely does not apply in cases where the interests of an
suspended while on strike, the workers do not work innocent bystander are concerned. Thus, the right
and do not get paid. may be regulated at the instance of third parties or
"innocent. bystanders" if it appears that the
Mere participation of a worker in a lawful strike shall inevitable result of its exercise is to create an
not be a sufficient ground for termination of his impression that a labor dispute with which they
employment, even if a replacement had been hired have no connection or interest exists between
during the strike. (Art.279 (a), Labor Code) them and the picketing union or constitute an
invasion of their rights. In one case decided by this
Art. 279 sets out the consequences to union officers Court, we upheld a trial court's injunction
and member for (1) participation in a strike and (2) prohibiting the union from blocking the entrance to
commission of illegal acts. a feed mill located within the compound of a flour
mill with which the union had a dispute (Liwayway
The penalty imposable is not always be termination Publications v. Permanent, G.R. No. L-25003,
but maybe suspension. The Court used its judicial 1981)
prerogative in the case of PAL v. Brillantes, G.R.
119360, 1990, where it found that both employers Thus, in a case where the Union declared a strike
and employees contributed to the volatile against its ER and picketed the premises,
atmosphere. preventing the peaceful passing of other persons
not connected with the ER, the Court upheld the
Forfeiture of Reinstatement injunction granted by a regular court (not by the
The Court has ruled that a striker who failed to report NLRC).
for work when one had the opportunity to do so
waived his right to reinstatement. (East Asiatic v. Injunctions by the NLRC
CIR, G.R. L-29068, 1971) Under Art. 225 (e), the NLRC has the power to
enjoin or restrain any actual or threatened
What are Illegal Acts? commission of any or all prohibited or unlawful acts
1. Violation of Art. 279(e) of the Labor Code or to require the performance of a particular act in
2. Commission of crimes and other unlawful any labor dispute which, if not restrained or
acts in carrying out the strike performed forthwith, may cause grave or irreparable
3. Violation of any order, prohibition, or damage to any party or render ineffectual any
injunction issued by the DOLE Secretary or decision in favor of such party.
NLRC in connection with the assumption of
jurisdiction/certification order under Art. Requirements for Injunction to Issue: (Labor
278(g) of the Labor Code Code, Art. 225 (e))
1. Hearing of testimony of witnesses, with
This enumeration is not exclusive and may cover opportunity for cross-examination, in support of
other breaches of existing laws. verified complaint, and testimony in opposition
thereto
Injunctions 2. A finding of fact by the NLRC that: (see
Philippine Association of Free Labor Unions v.
General Rule: No temporary or permanent Hon. Tan, G.R. 9115, 1956)
injunction or restraining order in any case involving

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a. Prohibited/unlawful acts will be committed The employer shall provide the telecommuting
or have been committed and will be employee with relevant written information in order
continued unless restrained to adequately apprise the individual of the terms and
b. Substantial and irreparable injury will conditions of the telecommuting program, and the
follow responsibilities of the employee. (R.A. 11165, Sec.
c. Greater injury will be inflicted upon 4)
complainant by the denial of relief than
will be inflicted upon defendants by the Requirements for the terms and conditions:
granting of the relief 1. It shall not be less than the minimum labor
d. Complainant has no adequate remedy at standards set by law; and
law 2. It shall include:
e. The public officers charged with the duty • compensable work hours,
to protect complainant’s property are • minimum number of work hours,
unable or unwilling to furnish adequate • overtime,
protection • rest days, and
3. Notice of hearing has been served to • entitlement to leave benefits. (Id.)
a. All persons against whom relief is sought
b. Local Chief Executive and other public 3. Fair Treatment
officers of the province/city charged with
the duty to protect complainant’s property Responsibility of the employer:
4. Bond in an in an amount to be fixed by the Ensure that the telecommuting employee
NLRC are given the same treatment as that of
comparable employees working at the
Conditions for Ex-Parte TRO: (Sec. 14, D.O. 40- employer's premises; and
G-03, 2010) Ensure that measures are taken to prevent
the telecommuting employee from being
A 20-day TRO may be issued ex-parte under the ff. isolated from the rest of the working
conditions: community in the company by giving the
1. Complainant also alleges that, unless a telecommuting employee the opportunity to
TRO shall be issued without notice, a meet with colleagues on a regular basis,
substantial and irreparable injury to his and allowing access to company
property will be unavoidable information. (R.A. 11165, Sec. 5)
2. Testimony under oath, sufficient, if
sustained, to justify the issuance of a TRO after
Rights of telecommuting employees:
notice and hearing a) A rate of pay, including overtime and night
3. Bond in an amount to be fixed by the NLRC
shift differential, and other similar monetary
sufficient to recompense the
benefits not lower than those provided in
improvident/erroneous issuance of such applicable laws, and CBAs.
injunction/TRO
b) Right to rest periods, regular holidays, and
4. TRO shall be effective for no longer than 20
special nonworking days.
days and shall become void at its expiration
c) Same or equivalent workload and
performance standards as those of
E. TELECOMMUTING ACT (R.A. comparable workers at the employer’s
11165) premises.
d) Same access to training and career
1. Definition development opportunities as those of
comparable workers at the employer’s
Telecommuting refers to a work from an alternative premises, and be subject to the same
workplace with the use of telecommunications appraisal policies covering these workers.
and/or computer technologies. (R.A. 11165, Sec. 3) e) Appropriate training on the technical
equipment at their disposal, and the
2. Telecommuting Program characteristics and conditions of
telecommuting.
An employer in private sector may offer a f) Same collectible rights as the workers at
telecommuting program to its employees on a the employer’s premises, and shall not be
voluntary basis, and upon such terms and barred from communicating with workers’
conditions as they may mutually agree upon. representatives.(Id.)
-- end of topic --

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IV. POST-EMPLOYMENT A. EMPLOYER-EMPLOYEE

RELATIONSHIP
Employer” includes any person acting in the interest
A. EMPLOYER-EMPLOYEE RELATIONSHIP of an employer, directly or indirectly. The term shall
1. Tests to Determine Employer-Employee not include any labor organization or any of its
Relationship officers or agents except when acting as employer.
2. Kinds of Employment (Labor Code, Art. 219[e])
a) Regular
b) Casual “Employee” includes any person in the employ of an
c) Probationary employer. The term shall not be limited to the
d) Project employees of a particular employer, unless the
e) Seasonal Code so explicitly states. It shall include any
f) Fixed-Term individual whose work has ceased as a result of or
g) Floating Status in connection with any current labor dispute or
3. Legitimate Subcontracting vs. Labor-only because of any unfair labor practice if he has not
Contracting obtained any other substantially equivalent and
a) Elements regular employment. (Labor Code, Art. 219[f])
b) Trilateral Relationship
c) Solidary Liability It is axiomatic that the existence of an employer-
B. TERMINATION OF EMPLOYMENT BY employee relationship cannot be negated by
EMPLOYER expressly repudiating it in the management contract
1. Just causes and providing therein that the “employee” is an
2. Authorized causes independent contractor when the terms of
3. Due Process agreement clearly show otherwise. For, the
a) Twin-notice Requirement employment status of a person is defined and
b) Hearing prescribed by law and not by what the parties say it
4. Termination of Contract of Migrant Workers should be. (Insurance Life Assurance Co. v. NLRC,
Under RA 8042 as amended by RA 10022 GR No. 11930, 1998)
C. TERMINATION OF EMPLOYMENT BY
EMPLOYEE Contractual in nature
1. Resignation versus constructive dismissal The relationship of employer and employee is
D. PREVENTIVE SUSPENSION contractual in nature. It may be an oral or written
E. RELIEFS FROM ILLEGAL DISMISSAL contract. A written contract is not necessary for the
F. RETIREMENT creation and validity of the relationship. (Compania
Maritima v. Ernesta Cabagnot Vda. De Hio, GR No.
L-10675, 1960)
Conditional Employment: An employment

contract, like any other contract, is perfected at the
moment the parties come to agree upon its terms
and conditions, and thereafter, concur in the
essential elements thereof. In Sagun v. ANZ Global
Services, the Court ruled that there was already a
perfected contract of employment when Sagun
signed ANZ's employment offer and agreed to the
terms and conditions that were embodied therein.
Nonetheless, the offer of employment extended to
Sagun contained several conditions before he may
be deemed an employee of ANZ. Accordingly,
Sagun’s employment depended on the outcome of
his background check, which partakes of the nature
of a suspensive condition, and hence, renders the
obligation of the would-be employer, i.e., ANZ in this
case, conditional. Jurisprudence states that when a
contract is subject to a suspensive condition, its
effectivity shall take place only if and when the event
which constitutes the condition happens or is

ATENEO CENTRAL
fulfilled. Considering, however, that Sagun failed to being expressed in terms of

comply with his obligations, ANZ's obligations as a money, whether fixed or
would-be employer were held in suspense and thus, ascertained on a time, task, price
had yet to acquire any obligatory force. (Sagun v. or commission basis..." (Insular
ANZ Global Services, GR No. 220399, 2016) Life Assurance Co., Ltd. v. NLRC,
G.R. No. 119930, 1998)
Authority of DOLE Secretary to determine e. EER not determined by basis of
Employer-Employee Relationship (EER) employee’s compensation. (Labor
The DOLE Secretary has the authority to determine Congress v. NLRC, G.R. No.
the existence of an employer- employee 123938, 1998).
relationship. Under Article 128(b) of the Labor Code,
as amended by RA 7330, the DOLE is fully 3. Power of dismissal (Firing)
empowered to make a determination as to the a. Who has the power to dismiss the
exercise of an employer- employee relationship in employee?
the exercise of its visitorial and enforcement power, b. Disciplinary power exercised by
subject to judicial review, not review by the NLRC. employer over the worker and the
(People’s Broadcasting Service v. Secretary of corresponding sanction imposed
Labor, GR 179652, 2012) in case of violation of any of its
rules and regulations
1. TESTS TO DETERMINE EMPLOYER-

EMPLOYEE RELATIONSHIP 4. Power to control employee’s conduct
(Control Test)
FOUR-FOLD TEST a. Who exercises control over the methods
The existence of an employer-employee and results by which the work of the
relationship (EER) is ultimately a question of fact. To employee is accomplished? The most
ascertain the existence of an employer-employee important factor is the control test. This test
relationship, jurisprudence has invariably adhered is premised on whether the person for
to the four-fold test, to wit: whom the services are performed reserves
the right to control both the end achieved
1. Selection and engagement of the and the manner and means used to
employee (Hiring); achieve that end. (Reyes v. Glaucoma
a. Who has the power to select the Research Foundation, Inc.,GR No. 189255,
employee? 2015)
b. Employment relation arises from b. The control test calls for the existence of
contract of hire, express or the right to control the manner of doing the
implied. (Ruga v. NLRC, G.R. No. work, not the actual exercise of the right.
L-72654-61, 1990). (Dy Keh Beng v. Int’l Labor & Marine Union
c. Selection and engagement of the of the Phil, G.R. No. L-32245, 1979)
workers rests with the employers. c. There could be no EER where "the element
of control is absent; where a person who
2. Payment of wages or salaries works for another does so more or less at
a. Who pays the employee’s wages? his own pleasure and is not subject to
b. The mode of paying the salary or definite hours or conditions of work; and in
compensation of a worker does turn is compensated according to the result
not preclude existence of of his efforts and not the amount thereof,
employer-employee relationship. we should not find that the relationship of
c. Not a conclusive test since it can employer-employee exists." (Filipinas
be avoided by the use of Broadcasting Network, Inc. v. NLRC, G.R.
subcontracting agreements or No. 118892, 1998)
other contracts other than
employment contracts. Concept of Control over Insurance Agents –
d. Payment of compensation by way NOT Control in Labor Law
of commission does not militate The fact that private respondent was required to
against the conclusion that EER solicit business exclusively for petitioner could
exists. Under Art. 97 of the Labor hardly be considered as control in labor
Code, "wage" shall mean jurisprudence. Under Memo Circulars No. 2-81 and
"however designated, capable of 2-85 issued by the Insurance Commissioner,
insurance agents are barred from serving more than

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one insurance company, in order to protect the (Francisco v. NLRC, G.R. No. 170087, 2006)
public and to enable insurance companies to
exercise exclusive supervision over their agents in In cases where the control test is insufficient to
their solicitation work. Thus, the exclusivity determine the relationship between the parties, the
restriction springs from a regulation issued by the Francisco doctrine adds another test, applied in
Insurance Commission, and not from an intention by conjunction with the control test, called the
petitioner to establish control over the method and economic dependence test.
manner by which private respondent shall
accomplish his work. This is not meant to change (I) FIRST TIER: CONTROL TEST
the nature of the relationship between the parties, The putative employer’s power to control the
nor does it necessarily imbue such relationship with employee with respect to the means and methods
the quality of control envisioned by the law. (AFP by which the work is to be accomplished.
Mutual Benefit Association v. NLRC, G.R. No.
102199, 1997) (II) SECOND TIER: ECONOMIC REALITY TEST
(ALSO, ECONOMIC DEPENDENCE TEST)
That private respondent was bound by company Under this test, the economic realities prevailing
policies, memo/circulars, rules and regulations within the activity or between the parties are
issued from time to time is also not indicative of examined, taking into consideration the totality of
control. With regard to the territorial assignments circumstances surrounding the true nature of the
given to sales agents, this too cannot be held as relationship between the parties. This is resorted to
indicative of the exercise of control over an when there is serious doubt or genuine confusion as
employee. Not every form of control that a party to the relationship of the employee with the
reserves to himself over the conduct of the other employer.
party in relation to the services being rendered may
be accorded the effect of establishing an employer- The proper standard of “economic dependence” of
employee relationship. (AFP Mutual Benefit the employee is whether the worker is dependent on
Association v. NLRC, G.R. No. 102199, 1997) the alleged employer for his continued employment
in that line of business. (Orozco v. CA, G. R. No.
EER between crew members and owners of 155207, 2008)
fishing vessels
The employer-employee relationship between the The 2-tiered test provides a framework of analysis
crew members and the owners of the fishing vessels which would take into consideration the totality of
engaged in deep-sea fishing is merely suspended circumstances surrounding the true nature of the
during the time the vessels are dry-docked or relationship between the parties. It is appropriate in
undergoing repairs or being loaded with the a case where there is:
necessary provisions for the next fishing trip. This is a. No written agreement or terms of reference
premised on the principle that all these activities i.e., to base the relationship on; and
dry-dock, repairs, loading of necessary provisions, b. There exists a complexity in the
form part of the regular operation of the company relationship based on the various positions
fishing business. (Ruga v. NLRC, G.R. No.L-72654- and responsibilities given to the worker
61, 1990) over the period of the latter’s employment.
Not every form of control will have the effect of Thus, the determination of the relationship between
establishing EER. The line should be drawn employer and employee depends upon the
between: circumstances of the whole economic activity, such
1. Rules that merely serve as guidelines as:
towards the achievement of mutually 2. The extent to which the services performed
desired results without dictating the means are an integral part of the employer’s
or methods to be employed in attaining it. business;
These aim only to promote the result. NO 3. The extent of the worker’s investment in
EER exists. equipment and facilities;
2. Rules that control or fix the methodology 4. The nature and degree of control exercised
and bind or restrict the party hired to the by the employer;
use of such means. These address both the 5. The worker’s opportunity for profit and loss;
result and the means used to achieve it and 6. The amount of initiative, skill, judgment or
hence, EER exists (Insular Life Assurance foresight required for the success of the
Co, Ltd. v. NLRC, G.R. No. 84484, 1989) claimed independent enterprise;
TWO-TIERED TEST (Francisco Doctrine)

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7. The permanency and duration of the amount of time she devoted to soliciting
relationship between the worker and the clients was left entirely to her discretion.
employer; and The means and methods of recruiting and
8. The degree of dependency of the worker training her sales associates, as well as the
upon the employer for his continued development, management and
employment in that line of business. maintenance of her sales division, were left
(Francisco v. NLRC, G.R. No. 170087, to her sound judgment (Consulta v. CA,
2006) G.R. No 145443, 2005)
d. TV personality – The specific selection and
hiring of Sonza, because of his unique
Cases Where EER Exists: skills, talent and celebrity status not
a. Jeepney drivers on boundary basis possessed by ordinary employees, is a
(Villamaria v. CA, G.R. No. 165881, 2006) circumstance indicative, but not conclusive,
b. Drivers or helpers of sales men are of an independent contractual relationship
employees of the company (Alhambra (Sonza v. ABS-CBN, G.R. No. 138051,
Industries v. CIR, G.R. No. L-25984, 1970) 2004)
c. Employees of an unregistered association e. Where the contractor PSI was the one that
(Orlando Farm Growers v. NLRC, G.R. No. selected, engaged, and hired the security
129076, 1998) guards, the latter cannot claim that PLDT,
d. Street-hired kargador (Caurdanetaan Piece the entity to which they were detailed to, is
Workers Union v. Laguesman, G.R. No. their employer (Abella v. PLDT, G.R. No.
113542, 1998) 159469, 2005)
e. Workers in movie projects (Maraguinot and
Enero v. NLRC and Viva Fils, G.R. No. Importance of determining existence of
113542, 1998) employer-employee relationship
f. “Talents” (Begino v. ABS-CBN, G.R. No. Generally, labor standards and conditions apply
199166, 2015) only if there is an EER. However, in some instances,
g. Salaried insurance agent, as distinguished even if tehre is no EER, the Labor Code may still be
from registered agents on commission invoked (e.g. indirect employer’s liability, illegal
basis (Great Pacific Life Assurance Corp., recruitment, and misuse of POEA license).
v. Judico, G.R. No. 73887, 1989)
h. Tailors, seamstresses, servers, basters, EER is determined by law and not by contract
plantsadoras paid on piece-rate basis between the parties (Paguio v. NLRC, G.R. No.
(Makati Haberdashery v. NLRC, G.R. Nos. 147816, 2003)
83380-83, 1989)
i. In-house counsel (Hydro Resources 2. KINDS OF EMPLOYMENT
Contractors v. Pagalilauan, G.R. No. a. Regular
62909, 1989)
j. Security guards, with respect to the security Regular employment is an arrangement where the
agency (Agro Commercial Services v. employee:
NLRC, G.R. No. 82823-24, 1989) a. Has been engaged to perform tasks usually
necessary or desirable to the usual trade or
Cases where no EER exists: business of the employer (by nature of
a. Farm Workers are not employees of the work);
sugar central (Pondoc v. NLRC, G.R. No. b. Has rendered at least 1 year of service,
116347, 1996) whether such service is continuous or
b. Once in the playing court, the referees broken, with respect to the activity in which
exercise their own independent judgment, he is employed (by length of service); or
based on the rules of the game, as to when c. When an employee is allowed to work after
and how a call or decision is to be made. a probationary period (by probationary
The very nature of officiating a professional employment) (Labor Code, Art. 295, 296)
basketball game undoubtedly calls for
freedom of control (Bernante v. PBA, G.R. NOTE: Article 295 [280] is composed of two (2)
No. 190842, 2011) paragraphs. Its first paragraph answers the question
c. Healthcare associate - The manner in of who are regular employees. Once it is established
which Consulta was to pursue these that the employees are regular under the first
activities was not subject to the control of paragraph, there is no more need to dwell further on
Pamana. Consulta failed to show that she the question of whether or not they have rendered
had to report for work at definite hours. The one (1) year of service under the second paragraph

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thereof for purposes of determining regularity of 4. Repeated Hiring

employment. This is so because the second When the "seasonal" workers are continuously and
paragraph of the article demarcates in unequivocal repeatedly hired to perform the same tasks or
terms that all other employees who do not fall under activities for several seasons or even after the
the definitions in the first paragraph of regular, cessation of the season, this length of time may
project and seasonal employees, are deemed likewise serve as badge of regular employment.
casual employees. Not qualifying under any of the (Universal Robina Sugar Milling Corporation v.
kinds of employees covered by the first paragraph Acibo, G.R. No. 186439, 2014)
would necessarily mean that one is a casual
employee under the second paragraph thereof. Note: Regular employment does not mean
permanent employment. A regular employee may
Test to determine regular employment be terminated for just and authorized causes.
The primary standard of determining regular
employment is the reasonable connection between b. Casual
the particular activity performed by the employee to
the usual trade or business of the employer. The General Rule: Activity performed is not usually
connection can be determined by considering the necessary or desirable in the usual business or
nature of work performed and its relation to the trade of the employer, not project and not seasonal.
scheme of the particular business or trade in its Otherwise stated, casual employees perform
entirety. The repeated and continuing need for the activities which are incidental to the business of the
performance of the job has been deemed sufficient employer.
evidence of the necessity, if not indispensability of
the activity to the business. (Lopez v. MWSS, G.R. Exception: If he has rendered at least 1 year of
No. 154472, 2005) service, whether such service is continuous or
broken, he is considered a REGULAR employee
The performance of a job for at least a year is with respect to the activity in which he is employed
sufficient evidence of the job’s necessity if not and his employment shall continue while such
indispensability to the business. This is the rule even activity exists. (Labor Code, Art. 295)
if its performance is not continuous and merely
intermittent. The employment is considered regular, c. Probationary
but only with respect to such activity and while such
activity exists. (URC v. Catapang, G.R. No. 164736, Probationary employment exists where the
2005). employee, upon his engagement, is made to
undergo a trial period during which the employer
Ways of attaining regular employment determines his fitness to qualify for regular
employment based on reasonable standards made
1. By nature of work known to him at the time of his engagement (Labor
The employment is deemed regular when the Code, Art. 296)
employee has been engaged to perform activities
which are usually necessary or desirable in the Period of Probationary Employment
usual business or trade of the employer. (Labor Probationary employment shall not exceed six (6)
Code, Art. 295; Paguio v. NLRC G.R. No. 147816, months from the date the employee started working,
2003) unless it is covered by an apprenticeship agreement
stipulating a longer period. (Labor Code, Art. 296)
2. By length of service
The casual employee is reckoned as regular when Probationary employee is one who is on trial by an
the employee has rendered at least one (1) year of employer during which the employer determines
service, whether such service is continuous or whether or not he is qualified for permanent
broken, with respect to the activity in which he is employment. (International Catholic Migration
employed and his employment shall continue while Comm. v. NLRC, G. R. No. 72222, 1989)
such activity exists. (Labor Code, Art. 295; Conti v.
NLRC, G.R. No. 119253, 1997) While the employer observes the fitness, propriety,
and efficiency of a probationer to ascertain whether
3. Work beyond the probationary he is qualified for permanent employment, the
employment probationer, on the other hand, seeks to prove to the
The employment is considered regular when the employer that he has the qualifications to meet the
employee is allowed to work after a probationary reasonable standards for permanent employment.
period. (Labor Code, Art. 296)

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(Tamson’s Enterprises, Inc. v. CA, GR No. 192881, (Mariwasa Manufacturing v. Leogardo, G.R. No.
2011) 74246, 1989)
Probationary employment must have been The evil sought to be prevented is to discourage
expressly agreed upon. If there is no such scheming employers from using the system of
agreement, the employment is considered regular double or successive probation to circumvent the
(Sampaguita Auto Transport Corp. v. NLRC, G.R. mandate of the law on regularization and make it
No. 197384, 2013) easier for them to dismiss their employees (Holiday
Inn Manila v. NLRC, G.R. No. 109114, 1993)
Duration of Probationary Employment
General Rule: Probationary employment shall not Standards Must Be Made Known to Employee
exceed 6 months from the date the employee In all cases of probationary employment, the
started working (Labor Code, Art. 296) employer shall make known to the employee the
standards under which he will qualify as a regular
Probation ends 180 days from the starting date. employee at the time of his engagement. Where no
(Mitsubishi Motors Corporation v. Chrysler Phils., standards are made known to the employee at that
G.R. No. 148738, 2004) time, he shall be deemed a regular employee.
(Aberdeen Court, Inc. v. Agustin, G.R. No. 149371,
When an employer renews a contract of 2005; IRR Labor Code, Sec. 6[d], Rule I, Book V)
employment after the lapse of the six-month
probationary period, the employee thereby When dealing with a probationary employee, the
becomes a regular employee. No employer is employer is made to comply with two requisites:
allowed to determine indefinitely the fitness of its 1. The employer must communicate the
employees. (Labor Code, Art. 291, Malicdem v. regularization standards to the
Marulas Industrial Corp., GR No. 204406, 2014) probationary employee (performance
standard); and
2. The employer must make such
Exceptions: communication at the time of probationary
1. Covered by an apprenticeship agreement employee’s engagement.
stipulating a longer period (Labor Code,
Art. 296) If the employee fails to comply with either, the
2. Voluntary agreement of parties (especially employee is deemed as a regular and not a
when nature of work requires a longer probationary employee.
period) (Mariwasa Manufacturing v.
Leogardo, G.R. No. 74246, 1989) GR: An employer is deemed to have made known
3. The employer gives the employee a second the standards that would qualify a probationary
chance to pass the standards set employee to be a regular employee when it has
(Mariwasa Manufacturing v. Leogardo, exerted reasonable efforts to apprise the employee
G.R. No. 74246, 1989) of what he is expected to do or accomplish.
4. When a longer period is required and
established by company policy EXCEPTIONS:
• When the job is self-descriptive in nature
If not one of the exceptional circumstances above is such as in the case of maids, cooks,
proven, the employee whose employment exceeds drivers, or messengers. (Abbott
6 months is undoubtedly a regular employee (San Laboratories, Philippines v. Alcaraz, GR
Miguel v. Del Rosario, G.R. No. 168194 & 168693, No. 192571, 2013)
2005)
• Probationary managerial employee. A
Example: The probationary period set for managerial role essentially connotes an
exercise of discretion, the quality of
professors, instructors and teachers is 3
effective management can only be
consecutive years of satisfactory service pursuant to
DOLE Manual of Regulations for Private Schools. determined through subsequent
assessment.
Extension of Probation; Double/Successive • The case of probationary employees
Probation Not Allowed whose tasks involve the application of
The employer and employee may extend by discretion and intellect, such as – to name
agreement the probationary period of employment a few – lawyers, artists, and journalists
beyond 6 months, but it cannot be ad infinitum. (Abbott Laboratories, Philippines v.
Alcaraz, GR No. 192571 MR, 2014)

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The legal requirements for acquisition of permanent

Termination of Probationary Employment. A employment, are as follows:
probationary employee, like a regular employee, 1. The teacher is a full-time teacher;
enjoys security of tenure. Thus, services of an 2. The teacher must have rendered three
employee who has been engaged on probationary consecutive years of service; and
basis may be terminated for any of the following: 3. Such service must have been satisfactory.
• Just causes (UST v. NLRC G.R. No. 85519, 1990)
• Authorized causes
• When he fails to qualify as a regular d. Project
employee in accordance with reasonable
standards made known by the employer to One whose employment has been fixed for a
employee at the time of his engagement. specific project or undertaking, the completion of
(Abbott Laboratories, Philippines v. which has been determined at the time of
Alcaraz, GR No. 192571, 2013)) engagement of the employee. (Labor Code, Art.
295)
Note: If the termination is for cause, it may be done
anytime during the probation. The employer need For an employee to be considered project-based,
not wait until the probation period is over. (Carvajal the employer must show compliance with two (2)
v. Luzon Development Bank, GR No. 186169, 2012) requisites, namely that:
1. The employee was assigned to carry out a
Limitations to Termination of Probation specific project or undertaking; and
1. Must be exercised in accordance with the 2. The duration and scope of which were
specific requirements of the contract; specified at the time they were engaged for
2. The dissatisfaction on the employer’s part such project. (Gadia v. Sykes Asia, Inc., GR
must be real and in good faith, not feigned No. 209499, 2015)
so as to circumvent the contract or the law; Project Employees are NOT Regular Employees;
and Exception
3. There must be no unlawful discrimination in General Rule: Project employees are not regular
the dismissal (Davao Contractors employees, as their services are needed only when
Development v. Pasawa, G.R. No. 172174, there are projects to be undertaken.
2009)
Exception: Where the employment or project
Probationary employee may be dismissed before employees is extended long after the supposed
end of the probationary period. Termination, to be project has been finished, the employees are
valid, must be done before the lapse of the removed from the scope of project employees and
probationary period. (Pasamba v. NLRC, G.R. No. are considered regular employees. (Lao
168421, June 8, 2007; Manila Electric Company v. Construction v. NLRC, G.R. No. 116781, 1997)
NLRC, G.R. No. 83751, 1989).
When a Project Employee Becomes a Regular
Conversely, once the employer finds the employee Employee
qualified, the employer may extend to him regular 1. There is continuous re-hiring of project
employment even before the end of the probation employees even after the cessation of a
(Canagian Opportunities v. Dalangin, Jr., G.R. No. project for the same tasks or nature of tasks
172223, 2012) (the employee must be continuously
rehired without gaps and intervals); and
Due Process Prior to Termination 2. The tasks performed by the alleged project
Probationary employees is entitled to procedural employee are vital, necessary, and
due process prior to dismissal from service. Unlike indispensable to the usual business or
the first and second grounds (see above trade of the employer (Maraguinot v.
enumeration), the third ground does not require NLRC, G.R. No. 120969, 1998)
notice and hearing. Due process for the third ground
consists of making the reasonable standards Duration of Work
excepted of the employee during his probationary One year duration on the job is pertinent in deciding
period known to him at the time of his probationary whether a casual employee has become regular or
employment. (PDI v. Magtibay, Jr., G.R. No. not, but it is not pertinent to a seasonal or project
164532, 2007) employee.
Acquisition of Permanent Employment for “Day Certain” Rule

Private School Teachers

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Project employment does not end on an exact date, work pool may attain regular status as a project
but on the completion of the project. employee.
Termination Project Employment vs. Regular

As project employees, their termination is governed Employment
by Rule XXIII, Book V of the Omnibus Rules
Implementing the Labor Code which provides that:
If the termination is brought about by the completion PROJECT REGULAR
of the contract or phase thereof, no prior notice is EMPLOYMENT EMPLOYMENT
required. Regular employees enjoy
security of tenure and are
The services of project
This is because completion of work or project legally entitled to remain in
employees are coterminus
the service of their
automatically terminates employment, in which with project or any phase
employer and to hold on
case, the employer is, under the law, only obliged to thereof any may be
their work or position until
render a report to the DOLE on the termination of terminated upon the end
their services are
employment. (Cioco, Jr. v. C.E. Construction Corp., or completion of the
terminated by any of the
GR No. 156748 & 156896, 2015) project or phase thereof
modes of termination of
for which they were hired
service under the Labor
Length of time not applicable to the construction Code
industry
Generally, length of service provides a fair yardstick
for determining when an employee initially hired on
a temporary basis becomes a permanent one, If termination is for just
As to termination, due cause, due process
entitled to the security and benefits of regularization.
process complied with applicable to Art. 297
But this standard will not be fair, if applied to the
even if no prior notice of applies. If due to authorized
construction industry, simply because construction termination is served causes, Art. 298 & 299
firms cannot guarantee work and funding for its followed.
payrolls beyond the life of each project. And getting
projects is not a matter of course. (Uy Construction
v. Trinidad, G.R. No. 183250, 2010)
Work Pool Principle Note: A regular employee cannot be at the same

Generally, employees may or may not be members time a project employee (Magcalas v. NLRC, G.R.
of a work pool. A work pool refers to a group of No. 100333, 1997)
works from which an employer like a construction
company deploys or assigns to its various projects e. Seasonal
or any phase/s thereof.
Work or services to be performed is seasonal in
Types of Employees in the Construction nature and the employment is for the duration of the
Industry: season. (Labor Code, Art. 295)
1. Non-project employees are those
employed without reference to any Farm workers generally fall under the definition of
particular construction project or phase of a seasonal employees. Seasonal employees may be
project. Said employees are considered considered as regular employees.
regular employees; or
2. Project employees are those employed in Regular Seasonal Employment
connection with a particular construction Seasonal employees may attain regularity in their
project or phase thereof and such employment as such, Once they attained such
employment is coterminous with each regularity, they are properly to be called "regular
project or phase of the project to which they seasonal employees.”
are assigned. (Exodus International
Construction v. Biscocho, GR No. 166109, Regular seasonal employees are those called to
2011)) work from time to time. The nature of their
relationship with the employer is such that during the
Mere membership in the work pool does not result off season, they are temporarily laid off; but re-
in the workers’ becoming regular employees by employed during the summer season or when their
reason of that fact alone. (Abesso Construction and services may be needed. They are in regular
Dev’t Corp., v. Ramirez, G.R. No. 141168, 2006). employment because of the nature of their job, and
However, a project employee who is a member of a

ATENEO CENTRAL
not because of the length of time they have worked. seasonal worker
(Gapayao v. Fulo, GR No. 19343, 2013) regular or permanent.
(Mercado v. NLRC,
NOTE: Regular seasonal employees are NOT the G.R. No. 79869, 1991)
same and should not be lumped together with other
regular employees, who perform their work for the
entire year regardless of the season. When Seasonal Employees Considered as
Regular Employees
Employment Relationship During Off-Season 1. Where there is a reasonable connection
During off-season, the EER is not severed; the between the particular activity performed
seasonal employee is merely considered on leave by the employee in relation to the usual
of absence without pay. Workers who have trade or business of the employer; and
performed the same tasks every season for several 2. When seasonal workers are repeatedly
years are considered regular employees for their engaged to perform the same tasks for
respective tasks. (Hacienda Fatima v. National more than one season (Zamudio v. NLRC,
Federation of Sugarcane Workers-Food and G.R. No. 76723, 1990)
General Trade, G.R. No. 149440, 2003)
One year duration on the job is pertinent in deciding
Regular Seasonal Employee v. Regular whether a casual employee has become regular or
Employee not, but it is not pertinent to a seasonal or project
employee. Passage of time does not make a
Regular Seasonal Regular seasonal worker regular or permanent. (Mercado v.
1. Where there is Seasonal workers who NLRC, G.R. No. 79869, 1991)
a reasonable have worked for one
connection season only When Seasonal Employees NOT Considered as
between the (Hacienda Fatima v. Regular Employees
particular National Federation of a. Seasonal workers who have worked for
activity Sugarcane Workers- one season only (Hacienda Fatima v.
performed by Food and General National Federation of Sugarcane
the employee Trade, G.R. No. Workers-Food and General Trade, G.R.
in relation to 149440, 2003); No. 149440, 2003);
the usual b. When seasonal employees are free to
trade or contract their services with other farm
business of owners (Mercado, Sr. v. NLRC, 2013).
the employer;
and f. Fixed-Term
2. When
seasonal Fixed-term employment was repealed by Labor
workers are Code. But the Civil Code, a general law, allows
repeatedly fixed- term employment. (Brent School, Inc. v.
engaged to Zamora, G.R. No. 48494, 1990)
perform the
same tasks for Elements of valid fixed-term employment
more than a. The fixed period of employment was
one season knowingly and voluntarily agreed upon by
(Zamudio v. the parties without any force, duress, or
NLRC, G.R. improper pressure being brought to bear
No. 76723, upon the employee and absent any other
1990) circumstances vitiating his consent;
One year duration on When seasonal b. It satisfactorily appears that the employer
the job is pertinent in employees are free to and the employee dealt with each other on
deciding whether a contract their services more or less equal terms with no moral
casual employee has with other farm owners dominance exercised by the former or the
become regular or not, (Mercado, Sr. v. NLRC, latter.
but it is not pertinent to 2013).
a seasonal or project These indications, which must be read together,
employee. Passage of make the Brent doctrine applicable only in a few
time does not make a special cases wherein the employer and employee

ATENEO CENTRAL
are on more or less in equal footing in entering into not terminate employment. During this time,
the contract. employees are considered on "floating status". (Art.
301; International Hardware, Inc. vs. NLRC, G.R.
The reason for this is: when a prospective No. 80770,1989)
employee, on account of special skills or market
forces, is in a position to make demands upon the “Floating status” of an employee should only last for
prospective employer, such prospective employee a legally prescribed amount of
needs less protection than the ordinary worker. time. If it lasts longer than 6 months, he may be
Lesser limitations on the parties’ freedom of contract considered illegally dismissed from the service.
are thus required for the protection of the employee.
(Fuji Television Network v. Espiritu, G.R. Nos. Floating Status in Security Agencies
204944-45, 2014) This pertains to the period when security guards are
in between assignments or when they are made to
General Rule: Fixed-Period Employment is valid so wait after being relieved from a previous post until
long as the criteria is complied with. they are transferred to a new one.
Exception: Fixed-term employment will not be A floating status requires the dire exigency of the
considered valid where, from the circumstances, it employer's bona fide suspension of operation,
is apparent that periods have been imposed to business or undertaking. In security services, this
preclude acquisition of tenurial security by the happens when:
employee. (Dumpit-Murillo v. CA, G.R. No. 164652, 1. the clients who do not renew their contracts
2007) with a security agency are more than those
who do and the new ones that the agency
Rules: get
1. Notice of termination is not necessary in 2. Contracts for security services stipulate
fixed- term employment (Pangilinan v. that the client may request the agency for
General Milling Corporation, supra) the replacement of the guards assigned to
2. Employee is deemed regular if the contract it. (Sentinel Security Agency, Inc. v.
failed to state the specific period of National Labor Relations Commission,
employment (Poseidon Fishing v. NLRC, G.R. Nos. 122468 & 122716)
G.R. No. 168052, 2006);
3. Termination prior to lapse of fixed-term The employer should prove that there are no posts
contract should be for a just or authorized available to which the employee temporarily out of
cause (Anderson v. NLRC, G.R. No. work can be assigned. (Peak Ventures Corp v.
111212, 1996); Nestor Villareal, G.R. No. 184618)
4. Liability for illegal dismissal of fixed-term
employees is only for the salary for Reinstatement
unexpired portion (New Sunrise Metal v. The employer shall reinstate the employee to his
Pia, G.R. No. 171131, 2007) former position without loss of seniority rights if he
indicates his desire to resume his work not later than
Probationary Employment vs. Fixed-Term one (1) month from the resumption of operations of
Employment his employer or from his relief from the military or
civic duty (Art. 301, Labor Code).
PROBATIONARY FIXED-TERM
EMPLOYMENT EMPLOYMENT When deemed constructive dismissal
No such intention exists When that "floating status" of an employee lasts for
The parties intend to more than six months, he may be considered to
and the relationship
make their relationship have been illegally dismissed from the service.
automatically terminates
regular after the lapse of
at the expiration of the
the period.
period.
3. LEGITIMATE SUBCONTRACTING
VS. LABOR-ONLY CONTRACTING
g. Floating Status
Contracting or Subcontracting refers to an
The bona fide suspension of the operation of a arrangement whereby a principal agrees to farm out
business or undertaking for a period not exceeding to a contractor the performance or completion of a
six (6) months, or the fulfillment by specific job or work within a definite or
the employee of a military or civic duty shall predetermined period, regardless of whether such

ATENEO CENTRAL
work is to be performed or completed within or LABOR-ONLY

outside the premises of the principal. (DO 174-17, JOB CONTRACTING
CONTRACTING
Sec. 3(c)) Has sufficient substantial
Has NO substantial
capital OR investment in
Labor-Only Contracting – An arrangement where capital OR investment
machinery, tools or
the contractor or subcontractor recruits, supplies, or in the form of
equipment directly or
places workers to perform a job or work for a machinery, tools or
intended to be related to
principal, and the elements hereunder: equipment
the job contracted
The contractor does not have substantial capital or
Carries an independent
the contractor or subcontractor does not have Has no independent
business different from the
investments in the form of tools, equipment, business
employer’s
machineries; and the contractor’s or subcontractor’s
employees recruited and placed are performing Undertakes to perform the Performs activities
activities which are directly related to the main job under its own account directly related to the
business operation of the principal; or and responsibility, FREE main business of the
The contractor or subcontractor does not exercise from the principal’s control principal
the right of control over the work of the employee Principal treated as
(D.O. No. 174-17, Sec. 5) NO EER except when the direct employer of the
contractor or subcontractor person recruited in all
Test to determine the existence of an fails to pay the employees’ instances (contractor is
independent contractor wages. deemed agent of the
Whether one claiming to be an independent principal)
contractor has contracted to do the work according LIMITED liability (principal
to his own methods and without being subject to the solidarily liable with Principal’s liability
control of the employer, except only as to the results contractor or subcontractor extends to all rights,
of the work. (SMC v. Aballa, G.R. No. 149011, 2005) only when latter fails to duties and liabilities
comply with requirements under labor standard
An individual can be an independent contractor for as to unpaid wages and laws including the right
himself. (Sonza v. ABS-CBN, G.R. No. 138051, other labor standards to self-organization
2004) violations.
PERMISSIBLE PROHIBITED
Factors to consider in determining whether
Contractor is carrying on an Independent
a. Elements
Business:
It is not enough to show substantial capitalization or
Legitimate contracting or subcontracting
investment in the form of tools, equipment,
Contracting or subcontracting shall be legitimate if
machineries, and work premises, among others, to
all the following circumstances occur:
be considered as an independent contractor. In
a. The contractor is engaged in a distinct and
determining the existence of an independent
independent business and undertakes to
contractor relationship, several factors might be
perform the job or work on its own
considered:
responsibility according to its own method;
1. Nature and extent of work
b. The contractor or subcontractor has
2. Skill required
substantial capital and/or investment;
3. Term and duration of the relationship
c. The contractor undertakes to perform the
4. Right to assign the performance of
job, work or service on its own
specified pieces of work
responsibility, according to its own manner
5. Control and supervision of the workers
and method, and free from control and
6. Power of the employer with respect to the
direction of the principal in all matters
hiring, firing, and payment of workers of the
connected with the performance of the
contractor
7. Control of the premises work except as to the results thereof; and
8. Duty to supply premises, tools, appliances, d. The Service Agreement ensures
materials, and labor compliance with all the rights and benefits
9. Mode, manner, and terms of payment. for all of the employees of the contractor or
(Vinoya v. NLRC, GR No. 126586, 2000) subcontractor under Labor laws. (D.O. No.
174-17, Sec. 8)
Job Contracting v. Labor-Only Contracting
Labor-Only Contracting

ATENEO CENTRAL
Labor only contracting shall refer to an arrangement least Five Million Pesos (P5,000,000.00). (D.O. No.
where the contractor or subcontractor recruits, 174- 17, Sec. 3, ¶(i))
supplies, or places workers to perform a job or work
for a principal, and the elements hereunder: Capital stocks and subscribed capitalization in the
a. The contractor does not have substantial case of corporations, tools, equipment, implements,
capital; or the contractor or subcontractor machineries and work premises, actually and
does not have investments in the form of directly used by the contractor or subcontractor in
tools, equipment, machineries; and the the performance or completion of the job, work or
contractor’s or subcontractor’s employees service contracted out.
recruited and placed are performing
activities which are directly related to the The law does not require both substantial capital
main business operation of the principal; or and investment in the form of tools, equipment and
b. The contractor or subcontractor does not machineries. This is clear from the use of the
exercise the right of control over the work conjunction “or.” If the intention was to require the
of the employee (D.O. No. 174-17, Sec. 5) contractor to prove that he has both capital and the
requisite investment, then the conjunction “and”
Right to Control should have been used. (New Golden Builders &
Right reserved to the person for whom the services Dev’t Corp v. CA, et al., G.R. No. 154715, 2003)
of the contractual workers are performed, to
determine not only the end to be achieved, but also
the manner and means to be used in reaching that
end. (D.O. No. 18-A, Sec. 3[i]) Net Financial Contracting Capacity (NFCC)
refers to the formula to determine the financial
capacity of the contractor to carry out the job, work
Only one of either (i) substantial capital or (ii) or services sought to be undertaken under a Service
performing activities related to the main Agreement. NFCC is current assets minus current
business – is required for Labor-Only liabilities multiplied by K, which stands for contract
Contracting to exist duration equivalent to: 10 for one year or less; 15 for
Performing activities directly related to the principal more than one (1) year up to two (2) years; and 20
business of the employer is only one of the two for more than two (2) years, minus the value of all
indicators that "labor-only" contracting exists; the outstanding or ongoing projects including contracts
other is lack of substantial capital or investment. to be started. (D.O. 18-A, Sec. 3[g])
Labor-only contracting exists when any of the Illicit Forms of Employment Arrangements
two elements is present. (Quintanar, et al. v. The following are declared prohibited for being
Coca- Cola, G.R. No. 210565, 2016) contrary to law or public policy:
a. When the principal farms out work to a
Posting of Bond
An employer or indirect employer may require the "Cabo". “Cabo” refers to a person or group
contractor or subcontractor to furnish a bond equal of persons or to a labor group which, under
to the cost of labor under contract, on condition that the guise of labor organization,
the bond will answer for the wages due the cooperative, or any entity, supplies workers
employees should the contractor or subcontractor, to an employer, with or without any
as the case may be, fail to pay the same. (D.O. No. monetary or other consideration, whether in
174-17, Sec. 3[a], Labor Code, Art. 108) the capacity of agent of the employer or as
ostensible independent contractor. (D.O.
Substantial Capital No. 174-17, Sec. 3[b])
It refers to capital stocks and subscribed
capitalization in the case of corporations, tools, b. Contracting out of job or work through an
equipment, implements, machineries, and work in- house agency.
premises, actually and directly used by the c. Contracting out of job or work through an
contractor or subcontractor in the performance or in- house cooperative which merely
completion of the job, work or service contracted out supplies workers to the principal.
(D.O. No. 18- 02, Sec. 5) d. Contracting out of a job or work by reason
of a strike or lockout whether actual or
It also refers to paid-up capital stocks/shares of at imminent.
least Five Million Pesos (P5,000,000.00) in the case e. Contracting out of a job or work being
of corporations, partnerships and cooperatives; in performed by union members and such will
the case of single proprietorship, a net worth of at interfere with, restrain or coerce employees

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in the exercise of their rights to self- The three parties involved:

organization as provided in Article 259 of
the Labor Code, as amended 1. Contractor / Subcontractor
f. Requiring the contractor's/subcontractor's Any person or entity, including a cooperative,
employees to perform functions which are engaged in a legitimate contracting or
currently being performed by the regular subcontracting arrangement.
employees of the principal.
g. Requiring the contractor's/subcontractor's 2. Contractor’s Employee
employees to sign, as a precondition to One employed by a contractor or subcontractor to
employment or continued employment, an perform or complete a job, work or service pursuant
antedated resignation letter; a blank to an arrangement between the latter and a principal
payroll; a waiver of labor standards
including minimum wages and social or 3. Principal
welfare benefits; or a quitclaim releasing Any employer who puts out or farms out a job,
the principal or contractor from liability as to service or work to a contractor or subcontractor
payment of future claims; or require the (D.O. No. 174-17, Sec. 3)
employee to become member of a
cooperative. Relationships that exist in legitimate contracting
h. Repeated hiring by the or subcontracting:
contractor/subcontractor of employees 1. An employer-employee relationship
under an employment contract of short between the contractor and the employees
duration. it engaged to perform the specific job, work
i. Requiring employees under a or service being contracted; and
contracting/subcontracting arrangement to 2. A contractual relationship between the
sign a contract fixing the period of principal and the contractor as governed by
employment to a term shorter than the term the provisions of the Civil Code. (D.O. No.
of the Service Agreement, unless the 18- A-11, Sec. 5, ¶ 1)
contract is divisible into phases for which
substantially different skills are required Governing Laws
and this is made known to the employee at 1. Between the principal and the contractor
the time of engagement. the major laws applicable to their work
j. Such other practices, schemes or relationship are the Civil Code and
employment arrangements designed to pertinent commercial laws.
circumvent the right of workers to security 2. Between the contractor and his employees
of tenure. (D.O. No. 174-17, Sec. 6 the major laws applicable to their work
relationship are the Civil Code and special
b. Trilateral Relationship labor laws.
3. Between the principal and the contractor’s
employees, no employer-employee
relationship exists, because the contractor
himself is the employer. (Azucena, The
Labor Code with Comments and Cases
Volume I, 306, 2013)
The law recognizes and resolves this situation in

favor of employees in order to protect their rights
and interests from the coercive acts of the employer.
In fact, the employee who is constructively
dismissed may be allowed to keep on coming to
work. (McMer Corp., Inc. v. NLRC, G.R. No.
193421, 2014)
Rights of contractor’s employees

All contractor’s/subcontractor’s employees, shall be
entitled to security of tenure and all the rights and
privileges as provided for in the Labor Code, as
amended, to include the following:
1. Safe and healthful working conditions;

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2. Labor standards such as but not limited to The Service Agreement The Service Agreement
service incentive leave, rest days, overtime shall include the shall stipulate, among
pay, holiday pay, 13th month pay, and following: others:
separation pay as may be provided in the 1. Specific
Service Agreement or under the Labor description of the
Code; kind or nature of
3. Retirement benefits under the SSS or security job,
retirement plans of the contractor, if there is work, or service
any; being
4. Social security and welfare benefits; and subcontracted;
5. Self-organization, collective bargaining and 2. Place of work
peaceful concerted activities, including the and terms and
right to strike. (D.O. No. 174-17, Sec. 10) conditions
1. The specific governing the
Required Contracts description of contracting
the job or work arrangement
1. Employment contract between the being which shall
contractor and its employee. subcontracted, include the
a. Notwithstanding any oral or written including its agreed amount
stipulations to the contrary, the term or of security
contract between the contractor duration; services to be
and its employee shall be 2. The place or rendered and the
governed by the provisions of work and terms standard
Articles 279 and 280 of the Labor and administrative
Code, as amended. 3. conditions fee of not less
It shall include the following terms and governing the than 20% of the
conditions: contracting total contract
i. The specific description of the job, work arrangement, to cost;
or service to be performed by include the 3. Basic equipment
the employee; agreed amount to be provided by
ii. The place of work and of the the SSC/PSA
terms and conditions of employment, contracted job (handgun,
including a statement of the wage rate or work as well handheld radio);
applicable to the individual employee; and as the standard 4. Automatic
iii. The term or duration of employment that administrative crediting
must be co-extensive with theService fee of not less provision which
Agreement or with the specific phase of than 10% of the shall immediately
work for which the employee is engaged. total contract give effect to the
b. The contractor shall inform the employee of the cost. common
foregoing terms and conditions of employment in 4. A provision on provision in wage
writing on or before the first day of his/her the issuance of orders that
employment. bon/s as prescribed wage
defined in Sec. increases and
2. Service Agreement between the 3(a) renewable the Service
principal and the contractor v. security every year. Agreements shall
guards (Sec. 11, DO be deemed
Required Provisions: 174-17) amended
DO 150-16: The accordingly;
SSC/PSA and/or the 5. Provisions which
principle shall produce or shall ensure that
DO 174-17: Service
submit the original copy the principle and
Agreement between the
of the Service Agreement the SSC/PSA
principlal and the
when directed to do so by shall uphold the
contractor.
the Regional Director or rights and
his/her duly authorized provide all
representative. benefits of
security guards;

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6. Provision on the for purposes of monitoring compliance with the rules

NFCC of (D.O. No 174-17, Sec. 20)
SSC/PSA;
7. Undertaking that Note: Failure to register shall give rise to the
the SSC/PSA presumption that the contractor is engaged in labor-
shall directly only contracting. (Aklan v. San Miguel Corporation,
remit monthly G.R. No. 168537, 2008)
employers’ share
and employees’ c. Solidary Liability
contribution to
SSS, ECC, Labor Code Provisions on Liability
PhilHealth, Pag- In the event that the contractor or sub-contractor
IBIG; fails to pay the wages of his employees in
8. Undertaking that accordance with this Code, the employer shall be
expenses for any jointly and severally liable with his contractor or sub-
training required contractor to such employees to the extent of the
by the principal work performed under the contract, in the same
or other manner and extent that he is liable to employees
government directly employed by him. (Labor Code, Art. 106)
instrumentalities
shall be Principal as Direct Employer: Finding of Labor-
shouldered by Only Contracting
the principal. There is "labor-only" contracting where the person
(Sec. 4, DO 150- supplying workers to an employer does not have
16) substantial capital or investment in the form of tools,
equipment, machineries, work premises, among
others, and the workers recruited and placed by
Note: Administrative fee is different for security such person are performing activities which are
guards which must not be less than 20% of the total directly related to the principal business of such
contract cost. employer. In such cases, the person or intermediary
shall be considered merely as an agent of the
Registration of Contractors and Subcontractors employer who shall be responsible to the workers in
Mandatory Registration and Registry of Legitimate the same manner and extent as if the latter were
Contractors. Consistent with the authority of the directly employed by him. (Labor Code, Art. 106)
Secretary of Labor and Employment to restrict or In the event that there is a finding that the contractor
prohibit the contracting out of labor to protect the or subcontractor is engaged in labor-only
rights of workers, it shall be mandatory for all contracting under Section 5 and other illicit forms of
persons or entities, including cooperatives, acting as employment arrangements under Section 6 of these
contractors to register with the Regional Office of the Rules, the principal shall be deemed the direct
Department of Labor and Employment (DOLE) employer of the contractor's or subcontractor's
where it principally operates. (D.O. No. 174-17, Sec. employees. (D.O. No. 174-17, Sec. 7)
14)
Therefore: The principal shall be deemed an
Validity of Certificate of Registration of employer of the contractual employee and shall be
Contractors directly liable, in the following cases:
The contractor shall be deemed registered only on a. Labor-only contracting; and
the date of issuance of its Certificate of Registration. b. Prohibited contracting arrangements
The Certificate of Registration shall be effective for (Broadway Motors v. NLRC, G.R. No.
2 years, unless cancelled after due process. The 78382, 1987)
same shall be valid in the region where it is
registered. Principal as Direct Employer: Violations of
Rights of Employees or Required Contracts
In case the contractor has Service Agreement or A finding of violation of either Sections 10 (Rights of
operates outside the jurisdiction of the RTC where it Contractor’s Employees) or 11 (Required Contracts)
is registered, it shall request a duly authenticated shall render the principal the direct employer of the
copy of its certificate of registration from the DOLE employees of the contractor or subcontractor,
Regional Office where it seeks to operate, together pursuant to Art. 109 of the Labor Code (D.O. No.
with a copy of its Service Agreement/s in the area, 147-17, Sec. 12)

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Solidary Liability in Legitimate Contracting: absence of an EER, the law itself establishes one
Violations of the Labor Code and Social between the principal and the employees of the
Legislation agency for a limited purpose i.e. in order to ensure
In the event of violation of any provision of the Labor that the employees are paid the wages due them.
Code, including the failure to pay wages, there (Lapanday Agricultural Dev’t Corp. v. CA, G.R. No.
exists a solidary liability on the part of the principal 112139, 2000)
and the contractor for purposes of enforcing the
provisions of the Labor Code and other social Solidary Liability of Principal and Employer in
legislations, to the extent of the work performed cases of Illegal Dismissal
under the employment contract. (D.O. No. 174-17, Joint and several with the employer, but with the
Sec. 9) right to reimbursement from the employer-
contractor
Every employer or indirect employer shall be held
responsible with his contractor or subcontractor for Wage differentials only to the extent where the
any violation of any provision of this Code. For employee performed the work under the principal
purposes of determining the extent of their civil
liability under this Chapter, they shall be considered General Rule: Principal and contractor are solidarily
as direct employers. (Labor Code, Art. 109) liable.
Note: Principal’s Liability under Art. 109 Exception: When the contractor has already
If the liability is for failure to pay the minimum wage, received from the Principal the correct amount of
or the service incentive leave or other benefits wages and benefits, but failed to turn them over to
derived from or provided for by law, the principal is the workers, the contractor should solely bear the
equally liable with the contractor liability for the underpayment of wages and non-
payment of overtime pay. (Meralco v. NLRC, G.R.
If the liability is invested with punitive character, No. 145402, 2008)
such as an award for backwages and separation
pay because of an illegal dismissal, the liability
should be solely with the contractor in the absence Effect of Termination of Employment
of proof that the principal conspired with the The termination of employment of the
contractor in the commission of the illegal dismissal contractor's/subcontractor's employee prior to the
(see Meralco v. NLRC, G.R. No. 145402, 2008) expiration of the Service Agreement shall be
governed by Articles 297, 298 and 299 of the Labor
Solidary Liability for Wages and Money Claims Code.
for Performed Under The Contract
In the event that the contractor or subcontractor fails In case the termination of employment is caused by
to pay the wages of his employees in accordance the pre-termination of the Service Agreement not
with this Code, the employer shall be jointly and due to authorized causes under Article 298, the right
severally liable with his contractor or subcontractor of the contractor's/subcontractor's employee to
to such employees to the extent of the work unpaid wages and other unpaid benefits including
performed under the contract, in the same manner unremitted legal mandatory contributions, e.g.,
and extent that he is liable to employees directly SSS, PhilHealth, Pag-IBIG, ECC, shall be borne by
employed by him (Labor Code, Art. 106) the party at fault, without prejudice to the solidary
liability of the parties to the Service Agreement.
Should the indirect employer be constrained to pay
the workers, it can recover whatever amount it paid, Where the termination results from the expiration of
in accordance with the terms of the service contract the Service Agreement, or from the completion of
between itself and the contractor (Rosewood the phase of the job or work for which the employee
Processing v. NLRC, G.R. Nos. 116476-84, 1998). is engaged, the latter may opt to wait for re-
employment within three (3) months to resign and
The joint and several liability of the contractor and transfer to another contractor-employer.
the principal is mandated by the Labor Code to
assure compliance with the provisions therein Failure of the contractor to provide new employment
including the minimum wage. The contractor is for the employee shall entitle the latter to payment
made liable by virtue of his status as direct of separation benefits as may be provided by law or
employer. The principal, on the other hand, is made the Service Agreement, whichever is higher, without
the indirect employer of the contractor's employees prejudice to his/her entitlement to completion
to secure payment of their wages should the bonuses or other emoluments, including retirement
contractor be unable to pay them. Even in the benefits whenever applicable. The mere expiration

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of the Service Agreement shall not be deemed as a carry out the job,
termination of employment of the work or services
contractor's/subcontractor's employees who are sought to be
regular employees of the latter. undertaken under a
SA.
Comparative Table: D.O. No. 18-A-11 vs. D.O. CO-TERMINUS EMPLOYMENT
No. 174-17 Allowed. No co-terminus
DOLE D.O. DOLE D.O. 174-17 The term or duration employment (for regular)
18-A-11 of employment that Mere expiration of SA shall
COVERAGE must be co-extensive not be deemed as a
Expressly includes No express inclusion of with the SA or with termination of employment
cooperatives cooperatives, but should the specific phase of of the contractor’s
still be included work for which the employees who are
employee is regular employees of the
TRILATERAL RELATIONSHIP engaged. latter.
Trilateral Deleted provision on LABOR-ONLY CONTRACTING
Relationship was trilateral relationship. Prohibited Absolutely Prohibited
emphasized.
Principal Labor-only Labor-only Contracting:
  Contractor Contracting: 2nd kind
  Employees 1st Kind
The contractor does not
The contractor does have substantial capital -
ON CONTRACTING AND not have substantial or -
SUBCONTRACTING capital The contractor does not
Legitimacy: Requirements: - or – have investments in the
Legitimate Permissible Contracting formof tools, equipment,
Job Contracting  Distinct and The contractor does machineries, supervision,
 DOLE- independent not have work premises among
registered business; own manner investments in the others,
 Distinct and and method of form of tools, - and -
independent performance of job or equipment, The contractor’s or
business; own work machinery, work subcontractor’s
manner and method  Substantial capital premises, among employees recruited and
in performing AND others, placed are performing
job, work, service; investment (in the form of activities which are
free from control and tools, equipment, - and - directly related to the
direction of principal machinery and main business operation
except results supervision) The employees of the principal.
 Substantial  [new] Free from recruited and placed
capital and/or control and/or direction of are performing
investment Service the activities which are
Agreement (SA) principal usually necessary or
complies with labor  Service desirable to the
law rights and Agreement operation of the
benefits (SA) complies with labor company, or directly
law rights and benefits related to the main
business of the
principal within a
SUBSTANTIAL CAPITAL definite or
Php3,000,00.00 Php5,000,00.00 predetermined
period, regardless of
NET FINANCIAL CONTRACTING whether such job,
CAPACITY (NFCC) work or service is to
The formula to No provision on NFCC be performed within
determine the or outside the
financial capacity of premises of the
the contractor to principal

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Labor-only Labor-only Contracting: that is necessary/

Contracting: 2nd kind 2nd kind desirable or directly
The contractor does The contractor does not related to the
not exercise the exercise the right to business/ operation
right to control the control over the of the principal by
performance of the performance of the work reason of
work of employee. of the employee. strike/lockout
OTHER PROHIBITIONS WHEN PRINCIPAL MAY BE LIABLE
Other Prohibitions Other Illicit Forms of “Duties of the Principal deemed direct
(Not done in good Employment principal,” as employer when there is
faith and legitimate Arrangements (Good faith “indirect employer.” evidence of:
business reason) and legitimate business • Labor-only
reason no longer a contracting;
defense) • Other illicit forms
N/A [new] Contracting through of employment
an in-house cooperative arrangements;
which merely supplies • Violation of
workers employee’s
N/A [new] Practices, rights
schemed employment • Violation of
arrangements designed required
to circumvent Security of contracts
Tenure NON-IMPAIRMENT OF EXISTING
CONTRACTS
Benefits being No provision
N/A [new] Contracting out of a enjoyed by parties to
job or work by reason of a existing contracting
strike or lockout whether arrangements shall
actual or imminent not be impaired by
Results in Not listed this D.O.
termination/reductio EMPLOYMENT TERMINATION
n of regulars and If caused by pre- Same
reduction of work termination of SA
hours; or not due to
authorized causes,
Results in right to unpaid
termination/reductio wages and benefits
n of regulars and borne by party at
reduction/splitting of fault
bargaining unit Employee may opt Employee may opt to wait
Refusal to give Not listed for payment of for re-employment within
provide SA and separation benefits 3 months to resign and
employment as may be provided transfer to another
contracts in by law or the SA, employer. Failure to
bargaining unit of without prejudice to provide new employment,
principal’s certified his/her entitlement employee shall be entitled
bargaining agent to to the completion to separation benefits as
sole and exclusive [of] bonuses or other may be provided by law or
bargaining agent emoluments, the SA, whichever is
Engaging/maintaini Not listed including retirement higher, without prejudice
ng by principal of benefits whenever to entitlement completion
subcontracted applicable. of bonuses or other
employees in emoluments, including
excess of CBA or retirement benefits
set by Industry whenever applicable.
Tripartite Council SEPARATION BENEFITS
Contracting out of a Not listed Separation pay is If not re-employed after 3-
job/work/service contingent on its month wait, separation

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inclusion in the SA or benefits are given as may unique skills and talents who himself or herself
may apply only in be provided by law or the performs the job or work for the principal.
authorized causes SA.
outline in the Labor Non-Applicability of DO 174-17 to BPO/LPO/KPO
Code. 1. Business Process Outsourcing
CERTIFICATE OF REGISTRATION 2. Knowledge Process Outsourcing
Registration/Renew Php 100,00 Two (2) years 3. Legal Process Outsourcing
al Fee: Php 25,000 4. IT Infrastructure Outsourcing
Validity: Three (3) 5. Application Development
years 6. Hardware and/or Software Support
7. Medical Transcription
DOLE PROGRAMS 8. Animation Services
N/A Mandatory Enrollment to 9. Back Office Operations/Support
DOLE programs:
Principaland Applicability/Non-Applicability of DO 174-17 to
Contractors/Subcontracto Construction Industry; Coordination with PCAB-
rs CIAP
Pursuant to PD No. 1746, Series of 1980, licensing
Department Circular No. 01-17 and the exercise of regulatory powers over the
D.O. 174, Series of 2017, applies only to trilateral construction industry is lodged with the Philippine
relationship which characterizes contracting or Contractors Accreditation Board (PCAB) of the
subcontracting arrangement. It does not Construction Industry Authority of the Philippines
contemplate to cover information technology- (CIAP)
enabled services involving entire or specific
business process. Applicability/Non-Applicability of DO 174-17 to
Private Security Agencies
NOTE: Construction Industry NOT covered by Except for the registration requirements as provided
mandatory registration provision of D.O. 174-17 for in DO 174-17, contracting or subcontracting
arrangements in the private security industry shall
The DOLE, through its regional offices, shall not be governed by DO 15-16
require contractors licensed by PCAB in the
Construction Industry to register under D.O. 18-A, Non-Applicability of DO 174-17 to Other
Series of 2011. Findings of violation/s on labor Contractual Relationships
standards and occupational health and safety DO 174-17 applies only to trilateral relationship
standards shall be coordinated with PCAB for its which characterizes contracting or subcontracting
appropriate action, including the possible arrangement. It does not cover: (governed by CC)
cancellation/suspension of the contractor’s license. 1. Contract of Sale or Purchase
Contractors licensed by PCAB which are engaged 2. Contract of Lease
in other contracting or subcontracting arrangement 3. Contract of Carriage
in addition to, or other than construction activities 4. Contract of Growing/Growership
shall be required to register under D.O. No. 174-17 Agreement
5. Toll Manufacturing
Except for the registration requirements of D.O. 174- 6. Contract of Management, Operation, and
17, contracting or subcontracting arrangements in Maintenance
the private security industry shall be governed by
D.O. No. 150, Series of 2016. DO 174-17 does not cover the contracting out of job
or work to a professional, or individual with unique
D.O. No. 174-17 applies only to trilateral relationship skills and talents who himself performs the job or
which characterizes contracting or subcontracting work for the principal.
arrangement. It does not contemplate to cover
contractual relationships such as in contract of sale
or purchase, contract of lease, contract of carriage, Effects of Labor-Only Contracting
contract growing/growership agreement, toll A finding by a competent authority of labor-only
manufacturing, contract of management, operation contracting shall render the principal jointly and
and maintenance and other contracts governed by severally liable with the contractor to the latter’s
the Civil Code and other special laws. employees in the same manner and extent that the
principal is liable to employees directly hired by
D.O. No. 174-17 does not also cover the contracting him/her as provided in Art. 106 of the Labor Code,
out of job or work to a professional, or individual with as amended. (D.O. 18-A, Sec. 27, 2011)

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2. The misconduct must be of such grave and

A finding of commission of any of the prohibited aggravated character;
activities in Sec. 7 or violation of either Sections 8 or 3. Relates to the performance of the
9 hereof, shall render the principal the direct employee’s duties; and
employer of the employees of the contractor or 4. A showing that the employee becomes unfit
subcontractor. (D.O. 18-A, Sec. 7, 2011) to continue working for the employer. (D.O.
No. 147-15, Sec. 5.2[a])
B. TERMINATION OF EMPLOYMENT BY
EMPLOYER Examples
1. Reckless Driving. The irregularities or
Note: In September 2015, DOLE issued D.O. 147- infractions committed by the bus driver,
15, Amending the IRR of Book VI of the Labor Code including his tendency to speed up during
his trips, his reckless driving, his picking up
passengers in the middle of the road, his
Requisites for Valid Dismissal
racing with other buses and his jostling for
1. Substantive Due Process: The dismissal
vantage positions constitute as serious
must be for cause; and
misconduct (Sampaguita Auto Transport v.
2. Procedural Due Process: The employee
NLRC & Sagad, G.R. No. )
must be afforded an opportunity to be heard
2. The charge of drug abuse inside the
and defend himself (Fujitsu Computer
company’s premises and during working
Products v.CA, G.R. No. 158232, 2005)
hours (Bughaw v. Treasure Island, G.R. No.
173151)
1. Just Causes 3. Sexual harassment;
d. 4. Fighting within company premises;
Grounds: 5. Accusatory and inflammatory language
1. Serious misconduct or Willful disobedience used by an employee to an employer or
by the employee of the lawful orders of his superior (Nissan Motors Phils. v. Angelo,
employer or representative in connection G.R. No. 164181, 2011)
with his work (work-related) 6. Falsification of time records;
2. Gross and Habitual neglect by the 7. Gross immorality;
employee of his duties 8. Sexual intercourse inside company
3. Fraud or Willful breach by employee of the premises and during work hours (Imasen
Trust reposed in him by his employer or Philippine Manufacturing Corp v. Alcon,
duly authorized representative (not mere G.R. No. 194884)
suspicion) 9. Theft of company property
4. Commission of a crime or offense by the
employee against the person of his Habitual Infractions
employer or any immediate member of his A series of irregularities when put together may
family or duly authorized representative constitute serious misconduct (Gustilo v. Wyeth
5. Other analogous cases Phil., G.R. No. 149629)
Note: In one case, the Court considered the

Serious Misconduct or Willful Disobedience substantial amount of loss caused to the company
(Labor Code, Article 297[A]) in holding that the infraction of the employee
constituted serious misconduct, despite it only being
Serious Misconduct gross and not habitual. (LBC Express v. Mateo, G.R.
Improper or wrong conduct; the transgression of No. 168215, 2009)
some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in
Totality of infractions doctrine
character, and implies wrongful intent and not mere
The totality of infractions or the number of violations
error in judgment. To be serious within the meaning
committed during the period of employment shall be
and intendment of the law, the misconduct must be
considered in determining the penalty to be imposed
of such grave and aggravated character and not
upon an erring employee. Fitness for continued
merely trivial or unimportant. (Villamor Golf Club v.
employment cannot be compartmentalized into tight
Pehid, G.R. No. 166152)
little cubicles of aspects of character, conduct and
ability separate and independent of each other.
Elements of Serious Misconduct
While it may be true that petitioner was penalized for
1. There must be misconduct;
his previous infractions, this does not and should not
mean that his employment record would be wiped

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clean of his infractions. After all, the record of an Implies repeated failure to perform one’s duties over
employee is a relevant consideration in determining a period of time (JGB and Associates, Inc. v. NLRC,
the penalty that should be meted out since an G.R. no. 109390, 1996)
employee's past misconduct and present behavior
must be taken together in determining the proper Elements of Gross and Habitual Neglect:
imposable penalty. (Merin v. NLRC, G.R. No. 1. There must be neglect of duty; and
171790, 2008) 2. The negligence must be both gross and
habitual in character. (D.O. No. 147-15,
Elements of Willful Disobedience Sec. 5.2[c])
1. There must be disobedience or
insubordination; Exception: Where the negligence was gross, but
2. The disobedience or insubordination must not habitual, the SC still dismissed the erring
be willful or intentional characterized by a employee. The SC agreed that the resultant
wrongful and perverse attitude; damage caused by the employee’s negligence
3. The order violated must be reasonable, should be considered in the dismissal of the
lawful, and made known to the employee; employee. In this case, the damage went as far as
and claiming the life of a child. (School of Holy Spirit v.
4. The order must pertain to the duties which Taguim, G.R. No. 165565, 2008)
he has been engaged to discharge. (D.O.
No. 147-15) Note: Actual damage, loss, or injury is not an
essential requisite (DOLE Manual, Sec. 4343.01[2])
Note: This ground presupposes an act that is willful
in character and implies a wrongful intent. The Forms of neglect of duty
wrongful and perverse attitude must be present. 1. Habitual tardiness and absenteeism;
2. Abandonment of work
Examples When There Was No Wrongful Intent 3. Failure to report for work or absence
4. In a case, where an employee lent his ID The without valid or justifiable reason; and
employee lent his ID to the driver who forgot his 4. Clear intention to sever EER is manifested
ID, to facilitate entry into the company premises. by some overt acts (Tamblot Security and
The court said that there was no wrongful intent. General Services v. Item, G.R. No. 199314,
In fact, the employee who lent his ID to the other 2015)
worker was for the benefit of the employer.
(Dongon v. Rapid Movers and Forwarders Co., Abandonment vis-à-vis Illegal Dismissal
Inc., G.R. No. 163431, 2013) General Rule: Abandonment inconsistent with the
5. A teacher held various teaching positions in immediate filing of a complaint for illegal dismissal
other schools without asking permission from Tamblot Security v. Item, G.R. No. 199314, 2015)
her superior, which is against the school’s rules.
However, it was ruled that the teacher’s Exception: The above rule has no application where
performance was apparently unaffected by her the complainant does not pray for reinstatement and
external teaching engagements, as she was asks for separation pay instead (Jo v. NLRC, G.R.
found by the grievance committee to be one of No. 121605, 2000)
the better professors and was even offered the
Chairmanship of her college. Also, the fact that Examples
the teacher merely wanted to alleviate her 1. Poor performance
family’s poor financial conditions is a Previous infractions by the employee
justification that the school failed to refute. should have been acted upon appropriately
(Moreno v. San Sebastian College-Recoletos, by the employer before terminating the
G.R. No. 175283, 2008) former.
Gross and Habitual Neglect (Labor Code, Article As a general concept, “poor performance”
297[b]) is equivalent to inefficiency and
incompetence in the performance of official
Gross Neglect duties. An unsatisfactory rating can be just
An absence of that diligence that an ordinarily cause for dismissal only if it amounts to
prudent man would use in his own affairs (DOLE gross and habitual neglect of duties. Thus,
Manual, Sec. 4343.01[27]) the fact that an employee’s performance is
found to be poor and unsatisfactory does
Habitual Neglect not necessarily mean that the employee is
grossly and habitually negligent of his

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duties. (Universal Staffing Inc. v. NLRC, Loss of trust and confidence to be a valid cause for
G.R. No. 177576, 2008) dismissal must be based on a willful breach of trust
and founded on clearly established facts. The basis
2. Habitual Tardiness for the dismissal must be clearly and convincingly
Habitual tardiness is a form of neglect of established but proof beyond reasonable doubt is
duty. Lack of initiative, diligence, and not necessary. (Prudential Guarantee and
discipline to come to work on time everyday Assurance Employee Labor Union v. NLRC, G.R.
exhibit the employee’s deportment towards No. 185335, 2012)
work. Habitual and excessive tardiness is
inimical to the general productivity and Guidelines for the application of the doctrine of loss
business of the employer. This is especially of confidence
true when the tardiness and/or 1. Loss of confidence should not be
absenteeism occurred frequently and simulated.
repeatedly within an extensive period of 2. It should not be used as a subterfuge for
time. (RB Michael Press v. Galit, G.R. No. causes which are improper, illegal or
153510, 2008) unjustified;
3. It may not be arbitrarily asserted in the face
3. Gross negligence includes gross of overwhelming evidence to the contrary;
inefficiency and
Article 290 of the Labor Code provides that 4. It must be genuine, not a mere afterthought
one of the just causes for terminating an to justify earlier action taken in bad faith
employment is the employee's gross and (Coca-Cola Bottlers, Phils. Inc. v.
habitual neglect of his duties. This cause Kapisanan ng Malayang Manggagawa sa
includes gross inefficiency, negligence and Coca-Cola, G.R. No. 148205, 2005)
carelessness (Century Iron Works, Inc. v. 5. Unless duly proved or sufficiently
Bañas, G.R. No. 184116, 2013) substantiated otherwise, impartial tribunals
should not rely only on the statement of the
Fraud or Willful Breach of Trust (Labor Code, employer that it has lost confidence in its
Article 297[b]) employee (Perez v. Philippine Telegraph
and Telephone Co., G.R. No. 152048,
Elements of Fraud or Willful Breach of Trust 2009)
1. There must be an act, omission, or
concealment; The breach must be related to the performance of
2. The act, omission or concealment involves the employee’s function. (Enriquez v. BPI, G.R. No.
a breach of legal duty, trust, or confidence 172812, 2008)
justly reposed;
3. It must be committed against the employer Examples
or his/her representative; and 1. A treasury Sales Division Head of a bank
4. It must be in connection with the personally and actively participated in the
employees’ work. (D.O. No. 147-15, Sec. diversion of bank clients' funds to products
5.2[d]) of other companies that yielded interests
higher than what the employer bank
Elements of Loss of Confidence offered. The managerial employee was
1. There must be an act, omission or found to be dealing with customers in a
concealment; manner with conflict of interest (Genuino v.
2. The act, omission or concealment justifies NLRC, G.R. Nos. 142732-33 & 142753-54,
the loss of trust and confidence of the 2007)
employer to the employee; 2. A managerial employee authorized the
3. The employee concerned must be holding transfer of funds without the knowledge or
a position of trust and confidence; consent of the Board and in direct
4. The loss of trust and confidence should not contravention of the company's Distribution
be simulated; Rules constitutes valid and legal ground
5. It should not be used as a subterfuge for sufficient enough to warrant her dismissal.
causes which are improper, illegal, or The fact that the employee did not use the
unjustified; and funds for her personal gain and that the
6. It must be genuine and not a mere transfer thereof redounded to the benefit of
afterthought to justify an earlier action taken the company is of no moment. (Gaite v.
in bad faith. (D.O. No. 147-15, Sec. 5.2[e]) Filipino Society of Composers, Authors and
Publishers, Inc., G.R. No. 219324, 2018)

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Positions of trust and confidence Commission of a Crime or Offense: (Labor Code,

Managerial employees: Those vested with the Article 297[d])
powers or prerogatives to lay down management
policies and to hire, transfer, suspend, lay-off, recall, Commission of a crime or offense
discharge, assign or discipline employees or Refers to an offense by the employee against the
effectively recommend such managerial actions. person of his employer or any immediate member of
his family or his duly authorized representative.
Fiduciary Rank and file: Those who in the normal
and routine exercise of their functions, regularly Elements
handle significant amounts of money or property. 1. There must be an act or omission
Examples are cashiers, auditors, property punishable/ prohibited by law; and
custodians, etc. (Prudential Guarantee and 2. The act or omission must be voluntary
Assurance Employee Labor Union v. NLRC, G.R. and/or willful on the part of the employees.
No. 185335, 2012) (D.O. No. 147-15, Sec. 5.2[f])
MANAGERIAL FIDUCIARY RANK- Conviction or prosecution of the employee is not

AND-FILE necessary. A criminal case need not be actually
Mere existence of a Proof of involvement in filed. Commission of acts constituting a crime is
basis for the belief of the alleged events in sufficient. (Nicolas v. NLRC, G.R. No. 113948,
employee’s guilt question required; 1996)
(Grand Asian Shipping mere uncorroborated
Lines v. Galvez, G.R. assertions and Immediate Members of the Family
No. 178184, 2014) accusations are not 1. Between husband and wife;
Employment for a long enough (Etcuban v. 2. Between parents and children;
time is counted against Sulpicio Lines, G.R. 3. Among other ascendants and descendants;
the employee No. 148410, 2005) 4. Among brothers and sisters, whether of the
(Salvador v. Philippine full or half-blood (see Family Code, Art.
Mining Service Corp., 150)
G.R. No. 148766,
2003) Acquittal in criminal case arising from misconduct
Notwithstanding petitioner’s acquittal in the criminal
Confidential employees are those charged with case for qualified theft, the company had adequately
custody and protection of employer’s property like a established the basis for the company’s loss of
cashier (this is different from the “confidential confidence as a just cause to terminate. As opposed
employees” in labor relations) to the "proof beyond reasonable doubt" standard of
evidence required in criminal cases, labor suits
When an employee accepts a promotion to a require only substantial evidence to prove the
managerial position or to an office requiring full trust validity of the dismissal (Paulino v. NLRC, G.R. No.
and confidence, she gives up some of the rigid 176184, 2012)
guarantees available to ordinary workers infractions
which is committed by others would be overlooked Past Infractions Rule
or condoned or penalties mitigated may be visited Previous offenses may be used as justification for
with more sever disciplinary action. (Tirazona v. CA, dismissal from work only if the past infractions are
G.R. No. 169712, 2008) related to the subsequent offense upon which the
basis of termination is decreed. (Salas v. Aboitiz
Criminal and labor proceedings are distinct and One Inc., G.R. No. 178236, 2008)
separate from each other. Each requires a different
quantum of proof, arising though they are from the Past offenses/infractions can be taken into account
same set of facts or circumstances. An employee’s in determining the appropriate penalty. If the past
acquittal in a criminal case does not automatically infractions have already been penalized, the
preclude a determination that he has been guilty of employer can no longer punish the employee for the
acts inimical to the employer’s interest resulting in second time for the same offense, otherwise it is
loss of trust and confidence. Corollarily, the ground going to be analogous to double jeopardy. (Santos
for the dismissal of an employee does not require v. Integrated Pharmaceutical, Inc., G.R. No.
proof beyond reasonable doubt; as noted earlier, the 204620, 2016)
quantum of proof required is merely substantial
evidence. (Lopez v. Alturas Group of Companies,
G.R. No. 191008, 2011)

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Analogous Cases (Labor Code, Article 297[e]) Immorality

Requisites Disgraceful or immoral conduct can be used as a
1. There must be an act or omission similar to basis for termination of employment (Santos, Jr. v.
those specified just causes; NLRC, G.R. No. 115795, 1998)
2. The act or omission must be voluntary
and/or willful on the part of the employees The act of engaging in extramarital affairs was
(D.O. No. 147-15, Sec. 5.2[g]) specifically provided for by the cooperative’s
Personnel Policy as one of the grounds for
Analogous Cases must be due to the voluntary termination of employment and said act raised
and/or willful act or omission of the employee. concerns to the cooperative as the Board received
(Cosmos Bottling Corp. v. Fermin, G.R. No. 193676, numerous complaints and petitions from the
2012) cooperative members themselves asking for the
removal of Bandiola because of his immoral
D.O. No. 147-15 (new qualification) conduct, hence, immorality (extramarital affair)
No act or omission shall be considered as justified terminating the employment by the
analogous cause unless expressly specified in he employer (Alilem Credit Cooperative v. Bandiola,
company rules and regulations or policies. Jr., G.R. No. 173489, 2013)
Analogous Cases must be due to the voluntary Pregnancy out of wedlock

and/or willful act or omission of the employee. When the law speaks of immoral or, necessarily,
(Cosmos Bottling Corp. v. Fermin, G. R. No. disgraceful conduct, it pertains to public and secular
193676, 2012) morality; it refers to those conducts which are
proscribed because they are detrimental to
Examples conditions upon which depend the existence and
1. Abandonment progress of human society.
2. Violation of safety rules
3. Gross inefficiency To stress, pre-marital sexual relations between two
4. Wrongful acts of employee against the consenting adults who have no impediment to marry
company each other, and, consequently, conceiving a child
5. Violation of code of discipline out of wedlock, gauged from a purely public and
6. Failure to heed an order not to join an illegal secular view of morality, does not amount to a
picket disgraceful or immoral conduct. (Leus v. St.
7. Immorality Scholastica, G.R. No. 187226, 2015)
8. Sexual harassment
Valid Dismissal Because of Application of Union
Security Clause
Other Just Causes under other Labor Code Union security clauses in the collective bargaining
provisions agreements, if freely and voluntarily entered into,
are valid and binding. Thus, the dismissal of an
1. Union officers who, with knowledge, employee by the company pursuant to a labor
participate in an illegal strike. union’s demand in accordance with a union security
2. Any employee who commits an illegal act agreement does not constitute unfair labor practice.
during a strike (Malayang Samahan ng mga Manggagawa sa M.
3. Strikers who violate orders, prohibitions or Greenfield v. Ramos, G.R. No. 113907, 2001; Villar
injunctions issued by the NLRC, the v. Inciong, G.R. No. L-50283-84, 1983)
Secretary of Labor and Employment or the
President Although a union security clause in a CBA may be
4. Violation of union security clause in the validly enforced and dismissal pursuant thereto may
CBA likewise be valid, this does not erode the
fundamental requirement of due process. The
Doctrine of Incompatibility reason behind the enforcement of union security
Where the employee has done something that is clauses which is the sanctity and inviolability of
contrary or incompatible with the faithful contracts cannot override one’s right to due process.
performance of his duties, his employer has a just (MSMG-UWP v. Ramos, G.R. No. 113907, 2000)
cause for terminating his employment. (Manila
Chauffer’s League v. Bachrach Motor, G.R. No. L- Where the employer compelled the employee to go
47138, 1940) on forced leave upon recommendation of the union
for alleged violation by the employee of the closed–

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shop agreement, the NLRC correctly ordered the 4. Cessation or Closure of Operation of the
reinstatement of the employee and directed the Establishment or Undertaking
union to pay the wages and fringe benefits which 5. Disease
employees failed to receive as a result of her forced
leave and to pay attorney’s fees. (Manila Mandarin Change of Ownership
Employees Union v. NLRC, G.R. No. 76989,,1987) A mere change in the equity composition of a
corporation is neither a just nor an authorized cause
Where the employer dismissed his employees in the that would legally permit the dismissal of the
belief in good faith that such dismissal was required corporation's employees en masse. (SME Bank,
by the closed – shop provisions of the collective Inc. v. De Guzman, G.R. Nos. 184517 & 186641,
bargaining contract with the union, he may not be 2013)
ordered to pay back compensation to such
employees although their dismissal is found to be Installation of Labor-Saving Device
illegal. (Confederated Sons of Labor v. Anakan This refers to the installation of machinery to effect
Lumber, G.R. No. L-12503, 1960) economy and efficiency in the employer’s method of
production (Edge Apparel, Inc. v. NLRC, G.R. No.
Bona Fide Occupational Qualification (BFOQ) 121314, 1998)
General Rule: Where the job itself necessarily
requires a particular qualification, then the job Elements of a valid termination based on
applicant or worker who does not possess it may be installation of labor-saving devices
disqualified on that basis and such will not be 1. There must be introduction of machinery,
considered unlawful discrimination. equipment or other devices;
2. The introduction must be done in good faith;
Exception: To justify a BFOQ, the employer must 3. The purpose for such introduction must be
prove that: valid such as to save on cost, enhance
1. The employment qualification is reasonably efficiency and other justifiable economic
related to the essential operation of the job reasons;
involved; and 4. There is no other option available to the
2. There is factual basis for believing that all employer than the introduction of
or substantially all persons meeting the machinery, equipment or device and the
qualification would be unable to properly consequent termination of employment of
perform the duties of the job (Star Paper those affected thereby; and
Corporation, et. al. vs. Simbol, et. al., G.R. 5. There must be fair and reasonable criteria
No. 164774, 2006). in selecting employees to be terminated.
(DO 147-15)
The Supreme Court had upheld the dismissal of a
cabin crew member for being unable to trim down Due Process Requirements for Termination Due
his weight. The Court classified such weight to Installation of Labor-Saving Device
standards as a BFOQ, which is defined as the 1. The employer served a written notice both
employment qualifications imposed by an employer to the employees and to the DOLE at least
such as sex, religion, or national origin as a limiting 30 days prior to the intended date of
factor in performing a certain job. In the instant case, termination; and
PAL is a common carrier and from the nature of its 2. The employer pays the employees
business and for reasons of public policy, it is bound separation pay equivalent to one month pay
to observe extraordinary diligence for the safety of or at least one month pay for every year of
the passengers it transports. A BFOQ on weight service, whichever is higher, a fraction of at
standards in this case was deemed to be necessary least six months being considered as one
and justified given the normal operations of PAL. (t||| whole year. (Labor Code, Art. 298)
(Yrasuegui v. Pilippine Airlines, Inc., G.R. No.
168081, 2008) Redundancy
2. Authorized Causes Redundancy exists where the services of an

employee are in excess of what is reasonably
Grounds: demanded by the actual requirements of the
1. Redundancy enterprise. (Wiltshire File Co. Inc. v. NLRC, G. R.
2. Retrenchment No. 82249, 1991)
3. Introduction of Labor-saving devices
A position has become superfluous as an outcome
of a number of factors such as over hiring of

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workers, decreased volume of business, dropping of (Azucena, The Labor Code with Comments and
a particular product line or service activity previously Cases Volume II-B, 884, 2016)
manufactured or undertaken by the enterprise (thus
it only requires superfluity not duplication of work The characterization of an employee’s services as
(Asian Alcohol Corp. v. NLRC, G. R. No. 131108, no longer necessary or sustainable, and therefore,
1999) properly terminable, is an exercise of business
judgment on the part of the employer, and that the
Elements of Redundancy wisdom or soundness of such characterization or
1. There must be superfluous positions or decision is not subject to discretionary review,
services of employees; provided of course that violation of law or arbitrary
2. The positions or services are in excess of or malicious action is not shown. (Becton Dickinson
what is reasonably demanded by the actual Phils., Inc. v. National Labor Relations Commission,
requirements of the enterprise to operate in G.R. Nos. 159969 & 160116, 2005)
an economical and efficient manner;
3. There must be good faith in abolishing A reduction of the number of regular working days is
redundant positions; valid where the arrangement is resorted to by the
4. There must be fair and reasonable criteria employer to prevent serious losses due to causes
in selecting the employees to be beyond his control, such as when there is a
terminated; and substantial slump in the demand for his goods or
5. There must be an adequate proof of services or when there is lack of raw materials. (I|||
redundancy such as but not limited to the (Linton Commercial Co., Inc. v. Hellera, G.R. No.
new staffing pattern, feasibility studies/ 163147, 2007)
proposal, on the viability of the newly
created positions, job description and the Elements of Retrenchment or Downsizing
approval by the management of the 1. The retrenchment must be reasonably
restructuring. (DO 147-15) necessary and likely to prevent business
losses;
Requisites for Implementation of a Valid 2. The losses, if already incurred, are not
Redundancy Program merely de minimis, but substantial, serious,
1. A written notice served on both the actual and real, or if only expected, are
employees and the DOLE at least one reasonably imminent.
month prior to the intended date of 3. The expected or actual losses must be
retrenchment proved sufficient and convincing evidence
2. Payment of separation pay equivalent to at such as financial statements (audited by an
least one month pay or at least one month independent firm) over a span of several
pay for every year of service, whichever is years OR some reasonable period of time,
higher and not merely the actual year of business
3. Good faith in abolishing the redundant loss;
positions 4. The retrenchment must be in good faith for
4. Fair and reasonable criteria in ascertaining the advancement of its interest and not to
what positions are to be declared defeat or circumvent the employees’ right to
redundant and accordingly abolished. security of tenure; and
(Lopez Sugar Corporation v. Franco, G.R. 5. There must be fair and reasonable criteria
No. 148195, 2005) in ascertaining who would be dismissed
and who would be retained among the
Proof of good faith and fair and reasonable employees, such as status, efficiency,
criteria to substantiate redundancy seniority, physical fitness, age, and
1. New staffing pattern; financial hardship for certain workers. (D.O.
2. Feasibility studies / proposal on the viability No. 147-15, Sec. 5.4[c])
of the newly created positions;
3. Job description; and Two kinds of losses to justify retrenchment
4. Approval by the management of the 1. Incurred losses which are substantial,
restructuring (General Milling Corporation serious, actual and real; and
v. Violeta L. Viajar, G.R. No. 181738, 2013) 2. Expected losses – which are reasonably
imminent. (Sanoh Fulton Phils. Inc. v.
Retrenchment Bernardo & Tagohoy, G.R. No. 187214,
Retrenchment is one of the economic grounds 2013)
resorted to by an employer to terminate employment a. The phrase “to prevent losses” means
primarily to avoid or minimize business losses. that retrenchment or termination from

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the service of some employees is Due Process Requirements of the Retrenchment

authorized to be undertaken by the Program:
employer sometime before the losses 1. The retrenchment is necessary to prevent
anticipated are actually sustained or or minimize losses and such losses are
realized. Actual losses need not set in proven;
prior to retrenchment (Cajucom VII v. 2. Written notice is given to the employees
TPI Phil. Cement Corp., G.R. No. and the Department of Labor and
149090, 2005) Employment at least one month before the
Fair and Reasonable Criteria intended date of retrenchment;
In selecting employees to be dismissed, fair and 3. Payment of separation pay equivalent to at
reasonable criteria must be used, such as but not least one month pay or at least ½ month
limited to: (a) less preferred status (e.g., temporary pay for every year of service, whichever is
employee), (b) efficiency and (c) seniority. higher;
4. The employer exercise its prerogative to
Example when Criteria was not Used retrench employees in good faith for the
[The employer] demonstrated arbitrariness in the advancement of its interest; and
selection of which of its employees to retrench. By 5. Fair and reasonable criteria in ascertaining
discarding the cabin crew personnel’s previous who will be dismissed or retained.
years of service and taking into consideration only 1 (Azucena, The Labor Code with Comments
year’s worth of job performance for evaluation, PAL and Cases Volume II-B, 886-887, 2016)
virtually did away with the concept of seniority,
loyalty and past efficiency, and treated all cabin Burden of Proof
attendants as if they were on equal footing. (FASAP The employer bears the burden of proving the
v. Philippine Airlines, Inc., G.R. No. 178083, 2008; existence of the imminence of substantial losses
G.R. No. 178083, 2009) with clear and satisfactory evidence that there are
legitimate business reasons justifying a
“Last In, First Out” Rule (LIFO) retrenchment. (Mount Carmel Employees Union v.
When there are two or more employees occupying Mount Carmel College, G.R. No. 187261, 2014)
the same position in the company affected by the
retrenchment program, the last one employed will No evidence can best attest to a company's
necessarily be the first to go (Maya Farms economic status other than its financial statement.
Employees Organization v. NLRC, G.R. No. The condition of business losses is normally shown
106256, 1994) by audited financial documents l like yearly balance
sheets and profit and l loss statements as well as
However: No law mandates LIFO. A host of relevant annual income tax returns. Financial statements
factors come into play in determining cost-efficient must be prepared and signed by independent
measures in choosing the employees who will be auditors. Unless duly audited, they can be assailed
retained or separated to save the company from as self-serving documents. It is not enough that only
closing chop. In determining these issues, the financial statements for the year during which
management has to enjoy a pre-eminent role. retrenchment was undertaken, are presented in
(Asian Alcohol Corp. v. NLRC, G.R. No. 131108, evidence. For it may happen that while the company
1999) has indeed been losing, its losses may be on a
downward trend, indicating that business I s picking
In case of installation of labor-saving devices, up and retrenchment, being a drastic move, should
redundancy and retrenchment, the LIFO rule shall no longer be resorted to.
apply, except when an employee volunteers to be
separated from employment (D.O. No. 147-15, Sec. While it is true that the Court has ruled that financial
5.4) statements audited by independent external
auditors constitute the normal method of proof of the
Hobson’s Choice profit and loss performance of a Company, financial
No choice at all; a choice between accepting what is statements, in themselves, do not suffice to meet
offered or having nothing at all. the stringent requirement of the l aw that the losses
must be substantial, continuing and without any
In Asufrin, Jr. v. San Miguel Corp. (G.R. No. 156658, immediate prospect of abating. Oriental Petroleum
2004), the employees were given the choice either and Minerals Corp. v. Fuentes, G.R. No. 151818,
to voluntarily retire, be retrenched without benefits, 2005)
or be dismissed without receiving any benefit at all.

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and unfair to the employer. (GSWU-

Difference between redundancy and NAFLU-KMU v. National Labor Relations
retrenchment Commission, G.R. No. 165757, 2006)
Redundancy: the position of the employee has
become superfluous even if the business does not Closure Not Due to Losses
suffer from financial problems. In cases of closure not due to losses, it must NOT
be in BAD FAITH. (Azucena, The Labor Code with
Retrenchment: always linked with losses; a cost- Comments and Cases Volume II-B, 902)
cutting measure made necessary by business
reverses. Guidelines in Closure
(Azucena, The Labor Code with Comments and 1. Closure or cessation of operations of
Cases Volume II-B, 893, 2016) establishment or undertaking may either be
partial or total.
Closure or Cessation of Operation of The 2. Closure or cessation of operations of
Establishment or Undertakings establishment or undertaking may or may
not be due to serious business losses or
Closure of business is the reversal of fortune of the financial reverses. However, in both
employer whereby there is a complete cessation of instances, proof must be shown that:
business operations and/or an actual locking-up of a. It was done in good faith to advance the
the doors of establishment, usually due to financial employer's interest and not for the
losses. Closure of business as an authorized cause purpose of defeating or circumventing
for termination of employment aims to prevent the rights of employees under the law or
further financial drain upon an employer who cannot a valid agreement; and
pay anymore his employees since business has b. A written notice on the affected
already stopped. (J.A.T. General Services v. employees and the DOLE is served at
National Labor Relations Commission, G.R. No. least one month before the intended
148340, 2004) date of termination of employment.
c. The employer can lawfully close shop
Elements of Closure or Cessation of Operation even if not due to serious business
1. There must be a decision to close or cease losses or financial reverses but
operation of the enterprise by the separation pay, which is equivalent to at
management; least one month pay as provided for by
2. The decision was made in good faith; and the Labor Code as amended, must be
3. There is no other opinion available to the given to all the affected employees.
employer except to close or cease 3. If the closure or cessation of operations of
operations. (DO 147-15) establishment or undertaking is due to
serious business losses or financial
Due Process Requirements for Termination Due reverses, the employer must prove such
to Closure or Cessation of Operation allegation in order to avoid the payment of
1. Service of written notice to the employees separation pay. Otherwise, the affected
and to the DOLE at least one month before employees are entitled to separation pay.
the intended date thereof; 4. The burden of proving compliance with all
2. The cessation of or withdrawal from the above-stated falls upon the employer.
business operations must be bona fide in (Manila Polo Club Employees’ Union v.
character; and Manila Polo Club, Inc., G.R. No. 172846,
3. When Closure is not due to losses. 2013)
Payment to the employees of termination
pay amounting to at least one-half (1/2) Closure of Department
month pay for each year of service, or one The closure of a department or division of a
month pay, whichever is higher. (Azucena, company constitutes retrenchment by, and not
The Labor Code with Comments and closure of, the company itself. (Waterfront Cebu City
Cases Volume II-B, 903) Hotel v. Jimenez, G.R. No. 174214, 2012)
4. When Closure is due to losses. Article 283
of the Labor Code does not obligate an
employer to pay separation benefits when
the closure is due to serious losses. To
require an employer to be generous when it
is no longer in a position to do so, in our
view, would be unduly oppressive, unjust,

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Retrenchment vs. Redundancy vs. Closure Computation of Separation Pay
Retrenchment Redundancy Closure Computation of Separation Pay

Reduction of The service The reversal Installation of labor- 1 month pay or 1
personnel of an of the fortune saving devices month pay for every
usually due to Employee is of the Redundancy year of service
poor financial in excess of employer whichever is higher.
returns so as what is whereby there Retrenchment to 1 month pay or at
to cut down on required by is a complete prevent losses least 1/2 month pay
costs of an enterprise cessation of for every year of
operations in business Closures or cessation service whichever is
terms of operations of operations of higher.
salaries and and/or actual establishments or
wages locking-up of undertaking NOT due
the doors of to serious business
the losses or financial
establishment, reverses
usually due to
financial Disease
losses
Resorted to To save Aims to Closures or cessation No separation pay
primarily to production prevent of operations due to
avoid or costs further serious business
minimize financial drain losses or financial
business upon the reverses
losses Employer
Employee is Employee is In case of Note: A fraction of at least 6 months is considered 1
entitled to entitled to closure of year
separation pay separation business not
of 1 month pay pay of 1 due to serious Temporary Closure / Bona Fide Suspension of
or 1/2 month month pay or business Operations (Labor Code, Art. 301)
pay per year of 1 month pay losses, the A bona fide suspension of business operations for
service, per year of employer not more than 6 months does not terminate
whichever is service, pays the employment.
higher whichever is employees
higher terminated After 6 months, the employee may be recalled to
separation work or be permanently laid off. (SKM Art Craft Corp
pay of 1 v. Bauca, G.R. No. 171282, 183484, 2013)
month pay or
1/2 month pay An employer may validly suspend operations for at
per year of most 6 months. Not accepting the workers back to
service, work after the 6-month period is equivalent to
whichever is termination, which should be for cause and with
higher proper procedure. (Manila Mining Corp. v. Amor,
G.R. No. 182800, 2015)
Floating Status
It is legal, such as in the case of security guards who
have no assignment.
In security agency parlance, being placed “off duty”

or on ‘floating” status means “waiting to be posted.”
Such a status should not exceed six months; if it
does, it amounts to a dismissal. (Agro Commercial
Services v. NLRC, G.R. No. 82823-24, 1989)

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Ailment or Disease e. Two-notice rule

Substantive Elements of Due Process for
Termination Due to Ailment or Disease The employer has the burden of proving that a
1. An employee has been found to be dismissed worker has been served two notices:
suffering from any disease, whether
contagious or not; First written notice: served on the employee
2. His continued employment is prohibited by specifying the ground or grounds for termination,
law or prejudicial to his health, or to the and giving said employee reasonable opportunity
health of his co-employees; within which to explain his side.
3. A competent public health authority certifies
that the disease is of such nature or at such Second written notice: served upon the employee,
a stage that it cannot be cured within a indicating that upon due consideration of all the
period of six months even with proper circumstances, grounds have been established to
medical treatment; and justify his termination.
4. Payment of separation pay equivalent to at
least one month salary or to one-half month First Contain specific causes or grounds for
salary for every year of service, whichever Notice termination as provided under Art. 297
is greater, a fraction of at least six months and company policies, if any;
being considered as one whole year. Contain a detailed narration of the
facts and circumstances that will serve
Prior Certification from Competent Public as basis for the charge against the
Authority employee. (general description of the
The burden falls upon the employer to establish charge will not suffice); and
these requisites, and in the absence of such Contain a directive that the employee
certification, the dismissal must necessarily be is given the opportunity to submit his
declared illegal. written explanation within the
reasonable period of FIVE (5)
It is only where there is a prior certification from a CALENDAR DAYS from receipt of the
competent public authority that the disease afflicting notice:
the employee sought to be dismissed is of such - to enable him to prepare
nature or at such stage that it cannot be cured within adequately for his defense;
6 months even with proper medical treatment that - to study the accusation
the latter could be validly terminated from his job against him;
(Crayons Processing, Inc., v. Pula, G.R. No. - to consult a union official or
167727, 2007) lawyer;
- to gather data and evidence;
3. Due Process and
- to decide on the defenses he
Subject to the constitutional right of workers to will raise against the
security of tenure and their right to be protected complaint. (DO 147-15)
against dismissal except for a just and authorized Second After determining that termination of
cause and without prejudice to the requirement of Notice employment is justified, the employer
notice under Art. 283 of this Code. shall serve the employees a written
notice of termination indicating that:
The employer shall furnish the worker whose - all circumstances involving
employment is sought to be terminated: the charge/s against the
1. A written notice containing a statement of employee have been
the causes for termination, considered; and
2. And shall afford the latter ample opportunity - grounds have been
to be heard and to defend himself with the established to justify the
assistance of his representative if he so severance of his employment.
desires, in accordance with company rules
and regulations promulgated pursuant to An employee may be dismissed only if the grounds
guidelines set by the Department of Labor mentioned in the pre-dismissal notice were the ones
and Employment. (Labor Code, Art. 292[b]) cited for the termination of employment. (Erector
Advertising Sign Group, Inc. v. Cloma, G.R. No.
Note: Employee may have a counsel but it is not 167218, 2010)
indispensable.

ATENEO CENTRAL
f. Hearing reversed. (ABD Overseas Manpower Corporation v.

NLRC, G.R. No. 117056, 1998)
After serving the first notice, the employer should
schedule and conduct a hearing or conference Procedural Requirements in Termination Cases
wherein the employee will be given the opportunity (Just Cause and Authorized Cause)
to: AUTHORIZED
JUST CAUSES
1. Explain and clarify his defenses to the CAUSES
charge/s against him; First Notice specifying Notice to the following:
2. Present evidence in support of his the grounds for which 1. Employee; and
defenses; and dismissal is sought 2. DOLE
3. Rebut the evidence presented against him
by the management. Hearing or opportunity At least 1 month prior to
to be heard effectivity of the
Guiding principles in hearing requirement separation
1. "Ample opportunity to be heard" means any Second Notice of the
meaningful opportunity (verbal or written) decision to dismiss
given to the employee to answer the
charges against him and submit evidence Requisites for Notice in Authorized Causes
in support of his defense, whether in a 1. Notice is not needed when Employee
hearing, conference or some other fair, just consented to the retrenchment or
and reasonable way. voluntarily applied for one (Int’l Hardware v.
2. A formal hearing or conference becomes NLRC, G.R. No. 80770, 1989)
mandatory only when requested by the 2. Notice must be individual, and not
employee in writing or substantial collective (Shoppers Gain Supermart v.
evidentiary disputes exist or a company NLRC, G.R. No. 110731, 1996)
rule or practice requires it, or when similar 3. Voluntary Arbitration satisfies notice
circumstances justify it. requirement for authorized causes
3. The "ample opportunity to be heard" (Revidad v. NLRC, G.R. No. 111105, 1995)
standard in the Labor Code prevails over
the "hearing or conference" requirement in 4. Termination of Contract of
the implementing rules and regulations Migrant Workers Under RA
(Perez v. PT&T, G.R. No. 152048, 2009) 8042 as amended by RA
10022
Use of position paper
It is the labor arbiter who is authorized to determine
whether or not there is a necessity for conducting Under the Migrant Workers’ Act
formal hearings in cases brought before them for A worker dismissed from overseas employment
adjudication even after the submission of the parties without just, valid or authorized cause as defined
of their position papers or memoranda. A formal by law or contract, or any unauthorized deductions
trial-type hearing is not at all times and in all from the migrant worker's salary is entitled to:
instances essential to due process. It is enough that
the parties are given a fair and reasonable 1. Full reimbursement of the placement fee
opportunity to explain their respective sides of the and the deductions made with interest at
controversy and to present supporting evidence on 12% per annum PLUS
which a fair decision can be based. (Seastar Marine 2. His salary for unexpired portion of his
v. Bul-an, Jr., G.R. No. 142609, 2004) employment contract OR salary for 3
months for every year of the unexpired
Decision/Award term, WHICHEVER IS LESSER. (R.A. No.
It is a requirement of due process that the parties to 8042, as amended by R.A. 10022, Sec.
a litigation be informed of how it was decided, with 10)
an explanation of the factual and legal reasons that
led to the conclusions of the court. Rule before Serrano (1995-2009): 3-month
salary rule
The court cannot simply say that judgment is • The employment contract involved in the instant
rendered in favor of X and against Y and just leave case covers a two-year period but the overseas
it at that without any justification whatsoever for its contract worker actually worked for only 26 days
action. The losing party is entitled to know why he prior to his illegal dismissal. Thus, the three
lost, so he may appeal to a higher court, if permitted,
should he believe that the decision should be

ATENEO CENTRAL
months’ salary rule applies. (Flourish Maritime exigency of the service, such that he has no other
Shipping v. Almanzor, G.R. No. 177948, 2008) choice but to disassociate himself from his
employment. (Cervantes v. PAL Maritime Corp.,
Rule after Serrano (2009-present): it invalidated G.R. No. 175209, 2013)
the 3-month salary cap clause
• Full reimbursement of the placement fee with To constitute a resignation, it must be unconditional
interest at 12% per annum. This decision held that and with the intent to operate as such. There must
Sec. 10 of 8042, which limited the separation pay be an intention to relinquish a portion of the term of
to three months, was unconstitutional for violating office accompanied by an act of relinquishment.
the equal protection clause. (Serrano v. Gallant, (Azcor Manufacturing Inc. v. NLRC, G.R. No.
G.R. No. 167614, 2009) 117963, 1999)
Resignation is inconsistent with the filing of a

Despite the fact that the clause “or for three (3)
complaint for illegal dismissal. (Blue Angel
months for every year of the unexpired term, Manpower and Security Services Inc. v Court of
whichever is less” was reinstated in R.A 8042 upon Appeals, G.R. No. 161196 2008)
promulgation of R.A. 10022 in 2010, the Supreme
Court reiterated its finding in Serrano v. Gallant
The rule requiring an employee to stay or complete
Maritime that limiting wages that could be
the 30-day period prior to the effectivity of his
recovered by an illegally dismissed overseas
resignation becomes discretionary on the part of
worker to three months is both a violation of
management as an employee who intends to resign
due process and the equal protection clauses may be allowed a shorter period before his
of the Constitution. (Sameer Overseas resignation becomes effective. (Hechanova Bugay
Placement Agency v. Cabiles, G.R. 170139, 2014) Vilchez Lawyers v. Matorre, G.R. No. 198261, 2013)
C. TERMINATION OF Stipulations providing that either party may

EMPLOYMEMNT BY EMPLOYEE terminate a contract even without cause are
legitimate if exercised in good faith. Thus, while
Termination by employee may be split into (Labor either party has the right to terminate the contract at
Code, Art. 300): will, it cannot not act purposely to injure the other.
The monetary award provided in Section 10 of R.A.
WITH NOTICE: Termination without Just Cause 8042 applies only to an illegally dismissed overseas
1. At least 1month prior notice contract worker or a worker dismissed from
2. Acceptance by the employer is necessary overseas employment without just, valid or
Employee may be held liable for damages for failure authorized cause as defined by law or contract. It
to give notice finds no application to cases in which the OFW was
not illegally dismissed. (GBMLT Manpower Services
WITHOUT NOTICE: Termination with Just Cause vs Malinao, G.R. No. 189262, 2015)
Grounds
1. Serious insult on the honor and person of Constructive Dismissal
employee by the employer or his No formal dismissal
representative The employee is placed in a situation by the
2. Inhumane and unbearable treatment employer such that his continued employment has
accorded to the employee become UNBEARABLE → Forced resignation.
3. Commission of a crime against person of
the employee or any of the immediate Constructive dismissal exists when an act of clear
members of his family discrimination, insensibility or disdain on the part of
4. Other causes analogous to the foregoing the employer has become so unbearable as to leave
5. Notice not necessary when resignation is an employee with no choice but to forego continued
with just cause. employment.
1. Resignation vs. Constructive Constructive dismissal occurs when:

dismissal 1. Continued employment is rendered
impossible or unreasonable, resulting in an
Resignation involuntary resignation
Resignation is the voluntary act of an employee who 2. Demotion in rank or diminution in pay
finds himself in a situation where he believes that 3. Forced resignation to make it appear that
personal reasons cannot be sacrificed in favor of the no termination by the employer was done

ATENEO CENTRAL
(Leonardo v. NLRC, G.R. No. 125303, Resignation

2000) Forced resignation must be substantiated by more
than mere threats and allegations. (Mandapat v.
Test of Constructive dismissal: whether or not a AddForce Personnel Services, Inc., G.R. No.
reasonable person in the employee’s position would 180285, 2010)
feel the need to give up his position
A threat to sue the employee will not amount to
Note: Abandonment is incompatible with forced resignation, as this is a legal act which will be
constructive dismissal. decided by a competent authority. (Callanta v.
NLRC, G.R. No. 105083, 1993)
It is the inherent prerogative of an employer to
transfer and reassign its employees to meet the A choice between investigation and resignation is
requirements of its business. Be that as it may, the not illegal. (Belaunzaran v. NLRC, G.R. 120038,
prerogative of the management to transfer its 1996)
employees must be exercised without grave abuse
of discretion. The exercise of the prerogative should An employee who tenders her voluntary resignation,
not defeat an employee's right to security of accepts separation pay and benefits cannot claim
tenure. The employer’s privilege to transfer its constructive dismissal. (Concrete Aggregates v.
employees to different workstations cannot be used NLRC, G.R. No. 82458, 1989)
as a subterfuge to rid itself of an undesirable worker.
(Veterans Security Agency v. Vargas, G.R. No. An employee may be considered constructively
159293, 2005) dismissed and at the same time legally dismissed,
as when a complaint for sexual abuse is proven in
Instances of Constructive Dismissal the NLRC. This will amount to a termination with just
1. There may be constructive dismissal if an cause but without due process (see the Agabon
act of an employer becomes so unbearable doctrine above). (Formantes v. Duncan
on the part of the employee that it could Pharmaceuticals Inc., G.R. No. 170661, 2009)
foreclose any choice by him except to
forego his continued employment (Hyatt D. PREVENTIVE SUSPENSION
Taxi Services v. Catinoy, G.R. No. 143204,
2001) Preventive suspension is a disciplinary measure for
2. Continued employment is rendered the protection of the company's property pending
impossible or unreasonable, resulting in an investigation of any alleged malfeasance or
involuntary resignation; misfeasance committed by the employee. The
3. Demotion in rank or diminution in pay; employer may place the worker concerned under
4. Forced resignation to make it appear that preventive suspension if his continued employment
no termination by the employer was done; poses a serious and imminent threat to the life or
(Leonardo v. NLRC, G.R. No. 125303, property of the employer or of his co- workers.
2000) However, when it is determined that there is no
5. After the 30-day period of preventive sufficient basis to justify an employee's preventive
suspension, the employee must be suspension, the latter is entitled to the payment of
reinstated to his former position because salaries during the time of preventive suspension.
suspension beyond this maximum period (Gatbonton v. NLRC, G.R. No. 146779, 2009)
amounts to constructive dismissal (Hyatt
Taxi Services v. Catinoy, supra); Duration of preventive suspension
6. Floating status of a security guard if it lasts No preventive suspension shall last longer than
for more than 6 months (Emeritus Security thirty (30) days.
and Maintenance Systems v. Dailig, G.R.
No. 204761, 2014) Upon the expiry of such period, the employer shall
thereafter
Note: It is manifestly unfair and unacceptable to 1. Reinstate the worker in his former or in a
declare the mere lapse of the six-month period of substantially equivalent position or
floating status as a case of constructive dismissal 2. The employer may extend the period of
without looking into the peculiar circumstances that suspension provided that during the period
resulted in the security guard’s failure to assume of extension, he pays the wages and other
another post (Exocet Security and Allies Services benefits due to the worker (IRR Labor
Corp v. Serrano, G.R. no. 198538, 2014) Code, Sec. 9, Rule XXIII, Book V)

ATENEO CENTRAL
Preventive Suspension as a Protective Measure (c) Employer pays separation pay if

vs. Suspension as a Penalty for authorized causes.
Preventive suspension is not a penalty in itself. It is 3. No Just or Authorized Cause + Due
merely a measure of precaution so that the Process
employee who is charged may be separated, for (a) Illegal Dismissal
obvious reasons, from the scene of his alleged (b) Employer is liable to reinstate
misfeasance while the same is being investigated. employee or pay separation pay.
(c) If reinstatement is not possible,
While [preventive suspension] may be imposed on pay full backwages.
a respondent during the investigation of the charges 4. No Just or Authorized Cause + No Due
against him, [suspension] is the penalty which may Process
only be meted upon him at the termination of the (a) Illegal Dismissal
investigation or the final disposition of the case. (b) Employer is liable to reinstate
(PAL v. NLRC, G.R. No. 114307, 1998) employee or pay separation pay.
(c) If reinstatement is not possible,
Notice requirement not complied with by mere pay full backwages.
issuance of suspension order
Suspension orders are not enough to meet the RELIEFS FOR ILLEGAL DISMISSAL
notice requirement necessary in termination. These An employee who is unjustly dismissed from work
do not give the employee ample warning that he shall be entitled to reinstatement without loss of
may be terminated for his infractions, only that he is seniority rights and other privileges and to his full
being suspended for them. The notice must backwages, inclusive of allowances, and to his other
sufficiently apprise the employee of the instances or benefits or their monetary equivalent computed from
for which he is to be terminated, and he must not the time his compensation was withheld from him up
have already been punished for these (ex. with to the time of his actual reinstatement. (Labor Code,
suspension) (Erector v. NLRC, G.R. No. 167218, Art. 294)
2010)
1. Backwages + Reinstatement without loss
E. RELIEFS FROM ILLEGAL of seniority rights, OR
DISMISSAL 2. Backwages + Separation Pay, if
reinstatement impossible, or not ordered, in
Determining the Validity of Dismissal view of the application of the strained
DISMISSAL SUBSTANTIAL PROCEDURAL relations doctrine.
DUE DUE
PROCESS PROCESS NOTE: Where reinstatement is ordered, but the
Valid ✓ ✓ position is already filled up, the dismissed employee
Illegal   must still be reinstated if it is still possible.
Illegal  ✓
Valid but ✓  In illegal dismissal cases, the VA or panel of VAs
employer may grant the same reliefs and remedies granted by
must pay Labor Arbiters under Article 279 of the Labor
nominal Code, such as:
damages 1. Actual reinstatement;
2. Separation pay in lieu of reinstatement, in
Consequences for Non-Compliance of case reinstatement becomes impossible,
Procedural Due Process non-feasible or impractical;
3. Full backwages;
4. Moral and exemplary damages; and
1. Just or Authorized Cause Exists + Due
5. Attorney’s fees.
Process
(a) Valid Dismissal
(b) Employer is not liable; but pays Reinstatement
separation pay only in authorized
causes. Reinstatement is the restoration to a state or
2. Just or Authorized Cause + No Due condition from which one had been removed or
Process separated. The person reinstated assumes the
(a) Valid Dismissal position he had occupied prior to his dismissal. It
(b) Employer is liable for damages presupposes that the previous position from which
due to procedural infirmities. one had been removed still exists, or that there is an

ATENEO CENTRAL
unfilled position which is substantially equivalent or Note: The decision of the Labor Arbiter reinstating a
of similar nature as the one previously occupied by dismissed or separated employee shall immediately
the employee. (Pfizer, Inc., et al. v. Velasco, G.R. be executory, even pending appeal. The employee
No. 177467, 2011) shall either be admitted back to work under the
same terms and conditions prevailing prior to his
General Rule: Reinstatement and backwages are dismissal or separation or, at the option of the
awarded employer, merely reinstated in the payroll. The
posting of a bond by the employer shall not stay the
Exceptions: execution for reinstatement provided herein. (Labor
1. Payment of separation pay as a substitute Code, Art. 223)
for reinstatement is allowed only under
exceptional circumstances: Two options given to employers
a. when reasons exist which are not 1. Actual Reinstatement
attributable to the fault or are beyond 2. Restoration of an illegally dismissed
the control of the employer, such as employee to the position s/he had occupied
when the employer — who is in severe prior to the illegal dismissal.
financial strait, has suffered serious
business losses, and has ceased Payroll Reinstatement
operations — implements The employer, instead of physically reinstating the
retrenchment, or abolishes the position employee to his former or substantially equivalent
due to the installation of labor-saving position, chooses to reinstate the employee in the
devices; payroll only by paying him wages and other benefits
b. when the illegally dismissed employee without however allowing or requiring him to actually
has contracted a disease and his report for work.
reinstatement will endanger the safety
of his co-employees; or, Obligation to Reinstate – Order of Reinstatement
c. where a strained relationship exists If the order of reinstatement of the Labor Arbiter is
between the employer and the reversed on appeal, it is obligatory on the part of the
dismissed employee. (Composite employer to reinstate and pay the wages of the
Enterprises v. Caparoso, G.R. dismissed employee during the period of appeal
No.159919) until reversal by the higher court. The Labor Arbiter's
2. Closure of business (Retuya v. Hon. order of reinstatement is immediately executory and
Dumarpa, G.R. No. 148848, 2003) the employer has to either re-admit them to work
3. Economic Business Conditions (Union of under the same terms and conditions prevailing
Supervisors v. Secretary of Labor, G.R. No. prior to their dismissal, or to reinstate them in the
L-39889, 1981) payroll, and that failing to exercise the options in the
4. Employee’s unsuitability (Divine Word High alternative, employer must pay the employee's
School v. NLRC, G.R. No 72207, 1986) salaries. (Magana v. Medicard Philipppines, G.R.
5. Employee’s retirement / overage (New Phil. No. 174833, 2010)
Skylanders v. Dekila, G.R. No. 199547,
2012) No obligation to refund salaries and wages
6. Antipathy and antagonism (Wensha Spa during pendency of the appeal
Center v. Yung, G.R. No. 185122, 2010) An employee cannot be compelled to reimburse the
7. Job with a totally different nature (DUP salaries and wages he received during the
Sound Phils. v. CA, G.R. No. 168317, pendency of his appeal, notwithstanding the
2011) reversal by the NLRC of the LA's order of
8. Long passage of time reinstatement. (College of Immaculate Conception
9. Inimical to the employer’s interest v. NLRC, G.R. No. 167563, 2010)
10. Supervening facts have transpired which
make execution unjust or inequitable, to an Note: Rule XI, Sec. 14 of the 2011 NLRC Rules of
increasing extent (Emeritus Security v. Procedure provide for restitution of amounts paid
Dailig, G.R. No. 204761, 2014) pursuant to execution of awards during pendency of
the appeal. However, it expressly disallows
Prescriptive Period restitution of wages paid due to reinstatement
Bring action for reinstatement within 4 years from pending appeal.
the time of dismissal. (Civil Code, Art. 1146)
Reinstatement pending appeal

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Backwages Emergency cost of living allowances (ECOLA),

transportation allowances, and 13th month pay
Backwages are earnings lost by a worker due to his should be included. (Paramount Vinyl Product Corp.
illegal dismissal; a form of relief that restores the v. NLRC, G.R No. 81200, 1990)
income lost by reason of such unlawful dismissal; it
is not private compensation or damages; nor is it a General wage increases are not included in the
redress of a private right but, rather, in the nature of computation of wages. However, The LA and NLRC
a command to the employer to make a public usually include the increases mandated by wage
reparation for illegally dismissing an employee. (St. orders in the computation of backwages regardless
Theresa's School of Novaliches Foundation v. of the time they are given since they are close to a
NLRC, G.R. No. 122955, 1998) legal issuance that stems from an authorized
statute. This only applies if the employee illegally
Backwages and reinstatement are two reliefs that dismissed is actually covered by that particular
should be given to an illegally dismissed employee. wage order. (Equitable Banking Corp. v. Sadac,
They are separate and distinct from each other. G.R. No. 164772, 2006)
(Aurora Land Projects v. NLRC, G.R. No. 114733,
1997) Reinstatement; payment of backwages
An order of reinstatement by the labor arbiter is not
Failure to order backwages the same as actual reinstatement of a dismissed or
A “plain error” which may be rectified, even if separated employee. Thus, until employer actually
employee did not bring an appeal regarding the reinstates, their obligation to the illegally dismissed
matter (Aurora Land Projects v. NLRC, G.R. No. employee, insofar as accrued backwages and other
114733, 1997) benefits are concerned, continues to accumulate.
Limited Backwages It is only when the illegally dismissed employee

General Rule: Illegally dismissed employee is receives the separation pay (in case of strained
entitled to full backwages relations) that it could be claimed with certainty that
the EER has formally ceased thereby precluding the
Exceptions: possibility of reinstatement. In the meantime, the
The Court awarded limited backwages where the illegally dismissed employee’s entitlement to
employee was illegally dismissed but the employer backwages, 13th month pay, and other benefits
was found to be in good faith. (San Miguel subsists. Until the payment of separation pay is
Corporation v. Javate, Jr., G.R. No. L-54244, 1992) carried out, the employer should not be allowed to
Delay of the employee in filing the case for illegal remain unpunished for the delay, if not outright
dismissal (Mercury Drug Co., v. CIR, G.R. No. L- refusal, to immediately execute the reinstatement
23357, 1974) aspect of the labor arbiter’s decision.
Deduction of earnings elsewhere rule Further, the employer cannot refuse to reinstate the
The earnings the employee derived from another illegally dismissed employee by claiming that the
employment during the time of their illegal dismissal latter had already found a job elsewhere. Minimum
is not deducted from backwages. (Bustamante v. wage earners are left with no choice after they are
NLRC, G.R. No. 111651, 1996) illegally dismissed from their employment, but to
seek new employment in order to earn a decent
Note: The Bustamante doctrine must be read in light living. Surely, we could not fault them for their
of R.A. No. 6715 (21 March 1989). Prior to that date, perseverance in looking for and eventually securing
backwages are limited to three years without new employment opportunities instead of remaining
deduction or qualification (Azucena, The Labor idle and awaiting the outcome of the case. (Triad
Code with Comments and Cases Volume II, 918, Security & Allied Services, Inc, et al. v Ortega, G.R.
2013) No. 160871, 2006)
Components of the amount of backwages Computation of backwages

(Azucena, The Labor Code with Comments and Backwages are computed from the time of illegal
Cases Volume II-B, 976, 2016) dismissal up to time of actual reinstatement.
1. Salaries at the wage rate level at the time
of dismissal, not current wage level. If reinstatement is no longer possible, backwages
2. Allowances or other benefits regularly should be computed from the time the employee
granted was terminated until the finality of the decision,
finding the dismissal unlawful. (Bustamante v.
NLRC, G.R. No. 111651, 1996)

ATENEO CENTRAL
CAUSE SEPARATION PAY

Full backwages means exactly that, i.e., without Introduction of labor- Separation pay of 1
deducting from backwages the earnings derived saving devices, month pay or 1 month
elsewhere by the concerned employee during the redundancy pay per year of service,
period of his illegal dismissal. (Bustamante v. NLRC, whichever is higher
G.R. No. 111651, 1996) Retrenchment or Separation pay of 1
closure or cessation of month pay or ½ month
Awards including salary differentials are not allowed operations NOT due to pay per year of service,
(Insular Life Assurance Co., v. NLRC, G.R. No. L- serious business whichever is higher
74191, 1987) losses; Disease
Retrenchment or None
The effects of extraordinary inflation are not to be closure or cessation of
applied without an official declaration by competent operations due to
authorities (Lantion v. NLRC, G.R. No. 82028, serious business
1990). losses
Note: A fraction of at least 6 months is considered 1
Reliefs of local workers vs. migrant workers year
Art. 279, LC Sec. 10, RA 8042
(LOCAL WORKERS) (MIGRANT Second Kind: Separation pay as financial
WORKERS) assistance
Reinstatement Full reimbursement of Separation pay may be awarded, in the name of
his placement fee with compassionate justice, to an employee dismissed
interest of 12% per for a “just cause”, except in the following:
annum 1. Serious misconduct; or
Full backwages from Salaries for the 2. Other offenses reflecting on his moral
the time his unexpired portion of his character (PLDT v. NLRC, G.R. No. 80609,
compensation was employment contract. 1988)
withheld from him up to
the time of his actual However: In the Toyota case, the Supreme Court
reinstatement ruled that if the dismissal is based on any of the just
g. causes in Art. 297 of the Labor Code – No financial
Separation pay, doctrine of strained assistance can be granted, except perhaps under
“analogous causes.” (Toyota Motor Phil. Corp.
relations
Workers Ass’n. v. NLRC, G.R. No. 158786, 2007)
Reinstatement and separation pay – exclusive
But note: In the International School case, the
remedies
Supreme Court granted “separation pay” of ½ month
Payment of separation pay and reinstatement are
per year of service while upholding the teacher’s
exclusive remedies. The payment of separation pay
dismissal on the ground of “gross inefficiency”
replaces the legal consequences of reinstatement to
resulting from the lack of skills, thereby failing to
an employee who was illegally dismissed. (Bank
meet the standards of the employer of the school.
Rural Bank v. De Guzman, G.R. No. 170940, 2013)
(International School v. International School
Alliance, G.R. No. 167286, 2014)
Kinds of separation pay
1. Statutory separation pay, in authorized
No financial assistance to dismissed strikers.
causes (Labor Code, Arts. 288-299)
2. Separation pay as financial assistance
Third Kind: Separation Pay in Lieu of
(found in the next section)
Reinstatement
3. Separation pay in lieu of reinstatement
This happens only in cases where:
where reinstatement is not feasible; and
1. When reinstatement would only
4. Separation pay as a benefit in the CBA or
exacerbate the tension and strained
company policy
relations between the parties. (Quijano v.
Mercury, G.R. No. 126561, 1998)
First Kind: Statutory separation pay
2. Where reinstatement is not feasible,
The employer has a statutory obligation in cases of
expedient or practical, as where
legal termination due to authorized causes.
reinstatement would only exacerbate the
tension and strained relations between the
parties, or where the relationship between
the employer and [the] employee has been

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unduly strained by reason of their 2. If dismissal due to Authorized causes -

irreconcilable differences, particularly P50,000 (Jaka Food v. Pacot, G.R. No.
where the illegally dismissed employee 151378)
held a managerial or key position in the h.
company, it would be more prudent to order In cases involving dismissals for cause but without
payment of separation pay instead of observance of the twin requirements of notice and
reinstatement. (Sagum v. Court of Appeals, hearing, the dismissal was for just cause but
G.R. No. 158759, 2005) sanctions will be imposed on the employer. By doing
3. In one case, reinstatement of janitor so, this Court would be able to achieve a fair result
supervisors and security guards were held by dispensing justice not just to employees, but to
as no longer feasible due to strained employers as well. (Agabon v. National Labor
relations between the parties (Carlos v. Relations Commission, G.R. No. 158693, 2004)
Court of Appeals, G.R. No. 168096, 2007) i.
But there may be other factors to be considered by
Note: Moral and exemplary damages may also be the Court in the award of nominal damages such as:
awarded. 1. the authorized cause invoked, whether it
was a retrenchment or a closure or
Computation of separation pay cessation of operation of the establishment
SP as a statutory requirement is computed by due to serious business losses or financial
integrating the basic salary with regular allowances reverses or otherwise;
employee has been receiving (Planters Products v. 2. the number of employees to be awarded;
NLRC, G.R. No. 78524, 1989); allowances include 3. the capacity of the employers to satisfy the
transportation and emergency living allowances awards, taking into account their prevailing
(Santos v. NLRC, G.R. No. 76721, 1987) financial status as borne by the records;
4. the employer's grant of other termination
Commissions included in separation pay; benefits in favor of the employees; and
exception to inclusion 5. whether there was a bona fide attempt to
Inasmuch as the words "wages", "pay" and "salary" comply with the notice requirements as
have the same meaning, and commission is opposed to giving no notice at all.
included in the definition of "wage", the logical (Industrial Timber v. Ababan, G.R. No. G.R.
conclusion, therefore, is, in the computation of the No. 164518, 2006)
separation pay of petitioners, their salary base
should include also their earned sales commissions. Award of Moral Damages
(Songco v. NLRC, G.R. Nos. 50999-51000) The employee is entitled to moral damages when
the employer acted
Commissions given to a managerial employee who 1. in bad faith or fraud;
did not perform actual business transactions to earn 2. in a manner oppressive to labor; or
the commission shall not be included in the salary 3. in a manner contrary to morals, good
for purposes of computing separation pay. (Phil. customs, or public policy (Montinola v. PAL,
Duplicators v. NLRC, G.R. No. 11068, 1995) G.R. No. 198656, 2014).
Damages The award of moral damages cannot be justified

solely upon the premise (otherwise sufficient for
Award of Nominal Damages redress under the Labor Code) that the employer
If the dismissal is based on a just cause but the fired his employee without just cause or due
employer failed to comply with the notice process. Additional facts must be pleaded and
requirement, the sanction to be imposed upon him proven to warrant the grant of moral damages under
should be tempered because the dismissal process the Civil Code, these being, to repeat, that the act of
was, in effect, initiated by an act imputable to the dismissal was attended by bad faith or fraud, or was
employee. If the dismissal is based on an authorized oppressive to labor, or done in a manner contrary to
cause but the employer failed to comply with the morals, good customs, or public policy; and, of
notice requirement, the sanction should be stiffer course, that social humiliation, wounded feelings,
because the dismissal was initiated by the grave anxiety, etc., resulted therefrom. (Primero v.
employer’s exercise of management prerogative. Intermediate Appellate Court, G.R. No. L-72644,
The amount of nominal damages awarded by the 1987)
Court are as follows:
1. If dismissal due to Just causes - P30,000 Award of Exemplary Damages
In labor cases, the court may award exemplary

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damages "if the dismissal was effected in a wanton, Degree of proof

oppressive or malevolent manner. (Garcia v. NLRC, In labor cases, substantial evidence is required: it is
GR. No. 110518, 1994) such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.
Attorneys’ fees (Andrada v. Agemar Manning Agency, G.R. No.
LA, NLRC, or CA MAY validly award attorney’s fees 194758, 2012)
in favor of a complainant even if not claimed or j.
proven in the proceeding. If the authorized cause that terminates employment
The provision on attorney’s fees in Article 111 arises from losses, the penalty to the employer who
envisions a situation where there is a judicial or disregarded due process may be lighter than if the
administrative proceeding for recovery of wages. authorized cause has no relation to losses.
(Industrial Timber v. Ababan, G.R. No. 164518,
Upon the termination of the proceedings, the law 2006)
allows a deduction for attorney’s fees of 10% from
the total amount due to the winning party. (Vengco A dismissal lacking in valid cause or valid procedure
v. Trajano, G.R. No. 74453, 1989). is “illegal.” In a dismissal based on just or authorized
cause, but effected without due process, the
Hence, even if there is no claim and proof, attorney’s employee remains dismissed, but the employer
fees not more than 10% of the amount entitled may must pay nominal damages. (HSBC Employees
be awarded. The court has also a liberty of Union v. NLRC, G.R. No. 156635, 2016)
decreasing it if the questions involved in the litigation
are neither novel nor difficult. (D.M. Consunji v. F. RETIREMENT
NLRC, G.R. No. 71459, 1986).
The result of a bilateral act of the parties, a voluntary
Liabilities of corporate officers agreement between the employer and the employee
whereby the latter, after reaching a certain age
An “employer” is defined as that including any agrees to sever his or her employment with the
person acting in the interest of an employer, directly former. (Jaculbe v. Siliman University, G.R. No.
or indirectly. (Art. 219(e), Labor Code) 156934, 2007)
Note that the provision does not expressly make a Retroactive Effect of Retirement Laws
corporate officer personally liable for the liabilities of The claimant for retirement benefits was still in the
a corporation. As a general rule, officers are not employ of the employer at the time the statute took
personally liable for corporate obligation, with the effect; and
exception that in order to hold a director or officer The claimant had complied with the requirements for
personally liable occurs when the following eligibility for such retirement benefits under the
requisites are present: statute (URC v. Caballeda, G.R. No. 156644, 2008)
3. the complaint must allege that the director
or officer assented to the patently unlawful Eligibility
acts of the corporation, or that the director General Rule: All employees in the private sector,
or officer was guilty of gross negligence or regardless of their position, designation, or status,
bad faith; and and irrespective of the method by which their wages
4. there must be proof that the director or are paid (IRR R.A. No. 7641, Sec. 1)
officer acted in bad faith. (Lozada vs
Mendoza, G.R. No. 196134, 2016) Exceptions:
1. Employees covered by the Civil Service
Law;
Burden of Proof
2. Domestic Helpers and Persons in the
Personal Service of Another; and
In illegal dismissal cases, the onus of proving that
3. Employees in Retail, Service, and
the employee was not dismissed or, if dismissed,
Agricultural Establishments or Operations
that the dismissal was not illegal, rests on the
Regularly Employing Not More Than 10
employer, failure to discharge which would mean
Employees (IRR R.A. No. 7641, Sec. 2)
that the dismissal is not justified and, therefore,
illegal. (Macasero v. Southern Industrial Gases
Exclusions from coverage
Philippines, G.R. No. 178524, 2009)
R.A. No. 7641, "The Retirement Pay Law," only
applies in a situation where:
1. There is no collective bargaining
agreement or other applicable employment

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contract providing for retirement benefits employer. (UST Faculty Union v. NLRC, G.R. No.
for an employee; or 89885, 1990)
2. There is a collective bargaining agreement
or other applicable employment contract Retirement Age for Underground and Surface
providing for retirement benefits for an Mine Workers
employee, but it is below the requirements For underground and surface mine workers, the
set for by law. optional retirement age is 50, while the mandatory
retirement age is now 60. (R.A. No. 10757, Sec. 2)
The reason for the first situation is to prevent the
absurd situation where an employee, who is Amount of Retirement Pay
otherwise deserving, is denied retirement benefits The minimum retirement pay shall be equivalent to
by the nefarious scheme of employers in not one-half (1/2) month salary for every year of service,
providing for retirement benefits for their employees. a fraction of at least six (6) months being considered
The reason for the second situation is expressed in as one whole year.
the Latin maxim pacta private juri public derogare
non possunt. Private contracts cannot derogate For the purpose of computing retirement pay, “one-
from the public law. (Oxales vs Unilab, G.R. No. half month salary” shall include all of the following:
152991, 2008) Fifteen (15) days salary based on the latest salary
rate;
Age of retirement 1. Cash equivalent of five (5) days of service
Optional retirement: In the absence of a retirement incentive leave;
plan or other applicable agreement providing for 2. One-twelfth (1/12) of the 13th month pay.
retirement benefits of employees in an (1/12 x 365/12 = .083 x 30.41 = 22.5 days)
establishment, an employee may retire upon
reaching the age of 60 or more if he has served for Total: 22.5 days
at least 5 years in said establishment.
Thus, “one-half month salary” is equivalent to 22.5
Compulsory retirement: In the absence of a days. (Capitol Wireless, Inc. vs Sec. Confessor,
retirement plan or other applicable agreement G.R. No. 117174, 1996; Rogelio Reyes v. NLRC,
providing for retirement benefits of EEs in an G.R. No. 160233, 2007)
establishment, an EE shall be retired at the age of
65 years. (IRR R.A. No. 7641, Sec. 4) Other benefits may be included in the computation
of the retirement pay upon agreement of the ER and
May the optional and compulsory retirement the EE or if provided in the CBA.
ages be lowered?
1. Written policy – such as in the CBA Retirement pay under RA 7641 vis-à-vis
(Pantranco North Express v. NLRC & U. retirement benefits under SSS and GSIS laws
Suniga, G.R. No. 95940, 1996); or RA 7641 mandates payment of retirement benefits.
2. Assented to by the employees (Jaculbe v. All private sector employees regardless of their
Silliman University, G.R. No. 156934, position, designation or status and irrespective of
2007) the method by which their wages are paid are
entitled to retirement benefits upon compulsory
Nature of employees’ assent retirement at the age of sixty-five (65) or upon
The employees’ assent may be evidenced by optional retirement at sixty (60) or more but not 65.
silence. (Obusan v. PNB, G.R. No. 181178, 2010) The minimum retirement pay due covered
employees shall be equivalent to one-half month
However, in another case, the Supreme Court ruled salary for every year of service, a fraction of at least
that acceptance by the employees of an early six (6) months being considered as one whole year.
retirement age option must be explicit, voluntary, The benefits under this law are other than those
free, and uncompelled. (Cercado v. Uniprom, Inc., granted by the SSS or the GSIS.
G.R. No. 188154, 2010)
Retirement Benefits under a CBA or Applicable
Note: Obusan was decided by the Supreme Court Contract
in division on July 26, 2010, while Cercado was Any employee may retire or be retired by his/her
decided also in division on October 13, 2010. employer upon reaching the age established in the
CBA or other applicable agreement/contract and
Extension of Service of Retiree shall receive the retirement benefits granted therein;
The matter of extension of service of such employee provided, however, that such retirement benefits
or official is addressed to the sound discretion of the shall not be less than the retirement pay required

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under R.A. No. 7641, and provided further that if that arising from liability imposed in a criminal
such retirement benefits under the agreement are action.
less, the employer shall pay the difference.
Additional conditions
Where both the employer and the employee 1. The benefit plan must be approved by the
contribute to a retirement fund pursuant to the Bureau of Internal Revenue;
applicable agreement, the employer’s total 2. The retiring official or employee has been
contributions and the accrued interest thereof in the service of the same employer for at
should not be less than the total retirement benefits least ten (10) years and is not less than fifty
to which the employee would have been entitled had years of age at the time of his retirement;
there been no such retirement benefits’ fund. If such 3. The retirement benefits shall be availed of
total portion from the employer is less, the employer by an official or employee only once; and,
shall pay the deficiency.
4. In case of separation of an official or
Retirement Benefits of Workers Who Are Paid employee from the service of the employer
By Results due to death, sickness or other physical
For covered workers who are paid by result and do disability or for any cause beyond the
not have a fixed monthly salary rate, the basis for control of the said official or employee, any
the determination of the salary for 15 days shall be amount received by him or by his heirs from
their average daily salary (ADS). The ADS is derived the employer as a consequence of such
by dividing the total salary or earning for the last 12 separation shall likewise be exempt as
months reckoned from the date of retirement by the hereinabove provided.
number of actual working days in that particular
period, provided that the determination of rates of Reasonable private benefit plan
payment by results are in accordance with A pension, gratuity, stock bonus or profit sharing
established regulations. (Rules Implementing R.A. plan maintained by an employer for the benefit of
No. 7641, Sec. 5.3) some or all of his officials and employees, wherein
contributions are made by such employer or officials
Retirement Benefit of Part-Time Workers and employees, or both, for the purpose of
Part-time workers are also entitled to retirement pay distributing to such officials and employees the
of “one-half month salary” for every year of service earnings and principal of the fund thus accumulated,
under RA 7641 after satisfying the following and wherein it is provided in said plan that at no time
conditions precedent for optional retirement: shall any part of the corpus or income of the fund be
There is no retirement plan between the employer used for, or be diverted to, any purpose other than
and the employee; and for the exclusive benefit of the said officials and
The employee should have reached the age of 60 employees.
years, and should have rendered at least 5 years of
service with the employer. Retirement Benefits and Separation Pay May be
Simultaneously Granted; When Not Granted
The components of retirement benefit of part- time Both may be granted if provided for in the CBA or
workers may likewise be computed at least in company policy. (University of the East v. UE
proportion to the salary and related benefits due Faculty Association, G.R. No. 74007, 1987)
them. (DOLE Handbook on Workers’ Statutory
Monetary Benefits, 2014 ed.) Separation pay is required in the cases
enumerated in Articles [298] and [299] of the Labor
Taxability Code. It is a statutory right designed to provide the
General Rule: Any provision of law to the contrary employee with the wherewithal during the period
notwithstanding, the retirement benefits received by that he is looking for another employment.
officials and employees of private firms, whether
individual or corporate, in accordance with a Retirement benefits, where not mandated by law,
reasonable private benefit plan maintained by the may be granted by agreement of the employees and
employer shall be exempt from all taxes and shall their employer or as a voluntary act on the part of
not be liable to attachment, garnishment, levy or the employer. Retirement benefits are intended to
seizure by or under any legal or equitable process help the employee enjoy the remaining years of his
whatsoever (Intercontinental Broadcasting Corp. life, lessening the burden of worrying for his financial
(IBC) v. Amorilla, G.R. No. 162775, 2006) support, and are a form of reward for his loyalty and
service to the employer. (Aquino v. NLRC & Otis
Exception: Except to pay a debt of the official or Elevator, G.R. No. 87653, 1992)
employee concerned to the private benefit plan or

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However: Company policy or CBA may make

separation pay and retirement benefits mutually
exclusive. (Aquino v. NLRC & Otis Elevator, G.R.
No. 87653, 1992)
Gratuity Pay distinguished from Retirement

Benefit
Gratuity Pay is paid to the beneficiary for the past

services or favor rendered purely out of the
generosity of the giver or grantor. Gratuity,
therefore, is not intended to pay a worker for actual
services rendered or for actual performance. It is a
money benefit or bounty given to the worker, the
purpose of which is to reward employees who have
rendered satisfactory service to the company.
Retirement Benefits are intended to help the
employee enjoy the remaining years of his life,
releasing him from the burden of worrying for his
financial support, and are a form of reward for his
loyalty to the employer. (Sta. Catalina College v.
NLRC and Tercero, G.R. No. 144483, 2003)
-- end of topic --

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V. JURISDICTION AND REMEDIES A. LABOR ARBITER
1. Jurisdiction of the Labor

Arbiter as distinguished
A. LABOR ARBITER from the Regional Director
1. Jurisdiction of Labor Arbiter vs. Jurisdiction
of Regional Director In order that the causes of action under Art. 224(a)
2. Requisites to Perfect an Appeal With the may prosper (and inferentially, in order that a LA can
National Labor Relations Commission exercise jurisdiction over cases thereon), an
3. Reinstatement and/or Execution Pending indispensable precondition must be met – the prior
Appeal existence of an EER between the parties.
B. NATIONAL LABOR RELATIONS (Palomado v. NLRC, (G.R. No. 96520, 1996)
COMMISSION
C. COURT OF APPEALS A money claim arising from employer-employee
D. SUPREME COURT relations, except SSS, ECC/Medicare claims, is
E. BUREAU OF LABOR RELATIONS within the jurisdiction of:
F. NATIONAL CONCILIATION AND MEDIATION
BOARD Labor Arbiter Regional Director
1. Conciliation vs. Mediation Claim, regardless of Money claim is not
G. DOLE REGIONAL DIRECTORS amount, is accompanied by
H. DOLE SECRETARY accompanied with a reinstatement AND
1. Jurisdiction claim of reinstatement;
2. Visitorial and Enforcement Powers or Claim does not exceed
3. Power to Suspend Effects of Termination P5,000 (Labor Code,
4. Remedies Claim exceeds P5,000, Art. 129)
I. VOLUNTARY ARBITRATOR whether or not there is
J. PRESCRIPTION OF ACTIONS a claim for
1. Money claims reinstatement.
2. Illegal dismissal
3. Unfair labor practice Jurisdiction over Contested Cases Forwarded
4. Offenses under the Labor Code from Regional Director to Labor Arbiter
5. Illegal recruitment (a) The employer contests the findings of the labor
regulations officer and raises issues thereon;
(b) In order to resolve such issues, there is a need
to examine evidentiary matters; and
(c) Such matters are not verifiable in the normal
course of inspection.
If all requisites are present, the labor standard case

falls under the exception clause under Art. 128(b),
and the RD will need to endorse the case to the
appropriate LA. (Ex-Bataans Veterans Security
Agency v. Secretary, G.R. No. 162396, 2007)
JURISDICTION OF THE LABOR ARBITER
(1) ULP (PRIORITY, RESOLVED WITHIN 30

CALENDAR DAYS FROM SUBMISSION FOR
DECISION)
The LA has jurisdiction over the civil aspect of

ULP. The criminal aspect is lodged with the regular
courts. (Labor Code, Art. 258)
Violations of the CBA are not ULP unless the same

are gross violations. (Labor Code, Art. 274)

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The test of whether an employer has interfered with CONDITIONS OF EMPLOYMENT – IF

and coerced employees within the meaning of Art. ACCOMPANIED WITH A CLAIM FOR
259 (a) is whether the employer has engaged in REINSTATEMENT
conduct which it may reasonably be said tends to
interfere with the free exercise of an employees’ The LA has jurisdiction to award not only the reliefs
rights, and it is not necessary that there be direct provided by labor laws, but also damages governed
evidence that any employee was in fact intimidated by the Civil Code. The employee need only include
or coerced by statements of threats of the employer his claim for damages in the illegal dismissal suit
if there is a reasonable inference that anti-union filed with the LA. (Kawachi v. Del Quero, G.R. No.
conduct of the employer does not have an adverse 163738, 2007)
effect on self-organization and collective bargaining.
(Francisco Labor Laws, 1956, Vol. II p 323) (4) CLAIMS FOR ACTUAL, MORAL,
EXEMPLARY AND OTHER FORMS OF
(2) TERMINATION DISPUTES DAMAGES ARISING FROM EER
Resolving Questions of Jurisdiction Between (5) CASES ARISING FROM PROHIBITED

Labor Arbiter and Voluntary Arbitrator ACTIVITIES DURING STRIKES, INCLUDING
General Rule: Complaints for illegal dismissal are QUESTIONS INVOLVING THE LEGALITY OF
within the original and exclusive jurisdiction of the STRIKES AND LOCKOUTS
LA.
LA vs. DOLE Secretary/NLRC Jurisdiction
Exception: The parties may submit the question of General Rule: LA has jurisdiction in determining the
termination to voluntary arbitration but this must be legality or illegality of a strike or lockout. (NCMB
expressed in unequivocal language in their CBA. Primer on Strike, Picketing, and Lockout, No. 22)
(Ace Navigation Co. v. Fernandez, G.R. No.
197309, 2012) Exception: In labor disputes involving industries
indispensable to the national interest, the DOLE
Termination of Corporate Officers Secretary (if there is an assumption of jurisdiction)
The LA has jurisdiction over the termination of or NLRC (if certified by the Secretary) has
corporate employees. jurisdiction.
The RTC acting as a Special Commercial Court has Industries Indispensable to the National Interest
jurisdiction over termination of corporate officers. A. Hospital sector;
B. Electric power industry;
A person is a corporate officer if: C. Water supply services, to exclude small water
supply services such as bottling and refilling
(a) The creation of the position is under the stations;
corporation’s charter or specifically D. Air traffic control; and
mentioned in the by-laws as a corporate E. Such other industries as may be recommended
officer position; and by the National Tripartite Industrial Peace
(b) The election of the officer is by the Council.
directors or stockholders.
(6) ALL OTHER CLAIMS ARISING FROM EER
The better policy in determining which body has INVOLVING AN AMOUNT EXCEEDING P5,000
jurisdiction over a case would be to consider not REGARDLESS OF WHETHER ACCOMPANIED
only the status or relationship of the parties but also BY A CLAIM FOR REINSTATEMENT EXCEPT
the nature of the question that is the subject of their CLAIMS FOR ECC, SSS, MEDICARE, &
controversy. (Matling v. Coros, G.R. No. 157802, MATERNITY BENEFITS
2010)
Monetary claims arising from EER which do not
However: In Prudential Bank v. Reyes (G.R. No. exceed Php5,000 fall within the jurisdiction of the
141093, 2001), it was held that an employee who DOLE Regional Director. (LC, Art. 129)
rose from the ranks is a regular employee and not a
mere corporate officer. NOTE: A kasambahay’s claim, regardless of the
amount, falls within the jurisdiction of the DOLE
(3) CLAIMS FOR WAGES, RATES OF PAY, Regional Office, and not the NLRC. (Batas
HOURS OF WORK AND OTHER TERMS AND Kasambahay, Sec. 37)

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Art. 306 provides that “all money claims arising from Cooperatives
EER shall be filed within 3 years from the time the
cause of action accrued, before the labor arbiter. Termination of members of cooperatives is not
cognizable by the LA (members are not employees)
But this prescriptive period is subject to interruption
through: LA has jurisdiction over illegal dismissal cases
involving employees of cooperatives
(a) Filing of an action;
(b) Written extrajudicial demand; LA Does NOT Have Jurisdiction Over
(c) Written acknowledgement of indebtedness.
(IBC v. Panganiban, G.R. No. 151407, 2007) i. Intra-corporate disputes
ii. Cases involving corporate officers (because
A judgment in the form of a wage order for money they are not employees);
claims which has become final and executory iii. Cases involving GOCCs with original charters;
prescribes in 10 years, pursuant to Art. 1144 of the iv. Cases involving entities immune from suit
Civil Code on prescription of judgments. (JK (except when the entity performs proprietary
Mercado & Sons v. Sto Tomas, G.R. No. 158084, functions);
2008) v. Local water districts (since they are quasi-public
corporations);
DOLE certification that all mandatory wage vi. Actions based on tort;
increases and other monetary benefits were all vii. Claim of a seaman for damages is under torts
complied with by the employer is not sufficient proof (regular court has jurisdiction). (Tolosa v.
to conclude payment of the monetary claims of the NLRC, G.R. No. 149578, 2003)
employee, especially if the certification was issued
based only on documents submitted by the Money Claims: LA vs. VA’s Jurisdiction
employer. (Dansart Security v. Bagoy, G.R. No.
168495, 2010) (a) Money claims arose from EER; and
(b) Money claims arose from law or contracts
(7) WAGE DISTORTION CASES IN other than a CBA
UNORGANIZED ESTABLISHMENTS
NOTE: EER is a jurisdictional requisite, absent of
Note: In Organized Establishments: The Voluntary which, the NLRC has no jurisdiction to hear and
Arbitrator (VA) has jurisdiction decide the case. (Hawaiian-Philippine Company v.
Gulmatico, G.R. No. 106231, 1994)
(8) ALL MONETARY CLAIMS OF OFWS ARISING
FROM EER OR BY VIRTUE OF ANY LAW OR
CONTRACT INVOLVING FILIPINO WORKERS MONEY CLAIMS
FOR OVERSEAS DEPLOYMENT, INCLUDING ARISE FROM EER
MONEY CLAIMS NOT
CLAIMS FOR ACTUAL, MORAL, EXEMPLARY BUT BY VIRTUE OF
ARISING FROM EER
AND OTHER FORMS OF DAMAGES (RA 8042) IMPLEMENTATION
OF CBA
For the LA to have jurisdiction over money claims of

OFWs, a EER is not necessary, as the article also Regular Courts have Voluntary Arbitrator
refers to “law” or “contract.” (see Santiago v. C.F. jurisdiction has jurisdiction
Sharp, G.R. No. 162419, 2007)
In order for the LA to assume jurisdiction over the

money claim, the OFW must have a certification “Exclusive and Original” Jurisdiction subject to
from the POEA (PNB v. Cabansag, G.R. No. Articles 274 and 275
157010, 2005)
Note: Subject to Assumption of Jurisdiction
(9) ENFORCEMENT OF COMPROMISE
AGREEMENTS WHEN THERE IS NON- A case under Art 224 may be lodged with the VA.
COMPLIANCE BY ANY OF THE PARTIES The policy of the law is to give primacy to voluntary
PURSUANT TO ART. 233 OF THE CODE (SEC. 1, modes of settling dispute.
RULE V, 2005 NLRC RULES)
For the VA to have jurisdiction over a subject matter
under the LA’s jurisdiction (such as termination
disputes), the parties must express this in

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unequivocal language in their CBA. (see Ace However, if reinstatement is no longer possible,
Navigation Co. v. Fernandez, G.R. No. 197309, backwages shall be computed from the time of
2012) illegal dismissal until the date the decision becomes
final. (Javellana v. Belen, G.R. No. 181913 and
Appeal of LA’s Decision 182158, 2010)
Appeal from the decision of the LA is brought by Note: If there was implementation of reinstatement
ordinary appeal to the NLRC within 10 calendar pending appeal, either through actual or payroll
days from receipt of the decision. (Vir-jen Shipping reinstatement, and the employee received his/her
and Marine Services v. NLRC, G.R. No. 58011-12, salary for the period of such reinstatement, the said
1982) amount received shall be deducted from the total
amount of backwages due the employee, assuming
The 10-day period is reckoned from receipt by the final decision of the case awarded backwages to
counsel of the final decision, order or award. This the employee.
applies to both appeals from the LA to NLRC and
NLRC to CA. (Sy. v. Fairland Knitcraft, G.R. No. An employee who was dismissed on the ground of
182915, 2011) AWOL due to incarceration, is entitled to
reinstatement and under the principle of “no work,
This 10-day period is both mandatory and no pay”, his full backwages shall only commence
jurisdictional in nature. (Charter Chemical & Coating from the time he is refused work after acquittal.
Corp v. Tan, G.R. No. 163891, 2009) (Standard Electric v. Standard Electric employees
Union, G.R. No. 166111, 2005)
NOTE: There is no appeal from the decision of the
NLRC. The only way to elevate the case to the CA Determination of Employer’s Liability After
is by way of special civil action of certiorari under Finality of the Case
Rule 65, Rules of Court.
After finality of the case, the records will have to be
From the ruling of the CA, it may be elevated to the remanded to the LA to determine the actual liability
SC by petition for review on certiorari under Rule 45 of the employer to each and every employee. Both
of the Rules of Civil Procedure. (St. Martin Funeral parties will have a chance to submit further proof
Home v. NLRC, et al., G.R. No. 130866, 1998) and argument in support of their respective
proposed computations.
Grounds
For the guidance of the LA, as well as the parties,
1. Prima facie evidence of abuse of discretion on jurisprudence had laid down the following yardsticks
the part of LA; in the computation of the final amount of liability:
2. The decision, order or award was secured
through fraud or coercion including graft and 1. Employees who have been re-employed
corruption; without loss of seniority rights shall be paid
3. Pure questions of law; and backwages but only up to actual
4. Raised serious errors in the findings of facts reinstatement;
which could cause grave or irreparable 2. Employees who have been re-employed as
damage or injury to the appellant. new hires shall be restored their seniority and
other preferential rights. However, their
Additional Requirement: In case of judgment backwages shall be computed only to date of
involving a monetary award, employer (appellant) actual re-hiring;
may perfect the appeal of the LA’s decision only 3. Employees who shall have reached
upon the posting of a cash or surety bond issued compulsory age of retirement shall receive
by a reputable bonding company duly accredited by backwages up to their retirement only. The
the NLRC in the amount equivalent to the monetary same is true as regards the heirs of those who
award in the judgment appealed from. have passed away;
4. Employees who have not been reemployed
Effect of self-executing order of reinstatement plus those who have executed quitclaims and
on back wages received separation pay of financial assistance
shall be reinstated without loss of seniority
The law intends the award of backwages and similar rights and paid full backwages, after deduction
benefits to accumulate past the date of the LA’s of whatever amounts already received; and
decision until the dismissed employee is actually 5. Employees who had obtained substantially
reinstated. (Siemens Philippines v. Domingo, G.R. equivalent or even more lucrative employment
No. 150488, 2008)

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elsewhere in 1998 or thereafter are deemed to compassionate policy on labor and workingman.
have severed their employment with their The State is mandated to afford full protection to
previous employer, and shall be entitled to full labor. If in ordinary civil actions execution of
backwages from the date of their retrenchment judgment pending appeal is authorized for reasons
only up to the date they found gainful the determination of which is merely left to the
employment elsewhere. (FASAP v. PAL, G.R. discretion of the judge, the Court saw no reason to
No. 172013, October 2, 2009) withhold it in cases of decisions reinstating
dismissed employees. In such cases, the poor
2. Requirements To Perfect employees had been deprived of their only source
Appeal To National Labor of livelihood. (Pacios, et. al. v. Tahanang Walang
Relations Commission Hagdan, G.R. No. 229579, 2017).
Appeal by Employer Involving Monetary Award

Requisites
A bond equivalent to monetary award should be
1. Filed within the reglementary period;
posted within the 10-day period for filing an appeal.
2. Memorandum of Appeal under oath;
3. Appeal fee;
If no bond is filed, appeal is not perfected. (see
4. Cash, property, or surety bond, if judgment
Catubay v. NLRC, G.R. No. 119289, 2000)
involves monetary award; and
5. Proof of service to the adverse party. Remedy in case of failure to post bond, remedy is to
file a motion to dismiss.
Procedure
No monetary award, no appeal bond required
1. File Memorandum of Appeal within 10 calendar If LA’s decision does not provide for a computation
days, counted from receipt of decision; of the monetary award, no appeal bond is required
2. Other party can file an Answer within 10 to be filed.
calendar days from receipt of Memorandum of
Appeal; Justifications for Non-Posting of Bond
3. NLRC decides within 20 calendar days;
4. NLRC decision becomes final and executory 10 1. No monetary award (Aba v. NLRC, G.R. No.
days after it is rendered. (subject to MR) 122627, 1999);
2. Monetary award is not specified in the decision
Failure to Serve Copy of Memorandum of Appeal (Orozco v. CA, G.R. No. 155207, 2005);
Not Jurisdictional 3. In case of conflict between body and fallo of the
decision, the latter should prevail (Mendoza Jr.
The mere failure of a party to serve his v. San Miguel Foods, G.R. No. 158684, 2005)
Memorandum of Appeal upon the opposing party
does not bar the NLRC from giving due course to an Motion to Reduce Bond
appeal. Such failure is only treated as a formal
lapse, an excusable neglect, and, hence, not a General Rule: Motion to reduce bond does not toll
jurisdictional defect warranting the dismissal of an the running of the period to perfect appeal.
appeal. Instead, the NLRC should require the
appellant to provide the opposing party copies of the Exception: See below (McBurnie v. Ganzon, G.R.
notice of appeal and memorandum of appeal. (J. Nos. 178034 & 178117, 2013)
PB: Fernandez v. Botica Claudio, G.R. No. 205870,
2014) McBurnie v. Ganzon Guidelines in Reduction of
Appeal Bond
Execution of Decision Pending Appeal
1. The filing of a motion to reduce appeal bond
General Rule: The NLRC Rules provides that the shall be entertained by the NLRC subject to the
perfection of an appeal shall stay execution of the following conditions:
decision of the LA. (a) There is meritorious ground; and
(b) A bond in a reasonable amount is posted;
Exception: Execution of decisions reinstating 2. For purposes of compliance with the second
dismissed employees in labor cases pending condition – bond in reasonable amount – a
appeal. motion shall be accompanied by the posting of
a provisional cash or surety bond equivalent to
In the case of Aris, Inc. v. NLRC the Supreme Court (10%) of the monetary award subject of the
explained that the reason for such exception is the

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appeal, exclusive of damages and attorney's 3. Reinstatement and/or

fees; Execution Pending Appeal
3. Compliance with the foregoing conditions shall
suffice to suspend the running of the 10-day If reinstatement is ordered in an illegal dismissal
reglementary period to perfect an appeal from case, it is immediately executory even pending
the labor arbiter's decision to the NLRC; appeal. This means that the perfection of an appeal
4. The NLRC retains its authority and duty to shall stay the execution of the decision of the LA
resolve the motion to reduce bond and except execution of the reinstatement pending
determine the final amount of bond that shall be appeal.
posted by the appellant, still in accordance with
the standards of meritorious grounds and Self – executing with no need for a writ of
reasonable amount; and execution – only applicable to order issued by
5. In the event that the NLRC denies the motion to Labor Arbiter.
reduce bond, or requires a bond that exceeds
the amount of the provisional bond, the Writ of execution required when reinstatement is
appellant shall be given a fresh period of 10 ordered by NLRC on appeal, or subsequently by the
days from notice of the NLRC order within CA or SC, as the case may be.
which to perfect the appeal by posting the
required appeal bond. Either admitted back to work under the same terms
and conditions prevailing prior to his dismissal or
NOTE: A substantial monetary award, even if it runs separation or merely reinstated in the payroll (at the
into millions, does not necessarily give the option of the employer, i.e. confidential employee,
employer-appellant a ‘meritorious case’ and does but the choice must be communicated to the
not automatically warrant a reduction of the appeal employee by the employer)
bond. (Calabash Garments v. NLRC, G.R. No.
110827, 1996) Posting of a bond shall not stay the execution of
reinstatement.
Examples of Meritorious Grounds
The unjustified refusal of the employer to reinstate
1. Fundamental consideration of substantial an illegally dismissed employee entitles the
justice; employee to payment of his salaries.
2. Prevention of miscarriage of justice or of unjust
enrichment; or Reinstatement Pending Appeal (Art. 229) vs.
3. Special circumstances of the case combined Order of Reinstatement (Art. 294)
with its legal merits and the amount and issue
involved (Garcia v. KJ Commercial, G.R. No. ART. 229 ART. 294
196830, 2012)
Order of reinstatement The order of
10% Appeal Bond is Provisional by the LA is reinstatement
The 10% requirement in McBurnie pertains to the immediately executory presupposes the
reasonable amount which the NLRC would accept pending appeal. award thereof is
as the minimum of the bond that should accompany pursuant to a final and
the motion to reduce bond in order to suspend the executory judgment,
period to perfect an appeal under the NLRC rules. and not while the case
The 10% is based on the judgment award and It is similar to a return- for illegal dismissal is
should in no case be construed as the minimum to-work order. pending on appeal.
amount of bond to be posted in order to perfect the
appeal. There is no room for a different Issued by the LA Issued by the NLRC,
interpretation when McBurnie made it clear that the CA, or SC
percentage of bond set is provisional. (Sara Lee v.
Macatlang, G.R. No. 180147, 2015) Generally, no need for Requires the issuance
the issuance of a writ of of a writ of execution.
Enforcement execution.
Any law enforcement agency may be deputized by
the DOLE Secretary or the NLRC.
Jurisprudence
Issuance of writ of execution on a judgment within 5 If despite several writs of execution, the employer
years from date it becomes final and executory motu still refuses to reinstate the employee, the remedy is
proprio or in motion of any interested party. not the grant of additional backwages to serve as

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damages but to file a motion to cite the employer for In Yupangco Cotton vs. CA (G.R. 126322, 2002),
contempt. (Christian Literature Crusade v. NLRC, the Court held a third party whose property has been
G.R. No. 79106, 1989) levied upon by a sheriff to enforce a decision against
a judgment debtor is afforded with several
An order for reinstatement entitles an employee to alternative remedies to protect its interests. The
receive his accrued backwages from the moment third party may avail himself of alternative remedies
the reinstatement order was issued up to the date cumulatively, and one will not preclude the third
when the same was reversed by a higher court party from availing himself of the other alternative
without fear of refunding what he had received. remedies in the event he failed in the remedy first
(Garcia v. Philippine Airlines, Inc., G.R. No.164856, availed of.
2009)
Thus, a third party may avail himself of the following
B. NATIONAL LABOR RELATIONS alternative remedies:
COMMISSION 1. File a third party claim with the sheriff of the
Labor Arbiter, and
Original Jurisdiction 2. If the third party claim is denied, the third
1. Injunction in ordinary labor disputes to party may appeal the denial to the NLRC.
enjoin or restrain any actual or threatened
commission of any or all prohibited or Even if a third party claim was denied, a third party
unlawful acts or to require the performance may still file a proper action with a competent court
of a particular act in any labor dispute to recover ownership of the property illegally seized
which, if not restrained or performed by the sheriff.
forthwith, may cause grave or irreparable
damage to any party; Ocular Inspection by LA & NLRC at any time
2. Injunction in strikes or lockouts under Art. during working hours
279; The Chairman, any Commissioner, LA, or their duly
3. Certified labor dispute causing or likely to authorized representatives, may at any time during
cause a strike or lockout in an industry work hours, conduct ocular inspection. (2011 NLRC
indispensable to the national interest, Rules of Procedure, Rule X, Sec. 5)
certified to it by the DOLE Secretary for
compulsory arbitration; Injunction from the NLRC is NOT the proper remedy
4. Contempt cases; and against employee dismissal. The NLRC’s power to
5. Petition to annul or modify the order or issue an injunction originates from a ‘labor dispute’
resolution of the LA; before the LA. (PAL v. NLRC, G.R. No. 120567,
1998)
Exclusive Appellate Jurisdiction
1. All cases decided by the LAs, including Prohibited Second Motions
contempt cases; Sec. 15 of the NLRC RULES OF PROCEDURE prohibits
2. Cases decided by the DOLE Regional a party from questioning a decision, resolution, or
Directors or his duly authorized hearing order, twice. However, a decision substantially
officers involving recovery of wages, simple reversing a determination in a prior decision is a
money claims and other benefits not discrete decision from the earlier one. Where a
exceeding P5,000 and not accompanied by tribunal renders a decision substantially reversing
a claim for reinstatement. itself on a matter, a motion for reconsideration
seeking reconsideration of this reversal, for the first
Jurisdiction to Determine EER time, is not a prohibited second motion for
The NLRC has jurisdiction to determine, reconsideration. (Cristobal v. Philippine Airlines,
preliminarily, the parties’ rights over a property, Inc., G.R. No. 201622, 2017.)
when it is necessary to determine an issue related
to rights or claims arising from an EER. (Milan v. C. COURT OF APPEALS
NLRC, G.R. No. 202961, 2015)
RULE 65, RULES OF COURT
Jurisdiction to hear cases over company-owned Section 1. Petition for certiorari. — When any
property tribunal, board or officer exercising judicial or quasi-
Both the LA and the NLRC have jurisdiction to hear judicial functions has acted without or in excess its
cases over company-owned property although the or his jurisdiction, or with grave abuse of discretion
LA has primary jurisdiction. amounting to lack or excess of jurisdiction, and
there is no appeal, or any plain, speedy, and
adequate remedy in the ordinary course of law, a

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person aggrieved thereby may file a verified petition the decision or order must be obtained and before a
in the proper court, alleging the facts with certainty petition for certiorari may be instituted.
and praying that judgment be rendered annulling or
modifying the proceedings of such tribunal, board or NOTE: A second motion for reconsideration is
officer, and granting such incidental reliefs as law prohibited under the NLRC Rules. (G.R. No.
and justice may require. 189861, 2014)
General Rule When Filing of a Motion for Reconsideration is

The only mode by which a labor case decided by Not Necessary
any of the following labor authorities/tribunals may Q: A labor dispute between X and Y was pending
reach the Court of Appeals is through a Rule 65 before the NLRC. The NLRC ruled partly in favor of
petition for certiorari. Y. Dissatisfied with the decision, Y filed a motion for
1. The DOLE Secretary; reconsideration which was denied. In the denial, the
2. The NLRC; and NLRC stated that “No further motion of similar
3. The Director of the Bureau of Labor import shall be entertained.” Without filing a motion
Relations (BLR) in cases decided by him in for reconsideration, X filed a petition for certiorari
his appellate jurisdiction (as distinguished before the CA. Was the action taken by X proper?
from those he decides in his original
jurisdiction which are appealable to the A: Yes. The resolution explicitly warned the litigating
DOLE Secretary). parties that the NLRC shall no longer entertain any
further motions for reconsideration. This
Exception circumstance gave X the impression that moving for
Decisions, orders or awards issued by the VA or reconsideration before the NLRC would only be an
panel of VAs which may be elevated to the CA by exercise in futility in light of the tribunal's aforesaid
way of an ordinary appeal under a Rule 43 petition warning. (Genpact Services v. Santos-Falceso,
for review. G.R. No. 227695, 2017)
Requisites before filing a Petition for Review under When Appeal Bond May Be Reduced
Rule 65 While the posting of a cash or surety bond is
1. A Motion for Reconsideration must have indispensable to the perfection of an appeal in cases
been filed before the DOLE Secretary, involving monetary awards from the decision of the
NLRC, or BLR Director, as the case may LA, the Rules of Procedure of the NLRC
be. This is mandatory and jurisdictional. nonetheless allows the reduction of the bond upon
a showing of:
A motion for reconsideration should be filed even 1. The existence of a meritorious ground for
though it is not required or even prohibited by the reduction, and
concerned government office. This was the rule 2. The posting of a bond in a reasonable
enunciated in the 2014 case of Philtranco Service amount in relation to the monetary award.
Enterprises, Inc. v. PWU- AGLO (G.R. No. 180962, (Philippine Touristers, Inc. and/or Alejandro
2014). R. Yague, Jr. v. Mas Transit Workers
Union-Anglo-Kmu and its members, G.R.
Failure to file a motion for reconsideration within the No. 201237, 2014).
10-day reglementary period prior to the filing of a
petition for certiorari renders the NLRC decision final Simultaneous filing of the motion to reduce bond
and executory. (J. PB: Michelin Asia Pacific and the posting of the reduced amounts to
Application Support System v. Ortiz, G.R. No. substantial compliance with Art. 223
189861, 2014) While the bond requirement on appeals involving a
monetary award has been relaxed in certain cases,
Thus, while a government office may prohibit this can only be done where there was substantial
altogether the filing of a motion for reconsideration compliance with the rules or where the appellants,
with respect to its decisions or orders, the fact at the very least, exhibited willingness to pay by
remains that certiorari inherently requires the filing posting a partial bond. (Magdala Multipurpose v.
of a motion for reconsideration which is the tangible KMLMS, G.R. 191138- 39, 2011).
representation of the opportunity given to the office
to correct itself.
Simply put, regardless of the proscription against

the filing of a motion for reconsideration, the same
may be filed on the assumption that rectification of

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Decision is
D. SUPREME COURT immediately executory
upon issuance of entry
RULE 45, RULES OF COURT Appeal to DOLE of final judgment; can
Secretary be reviewed by the CA
Section 1. Filing of petition with Supreme
in a petition for
Court. — A party desiring to appeal by certiorari
certiorari under Rule
from a judgment or final order or resolution of the
65.
Court of Appeals, the Sandiganbayan, the Regional
Within 10 days to the
Trial Court or other courts whenever authorized by
law, may file with the Supreme Court a verified DOLE Secretary
petition for review on certiorari. The petition shall
raise only questions of law which must be distinctly Grounds:
set forth. Grave abuse of
discretion
All references in the amended Section 9 of B.P. No.
129 to supposed appeals from the NLRC to the Gross incompetence
Supreme Court are interpreted and hereby declared
to mean and refer to petitions for certiorari under Appeal of BLR’s Decision
Rule 65. 1. Denial of application for registration of a
union.
Consequently, all such petitions should hence forth 2. Denial by the Regional Office, appeal to the
be initially filed in the Court of Appeals in strict BLR.
observance of the doctrine on the hierarchy of 3. Denial is originally made by the BLR,
courts as the appropriate forum for the relief desired. appeal may be had to the DOLE Secretary.
(St. Martin Funeral Home vs. NLRC, 1998) 4. Cancellation of registration of a union.
5. Cancellation by the Regional Office, appeal
Appeal from CA to SC should be under Rule 45 to the BLR.
(Petition for Review on Certiorari) and not Rule 65 6. Cancellation by the BLR in a petition filed
(Special Civil Action for Certiorari). (Sea Power directly, appeal to DOLE Secretary by
Shipping Enterprises, Inc. vs. CA, 2001) ordinary appeal.
7. Decision of the BLR rendered in its original
jurisdiction may be appealed to the DOLE
E. BUREAU OF LABOR RELATIONS
Secretary whose decision thereon may
only be elevated to the CA by way of
Jurisdiction of BLR
certiorari under Rule 65.
1. Inter-union and intra-union conflicts
8. Decision of the BLR rendered in its
2. All disputes, grievances or problems arising
appellate jurisdiction may not be appealed
from or affecting labor-management
to the DOLE Secretary but may be elevated
relations in all workplaces EXCEPT those
directly to the CA by way of certiorari under
arising from the implementation or
Rule 65. (Abbott Laboratories Philippines,
interpretation of the CBA which shall be the
Inc. v. Abbott Laboratories Employees
subject of grievance procedure and/or
Union, et al., G.R. No. 131374, 2000)
voluntary arbitration
3. Complaint involving federations, national
Note: Unlike the NLRC which is explicitly vested
unions, industry unions, its officers or
with the jurisdiction over claims for actual, moral,
member organizations
exemplary and other forms of damages, the BLR is
not specifically empowered to adjudicate claims of
Original Appellate such nature arising from intra-union or inter-union
Cases involving Cases involving disputes. (Mariño, Jr., et. al. v. Gamilla, et. al.,G.R.
Federations and independent unions No. 132400, January 31, 2005)
National Unions and local chapters
Power to Issue Subpoena
Mode of review When relevant to a labor dispute under its
Original Appellate jurisdiction jurisdiction either at the request of any interested
jurisdiction party or at its own initiative
Compromise Agreements

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If voluntarily agreed upon by the parties with the Conciliation Preventive Mediation
assistance of the BLR or the regional office of DOLE Case Case
are final and binding upon the parties Refers to actual
Refers to the potential
existing labor dispute
The only time NLRC or any courts can assume labor disputes which
subject of a notice of
jurisdiction over issues involved therein: are the subject of a
strike or lockout and
In case of non-compliance thereof formal or informal
cases of actual strike
If there is prima facie evidence that the settlement request for conciliation
or lockout. (NCMB
was obtained through fraud, misrepresentation or and mediation
Manual of Procedures
coercion assistance sought by
Rule III, Section 1, (3))
either or both parties or
As long as the agreement is voluntarily entered into upon the initiative of
and has a reasonable award, it is valid. the NCMB to avoid the
occurrence of actual
It must be approved by the LA (NLRC Rules). labor disputes. (NCMB
Manual of Procedures
At the DOLE Secretary’s level, the Secretary must Rule III, Section 1,
approve. (20))
On appeal, the NLRC must approve the Organized Unorganized

agreement. Establishment With Establishments And
CBA Without CBA
An offer to settle is not proof that something is due Submit issue before Submit the issue
to the employee. the grievance before NCMB for
machinery. If conciliation. If not
Art. 233 of the Labor Code states that any unresolved, refer to fruitful in 10 days, refer
compromise settlement, including those involving voluntary arbitration. to NLRC for arbitration.
labor standard laws, voluntarily agreed upon by the
parties with the assistance of the Bureau or the Privileged Communication
Regional Office of the Department of Labor shall be Information and statements made at conciliation
final and binding upon the parties. meetings shall NOT be used as evidence in the
NLRC. Conciliators and similar officials shall not
Note: The assistance of the BLR or the regional testify in any court or body regarding any matters
office of the DOLE in the execution of a compromise taken up at conciliation proceeding conducted by
settlement is a basic requirement. Without it, there them.
can be no valid compromise settlement. Mere
appearance before BLR or the regional office of the Preventive Mediation
DOLE to file the already executed compromise NCMB Manual of Procedures Section 1, (24), refers
settlement is not the “assistance” required by the to Preventive Mediation cases as labor disputes
law. (Mindoro Lumber and Hardware v. Eduardo D. which are the subject of a formal or informal request
Bacay, et. al., G.R. No. 158753, 2005) for conciliation and mediation assistance sought by
either or both parties or upon the initiative of the
F. NATIONAL CONCILIATION AND NCMB.
MEDIATION BOARD
Only a certified or duly recognized bargaining agent
Jurisdiction of the NCMB may file a notice or request for preventive mediation.
1. Conciliation
2. Mediation NCMB has no jurisdiction to entertain any notice
3. Voluntary arbitration cases filed by the federation in behalf of individual union
members of its local. (Insular Hotel Employees
1. Conciliation vs. Mediation Union-NFL v. Waterfront Insular Hotel Davao, G.R.
No. 174040-41, 2010)
Conciliation-Mediation refers to the process of
dispute management conducted by a Conciliator- G. DOLE REGIONAL DIRECTORS
Mediator with the end in view of facilitating amicable
settlement of the labor dispute. (NCMB Manual of Jurisdiction of DOLE RDs
Procedures Rule III, Section 1, (4)) 1. Visitorial power. (Art. 128, Labor Code)

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2. Simple Money Claims not exceeding Php (e) If violation is ER’s fault: ER will pay
5,000. (Art. 129, Labor Code) wages during stoppage period
4. Jurisdiction of SOLE for strikes or lockouts
Recovery and Adjudicatory Power - Requisites that involve national interest cases (SOLE
for RD to Decide Small Money Claims may assume jurisdiction or certify the
1. Claim is presented by an employee, or a case).
person employed in domestic or household 5. Appeals from BLR decisions, where BLR
service, or employer; exercises original jurisdiction.
2. The claim arises from an EER;
3. The claimant does not seek reinstatement; 2. Visitorial and Enforcement
and Powers
4. The aggregate money claim of each
claimant does not exceed PhP 5,000 Visitorial Power
Power of the Secretary of Labor or his duly
Notes: In the absence of any of the above authorized representative, including labor regulation
requisites, the LA will have jurisdiction over the officers to:
case, pursuant to ART. 224.
1. Have access to employer’s records and
The claimant need not be an employee at the time premises at any time of the day or night
the complaint has been filed; it is enough that the whenever work is being undertaken therein
claim arises from employment 2. Right to copy records
3. To question any employee
Appeal from the RD’s Decision 4. Investigate any fact, condition, or matter
The Complainant may appeal to the NLRC within 5 which may be necessary to determine
calendar days from a receipt of a copy of the violations or which may be necessary to aid
Regional Director’s decision / resolution. in the enforcement of the Labor Code or
any labor law or order
H. DOLE SECRETARY
Enforcement Power
1. Jurisdiction Power of the Secretary of Labor or his duly
authorized representative, including labor regulation
If the BLR Director inhibits himself in a case falling officers to:
under the jurisdiction of the BLR, it can be appealed
1. Issue compliance orders to give effect to
to the SOLE. Additionally, the ff matters are under
labor legislation based on the findings of
the SOLE’s jurisdiction:
employment and enforcement officers or
1. Art. 128 (a) – Jurisdiction over inspections industrial safety engineers made in the
and investigations (can also be exercised course of inspection
by the RD) 2. Issue writs of execution to the appropriate
2. Art. 128 (b) – Compliance orders for labor authority for the enforcement of their
standards, where EER still exists orders, EXCEPT in cases where the
(a) XPN: If ER contests the findings of the employer contests the findings of the labor
labor employment and enforcement employment and enforcement officer and
officer and raises issues supported by raises issues supported by documentary
documentary proofs which were not proofs which were not considered in the
considered in the course of inspection course of inspection – in the latter case, the
(then the case will be with LA) case will have to be forwarded to a Labor
(b) NOTE: This power is often exercised Arbiter
through RD (see RD cases) 3. Order Work Stoppage / Suspension of
(c) There is no ceiling for the amount in Operations when non-compliance with the
this case. law or IRR poses grave or imminent danger
3. Jurisdiction over work stoppage orders to the health and safety of the workers in
when non-compliance with the law or IRRs the workplace
poses grave and imminent danger to 4. Conduct hearings within 24 hours to
health and safety or workers in the determine whether:
workplace (a) An order for stoppage of work /
(d) Within 24 hours: Hearing to decide if suspension of operations shall be lifted
suspension order should be lifted or not; and

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(b) Employer shall pay the employees Comparison: Enforcement Power under Art.
concerned their salary in case the 128 vs. Adjudicatory Power under Art. 129
violation is attributable to his fault ART. 128 ART. 129
Nature / Subject of Proceedings
Note: EER must still exist at the time of the initiation Inspection of
of the action for the Secretary or his authorized establishments and
representative to exercise Enforcement Power issuance of compliance Adjudication of
orders with labor monetary claims
When Enforcement Power Cannot be Used standards, wage (labor standards)
orders, or other labor
1. Case does not arise from exercise of laws
visitorial power Who Initiates Claims?
2. When EER ceased to exist at the time of Any interested party
inspection The DOLE Secretary or
initiates the case
3. If employer contests finding of the labor Regional Director acts
through a sworn
officer and such contestable issue is not motu propio
complaint
verifiable in the normal course of inspection
Workers Involved
Present or past
Compliance Order
Employees must still employees at the time
Must observe due process in administrative be in the service the complaint is filed,
proceedings: (hence, there is an provided that there is
existing EER) no demand for
1. Alleged violator must first be heard and reinstatement
given adequate opportunity to present Jurisdictional Limits
evidence on his behalf. No maximum monetary Maximum of P5,000
2. Evidence presented duly considered before limit per complainant
any decision reached. Officers Designated
3. Decision is based on substantial evidence. DOLE Secretary or any Regional Director
4. Decision based on evidence presented in of his duly authorized (RD) or any duly
the hearing, or at least contained in the representative (may or authorized hearing
record and disclosed to the parties. may not be RD) officer of the DOLE
5. Decision should explain the issues involved Mode of Appeal
and the reasons for the decisions rendered. Appealable to the Appealable to the
DOLE Secretary NLRC
Appeal
If order issued by duly authorized representative of Before the DOLE may exercise its power under Art.
DOLE Secretary – appeal to the latter 128, two important things must be resolved:
If order involves monetary award – an appeal by the 1. Does the employer-employee relationship
employer may be perfected upon only upon posting still exist, or alternatively, was there ever an
of CASH or SURETY bond in the amount equivalent employer-employee relationship to speak
to the monetary award in the order appealed from. of; and
2. Are there violations of the Labor Code or
Stoppage of Work/Suspension of Operations any of the labor laws?
The Secretary may order stoppage of work OR
suspension of any unit or department where non- Note: The existence of EER is a statutory
compliance with the law or implementing rules and prerequisite to a limitation on the power of the
regulations poses grave and imminent danger to the Secretary of Labor, on which the legislative branch
health and safety of workers in the workplace. is entitled to impose.
Within 24 hours – a hearing shall be conducted to Art. 128’s grant of visitorial and enforcement powers
determine whether an order for the stoppage of work is for the purpose of determining violations of, and
or suspension of operations shall be lifted enforcing, the Labor Code and any labor law, wage
order, or rules and regulations. If there is no
If violation is attributable to fault of the employer, he employer-employee relationship in the first place,
shall pay the employees concerned their salaries or the duty of the employer to adhere to labor
wages during the period of such stoppage of work standards with respect to the non-employees is
or suspension of operations. questionable.

ATENEO CENTRAL
DOLE can Determine, Prima Facie, the 3. Power to Suspend Effects of

Existence of an EER Termination
If there is a prima facie showing of the absence of
employer-employee relationship, the Secretary is Miscellaneous Provisions
precluded from exercising the visitorial and The Secretary of Labor and Employment may
enforcement powers. (People’s Broadcasting v. suspend the effects of the termination pending
Secretary of Labor, G.R. No. 179652, May 8, 2009) resolution of the dispute in the event of a prima facie
finding by the appropriate official of the Department
Under Art. 128(b) of the Labor Code, as amended of Labor and Employment before whom such
by RA 7730, the DOLE is fully empowered to make dispute is pending that the termination may cause a
a determination as to the existence of an employer- serious labor dispute or is in implementation of a
employee relationship in the exercise of its visitorial mass lay-off. (Labor Code, Art. 292[b])
and enforcement power, subject to judicial review,
not review by the NLRC.
Conditions under which Secretary of Labor or
If a complaint is brought before the DOLE to give his duly authorized representative MAY inquire
effect to the labor standards provisions of the Labor into the financial activities of legitimate labor
Code or other labor legislation, and there is a finding organizations
by the DOLE that there is an existing employer- The Secretary of Labor and Employment or his duly
employee relationship, the DOLE exercises authorized representative is hereby empowered to
jurisdiction to the exclusion of the NLRC. inquire into the financial activities of legitimate labor
organizations upon the filing of a complaint under
If the DOLE finds that there is no employer- oath and duly supported by the written consent of at
employee relationship, the jurisdiction is properly least 20% of the total membership of the labor
with the NLRC. organization concerned and to examine their books
of accounts and other records to determine
If a complaint is filed with the DOLE, and it is
compliance or non- compliance with the law and to
accompanied by a claim for reinstatement, the
prosecute any violations of the law and the union
jurisdiction is properly with the Labor Arbiter, under
constitution and by-laws:
Art. 217(3) of the Labor Code, which provides that
the Labor Arbiter has original and exclusive Provided, that such inquiry or examination shall not
jurisdiction over those cases involving wages, rates be conducted during the 60-day freedom period nor
of pay, hours of work, and other terms and within the 30 days immediately preceding the date
conditions of employment, if accompanied by a of election of union officials. (Labor Code, Art. 289)
claim for reinstatement.
SOLE generally has NO jurisdiction over
If a complaint is filed with the NLRC, and there is still appeals
an existing EER, the jurisdiction is properly with the In The Heritage Hotel vs. National Union of Workers
DOLE. (G.R. 178296, 2011), the Supreme Court ruled that
jurisdiction remained with the BLR despite the BLR
The findings of the DOLE, however, may still be
Director's inhibition.
questioned through a petition for certiorari under
Rule 65 of the Rules of Court. (People’s “When the DOLE Secretary resolved the appeal,
Broadcasting v. Secretary of Labor, G.R. No. she merely stepped into the shoes of the BLR
179652, 2012) Director and performed a function that the latter
could not himself perform.”
Unlawful Activities
SOLE has the power to give arbitral awards in
1. For any person or entity to obstruct, impede,
the exercise of his authority to assume
delay or otherwise render ineffective the orders
jurisdiction over labor dispute
of the Secretary or his authorized
The arbitral award given by the Secretary of Labor
representatives issued pursuant to the
can be considered as an approximation of a
authority under Art. 128.
collective bargaining agreement. While the award
2. No inferior court shall issue temporary or
per se cannot be categorized as an agreement
permanent injunction or restraining order or
between the parties (because of the Secretary's
otherwise assume jurisdiction over any case
interference), it still has the force and effect of a valid
involving the enforcement orders.
contract obligation between the parties. (Cirtek
Employees vs. Cirtek Electronics, G.R. 190515,
2011).

ATENEO CENTRAL
4. Remedies personnel policies. (Sanyo Philippines Workers

Union-PSSLU v. Canizares, G.R. No. 101619,
Remedy where no EER exists 1992)
Where no employer-employee relation exists
between the parties and no issue is involved which A VA is confined to the interpretation and application
may be resolved by reference to the Labor Code, of the CBA. He does not sit to dispense his own
other labor statutes, or any collective bargaining brand of industrial justice and his award is legitimate
agreement, it is the RTC that has jurisdiction. only insofar as it draws its essence from the CBA.
The RTC has jurisdiction over the claim of an While the VA is confined to the interpretation and the
independent contractor to adjust the contractor’s application of the CBA in resolving the issue/s
fee. (Urbanes v. Secretary of Labor, G.R. No. submitted for its resolution, he is not expected to
122791, 2003) merely rely on the cold and cryptic words on the face
of the CBA. He is mandated to discover the
I. VOLUNTARY ARBITRATOR intentions of the parties and gaps may likewise be
filled by reference to the practices of the industry,
Jurisdiction (Art. 274) such that the parties’ contemporaneous and
1. Grievances arising from the subsequent acts should be considered. (Veloso,
implementation or interpretation of CBAs Labor Reviewer, pp 415-416 (2011))
2. Arising from interpretation or enforcement
of company personnel policies A dispute settled through voluntary arbitration IS
3. Wage distortion issues arising from the NOT inconsistent with Article 217 of the Labor Code.
application of any wage orders in organized The SC in The University of Immaculate Concepcion
establishments vs. NLRC (G.R. 181146, 2011), stated that Article
4. Arising from interpretation and 262 provides of an exception, and “for the exception
implementation of the productivity incentive to apply, there must be agreement between the
programs under RA 6971 parties clearly conferring jurisdiction to the voluntary
5. Any other labor disputes upon agreement arbitrator. Such agreement may be stipulated in a
by the parties. collective bargaining agreement. However, in the
absence of a collective bargaining agreement, it is
NOTE: The parties may choose to submit the enough that there is evidence on record showing the
dispute to voluntary arbitration proceedings before parties have agreed to resort to voluntary
or at stage of the compulsory arbitration arbitration.”
proceedings.
Effect of failure to resort to barangay
Issues/ controversies which may be the subject of conciliation to the labor case
voluntary arbitration Labor disputes are the exception to PD 1508. Under
1. Article 261 of the Labor Code provides that Art. 226 of the Labor Code, motions to dismiss
VA shall have original and exclusive before the LA are only allowed on grounds of lack of
jurisdiction over unresolved grievances jurisdiction, improper venue and bar by prior
arising from the interpretation or judgment or prescription. Hence, failure to resort to
implementation of the CBA and those barangay conciliation is not a valid ground to defeat
arising from the interpretation or the labor case.
enforcement of company personnel
policies J. PRESCRIPTION OF ACTIONS
2. Violations of the CBA which are not gross 1. Money claims
in character if not resolved through the 2. Illegal dismissal
grievance machinery. 3. Unfair labor practice
3. All other labor disputes including ULP and 4. Offenses under the Labor Code
bargaining deadlock upon agreement of the 5. Illegal Recruitment
parties (Labor Code, Art. 262)
All money claims arising from
Submission agreement
employer – employee relations
Note: It is mandatory for parties to refer their
accruing during the effectivity of
controversy to a grievance machinery and voluntary MONEY
this Code shall be filed within 3
arbitrators for the adjustment or resolution of CLAIMS
years from the time the cause of
grievances arising from the interpretation or
action accrued; otherwise they
implementation of their CBA and those arising from
shall be forever barred.
the interpretation or enforcement of company

ATENEO CENTRAL
An action for reinstatement

prescribes in 4 years, for the Failure to implead a substitute party is not a fatal
injury to the employee’s rights defect. (Chu v. Pasajo, 2003)
ILLEGAL
as provided under Art. 1146 of
DISMISSAL
the Civil Code. (Callanta v. Payment of docket fees is not required in labor
Carnation Philippines, G.R. No. standards claims under Art. 292(d).
70615, 1986)
1 year from accrual of such Except: In case of bargaining deadlock, the fees are
ULP
unfair labor practice. shared by the parties.
General Rule: 3 years from the
OFFENSES time the cause of action accrued Sec. 3, Rule V of the NLRC Rules allows parties to
UNDER THE submit position papers with attachments and they
LABOR Exception: ULP cases prescribe can be made basis of the LA’s decision.
CODE within 1 year from accrual of
such unfair labor practice Holding of trial on the merits is discretionary on the
ILLEGAL Simple illegal recruitment – 5 part of the LA.
RECRUITME years
NT Economic sabotage – 20 years Due process in Art. 292(b), termination disputes →
A complaint or petition for audit end line is hearing with representative of own choice
or examination of funds and
books of accounts prescribes Due process in Art. 227→ opportunity to be heard
within three (3) years:
from the date of submission of It is wrong to apply opportunity be heard in due
the annual financial report to process under Art. 292(b).
the DOLE; or
ACTIONS from the date the same should Verification and Certification of Non-Forum
INVOLVING have been submitted as Shopping are required BUT Art. 227 can be
UNION required by law, whichever invoked.
FUNDS comes earlier.
NLRC Rules provide that before deciding, LA must
This provision on the inform parties that the case has been submitted for
prescriptive period applies only decision. If this is not complied with, decision is still
to a legitimate labor valid because of Art. 227.
organization which has
submitted the financial report Art. 218(c) cannot be invoked to support a faulty
required under the Labor Code. decision of the LA. The provision refers to a power
of the NLRC and not the LA.
SUMMARY OF PROCEDURE: LABOR CASES
Summary
The rules of evidence prevailing in courts of law or 1. Decision of the Voluntary Arbitrator –
equity shall not be controlling. appeal to CA under Rule 43 (Luzon Dev’t
Bank)
It is the spirit and intention of this Code which shall 2. Decision of the DOLE and other attached
be used as reasonable means to ascertain the facts agencies (including NLRC) should be
in each case, without regard to technicalities of law brought to the CA under Rule 65 (St. Martin
and procedure all in the interest of due process. Funeral Homes)
3. Decision of the DOLE Secretary – certiorari
Parties may be represented by legal counsel but it to the CA under Rule 65 (NAFLU v.
shall be the duty of the Chairman, any presiding Laguesma)
Commissioner or any labor arbiter to exercise 4. Order of the Med-Arbiter GRANTING the
complete control of the proceedings at all stages. Petition for CE in an UNORGANIZED
establishment – not appealable under DO
General Rule: The only way to acquire jurisdiction 40-03 (2003). Thus, the recourse is
is to serve summons. certiorari under Rule 65.
Exception: Voluntary appearance of the lawyer

amounts to voluntary submission to the jurisdiction
of the LA. (Santos v. NLRC, G.R No. 101699, 1996)

ATENEO CENTRAL
JURISDICTION TABLE
DOLE REGIONAL
LABOR ARIBTER NLRC COURT OF APPEALS SUPREME COURT
DIRECTORS
1. ULP 1. Visitorial power. (Art. ORIGINAL JURISDICTION VIA RULE 65 Appeal from CA to SC
2. Termination disputes 128, Labor Code) 1. Injunction in ordinary labor The only mode by which a should be under Rule
3. Claims for wages, rates of pay, 2. Simple Money disputes to enjoin or restrain labor case decided by 45 (Petition for
hours of work and other terms and Claims not exceeding any actual or threatened any of the following labor Review on Certiorari)
conditions of employment – if Php 5,000. (Art. 129, commission of any or all authorities/tribunals may and not Rule 65
accompanied with a claim for Labor Code) prohibited or unlawful acts reach the Court of (Special Civil Action
reinstatement 3. Simple Money or to require the Appeals is through a Rule for Certiorari). (Sea
4. Claims for actual, moral, Claims not exceeding performance of a particular 65 petition for certiorari. Power Shipping
exemplary, and other forms of Php 5,000. (Art. 129, act in any labor dispute 1. DOLE Secretary; Enterprises, Inc. vs.
damages arising from employer- Labor Code) which, if not restrained or 2. Commission (NLRC); CA, 2001)
employee relationship 4. Violation of the performed forthwith, may and
5. Cases arising from prohibited constitution & by – cause grave or irreparable 3. Director of the Bureau
activities during strikes, including laws and rights & damage to any party of Labor Relations
questions involving the legality of conditions 2. Injunctions in strikes or (BLR) in cases decided
strikes and lockouts membership. lockouts under Art. 279 by him in his appellate
6. All other claims arising from 5. Inter-union and intra- 3. Certified labor dispute jurisdiction (as
employer – employee relationship union disputes casing or likely to cause a distinguished from
involving an amount exceeding involving strike or lockout in an those he decides in his
P5000 regardless of whether independent unions industry indispensable to original jurisdiction
accompanied by a claim for and chartered locals. the national interest, which are appealable to
reinstatement except claims for certified to it by the DOLE the DOLE Secretary).
ECC, SSS, Medicare, & maternity Secretary for compulsory
benefits arbitration EXCEPTION: RULE 43
7. Wage distortion cases in Decisions, orders, or
unorganized establishments EXCLUSIVE APPELLATE awards issued by the
8. All monetary claims of OFWs JURISDICTION Voluntary Arbitrator or
arising from EER or by virtue of 1. All cases decided by the panel of Voluntary
any law or contract involving LAs, including contempt Arbitrators
Filipino workers for overseas cases
deployment, including claims for 2. Cases decided by the DOLE
actual, moral, exemplary, and Regional Directors or his
other forms of damages (RA 8042) duly authorized hearing
9. Enforcement of compromise officers involving recovery
agreements when there is non- of wages, simple money
compliance by any of the parties claims and other benefits
pursuant to Art. 233 of the Code not exceeding Php 5,000
(Sec. 1, Rule V, 2005 NLRC and not accompanied by a
Rules) claim for reinstatement.

ATENEO CENTRAL
NATIONAL
BUREAU OF LABOR CONCILIATION VOLUNTARY
DOLE SECRETARY
RELATIONS AND MEDIATION ARBITRATORS
BOARD
1. Inter-union and intra-union 1. Conciliation Art. 128. Visitorial and Enforcement Power. 1. Grievances arising from
conflicts 2. Mediation Power of the Sec. of Labor or his duly authorized the implementation or
2. All disputes, grievances or 3. Voluntary representative, including labor regulation officers to: interpretation of CBAs
problems arising from or arbitration 1. Have access to employer’s records and premises at any 2. Arising from
affecting labor-management time of the day or night whenever work is being interpretation or
relations in all workplaces undertaken therein enforcement of
EXCEPT those arising from 2. Right to copy records company personnel
the implementation or 3. To question any employee policies
interpretation of the CBA which 4. Investigate any fact, condition, or matter which may be 3. Wage distortion issues
shall be the subject of necessary to determine violations, or which may be arising from the
grievance procedure and/or necessary to aid in enforcement of the Labor Code or any application of any wage
voluntary arbitration labor law or order orders in organized
3. Complaint involving 5. Issue compliance orders to give effect to labor legislation establishments
federations, national unions, based on the findings of employment and enforcement 4. Arising from
industry unions, its officers or officers or industrial safety engineers made in the course interpretation and
member organizations of inspection implementation of the
6. Issue writs of execution to the appropriate authority for the productivity incentive
enforcement of their orders, EXCEPT in cases where the programs under RA
employer contests the findings of the labor employment 6971
and enforcement officer and raises issues supported by 5. Any other labor disputes
documentary proofs which were not considered in the upon agreement by the
course of inspection – in the latter case, the case will have parties.
to be forwarded to a Labor Arbiter

ATENEO CENTRAL
BAR OPERATIONS 2023
LABOR LAW

(2023) Blue Notes - Labor Law

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ATENEO CENTRAL

BAR OPERATIONS 2023 LABOR LAW

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I. FUNDAMENTAL PRINCIPLES AND CONCEPTS ........................................................................................ 9

II. PRE-EMPLOYMENT ................................................................................................................................. 16

III. EMPLOYMENT PROPER ......................................................................................................................... 30

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IV. POST-EMPLOYMENT ........................................................................................................................... 137

V. JURISDICTION AND REMEDIES ........................................................................................................... 180

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3. REINSTATEMENT AND/OR EXECUTION PENDING APPEAL .................................................... 185

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I. FUNDAMENTAL PRINCIPLES AND

Labor as Property Right

Sec. 4. No law shall be passed abridging the

Wearing armbands and putting up placards to

Sec. 8. The right of the people, including those

Sec. 16. All persons shall have the right to a speedy

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The State shall regulate the relations between 3. Labor Code

Management prerogative Principle of Co-Determination

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justice to ensure the well-being and economic

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In case of doubt, all legislation and all labor

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and Forwarders Co., Inc., and/or Nicanor E. Jao, Jr.,

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A. RECRUITMENT AND PLACEMENT

b. Ban on Direct Hiring

General Rule: No employer may hire a Filipino

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implementation of RA 8042, as amended, Under Section 4 of R.A. No. 8042, as amended by

d. Suspension or Cancellation of The government recognizes any of the following as

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1. Simple illegal recruitment Provided, That any such non-licensee or non-holder

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LABOR CODE R.A. NO. 8042 – MIGRANT WORKERS

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payment of the cost of Insurance fees,

A Non-Licensee / Non-Holder of authority is any The offender may be a non-licensee or a non-

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precedent for its approval. (R.A. No. 8042, as

A worker who suffers pecuniary damage, regardless Purpose of Solidary Liability

Estafa is committed by any person who defrauds Venue of Criminal Action

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manual or speaking skills of such applicant

4. Solo Parents (Sec 7, RA 8972, as

No employer shall discriminate against any solo

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